Employment Law Matters : Employment Lawyer & Attorney : Ogletree Deakins Law Firm : Labor Law, Human Resources

If so, you've done the following things:

 Created a pandemic flu plan and educated your employees on that plan;
 Have become aware of current CDC recommendations, and will stay alert for upgrades;
 Reviewed and (if necessary) revised attendance policies;
 Educated yourself on confidentiality issues and concerns;
 Checked with HR or legal on questions of federal employment laws (including OSHA, privacy questions, wage & hour issues, FMLA policies, and ADA accommodation issues).

The CDC Guidance (www.cdc.gov/h1n1flu/business/guidance/) Provides a Basic Outline of Issues about which employers should be concerned. That Guidance:

1. Includes preparedness and response recommendations:
 Monitor personnel for unusual increases in absenteeism;
 Work with state/local public health partners;
 Be prepared to act if schools/daycare close.

2. Suggests components of an Influenza Pandemic Plan:
 Review HR policies to assure consistency with existing laws;
 Explore flexible work hours/work sites;
 Establish lines of communication with employees;
 Identify essential business functions to assure coverage.

3. Recommends “action steps” regarding symptomatic employees:
 Sick employees should stay home (24 hrs after fever);
 Ensure that sick leave policies are flexible;
 Sick employees at work should be asked to leave.

4. Addresses issues related to vaccination of employees.
 Encourage employees to get seasonal flu vaccination;
 Encourage H1N1 vaccination when available;
 View http://www.cdc.gov/h1n1flu/vaccination/acip.htm;
 Offer worksite opportunities for vaccination.

5. Provides action plan in the event of increased severity of H1N1 during the upcoming flu season:
 Consider actively screening employees for H1N1;
 Create opportunities for alternative work environments;
 Consider increasing social distancing where possible.

6. Includes a list of additional guidance documents developed by the federal government to assist employers in planning efforts.
 

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Courts typically have dismissed discrimination claims under Title VII if those claims were made by an independent contractor, rather than by an “employee” of the company. However, 42 U.S.C. §1981 (“Section 1981”), which prohibits racial discrimination in the formation of contracts, states that “all persons” shall have the same right “to make and enforce contracts as is enjoyed by white citizens.” In a case of first impression for the 3d U.S. Circuit Court of Appeals, that court has followed prior decisions of three sister-appellate courts in holding that an independent contractor may sue for race discrimination under Section 1981. Brown v. J. Kaz, Inc. d/b/a Craftmatic of Pittsburgh, 3d Circ., No. 08-2713, Sept. 11, 2009.

Craftmatic is a distributor of adjustable beds that sells its product through sales representatives. Those representatives schedule their own appointments to visit potential customers’ homes, provide their own equipment and means of transportation for those sales calls, and are paid on commission. Each sales person signs an “independent contractor” agreement with Craftmatic.

In 2006, Kimberly Brown, an African-American female, responded to an ad in which Craftmatic was seeking sales representatives, and then registered for a three-day training and an interview session in Pittsburgh with the company. Brown traveled by bus to Pittsburgh from her home in Cleveland for the session – she testified that the reason was that she preferred not to drive in unfamiliar places. She attended the training with two male applicants, neither of whom was African-American. Regarding his initial meeting with Brown, Craftmatic’s recruiting manager, Jay Morris, later stated that he knew that she was “going to be a headache” because she “asks a lot of questions.”

On the final day of training, Morris approached the applicants, and extended his hand to all three. He shook hands with the two men and exchanged pleasantries with them. For unexplained reasons, Brown refused to shake Morris’ hand. Morris responded with a remark, the content of which is disputed. Brown states that the remark was a racial slur, while Morris says that he was expressing his disappointment that Brown refused to shake hands, equating it to a racial rebuff. This exchange was followed by some heated words, during which Morris stated that if he had any voice in the decision, Brown would not work for Craftmatic. With input from Morris, the company ultimately decided not to use Brown as a sales representative.

Brown ultimately sued Craftmatic, claiming race discrimination under Title VII, the Pennsylvania Human Relations Act, and Section 1981. The district court dismissed the Title VII and PHRA claims on the basis that Brown was not an employee. That court also ruled that while Brown’s independent contractor status did not preclude her from bringing claims under Section 1981, Brown did not provide evidence sufficient to support her claims under that statute. The Third Circuit disagreed, taking issue with the lower court’s conclusion that Craftmatic would have been equally concerned with Brown’s behavior, even if no racial slurs were made. The appeals court said that instead, the real question was whether the same decision would have been made if Brown’s race was “taken out of the equation” altogether. The Third Circuit then reversed the summary judgment on the Section 1981 claim, allowing that claim to go forward.

The Third Circuit’s decision does not mean that Brown has proven her case of discrimination. What it means, however, is that there are disputed issues of fact, and that those issues should be decided by a jury. The primary take-away from this case is that an independent contractor can bring a racial discrimination claim under Section 1981 against a company that allegedly discriminates in the formation of its contracts, even without an actual employee/employer relationship. Companies that regularly rely on such contractors should be sure that hiring, training, and terminations are done consistently and in a non-discriminatory manner, in order to avoid the issues presented in this case.
 

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The Age Discrimination in Employment Act (ADEA) makes it unlawful to discriminate against an individual over the age of 40, and specifically includes a prohibition against failing to hiring someone based on his or her age. The 2d U.S. Circuit Court of Appeals recently pointed out the expansive nature of that prohibition by holding that an employer may be held liable for discrimination by third parties - including an independent contractor who is authorized by the employer to make hiring decisions on its behalf. Halpert v. Manhattan Apartments, Inc., 2d Cir., No. 07-4074-cv, September 10, 2009.

