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Protection from Discrimination and Retaliation Provided by Civil Rights Act Extends Beyond Employees to Independent Contractors

By: Thomas Paschos

Thomas Paschos & Associates, P.C.

Haddonfield, New Jersey

In Brown v. J. Kaz Inc., d/b/a Craftmatic of Pittsburgh, — F.3d —, 2009 WL 2903348 (C.A. 3 (Pa.) 2009), Plaintiff Kimberly Brown brought an action against Defendant Craftmatic, charging violations of Section 1981, Title VII of the Civil Rights Act of 1964 and the Pennsylvania Human Relations Act, alleging discrimination based upon her race, including claims of disparate treatment, hostile work environment and relation. The United States District Court for the Western District of Pennsylvania dismissed all claims, finding that Plaintiff was an independent contractor at the time of the alleged discrimination and retaliation, and was therefore not protected by those Acts. The Third Circuit, in this case of first impression, ruled that Plaintiff could bring a claim for discrimination under Section 1981 of the Civil Rights Act, finding that the protections there under extend beyond employees to independent contractors.

Defendant, Craftmatic, is a distributor of adjustable beds, which are sold in-home through sales representatives. In summer 2006, Plaintiff Brown, an African-American female, responded to an advertisement seeking sales representatives for Craftmatic. After speaking via telephone on two occasions with Jay Morris, Craftmatics recruiting manager, Brown was invited to attend a three-day Craftmatic training session. Brown attended the training session with two other trainees, both male, neither of who was African-American. During the training, Brown was provided a copy of Craftmatics Independent Contractor Agreement, which she executed on the final day of training. During a break later that day, the three trainees were approached by Morris, who extended his hand to all three. While the other two trainees shook hands with Morris, for reasons unknown, Brown refused. Brown alleged that Morris then referred to her in a racially derogatory manner, which Morris denied. A heated argument ensued. Brown then returned to the training room, Morris followed, and advised her that if he had any say, she would not work for Craftmatic. Morris then met with the company president, John Girty. At some point later that day, it was decided that Craftmatic would not use Brown as a sales representative, and she was so informed.

Brown timely filed charges with the Equal Employment Opportunity Commission and the Pennsylvania Human Relations Commission. The EEOC dismissed and issued a notice of rights to Brown on March 27, 2007. The instant action followed. On summary judgment, the District Court dismissed the claims under Title VII and the PHRA, because Browns status as an independent contractor was outside the protections of those acts. As to the Section 1981 claim, the District Court found that Browns independent contractor status did preclude such a claim, but that the claim should be dismissed, as Brown was unable to prove her claim under either the Price Waterhouse mixed-motive analysis or the McDonnell Douglass pretext analysis. Brown appealed the District Courts decision.

While the Third Circuit affirmed that the claims under Title VII and the PHRA were barred due to Browns status as an independent contractor, the Third Circuit further agreed with the lower court that Browns status as an independent contractor did not bar the claims under Section 1981, which states, all persons . . . shall have the same right . . . to make and enforce contracts . . . as is enjoyed by white citizens. 42 U.S.C. 1981(a). Specifically, the Third Circuit stated, We thus agree . . . that an independent contractor may bring a cause of action under section 1981 for discrimination occurring within the scope of the independent contractor relationship.

The Court next turned to merits of Browns claim, using the Price Waterhouse mixed-motives analysis, whereunder a plaintiff must show by direct evidence that an illegitimate criterion as a substantial factor n the employment decision. If shown, the burden then shifts to defendant to convince the trier of fact that it is more likely than not that the decision would have been the same absent consideration of the illegitimate factor. The Third Circuit, noting that the question should be not whether the same decision would have been made had Morris not made the comments to Brown, but rather would the same decision have been made if Browns race was taken out the equation, thus found that a question of fact remained for the jury on that issue. Accordingly, the Third Circuit reversed the District Courts summary judgment Order as to Section 1981, and remanded for further proceedings.

An Employee Invokes The Rights Provided Under The FMLA, Not At The Time That The Leave Begins, But At The Time Leave Is Requested, Thus Entitling An Employee To Bring A Claim For Retaliation And/Or Interference If Terminated Prior to Commencement Of The Actual FMLA Leave.

