Employers Can Be Held Liable for Discriminatory Hiring Decisions Made By Independent Contractors

The Second Circuit Court of Appeals recently ruled that employers can be held liable for discriminatory hiring decisions of independent contractors who are authorized to make hiring decision on the employer’s behalf. The Second Circuit is the federal appellate court that handles appeals from District Courts in New York, Connecticut and Vermont.

The case, Halpert v. Manhattan Apartments Inc., involves an individual, Michael Halpert, who applied for a job showing rental apartments for Manhattan Apartments. When he was seeking the job, Mr. Halpert was interviewed by Robert Brooks. According to Mr. Halpert, during the interview, Mr. Brooks told him he was “too old” for the position.

Mr. Halpert then sued Manhattan Apartments for age discrimination under the Age Discrimination in Employment Act (ADEA). The ADEA is a federal anti-discrimination law which prohibits employers from using age as a basis not to hire, to fire, or otherwise discriminate against employees.

Prior to the appeal, the United States District Court for the Southern District of New York had dismissed Mr. Halpert’s claim. It ruled that Mr. Brooks was an independent contractor, rather than an employee of Manhattan Apartments. It also found that Mr. Halpert did not have enough evidence to prove that Mr. Brooks had actual or apparent authority to interview Mr. Halpert on behalf of Manhattan Apartments.

The Second Circuit disagreed. It ruled that even though the ADEA only prohibits employers from discriminating against employees on the basis of age, an employer can be held liable if an independent contractor discriminates on its behalf. The appellate court was careful to recognize that companies are not liable for hiring decisions made by independent contractors who are hiring on their own behalf.

Under the Second Circuit’s decision, to successfully sue an employer for a discriminatory hiring decision made by an independent contractor, an employee must prove that either (1) the independent contractor was hiring on behalf of the potential employer, or (2) the potential employee reasonably believed the independent contractor was hiring on behalf of the potential employer.

The Second Circuit found there was a dispute whether Mr. Brooks had actual or apparent authority to make hiring decisions for Manhattan Apartment. Accordingly, it sent the case back to the District Court to give Mr. Halpert a chance to try to prove his age discrimination claim.