Employer May be Liable for Discrimination Committed by Third Parties Authorized to make Employment Decisions on its Behalf

By Ted Olsen

Companies often believe that, by contracting out human resources functions, they may immunize themselves against potential employment discrimination claims.  This belief is not justified.  For instance, if an employer hires an agency to screen, interview and select among applicants for employment with the employer, the employer may be liable if the agency performs these functions in a discriminatory fashion.  One recent court decision, Halpert v. Manhattan Apartments, Inc., 107 FEP Cases 459 (2d Cir. Sept. 10, 2009), illustrates this.  

In Halpert, the plaintiff alleged that when he interviewed for a position in which he would show rental apartments, his interviewer told him he was "too old" for the position.  When he pursued an age discrimination case against the employer, the employer contended that it could not be responsible for an allegedly discriminatory act by the interviewer, who was an independent contractor.  The district court granted the employer summary judgment on this ground.

The Second Circuit Court of Appeals reversed, holding that there were sufficient facts from which a jury could find that the interviewer (despite being an independent contractor) was not acting in anticipation of hiring a candidate for the interviewer's own business, but rather, was acting on Manhattan Apartments' behalf.  If Manhattan Apartments hired the interviewer to perform this employment function for the company, Manhattan Apartments was responsible for the interviewer's discrimination.  "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."

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© 2009 Sherman & Howard L.L.C.                                                 October 12, 2009