Employers That Receive Federal Funding May Be Subject to Disability Discrimination Claims from Independent Contractors

California employers that receive federal funding may now be subject to disability discrimination claims from independent contractors under the Rehabilitation Act of 1973. In a surprising decision, the Ninth Circuit recently held that section 504 of the Rehabilitation Act should be broadly construed to protect all individuals denied participation from federally-funded programs, including independent contractors.

The Rehabilitation Act of 1973
The Rehabilitation Act was the first major federal statute designed to protect disabled individuals in this country. Section 504 of the Act creates a private right of action for individuals subjected to discrimination by any federally-funded program or activity. Specifically, the Act provides that an individual who is otherwise qualified cannot be excluded from participation in, denied the benefits of, or subjected to discrimination under any federally-funded program or activity solely because of his or her disability. A federally-funded program for purposes of the Act include businesses that receive any amount of federal funding. Further, section 504(d) provides that the standards used to determine a violation of the Act in an employment discrimination case are the same standards applied under Title I of the Americans with Disabilities Act (“ADA”).

Recently, various courts have been attempting to resolve the issue of whether section 504 covers only employees where the claim arises in the workplace or whether it also covers non-employees, such as independent contractors. In a recent Ninth Circuit case, Fleming v. Yuma Regional Medical Center, the court held that section 504 should be interpreted to cover independent contractors, which would allow them to bring discrimination claims under the Act.

Fleming v. Yuma Regional Medical Center
In Fleming v. Yuma Regional Medical Center, Dr. Lester Fleming applied for a position with the Yuma Regional Medical Center as an anesthesiologist. Upon learning that Dr. Fleming suffered from sickle cell anemia, Yuma informed him that it would not be able to accommodate his operating room and call schedules. Dr. Fleming declined to accept this condition, which effectively cancelled the contract. He then brought suit against Yuma for employment discrimination in violation of section 504 of the Act.

Yuma asked the Court to dismiss Dr. Fleming’s case, arguing that he was not an employee, but was instead an independent contractor who could not bring a claim a for discrimination under the Rehabilitation Act. The lower court agreed and granted Yuma’s motion, finding that Dr. Fleming was an independent contractor and that independent contractors are not protected by the Rehabilitation Act. Dr. Fleming appealed.

The Ninth Circuit agreed with Dr. Fleming, finding that the Rehabilitation Act (unlike the ADA) is not limited to employees but also applies to independent contractors and the entities that hire them. The Court reasoned that the Act covers any “otherwise qualified individual” denied participation in, benefits of, or subjected to discrimination from any program that receives federal funds. The Act defines “program or activity” broadly to include all operations of covered entities, not only those pertaining to employment. Based on the language of the Act, the Court concluded that it is broad enough to cover employees and independent contractors alike.

What this means for you:
It has long been understood that only employees may bring claims for disability discrimination. This case radically changes that notion. If you hire independent contractors and you receive any federal funding, you must now be aware of your obligation to reasonably accommodate a contractor who is disabled.