Earlier today, I was fortunate to hear Second Circuit Judge Guido Calabresi speak at a Connecticut Bar Association Young Lawyers Section event as the 2009 Distringuished Speaker Award. He can weave a great story and mixed telling us tales of his interactions between Justices Sotomayor and Roberts, and of working for a United States Supreme Court Justice many years ago.
Calabresi, a former dean of the Yale Law School, also happens to be part of a "per curiam" decision issued by the Second Circuit late last week that should be of some interest to employers.
That decision clarified the law in this circuit by finding thatt an employer can be liable for discrimination by a third party that is authorized by the employer to work on its behalf (such as making hiring decisions). In doing so, the Court reversed a lower court’s summary judgment ruling and sent it back to the lower court for further proceedings.
The case, Halpert v. Manhattan Apartments (Sept. 10, 2009) (download here) takes the lower court to task saying the language of the age discrimination act should not be read as narrowly as was decided below. The case also has some interesting language that discusses when employers are NOT liable as well. I
By its terms, employer liability under the ADEA is direct: an employer may not “fail or refuse to hire . . . any individual . . . because of such individual’s age.” 29 U.S.C. § 623(a)(1). That prohibition applies regardless of whether an employer uses its employees to interview applicants for open positions, or whether it uses intermediaries, such as independent contractors… If a company 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.
A company is not, of course, liable for the hiring decisions made by independent
contractors who are hiring on their own behalf. Nor is a company liable simply because a job applicant unreasonably (and incorrectly) believes that he is interviewing for a job with the company and that the independent contractor has the authority to make hiring decisions on behalf of the company. …
Significantly, however, the company’s potential liability does not depend on whether the individual hiring for the company as its agent is an employee or an independent contractor under the broadest meaning of those words as they are determined by the common law agency test. An independent contractor can act as an agent, or an apparent agent, of the company for the limited purpose of interviewing and potentially hiring job applicants while still retaining his independence for any number of other purposes.
So, in essence, says the 2d Circuit — if someone is acting on your behalf, you better watch what their doing.
For employers, the takeaway from this is straightforward: It is not sufficient to just outsource your hiring decisions to a third party and claim you are wiping your hands clean of the situation. The employer in many cases may want to monitor that third party to ensure that discrimination does not occur and that the company’s anti-discrimination policies should apply to all such hiring decisions.