Are Independent Contractors Protected Against Workplace Bias And Retaliation?

Many laws protect U.S. employees against discrimination, retaliation, and other workplace wrongs. But a lot of these statutes, including Title VII of the 1964 Civil Rights Act, for example, totally exclude up to 15 percent of the workforce: Independent contractors, who don’t qualify as “employees” under the law.

Are you an independent contractor? And if you are, what laws protect you against unfair treatment at work? The short answer is that you still have rights via a patchwork of federal laws, contract law, tort law, and — depending on where you live and work — some potentially powerful state laws.

This article provides an overview of the legal protections that are available to independent contractors who face unjust actions at work. As always, your individual situation is best assessed by an employment attorney.

Am I an Independent Contractor?

First things first: Are you truly an independent contractor? It’s not always easy to tell.

If your pay is reportable to the U.S. Internal Revenue Service via a 1099 form, that’s a sign that the company or person who paid you believes you’re an independent contractor. By contrast, employees generally get W2 tax forms. But your payer/employer may be wrong — and even if you’re an independent contractor under tax law, that doesn’t necessarily mean you’re an independent contractor for other legal purposes.

The definition of “independent contractor” vs. “employee” varies from law to law, state to state, and even among federal agencies. There are a few common principles, however, which can be weighed differently depending on context:

1. The degree of control an employer has over how work is completed. In general, if you control most of the decisions, you are more likely to be an independent contractor.
2. The method of payment. If you are paid a fixed amount for a service, rather than getting an hourly wage or salary throughout the year, you are more likely to be an independent contractor.
3. The degree of independence or separation you maintain from the employer: If you wear your own clothes, use your own tools, and keep your own hours, for example, you are more likely to be an independent contractor.
4. The length and depth of your “employment” relationship — the less you rely on a single job for your income, the more likely you are an independent contractor.
5. And finally, whether you get any benefits like 401(k) plans, paid vacation, or health insurance. If you don’t get any of these, you may appropriately be an independent contractor.

None of this is dispositive, however, and there are other factors that may change the analysis. In the end, only a court can definitively say whether any individual person is an employee or an independent contractor for the purpose of a specific law.

Still, for argument’s sake, let’s say that you’re probably an independent contractor — otherwise, why would you be reading this? What rights do you have?

Let’s look at them, category by category.

Federal Laws That Protect Independent Contractors

Most of the well-known federal workplace statutes — including Title VII, the Family and Medical Leave Act, the Fair Labor Standards Act, the American with Disabilities Act, and the Age Discrimination in Employment Act — either don’t apply to independent contractors or offer meager protections to them. However, there are some exceptions and some creative approaches.

Section 1981 of the 1866 Civil Rights Act: This isn’t a workplace law, as such, but it works as one. It provides that “all persons … shall have the same right to make and enforce contracts … as is enjoyed by white citizens.” Section 1981 allows independent contractors to sue an employer for treating them differently because of their race or national origin. It isn’t as wide-ranging as Title VII; it doesn’t address sex or religious discrimination, for instance. Still, it offers some basic protections.

Title III of the Americans with Disabilities Act: The ADA’s main employment provision excludes independent contractors. But Title III of the ADA states that “no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, advantages, or accommodations of any place of public accommodation.” At a glance, this protects mainly customers of businesses that serve the public. But some independent contractors, such as contracting physicians at medical facilities, have used Title III to file suit against their place of employment. As an example, the U.S. Court of Appeals for the Third Circuit has held that a doctor “who is not an employee for purposes of Title I” of the ADA still could win under Title III for a hospital’s suspension of his privileges after he revealed that he’d been diagnosed with attention deficit disorder.

Section 504 of the Rehabilitation Act: The Rehab Act is a law that’s mostly parallel to the ADA but that applies to the federal government. Section 504 prohibits discrimination on the basis of disability in access to any program that receives federal funding. Some prominent courts have held that this allows independent contractors to sue federal contractors for discrimination. As an example, the U.S. Court of Appeals for the Fifth Circuit ruled that a company that provided medical services to the U.S. Air Force could be held liable for refusing to provide a reasonable accommodation to a contract physician.

The Sarbanes-Oxley Act: Known as SOX, this law protects workers, including independent contractors, from retaliation for blowing the whistle on public companies that they believe have violated securities laws. The U.S. Supreme Court famously held that SOX would protect even a babysitter paid by the executive of a company covered by the law, if the babysitter were to report fraud. Still, SOX isn’t an all-purpose law against retaliation: It applies only to specific instances of whistleblowing about specific wrongdoing. But it’s a rarity among federal laws in its equal protection of employees and contractors.

