New Jersey Employment Lawyer Blog

An article in the New York Times reported that State and Federal agencies are going to be cracking down on an employer's use of independent contractors. For years, employers have utilized independent contractors in place of employing individuals as regular employees. The reason an employer uses an independent contractor is to avoid paying employer contributions for social security, medicare and unemployment insurance. New Jersey employment lawyers, and employment lawyers in other states, will certainly be busy dealing with the audits conducted by the various agencies charged with the authority to crack down on employers that are illegally designating an employee as an independent contractor.

Employment lawyers in New Jersey will need to take a look at this case. The U.S. Circuit Court of Appeals for the Third Circuit recently ruled in a case of first impression that the protection of Section 1981 of the Civil Rights Act extends beyond employees to independent contractors. In Brown v. J. Kaz Inc. d/b/a Craftmatic of Pittsburgh, the plaintiff Kimberly Brown brought a discrimination lawsuit against Craftmatic under Section 1981, Title VII of the Civil Rights Act of 1964 and the Pennsylvania Human Relations Act. She alleged disparate treatment, hostile work environment and retaliation. The Court of Appeals agreed with the district court that Brown was precluded from bringing actions under Title VII and Pennsylvania Human Relations Act. However, the court reversed the ruling on Brown's Section 1981 claims, which alleged that Craftmatic's termination of her contract was racially motivated. The Third Circuit panel in its decision agreed with three other federal appeals courts: the First, Seventh and Eleventh circuits.
The Third Circuit's decision is binding on employment discrimination cases filed in the State of New Jersey. Employment lawyers representing employers and employees in the State of New Jersey will have to pay close attention to the case since employers are now at risk for claims brought by independent contractors under federal employment laws.