Some employers mistakenly believe that if they hire independent contractors, they can get rid of them at will without risking a discrimination lawsuit. That’s not true.
Independent contractors can sue for race discrimination under a different section of the Civil Rights Act—called Section 1981. It predates Title VII and prohibits race discrimination in contracting. Since independent contractors work under the terms of contracts, Section 1981 applies to them.
Recent case: Joycinth sued AWS, a health care provider, after it terminated her contract to provide counseling services to clients. Joycinth is black and Jamaican.
Her lawsuit alleged that the company violated both Title VII and Section 1981.
AWS got the Title VII claim dismissed, convincing the court that Joycinth wasn’t an employee. The court agreed she was a true independent contractor after looking at all the circumstances: She worked under a contract, received a 1099 form instead of a W-2 at the end of the year, had significant independence in the way she worked and was allowed to counsel elsewhere.
Thus, the court didn’t dismiss her race discrimination claim under Section 1981 right away.
That part of the lawsuit survived until AWS explained that it terminated Joycinth’s contract because patients complained about her and because she rarely turned paperwork in on time. Joycinth lost, since she couldn’t show that white independent contractors had received similar complaints and ignored deadlines without being terminated. (Jones v. A.W. Holdings, et al., No. 11-2403, 7th Cir., 2012)