Wednesday, July 20, 2016

Is a joint employer liable for the discriminatory conduct of another joint employer?

The term "joint employers" refers to two or more employers that each exercise sufficient control over a worker to be considered his or her employer. This commonly arises when a staffing firm hires a worker and then assigns him to a client that supervises him on a day-to-day basis, but the staffing firm maintains an ongoing relationship with the worker, pays him, and retains the right to discharge him.

In Nicholson v. Securitas Services USA, Inc., No. 15-10582 (5th Cir. July 18, 2016), the court held that a staffing firm that jointly employs a worker can be liable for removing the worker pursuant to a client's discriminatory request only if the staffing firm knew or should have known that the request was discriminatory and the staffing firm either participates in some way in the discriminatory conduct or fails to take corrective action. Based on the evidence presented, a reasonable factfinder could conclude that the staffing firm should have known that a client's request to reassign an 83-year-old receptionist was motivated by age discrimination, because, contrary to its usual practices, the staffing firm did not investigate the reasons for the client's removal request.

Similarly, in Whitaker v. Milwaukee County, 772 F.3d 802 (7th Cir. 2014), which involved a claim under the Americans with Disabilities Act, the Seventh Circuit agreed with sister circuits that "establishing a 'joint employer' relationship does not create liability in the co-employer for actions taken by the other employer." Like Nicholson, Whitaker adopts the joint employer liability standard espoused by the EEOC in its 1997 guidance on contingent workers, which provides that a staffing firm that is a joint employer is liable if it "participates in the client's discrimination" or the firm "knew or should have known about the client's discrimination and failed to undertake prompt corrective measures within its control."

As illustrated, a joint employer's discriminatory conduct is not imputed to other joint employers. Rather, a  joint employer is only liable for its own conduct, and it is not vicariously liable for the conduct of another joint employer. Consequently, a joint employer is no more liable for the conduct of another joint employer than it is liable for the conduct of anyone else. For instance, an employer would be liable for firing an employee based on a discriminatory complaint by a customer if the employer knew or should have known that the complaint was discriminatory.

Because the Equal Pay Act is a subsection of the Fair Labor Standards Act, which has its own definition of "employee," it is not clear that these same principles also apply to the EPA. However, they do apply to all of the other federal EEO laws -- Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Genetic Information Nondiscrimination Act.

On the other hand, all bets are off outside the EEO context, such as under the National Labor Relations Act, so I don't mean to suggest that a joint employer will never be subject to potentially more expansive liability than a non-joint employer.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.