The 3rd U.S. Circuit Court of Appeals has ruled that independent contractors can sue companies for discrimination.

In a recent decision involving a Pittsburgh-based company, a panel of judges voted unanimously to extend the protection of Section 1981 of the Civil Rights Act to independent contractors, giving them the same protection against discrimination that employees have. Section 1981 of the original Civil Rights Act of 1866 prohibits discrimination based on race or color.

In the case in question, an African-American woman claimed that racial discrimination was the reason Craftmatic terminated her independent contract to serve as a sales representative. She filed a lawsuit under Section 1981, Title VII of the Civil Rights Act of 1964 and the Pennsylvania Human Resources Act.

The U.S. District Court for the Western District of Pennsylvania dismissed the lawsuit, saying that as an independent contractor, she was not protected by any of these three laws.

The appeals court agreed that Title VII and the Pennsylvania law do not cover independent contractors, but ruled that Section 1981 does apply, and therefore kicked the case back down to the district court level for a trial.

The decision should be a reminder to businesses that engage independent contractors that they should apply contracting, reimbursement, bonus and termination policies with the same consistency and fairness with which they apply policies related to hiring, firing and other employment decisions.

-- Beth Slagle,
Meyer Unkovic & Scott,
bas@muslaw.com

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