January 7, 2018

Independent contractor not an “employee” within the meaning of Title VII


Independent contractor not an “employee” within the meaning of Title VII
Isom v Valey Forge Insurance Co., USCA, 5th Circuit, No. 17-60014
Source: Selected reports posted by WK Workday

The full summary of this decision by Lorene D. Park, J.D. is posted on the Internet at:
http://www.employmentlawdaily.com/index.php/news/title-vii-plaintiff-not-employee-under-liability-policy-so-4m-settlement-not-covered/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CCH-Workday+%28WK+WorkDay%29

A “contract employee” physician who worked as an anesthesiologist claimed a surgeon and the medical practice of which he was CEO refused to work with the physician because he is black. The EEOC’s investigation of his charge ended after the agency concluded he was an independent contractor. He filed a Title VII race discrimination suit and the defendants filed claims with their insurers under policies providing employment practices liability (EPL) coverage and Businessowners liability coverage. The insurers refused to defend or indemnify, arguing the claims were not covered by the policies. The parties settled the discrimination suit for $4 million, but instead of paying damages, the surgeon and his practice assigned the physician their right to sue the liability insurers for indemnity.

The physician filed suit alleging a breach of contract claim against the insurers for breaching their duty to defend and indemnify under the policies and a claim for breach of implied covenant of good faith and fair dealing. The insurers moved for summary judgment, arguing that the claims in the underlying suit were not covered by any policy which they issued and, because there was no breach, there could not have been a breach of implied covenant of good faith and fair dealing. The district court granted the insurer's motion for summary judgment and the Circuit Court of Appeals affirmed.

The 5th Circuit's decision is posted on the Internet at


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