How you can be sued for bias even if you don’t discriminate

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in Compensation and Benefits,Discrimination and Harassment,Hiring,Human Resources

A New York City broker of apartment rentals and sales may face legal liability for alleged age bias—not because it discriminated, but because its independent contractor did. It’s a cautionary tale for any organization that outsources hiring.

Manhattan Apartments Inc. (MAI) engaged an employment agency to hire someone to show apartments to prospective tenants. When Michael Halpert applied for the job, he was allegedly told he was “too old.”

Halpert filed age discrimination charges against MAI in federal court. He alleged MAI was the real employer and the independent contractor was acting on MAI’s behalf.

MAI moved to have the case dismissed, claiming it wasn’t responsible for discrimination perpetrated by its contractor. Halpert argued the contractor wasn’t really independent—and even if it was, the Age Discrimination in Employment Act (ADEA) still applied. But a judge dismissed the case, ruling the ADEA did not apply to independent contractors.

Halpert appealed to the 2nd Circuit Court of Appeals, which saw things differently and ordered a trial. Now Halpert will have a chance to make his case to a jury.

In its ruling, however, the 2nd Circuit stopped short of saying employers are always liable when independent contractors discriminate. In cases where the employer “gives an individual authority to interview job applicants and make hiring decisions on the company’s behalf, then the company may be held liable if that individual improperly discriminates against applicants on the basis of age.”

The court also noted that liability isn’t based on whether the applicant believes he is interviewing for a position with the employer rather than the independent contractor, but instead on the actual relationship between the two.

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