Employment Law Daily Rehab Act authorizes employment discrimination suits by independent contractors
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Thursday, February 4, 2016

Rehab Act authorizes employment discrimination suits by independent contractors

By Kathleen Kapusta, J.D. While federal circuit and district courts overwhelmingly agree that a plaintiff may only sue a defendant under Title I of the ADA if the plaintiff is the defendant’s employee rather than an independent contractor, the Fifth Circuit, in an issue of first impression, ruled that Section 504(d) of the Rehabilitation Act does not incorporate this prohibition on employment discrimination suits. Siding with the Ninth and Tenth Circuits, the court pointed out that unlike Title I, Section 504 is far broader, covering “‘all of the operations of covered entities, not only those related to employment.’” Accordingly, the appeals court reversed the decision of the court below, which held that a pediatrician who was removed from her job after being diagnosed with Autism Spectrum Disorder-Mild (ASD-M) could not sue for employment discrimination under the Rehab Act because she was an independent contractor (Flynn v. Distinctive Home Care, Inc., February 1, 2016, Davis, W.). Removal from duties. One day after the plaintiff, a contract physician with a company that provided medical services at an air force base, was diagnosed with ASD-M, the company told her that due to complaints from patients and coworkers, the clinic was concerned about her performance. In response, she told the company about her diagnosis. When a government officer directed that she be removed from her duties, she asked to be reinstated with accommodations but her request was denied. Upon being informed that the company would not retain her as an independent contractor, she sued under the Rehab Act, alleging disability discrimination. Finding that she could not sue for employment discrimination because she was an independent contractor, the district court granted summary to the company. Circuit split. On appeal, the Fifth Circuit acknowledged that its sister Circuits have split on the issue of whether an independent contractor who lacks an employer-employee relationship with the defendant can sue that defendant for employment discrimination under Section 504 of the Rehab Act. It pointed out that after the enactment of the ADA, Congress became concerned about potential inconsistencies between the two laws. To assuage those concerns, Congress added subsection (d) to Section 504 of the Rehab Act, which incorporated portions of the ADA by reference to assure there would be consistent, equitable treatment for both individuals with disabilities and businesses under the two laws. Thus, the question was whether Section 504(d) incorporated Title I’s prohibition on employment discrimination suits brought by independent contractors. Not limited to employment context. Concluding that it does not, the court pointed out that unlike Title I, Section 504 of the Rehab Act is not limited to the employment context. Rather, it prohibits discrimination “under any program or activity receiving Federal financial assistance,” and “program or activity” is defined to include “all of the operations of . . . an entire corporation, partnership, or other private organization, or an entire sole proprietorship,” not just those related to employment. Further, the court found the Ninth and Tenth Circuits’ conclusion that the Rehab Act does not completely incorporate the terms of the ADA to be consistent with its opinion in Soledad v. United States Department of Treasury. In Soledad, the court held that Section 504(a)’s causation standard requiring that discrimination be “solely by reason of her or his disability,”’ was more specific than Section 504(d)’s more general language incorporating standards from Title I and thus that Section 504(d) does not incorporate Title I standards that would conflict with the Rehab’s plain language. Here, reasoned the court, Section 504(a) contains explicit language specifically authorizing discrimination suits against “any program or activity receiving Federal financial assistance.” Importing Title I’s requirement that the plaintiff and the defendant have an employee-employer relationship would therefore conflict with the plain language of the Rehab Act, which broadly authorizes discrimination suits against a wide variety of entities, including nonemployers. Thus, Section 504(d) does not incorporate this limitation. What not who. Nor does the language of Section 504(d) incorporate Title I in its entirety. Instead, it specifies that the ADA’s standards are to be used to determine whether the Rehab Act has been violated. The court thus agreed with the Ninth and Tenth Circuits that “the Rehabilitation Act adopts ‘only the substantive standards for determining what conduct violates the Rehabilitation Act, not the definition of who is covered’ under the Rehabilitation Act.” Eighth Circuit. While the defendant relied on the Eighth Circuit’s opinion in Wojewski v. Rapid City Regional Hospital, Inc., holding that the Rehab Act does indeed incorporate Title I’s bar on employment discrimination suits by independent contractors, the court rejected its conclusion that the ADA and the Rehabilitation Act are “similar in substance,” such that “cases interpreting either are applicable and interchangeable.” Instead, reasoned the court, “Title I and Section 504 do not cover the same entities, so the two statutes are not perfectly interchangeable.” As to the defendant’s reliance on its earlier opinion in Lollar v. Baker, holding that “a plaintiff cannot bring a Section 504 employment discrimination claim against a defendant that is not the plaintiff’s employer,” the court pointed out that Lollar held that a plaintiff may not sue her supervisor individually for employment discrimination under Section 504 of the Rehabilitation Act, not because the supervisor is not the plaintiff’s employer, but rather because the individual supervisor does not herself receive federal financial assistance. Finally, as to its 2004 unpublished per curiam opinion in Luna v. Roche, which held that a former Air Force employee “lacked standing to pursue his discrimination claims involving his terminated benefits” because he “was neither an employee of the Air Force, nor an applicant for employment with the Air Force, when his disability retirement benefits were terminated,” the court declined to follow it here for the reasons already articulated. Finding that the district court should have an opportunity to consider the merits in this case in the first instance, the court vacated its judgment and remanded for further proceedings.

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