Fifth Circuit Grants New Protections to Independent Contractors

Author: David B. Weisenfeld, XpertHR Legal Editor

February 12, 2016

The 5th Circuit Court of Appeals has ruled for the first time that Section 504 of the Rehabilitation Act authorizes employment discrimination lawsuits filed by independent contractors. The appellate court's ruling in Flynn v. Distinctive Home Care, significant in its finding that the Rehabilitation Act offers broader protection than Title I of the Americans with Disabilities Act (ADA). The 5th Circuit covers Texas, Louisiana and Mississippi.

The case involves a pediatrician who worked as an independent contractor providing medical services to patients of Distinctive Home Care at an Air Force base in Texas. After the pediatrician was diagnosed with Autism Spectrum Disorder-Mild, a condition formerly known as "Asperger's Syndrome," Distinctive removed the pediatrician from her duties and later refused to reinstate her, finding it could not agree to her requested accommodations. That led her to file suit under Section 504 of the Rehabilitation Act.

The Rehabilitation Act preceded the ADA and applies to federal contractors. The ADA bans discrimination in regard to job application procedures, the hiring, advancement or discharge of employees and other terms, conditions and privileges of employment. However, courts have overwhelmingly agreed that an individual may only sue a company under Title I of the ADA if that individual is an employee rather than an independent contractor.

But in contrast to the ADA, the 5th Circuit notes that Section 504 of the Rehabilitation Act prohibits discrimination under any program or activity receiving federal financial assistance. The appellate court finds that any program or activity covers all business operations, not only those related to employment. As a result, the pediatrician's lawsuit against Distinctive may go forward.

The nation's appellate courts have been divided over the issue of whether the Rehabilitation Act applies to independent contractors. The 9th and 10th Circuits have reached similar conclusions and determined that the Rehabilitation Act is not limited to the employment context. However, the St. Louis-based 8th Circuit has ruled that the Rehabilitation Act does indeed incorporate the ADA's bar on employment discrimination suits by independent contractors. Thus, Supreme Court review is not out of the question.