I
Introduction

Let’s say that you have a client that is an independent contractor. The following day after disclosing that he or she has a disability, the independent contractor relationship is terminated. Where does this person turn for a remedy?

The first possibility is to show that the client was not an independent contractor at all. That is, despite the label in the contract, the hiring authority exercises sufficient control over the independent contractor so that the client was in fact an employee. For this possibility to fly, you want to take a look at two different authorities. First, Revenue Ruling 87-41, which has a 20 part test for determining whether sufficient control is being exercised. Keep in mind, that none of those factors are dispositive in and of themselves. Rather, you have to look at the whole situation after applying all 20 factors. By googling Revenue Ruling 87-41, you can find all kinds of references to that law, including this one, though not necessarily the actual document unless you have a legal database or you want to write to the IRS. The second authority that you want to look at is Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003), where the United States Supreme Court evaluated whether a physician shareholder was an employee so as to be able to pursue a claim of disability discrimination under title I of the ADA.

Okay, so now you have tried that approach and you realize that your client is truly an independent contractor. Is your client out of luck? Where do you turn? There are two places you might turn to. First, if privileges or benefits are involved, you might try pursuing a claim under title III of the ADA, though you would only get injunctive relief and attorneys fees if you do so. A physician at a hospital who did precisely that can be found in this case, Mentkowitz v. Pottstown Memorial Medical Center, 154 F.3d 113 (3rd Cir. 1998). The other thing you could do is try suing under the Rehabilitation Act, which brings us to the case of the week. As usual, I have divided the blog entry into various categories: introduction; facts; issue; court’s reasoning; and takeaways. The reader is free to concentrate on any or all of the sections.

II
Facts
Our case of the week is Flynn v. Distinctive Home Care, Inc., 2015 U.S. Dist. LEXIS 26869 (W.D. Tex. March 5, 2015). In this case, a pediatrician was diagnosed with autism spectrum disorder, used to be called Aspergers syndrome. Shortly after disclosing her condition to the defendants, her independent contractor agreement was terminated. She opted to bring suit under the Rehabilitation Act.

III
Issue

In order for a person to bring in employment claim so to speak under the Rehabilitation Act, must that person be an employee?

IV
Court’s Reasoning

The court says yes relying on an unpublished decision from the Fifth Circuit. Nevertheless, the court does go into detail as to how the arguments can go either way and the Circuits are split. It all comes down to whether the Rehabilitation Act adopts title I of the ADA wholesale or whether it only selectively incorporates title I of the ADA.

1. The Sixth and Eighth Circuits have decided that the Rehabilitation Act adopts title I of the ADA in full. The Eighth Circuit noted that they were construing both laws to apply to the employer employee relationship because of the similarity between title I and the Rehabilitation Act in the absence of authority to the contrary. The Sixth Circuit found that the the ADA, ADEA, and Rehabilitation Act all borrow the definition of employer from title VII of the Civil Rights Act. Therefore, an individual not meeting the title VII statutory definition of employer could not be held liable under the Rehabilitation Act.

2. On the other hand, the Flynn court notes that the 9th and 10th circuit have concluded the title I of the ADA is only selectively incorporated into the Rehabilitation Act. The 10th circuit specifically noted that the language of the 1992 amendment to the Rehabilitation Act states that the ADA’s standards are to be used only to determine whether the Rehabilitation Act has been violated. That is not the same thing as saying that the standards of the ADA are used to determine whether an employer is even subject to the Rehabilitation Act in the first place. That is, the reference to the ADA’s employment provisions in the Rehabilitation Act addresses only the substantive standards for determining what conduct violates the Rehabilitation Act and does not go to the definition of who is covered under Rehabilitation Act.

3. In deciding that title I of the ADA was only selectively incorporated into the Rehabilitation Act, the Flynn court noted that the Ninth Circuit reached that conclusion for four different reasons. First, the scope of the Rehabilitation Act is broader than the ADA. Second, Congress did not use language of incorporation when it referred to the ADA and § 504. Third, to decide otherwise would substantially narrow the scope of the Rehabilitation Act. Fourth, complete incorporation of title I of the ADA into the Rehabilitation Act results in substantial duplication between the two laws, perhaps inconsistent duplication, in the definitions of key terms (as we have seen over the course of the discussions had in this blog, the differences between the two laws can be very subtle but at the same time significant).

4. The Flynn court says that since the Fifth Circuit in an unpublished decision had said that employment discrimination claims under the Rehabilitation Act require the existence of an employer employee relationship, they were bound to follow that decision.

V
Takeaways:

1. Since the Fifth Circuit decision on this issue is unpublished, it wouldn’t surprise me in the least to see this case appealed to the Fifth Circuit. It is anybody’s guess as to how the Fifth Circuit would rule in this case. That said, to my mind, the reasoning noted by this court of the 9th and 10th circuit is fairly compelling.

2. Before opting for the possibilities afforded by paragraph 3 below, always figure out first whether the person is truly an independent contractor. For that, as mentioned above, you definitely want to review Revenue Ruling 87-41 and also review Clackamas as well.

3. If you’re on the plaintiff’s side, it would make sense in these kind of situations to sue under both title III of the ADA and the Rehabilitation Act. Expect a vigorous defense to the title III suit on the grounds that title III was not meant to apply to employment situations. With respect to Rehabilitation Act claim, expect the same defenses made in this case. Of course, suing under title III of the ADA only allows for injunctive relief and attorneys fees. With respect to recovering under the Rehabilitation Act, the plaintiff will have two obstacles. First, they will have to show that the discrimination was the sole cause. Second, to get damages, they will have to show deliberate indifference. Nevertheless, a true independent contractor doesn’t have a lot of options available to him or her.

4. Since there is a Circuit split on whether coverage under the Rehabilitation Act demands an employer employee relationship, it is reasonable to expect that this will go to the United States Supreme Court someday.

2 Responses to Where does an independent contractor turn if he or she is terminated on the basis of his or her disability?

IC disability discrimination – i’m in WA state – the contractor is in AZ – i was terminated for “mental instability” while knowingly hiring me as SSDI “mentally disabled.” Learning the “law” the hard way – finding out there are NO legal protections against disability discrimination as an Independent Contractor.

Thanks for commenting. There are several things involved here. First, you are quite right that the ADA when it comes to employment you have to be an employer first as a general rule. However, it is possible that you were an employee despite what everyone says. See this case for example. Second, assuming you were an independent contractor, if the employer took federal funds, then it is possible that § 504 the Rehabilitation Act applies as we discussed in this blog entry. Finally, you mentioned that SSDI was involved here and you may be looking at a judicial estoppel defense as well as discussed here.

Hope this helps and thanks for being a reader of the blog.

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