Make Sure Your Contractors Aren’t Discriminating Against Workers

By Roy Maurer Jun 24, 2016

Employers that outsource jobs to a third party that relies on foreign workers must make sure the contractor is not engaging in citizenship discrimination, a federal official said.

Jennifer Sultan, special policy counsel in the Department of Justice’s Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices, confirmed that nondiscrimination violations can be found when employers displace U.S. workers with foreign labor, even if that occurs through use of a third-party contractor instead of direct hiring.

Sultan explained her agency’s position to attendees of the Council for Global Immigration’s 2016 Symposium on June 21 in Washington, D.C.

According to Sultan, employers that rely on outsourcing firms and firms engaged in outsourcing are both increasingly at risk when it comes to discrimination claims.

“There are several different things we will consider and look at when trying to determine whether the initial or main employer has committed intentional discrimination,” Sultan said. “We look at both the nature of the termination of the workers being replaced and the circumstances surrounding the employer’s choice for selecting the third-party contractor and whether or not the two entities can be considered joint employers.”

She said her office wants to make clear that “just because you as an employer farm hiring out to a third-party vendor, you can still be liable for intentional discrimination on the basis of citizenship and immigration status.”

Sultan reminded employers that the OSC provided general guidance in the context of hiring and firing that result from outsourcing to foreign workers in a Dec. 22, 2015, technical assistance letter.

The letter explicitly states that except for “very narrow circumstances,” an employer risks violating the antidiscrimination provision of the Immigration and Nationality Act if citizenship and immigration status are factors in an outsourcing decision.

Significantly, no pattern or practice outsourcing complaint has ever ended in a judgment against the employer, principally because of the difficulty of proving intentional discrimination based solely on citizenship status in outsourcing decisions. Presumably, employers are able to successfully defend against intentional discrimination claims by showing that the outsourcing was motivated by legitimate business need.

But one of the biggest takeaways from the letter was that an employer can still be liable for discrimination violations even if it contracts with an outside agency, instead of directly hiring the foreign workers. If an employer is deemed to be a joint employer with the firm it hires to perform the outsourced work, a court could determine that disparate impact exists if the job functions of the displaced workers end up being disproportionately performed by foreign workers at the outsourcing firm.

“Whether a company has committed a discrimination violation by using contract workers will depend on the specific facts of each case,” Sultan said, including the extent to which a company can be considered a joint employer of the contracted workers.

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy


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