Think you don’t have to worry about race discrimination in hiring contractors? Think again.
A little-known section of the federal Civil Rights Act has become a popular vehicle for claims of race discrimination in contracting. Section 1981 of the law bars intentional race discrimination in the making and termination of contracts, and it applies when organizations contract for goods or services with black-owned businesses.
To protect yourself, track how you select and retain contractors. Apply the same standards whether dealing with black contractors or with nonminority ones.
Maintain careful records showing how well all contractors perform the jobs they’re hired to do, and check to see that you levy and enforce penalties for nonperformance fairly.
Recent case: Big Apple Tire, a black-owned, truck-service contractor, won a contract to service Verizon vehicles at company garages.
When Verizon began seeing problems with the repair work, it started to closely monitor Big Apple’s performance. Its initial audit showed falsification of repair records. When it happened again, Verizon terminated the contract.
Big Apple sued, alleging Verizon canceled the contract because of racial bias. But Verizon was prepared. It had data showing how it handled nonminority contractors and could demonstrate that it applied equally strict standards to them. (Big Apple Tire v. Verizon Services Group, No. 05-CV-8870, SD NY, 2007)