Discrimination and Harassment Recovery for Independent Contractors

January 28th, 2014

Anyone who has suffered discrimination or harassment in the workplace has faced the difficult decision of raising the issue with a superior or human resources.  The discrimination or harassment itself is often completely debilitating and shocking for the worker, and deciding whether to report it to a superior can raise a host of concerns.  Will the superior take the complaint seriously?  Will the worker be subjected to retaliation?  Could reporting place the worker’s livelihood in jeopardy?

All of these concerns can be overwhelming for employees, but it can be even more overwhelming for workers who have been designated independent contractors.  Many workers do not understand the difference between the employee and independent contractor designation.  For these workers, approaching a supervisor and finding out that they are not considered an employee, but an independent contractor, can raise a whole host of legal questions and concerns.

California Constitution Article 1, Section 8 protects employees, but not independent contractors.   See Cal. Gov. Code §12940(a) and Sistare-Meyer v. Young Men’s Christian Assoc. (1997) 58 Cal. App. 4th 10, 16-17 (wrongful termination based on race and sex discrimination pursuant to Cal. Const., Art. 1., § 8 does not apply to independent contractors).  Likewise, claims under Title VII of the Civil Rights Act of 1964 and claims under California’s Fair Employment and Housing Act (“FEHA”) are generally inapplicable to independent contractors:

Section 12940, within the FEHA, prohibits numerous “employment practice[s]” specified in the subdivisions of the section—in general, invidious discrimination or harassment, and retaliation for complaining about such conduct. “The FEHA prohibits employment discrimination … ,” not discrimination or retaliation in other relationships. (Shephard v. Loyola Marymount Univ. (2002) 102 Cal.App.4th 837, 842.) “The fundamental foundation for liability is the ‘existence of an employment relationship between the one who discriminates … and [the person] who finds himself the victim of that discrimination.’ … ‘If there is no proscribed “employment practice,” the FEHA does not apply.’ (Vernon v. State of California (2004) 116 Cal.App.4th 114, 123; see Mendoza v. Town of Ross (2005) 128 Cal.App.4th 625, 632.)

Fitzsimons v. California Emergency Physicians Medical Group (2012) 205 Cal. App. 4th 1423, 1426-1427.  See also Adcock v. Chrysler Corp. (9th Cir. 1999), 166 F. 3d 1290, 1292.

Thus, for the worker who is designated an independent contractor, this designation may seem to prevent recovery.  However, this is not necessarily the case.  The independent contractor designation is in many instances incorrect.

Employers often designate individuals not as employees, but as independent contractors for tax and liability purposes.  In many circumstances, the employer has incorrectly designated the worker as an independent contractor, and the worker who has experienced harassment or discrimination has access traditional and statutory legal remedies.

The main legal test to determine if there is a legal independent contractor relationship is the “control test.”   Under California law, courts will consider the following factors in determining control:

[1] whether the worker is engaged in a distinct occupation or business, [2] the skill required in the particular occupation,  [3] whether the employer or the worker supplies the tools and the place of work, [4] the length of time for which the services are to be performed, [5] whether the worker is paid by time or by the job, and [6] whether the work is a part of the regular business of the employer, and the kind of relationship the parties believe they are creating.

See Elijahjuan v. Superior Court (2012) 210 Cal. App. 4th 15, 21-22 and S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341.

Under Federal law, specifically in evaluating applicability of Title VII of the Civil Rights Act of 1964, courts will consider the following factors:

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[1] the skill required; [2] the source of the instrumentalities and tools; [3] the location of the work; [4] the duration of the relationship between the parties; [5] whether the hiring party has the right to assign additional projects to the hired party; [6] the extent of the hired party’s discretion over when and how long to work; [7] the method of payment; [8] the hired party’s role in hiring and paying assistants; [9] whether the work is part of the regular business of the hiring party; [10] whether the hiring party is in business; [11] the provision of employee benefits; and [12] the tax treatment of the hired party.

See Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 323 (1992).

If the factors demonstrate that the worker has a sufficient level of control over his duties, the independent contractor designation will hold up in court.  If the factors demonstrate that the employer exercises sufficient control, then the independent contractor designation is deemed incorrect and the worker will have all of the rights and remedies afforded to employees under the FEHA and Title VII.

For workers that are found to be independent contractors, the law may still offer protection depending on the circumstances of the discrimination or harassment.  For instance, persons who are “providing services pursuant to contract” may be protected.  See Cal. Government Code § 12940(j)(1),(4) and Fitzsimons v. California Emergency Physicians Medical Group (2012) 205 Cal. App. 4th 1423.  Remedies may also be available under California’s Unruh Act (Cal. Civil Code §51.5).

In summary, the independent contractor designation does not necessarily prevent legal remedies for discrimination and harassment.  To determine specifically if the worker designated an independent contractor qualifies for legal recovery, an attorney should be contacted to perform the necessary analysis.