In October 2001, Michael Halpert interviewed for a position to show rental apartments for Manhattan Apartments, Inc. (MAI). The interview was conducted by Robert Brooks, an independent contractor/broker who allegedly told Halpert that Halpert was “too old” to work in the prospective position, and asked why the placement center had not sent a younger applicant. Halpert was born on September 19, 1957.

In response to a lawsuit filed by Halpert, MAI filed a motion for summary judgment which was granted by the district court. That lower court found that MAI as not an “employer” under the definition of the ADEA, and dismissed the case against MAI. That decision was reversed by the Second Circuit, which remanded the case for trial. The Second Circuit based the reversal on the fact that the ADEA’s prohibitions against discrimination apply to the hiring process, whether a company uses its own employees to interview applicants, or asks an independent contractor to fill that role. If a company gives someone authority to interview applicants and make hiring decisions on behalf of the company, the company may be held liable if that contractor discriminates against an applicant because of the applicant’s age.

MAI’s potential liability under the ADEA turns on whether Brooks was hiring Halpert to work for him as a fellow independent broker, or was making the hiring decision for MAI as its agent. The Court pointed out that MAI sponsored a training program for individuals hired to show the apartments, that the successful applicants would earn commissions from MAI, that the interview took place at MAI’s offices, and that the placement person who sent Halpert to the interview testified that she believed that he was being interviewed for a position with MAI. The Court held that there were disputed issues of material fact that precluded dismissal of the action.

The controversy in this case was not whether MAI was liable for discrimination against an independent contractor (an action typically not protected against under the ADEA), but whether MAI can be held liable for age discrimination by an independent contractor when that person works as an agent for MAI. The Court found that the answer to this question is an unequivocal Yes.

This case could have a significant impact on companies who plan to contract out human resource functions to a third party contractor. Employers who believe that using an independent contractor to conduct interviews will absolve them from compliance with federal anti-discrimination laws should become familiar with this case, and must recognize that the ADEA’s reach extends to a company that uses intermediaries to conduct activities related to employees or applicants. Such a company’s potential liability does not depend on whether the individual acting for the company is an actual employee or an independent contractor – either individual can be an agent for the company for purposes of the ADEA, regardless of his or her employment status for other purposes.
 

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Congress has repeatedly rejected legislation that would extend Title VII protection to claims of sexual orientation discrimination. However, under Title VII, an employee may raise a claim of gender discrimination if that individual can demonstrate that an harasser was acting to punish the employee’s noncompliance with gender stereotypes. The 3d U.S. Circuit Court of Appeals has allowed the claim of a self-described “effeminate man” to move forward to a jury trial, on the basis that the plaintiff presented evidence that his co-workers harassed him because of his non-compliance with male-associated stereotypes. Prowel v. Wise Business Forms, Inc., 3d Cir., No. 07-3997, August 28, 2009.

Brian Prowel was one of 145 employees of Wise Business Forms in Butler, Pennsylvania, and had worked for the company since 1991. Prowel, an openly gay male, felt that his mannerisms caused him not to “fit in” with the other men at Wise. He described his male co-workers as “blue collar,” “very rough around the edges,” and “everything I wasn’t.” In stark contract, Wise had a high-pitched voice, walked and carried himself in an effeminate manner, and filed his fingernails “instead of ripping them off with a utility knife.”

Some of his co-workers reacted negatively to Prowel’s demeanor and appearance, calling him “Princess” and “Rosebud” and making fun of the way he talked, walked, and sat. Prowel complained to his supervisors, but the harassment continued. In April 2004, Prowel became so unhappy with his work environment that he considered suing the company and said so to certain co-workers. Prowel subsequently was asked to meet with his supervisors and was asked about approaching those individuals regarding his proposed lawsuit. In December 2004, Prowel was terminated “for lack of work.”

Prowel then sued Wise in federal court. His claims included gender discrimination and retaliation claims under Title VII. The lower court found that Prowel’s claims were based upon sexual orientation – not a viable claim under Title VII – and dismissed the suit. On appeal, the Third Circuit reversed, finding that Title VII does not bar a homosexual man from bring a gender stereotyping claim under the Act, since such a claim is “because of” the plaintiff’s sex, a type of discrimination barred by law.

The Third Circuit pointed out the U.S. Supreme Court’s opinion in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), in which a female was denied a promotion because she failed to conform to gender stereotypes. Hopkins used profanity, was not “charming,” and did not walk, talk, or dress in a feminine manner. The Supreme Court found that when an employer acts on a belief that a woman cannot be aggressive, it has discriminated “because of sex” and has violated Title VII.

Similarly, the evidence set forth by Prowel indicates that he was harassed and treated differently because he did not conform to his co-workers’ vision of how a “man” should look, speak, or act. Therefore, Prowel marshaled enough evidence to argue that his harassment was based on gender stereotypes, even if part of the harassment was based on his sexual orientation.

The line between sexual orientation discrimination and discrimination “because of sex” can be difficult to draw. Under Title VII, an unlawful employment practice is established when the plaintiff demonstrates that sex was one of the motivating factors for discrimination, even if other factors - including harassment based on sexual preference - also motivated the same actions.

Employers should be aware of this decision, and should understand that while sexual orientation is not yet included as a protected category under federal law (although it is protected under some state statutes), gender stereotyping is a very closely related cause of action. Therefore, employee complaints of harassment should not be overlooked or downplayed on the basis that they appear to involve an issue of sexual orientation. (Of course, employee complaints should never be “overlooked or downplayed” under any circumstance.) Instead, if any of the complained-of activity includes actions that are meant to punish or belittle non-compliance with gender stereotypes, the actions may constitute a violation of Title VII’s “because of sex” provision.
 

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