On Sunday, I visited the American History Museum in Washington, where I came across this poster. Which I love. During World War II, Americans were encouraged to save their used cooking fat, which could be repurposed for manufacturing explosives. According to the University of Illinois, one pound of fat contained enough glycerin to make nearly a pound of explosives.
And that’s how bacon (sourced from a “wonderful, magical animal”?) helped win the war.
A different kind of battle continues to be fought over independent contractors’ rights. As we’ve discussed in many contexts, independent contractors lack many of the rights that employees have. That’s one of the reasons we see so many independent contractor misclassification claims.
One of the rights independent contractors lack is the right to be protected against disability discrimination—at least under federal law. In a recent case before the Sixth Circuit Court of Appeals, a nurse sued the hospital where she worked, alleging interference with her rights under the Americans with Disabilities Act (ADA). The nurse had been unable to work for several weeks after a head injury, and the hospital declined to re-credential her.
The problem for her, though, is that the hospital was not her employer, and so she didn’t have any rights under the ADA. (We can ignore the public accommodation sections of the ADA. They don’t apply here.)
The ADA allows workers to sue their employers for disability discrimination or for interference with their ADA rights. But a worker can’t sue a business that’s not the worker’s employer, even if the business takes action because of a disability.
The law has been clear for a long time that independent contractors cannot sue for disability discrimination under the ADA. This case was a bit different, though, because it dealt with the non-interference clause of the ADA, not the anti-discrimination clause. The court ruled that the same limitation applies to non-interference claims.
The plaintiff had another potential argument, and it was probably the better argument. But her lawyers never asserted it.
You see, the nurse was employed by a physicians’ group when she worked at the hospital. She first tried to sue the physicians’ group, but it went into bankruptcy, and the bankruptcy court disallowed her claim. She then sued the hospital where she performed the work. The hospital, not insignificantly, used to be her direct employer, but she had been rebadged as an employee of the physicians’ group three years earlier.
She probably should have argued that the hospital was her joint employer. But she didn’t. Because she never made the argument, the court didn’t conduct a joint employment analysis, and so we don’t know if the facts could have supported a finding of joint employment. But at least she might have had a viable argument. Maybe. But without any employment relationship, she had no argument and no chance to win. And that’s why the district court dismissed her claim and the Court of Appeals affirmed the dismissal.
There are two takeaways here.
First, independent contractors have far fewer rights than employees. Federal anti-discrimination laws protect employees, not independent contractors. Some state anti-discrimination laws protect independent contractors, but the ADA does not.
Second, when a worker is employed by a vendor or subcontractor, the real danger is joint employment. Your business can be held liable as a joint employer for misdeeds of the direct employer. The dangers of joint employment are even greater when the direct employer goes bankrupt. The whole purpose of joint employment is to make sure there is someone who can make the employee whole for any damages suffered. If your business is a joint employer, it doesn’t matter if you were primarily responsible for the wrong or not. Joint employment means both employers are fully liable for the loss.
You might be saying, hey, wait a minute. If she couldn’t work, how was that an ADA violation? We don’t know if her underlying claim had any legs or not. That’s not the point here. The point is that the court never got into the merits of the claim because it didn’t have to. The hospital had a complete defense. No employment relationship, no claim.
This case serves as a reminder of how important it is to be careful with non-employment relationships. Just like you would have been careful with your bacon grease, back in the 1940s.
© 2022 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.