In a case of first impression, the Third Circuit Court of Appeals recently announced that the federal civil rights statute, 42 U.S.C. § 1981 (“Section 1981”), affords protection to independent contractors who allege discrimination.
Section 1981 provides that "all persons . . . shall have the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens.” The phrase ‘make and enforce contracts’ is broadly defined to include "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship."
In Brown v. J.Kaz, Inc., the plaintiff, an African-American female, applied for a job as a sales representative for Craftmatic, a distributor of adjustable beds. During a training session, the plaintiff had a heated exchange with the recruiting manager, subsequent to which she was informed that Craftmatic did not wish to use her as its sales representative.
After exhausting her administrative remedies, she filed suit, alleging, among other things, violation of Section 1981. The federal district court held that, although her claims were not barred because she was an independent contractor (contrary to other federal and state employment discrimination statutes which prohibit such claims by independent contractors), Craftmatic was nonetheless entitled to summary judgment because it proved that the same decision would have been made regardless of the plaintiff’s race.
On appeal, the Third Circuit decided, for the first time, that an independent contractor may bring a cause of action under Section 1981 for discrimination occurring within the scope of the independent contractor relationship. In doing so, the appellate court pointed out that the statute “does not limit itself, or even refer, to employment contracts but embraces all contracts and therefore includes contracts by which a[n] . . . independent contractor . . . provides service to another”.
Ultimately, the appellate court reversed the federal district court’s grant of summary judgment in favor of Craftmatic, finding that the plaintiff had shown that there were disputed facts and inferences requiring a jury to determine whether Craftmatic terminated the plaintiff's contract based upon her race.
The appellate court’s decision in Brown thus affords independent contractors, who may otherwise be turned out of court, an extra layer of protection from discriminatory decisions.
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