S.K. Services v. FedEx Ground Package System, Inc.
2009 U.S. Dist. LEXIS 92092, 92 Empl. Prac. Dec. (CCH) 43,762, 663 F.Supp.2d 619 (2009)
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Rule of Law:
For an independent contractor to sustain a retaliation claim under 42 U.S.C. § 1981 against a third party for complaining about discrimination against the contractor's employee, the contractor must show the complaints were made to protect against interference with the contractual relationship between the contractor and their employee.
Facts:
- Beginning in 2002, S.K. Services, owned by Steve Hogue, had a contract to provide janitorial services for a FedEx Ground facility.
- S.K. Services employed Tommy Blake, an African-American man, to work at the FedEx facility under this contract.
- During 2007, a FedEx maintenance manager, John Certo, allegedly subjected Blake to race-based harassment, including using racial epithets and calling him a 'monkey'.
- In December 2007, FedEx accused Blake of stealing payroll checks.
- In January 2008, after conducting an investigation, FedEx barred Blake from its premises, which Hogue alleged was motivated by race.
- Hogue complained about Blake's treatment and exclusion to Certo and other FedEx managers.
- Hogue alleged that as a result of his complaints, FedEx chose not to renew its janitorial contract with S.K. Services after it expired in June 2008.
- After Blake was barred from the FedEx facility, Hogue had to terminate Blake's employment because he had no other contracts or work available for him.
Procedural Posture:
- S.K. Services and Steve Hogue (Plaintiffs) filed suit against FedEx Ground Package System, Inc. (Defendant) in the Chancery Court of Hamilton County, Tennessee, a state trial court.
- Defendant removed the case to the United States District Court for the Eastern District of Tennessee based on federal question jurisdiction.
- Plaintiffs filed an Amended Complaint with claims including breach of contract and retaliation in violation of 42 U.S.C. § 1981.
- The Court dismissed several of the claims on Defendant's pre-trial motions, leaving only the breach of contract and § 1981 retaliation claims for trial.
- The case proceeded to a jury trial.
- During the trial, Defendant objected to Plaintiffs' introduction of evidence about Hogue's complaints, arguing the evidence was irrelevant to the 'protected activity' element of the § 1981 claim.
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Issue:
Does 42 U.S.C. § 1981 permit an independent contractor to bring a retaliation claim against a company for complaining about the company's racial discrimination against the contractor's employee, where the alleged discrimination did not directly interfere with the contractual relationship between the contractor and their employee?
Opinions:
Majority - Curtis L. Collier
No. A retaliation claim under § 1981 is not cognizable where the complainant cannot show that the protected activity—the complaints about racial discrimination—concerned the impairment of a contractual relationship under which the plaintiff has rights. The Supreme Court's precedent in Domino’s Pizza, Inc. v. McDonald establishes that a § 1981 claim must identify an impaired contractual relationship under which the plaintiff has rights; one cannot sue to vindicate the rights of another. In this case, Hogue (the independent contractor) complained on behalf of Blake (his employee). The relevant contractual relationship that needed protection was the one between Hogue and Blake. However, FedEx's alleged racist conduct towards Blake did not directly interfere with or impair the employment contract between S.K. Services and Blake. The court found that the termination of Blake's employment resulted from Hogue's lack of other business opportunities after the FedEx contract was lost, not from a direct, race-based interference by FedEx in the Hogue-Blake contract. Therefore, Hogue's complaints were not a 'protected activity' under § 1981 because they did not concern an impaired contractual right of his own, rendering the approach 'too attenuated' for the statute to cover.
Analysis:
This decision clarifies and narrows the scope of third-party retaliation claims under 42 U.S.C. § 1981, particularly in the context of independent contractors. It establishes a significant hurdle for plaintiffs by requiring a direct causal link between the defendant's discriminatory act against an employee and the impairment of the contractual relationship between the plaintiff-contractor and that employee. By focusing on which contract was impaired, the ruling prevents plaintiffs from bringing retaliation claims based on derivative harm, thereby limiting the statute's reach in multi-party commercial relationships. Future cases involving similar facts will likely require plaintiffs to demonstrate that the defendant's actions were not just discriminatory, but specifically targeted or interfered with the complainant's own contractual rights with the victim of the discrimination.
