In a Second District Court of Appeals case titled Halpert v. Manhattan Apartments, Inc. the court decided that a company can be held liable for the discriminatory acts of its independent contractor.
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Federal ADEA Update
Company Liable For
Discriminatory Hiring Practices
Of Third Party Recuiter
By Christopher W. Olmsted
If a company retains an outside recruiter to interview and hire employees on its behalf, can the company be held liable if the recruiter engages in discriminatory practices?
In a Second District Court of Appeals case titled Halpert v. Manhattan Apartments, Inc. the court decided that a company can be held liable for the discriminatory acts of its independent contractor.
Manhattan Apartments directed independent commissioned sales associates to recruit for a position showing rental apartments. One independent contractor hired by Manhattan Apartments allegedly told an applicant that he was too old for the position.
The applicant sued the employer for age discrimination under the federal Age Discrimination in Employment Act (ADEA).
The ADEA makes it unlawful for an employer “to fail or refuse to hire or to discharge
any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.
Manhattan Apartments contended that it was not liable for the alleged discrimination because it did not act unlawfully; rather, a third party recruiter engaged in the alleged unlawful discrimination.
The court refused to make such a distinction. “By its terms, employer liability under the ADEA is direct: an employer may not ‘fail or refuse to hire . . . any individual . . . because of such individual’s age,” wrote the court. “That prohibition applies regardless of whether an employer uses its employees to interview applicants for open positions, or whether it uses intermediaries, such as independent contractors.”
The court noted in order for an employer to be held liable for the acts of a recruiter, the recruiter must have the authority (or at least apparent authority) to make hiring decisions on behalf of the company.
Commentary
Outsourcing of recruiting or other personnel duties is commonplace but is often overlooked when it comes to EEO practices. As this case illustrates, an employer with good internal EEO practices can nevertheless face liability on account of ill-trained independent contractors acting on behalf of the company.
When hiring recruiters or other service providers, engage in “HR due diligence” by confirming their understanding of and commitment to EEO practices. For example, what training do they have in the area of employment laws relating to the hiring process, including the ADA, ADEA, Title VII, and other laws? Do they know how to avoid asking improper questions, making improper comments, and how to focus on appropriate job qualifications? Are they familiar with your companies’ policies, including its anti-discrimination policies?
Consider whether the company intends to give actual authority to the independent contractor to act as an agent with authority on behalf of the company. If not, take steps to ensure that both the recruiter and job applicants are aware that the recruiter does not have this authority.
Related Article: U.S. Supreme Court Raises Employee Burden In Age Bias Cases.
Download entire October 2009 Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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