Companies are increasingly outsourcing functions formerly filled by employees.  Last week, the Second Circuit Court of Appeals reminded employers of their legal responsibility for  third-party contractors’ actions toward their employees.  In Halpert v. Manhattan Apartments, Inc., the employer retained a consultant who interviewed and hired rental agents.  The plaintiff alleged that when he applied for the job, the consultant told him that he was too old.  He sued alleging age discrimination.

The employer contended that it did not authorize or approve of the consultant’s actions.  The Second Circuit concluded that by retaining the consultant, the company was responsible for his behavior toward applicants.  Prohibitions against discrimination apply even where the employer uses intermediaries to fill certain roles.

Employers outsourcing human resource or other functions that have an impact on the terms and conditions of employment for employees or applicants should make certain that their agreements with such contractors provide that the contractor will comply with all applicable laws.  The agreements should also provide indemnification of the employer against claims brought by employees or applicants based on the contractor’s actions in contravention of these laws.