The Test of Employee Status: Economic Relations and Title VII

Abstract

Title VII of the 1964 Civil Rights Act 1 prohibits employment discrimination in the broadest possible terms. As the Supreme Court stated in Griggs v. Duke Power Co., "[t]he objective of Congress in the enactment of Title VII is plain .... It was to achieve equality of employment opportunities... [by] the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification." Thus, courts have liberally interpreted the substantive and procedural provisions of Title VII to ensure the achievement of these goals. Courts have prohibited both the disparate treatment of individuals and the use of policies that have a disparate impact on protected classes. Even those employment policies that are fair in form but discriminatory in operation have been declared unlawful. Furthermore, courts have broadly construed the procedural provisions of the statute to ensure maximum access to the statute's remedies for employment discrimination.

Some courts have arrested the broad reach of the statute, however, by applying a narrow test of employee status and thereby removing certain individuals from the Act's protection. In the absence of a definition of employee status in the statute, these courts have utilized the traditional common law test of employee status, which emphasizes the employer's right to control the alleged employee. This approach has limited the scope of the statute by declaring certain individuals to be independent contractors and thus not covered by the statute. The use of this test plainly misperceives the policy of Title VII and is totally unsupported by the legislative history. Furthermore, examined in light of its origin and rationale, the common law test fundamentally conflicts with the prophylactic goals of Title VII.

This Article examines both the injustices resulting from the use of the common law test in Title VII cases and the lack of support for adopting that test to determine employee status under the statute. The problem is not simply an academic one. Pervasive employment discrimination continues to prevail in American society two decades after the passage of Title VII. As the U.S. Civil Rights Commission pointed out in its final report in November 1983, before the Commission was reconstituted, a significant gap persists between the employment opportunities available to minorities and women and those available to white males. That disparity should not be further aggravated by limiting the scope of the statute through an arbitrary definition of the individuals to which it applies. This Article proposes that the analysis of employee status under Title VII should be based on an examination of the economic realities of the employer-employee relationship which would emphasize the employer's ability to affect an individual's employment opportunities. This test would properly focus on the dynamics of the employment relationship and would ensure that the comprehensive goals of the statute are not compromised by an unduly narrow test of employee status.

Keywords: Employee Rights, Employment Discrimination