A Temporary Agency Employee Can Pursue A Title VII Claim Against His Temporary Employer

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By: Karen L. Piper

 

The Third Circuit Court of Appeals ruled that an employee of a temporary staffing agency could sue the employer to which he was temporarily assigned for race discrimination under Title VII because of the level of control the temporary employer exercised over him. Faush v. Tuesday Morning, Inc., No. 14-1452 (3rd Cir. November 18, 2015).

Retailer Tuesday Morning was in the process of opening a new store.  It called upon temporary staffing firm, Labor Ready, with which it had a standing agreement, to provide some temporary workers to help get the new store ready to open.  Labor Ready assigned Matthew Faush to work at Tuesday Morning.  Labor Ready hired Faush, completed his I-9 form, established his pay rate, withheld taxes, paid social security on him, maintained workers compensation insurance on him and paid him in accordance with daily time cards it supplied to Faush.  If Faush was going to be absent, he called Labor Ready.  Once Faush arrived at Tuesday Morning’s premises, Tuesday Morning was responsible for “supervising and directing” Faush’s activities.  Tuesday Morning provided on-site supervision, “site specific safety orientation and training,” necessary safety equipment, clothing and devices needed to perform the job.  Tuesday Morning determined Faush’s “skill, competency, license, experience” and ability to perform the job.  It trained Faush, assigned him tasks on a daily basis and supervised his work.  It approved Faush’s daily time cards.  The tasks Faush performed were “no different from the work” assigned to Tuesday Moring’s own employees.  Tuesday Morning could not terminate Faush’s employment but, under its agreement with Labor Ready, could notify Labor Ready that it no longer wanted Faush’s service.  When it did, Tuesday Morning was assigned a replacement worker.

Faush sued Tuesday Morning for race discrimination and racial harassment he allegedly experienced at Tuesday Morning by Tuesday Morning employees.  The district court dismissed Faush’s claims against Tuesday Morning because Tuesday Morning was not Faush’s employer; Labor Ready was.  The Third Circuit Court of Appeals reversed.  It applied the so-called Darden[1] factors and ruled that Faush’s evidence was “more than sufficient” to preclude summary judgment in favor of Tuesday Morning.

The application of the Darden factors is a fact–specific, case–by–case assessment, not a simple, bright–line test.  It requires a court to assess and weigh each factor with respect to the worker’s relationship with the temporary employer.  No one factor controls but the extent to which a temporary employer controls the manner and means of the worker’s performance typically is the most important.  The Darden factors include:

  • The employer has the right to control when, where, and how the worker performs the job.
  • The work does not require a high level of skill or expertise.
  • The employer furnishes the tools, materials, and equipment.
  • The work is performed on the employer’s premises.
  • There is a continuing relationship between the worker and the employer.
  • The employer has the right to assign additional projects to the worker.
  • The employer sets the hours of work and the duration of the job.
  • The worker is paid by the hour, week, or month rather than the agreed cost of performing a particular job.
  • The worker does not hire and pay assistants.
  • The work performed by the worker is part of the regular business of the employer.
  • The employer is in business.
  • The worker is not engaged in his/her own distinct occupation or business.
  • The employer provides the worker with benefits such as insurance, leave, or workers’ compensation.
  • The worker is considered an employee of the employer for tax purposes (i.e., the employer withholds federal, state, and Social Security taxes).
  • The employer can discharge the worker.
  • The worker and the employer believe that they are creating an employer-employee relationship.

EEOC Compliance Manual, Section 2, Threshold Issues (last modified on August 6, 2009).

Applying these factors, the Third Circuit ruled that Faush had produced enough evidence of an employment relationship with Tuesday Morning that Faush could pursue his discrimination claims directly against Tuesday Morning.

Employers, who use temporary workers, even under an agreement with a temporary staffing firm, should consult experienced employment counsel, such as the author, to review the Darden factors and evaluate whether it can eliminate or reduce the chances of being sued for discrimination by a temporary worker.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of the law firm of Bodman PLC, located in its Troy MI office.  She can be reached at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. January 2016.

[1] Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992).