In Erdman v. Nationwide Insurance Company, — F.3d —, 2009 WL 3018116 (C.A. 3) Pa. (September 23, 2009), plaintiff, Brenda Erdman, brought suit against her former employer, Nationwide Insurance Company, alleging violations of the Family and Medical Leave Act (FMLA), and the American with Disabilities Act (ADA). The District Court granted summary judgment in favor of the employer, Nationwide. On appeal, the Third Circuit found that (1) plaintiff had worked sufficient hours as to qualify for FMLA leave, and (2) under the FMLA, plaintiff could bring a claim for retaliation or interference, where her termination occurred after leave was requested, but prior to leave being taken.

Plaintiff, Brenda Erdman, was hired by Nationwide in 1980 as a full-time employee. In or about 1998, she became, at her request, a part-time employee, in order to care for a child with Downs Syndrome. In 2002, again at Erdmans request, her schedule was altered to four days per week, at which time she became a non-exempt employee. Throughout the period of her part-time employment, Erdman was permitted to work from home. In compensation for the work from home, Erdman was variably paid overtime or provided comp time.

Shortly after Erdman plaintiff switched her schedule in early 2002, her supervisor, Patty Sarno, informed Erdman that she could no longer work extra hours from home for overtime pay. Nothing was said as to working from home for comp time. Thereafter, Sarno was replaced by Stella Getgen. In September 2002, Erdman contacted Getgen, and questioned whether she would be able to continue to work at home for comp time. She received no response thereto.

Thereafter, in January 2003, Getgen admonished Erdman for unapproved overtime, failure to consult with a supervisor before visiting a policyholder, and for performing unauthorized field work. On February 10, 2003, Getgen informed Erdman for the first time that she could no longer use the hours worked from home as comp time. Shortly thereafter, Getgen informed Erdman that the part-time positions were being eliminated. Erdman was permitted to return to full-time employment.

Upon returning to full-time employment, Erdman requested clarification regarding her previously approved request for vacation for the entire month of August, in order to prepare her disabled child for school. She was informed that this would not be possible. As a result, in April 2003, Erdman submitted a request for FMLA leave for the month of August. Human Resources advised Erdman that there was no problem with her request for leave.

On May 9, 2003, Erdmans employment was terminated. Nationwide alleged that the termination was due to performance and behavioral issues. Plaintiff alleged that Nationwides claims were pretext, and that she was terminated for requesting FMLA leave.

On summary judgment, Nationwide argued that Erdman was not entitled to FMLA leave, as she had not worked the requisite 1250 hours during the previous twelve months. However, the Third Circuit noted that the FMLA, at 29 CFR Section 785.12, provides that all work the employer knows or has reason to believe . . . is being performed should count towards the threshold requirement. Accordingly, all hours worked by Erdman from home in exchange for comp time up until the time she was told she could no longer work from home in February 2003, should be considered, because the Nationwide was aware that those hours were being worked. Accordingly, Erdman was able to meet the requisite hours threshold.

Next, Nationwide, asserted that the FMLA did not permit Erdman to bring a claim for either retaliation or interference, because she had not actually begin her requested leave. The Third Circuit found this argument to be patently absurd, noting that, under Nationwides theory that an employee must actually begin leave before being entitled to a retaliation claim, that an employer who wishes to punish an employee for taking FMLA leave could avoid liability simply by firing the employee before the leave begins. Ultimately, the Third Circuit stated, we interpret the requirements of an employee take FMLA leave to note invocation of FMLA rights, not actual commencement of leave. We therefore hold firing an employee for a valid request for FMLA leave may constitute interference with the employees FMLA rights as well as retaliation against the employee. Accordingly, while the Third Circuit affirmed the District Courts granting of summary judgment as to the ADA claim, they vacated summary judgment as to the FMLA claim, and remanded the matter for further proceedings.

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The general information contained herein is intended for informational purposes only. It is not intended to be, and should not be construed as, legal advice or legal opinion on any specific facts or circumstances.

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