The False Claims Act: The FCA incentivizes people to report fraud against the U.S. government — and it protects whistleblowers, including independent contractors, who suffer a negative employment action for exercising their rights under the FCA, which can include making purely internal reports about relevant wrongdoing. Like SOX, the FCA applies only to specific employers. If you perform work for a company that accepts federal funds, however, it could provide you with a useful legal tool. Indeed, the FCA’s anti-retaliation provision may suddenly be more powerful now that the U.S. government has loudly declared that FCA liability can attach to “disparate treatment based on race or ethnicity in the recruitment, employment (e.g., hiring, promotions), contracting (e.g., vendor agreements), program participation, or allocation or deployment of an entity’s resources.” Retaliation for reporting such discrimination may be found illegal under the statute.

State Laws That Protect Independent Contractors

Independent contractors may have greater protections under state law than under federal law. If you face discrimination or retaliation, therefore, a state court could be where you may find relief. Along with Washington, D.C., at least four states — Maryland, Minnesota, New York, and Rhode Island — broadly protect independent contractors against workplace bias, while at least five more states — California, Illinois, New Jersey, Pennsylvania, and Washington — offer good protection within certain contexts. In other places the situation may be less favorable, less clear, or both. State law is constantly evolving, however, and it’s mostly moving in favor of independent contractors. Meanwhile, some cities and counties are much friendlier than their parent state. New York City affords independent contractors broader protections than does New York State as a whole, for instance. For an up-to-date assessment of your specific circumstances, consult an employment attorney.

As an illustration of how rights can vary between states — and over time — here’s a snapshot of the situation in three jurisdictions around our firm’s home in Washinton, D.C.

Maryland: Since 2019, Maryland’s main anti-discrimination workplace law, the Fair Employment Practices Act, has included “independent contractor” within its definition of “employee.” Maryland independent contractors get full protection against discrimination and retaliation across many characteristics, from race to disability to age to gender identity, effectively filling the gaps left by multiple federal laws.

District of Columbia: The D.C. Human Rights Act always has prohibited a wide range of discriminatory acts by employers, but D.C. courts traditionally read this to require an employer/employee relationship between the parties. Happily, this situation changed in 2022, when the law was amended to cover independent contractors explicitly, taking its interpretation out of judges’ hands.

Virginia: The Virginia Human Rights Act protects “employees” from workplace bias. In their application of the VHRA, state courts have interpreted this to exclude independent contractors. Virginia’s workplace laws have been changing rapidly over recent years, however, so there’s hope for improvement.

Other Protections for Independent Contractors

The law also offers solutions that fall outside the realm of modern anti-discrimination employment statutes. Some practices that are prohibited by Title VII and its brethren have long been illegal under older theories of law, too — especially if the wrongdoing is an egregious form of harassment. Here are some examples.

Tort Law: A tort is a civil wrong — other than a breach of contract — that causes harm, injury, or loss to another person, resulting in legal liability for the person who commits the act (the tortfeasor). It allows injured parties to seek compensation, typically monetary damages, through civil lawsuits. Independent contractors can claim that they’ve suffered a legally recognized harm, or tort, due to the actions of an employer. In the workplace context and depending on the state where you live or work, such tort claims may include: harassment; negligent hiring, retention, or supervision of a discriminator or harasser; and infliction of emotional distress, either intentional or negligent. Although some version of “wrongful discharge” is a tort in most states, it’s generally available only to regular employees.

Contract Law: If you have a written contract or a job description that covers your work for an employer, this document could protect you against some workplace bias. Many contracts or job descriptions contain language that prohibits specific types of discrimination, promises accommodation of disabilities, or makes other potentially enforceable promises about “equal employment opportunity.” If you experience prohibited behavior, you might be able to sue (or enter arbitration) to enforce these contractual rights, just as you’d enforce any contract. In addition, you might be able to claim that an employer violated an “implied covenant of good faith and fair dealing.”

Criminal Law: Finally, some types of workplace wrongdoing may be pursued under criminal laws — most notably, hate crimes and intense sexual harassment. You will need the help of a sympathetic prosecutor.

Conclusion

Independent contractors have fewer legal protections against workplace bias than regular employees do, especially at the federal level. This is an unpleasant truth. If you’re an independent contractor, however, you’re not completely unprotected. State laws can be quite powerful, and some federal laws still may apply. There are other channels, too. To start the process, consult an employment attorney.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.