"Coverage" refers to the kind of practice that is prohibited by a law. The EEO laws only prohibit discrimination against "employees," so the requirement of an employment relationship is relevant to whether an alleged unlawful practice is covered by EEO law. In this case, the defendant allegedly discriminated against Clay by requiring that she be replaced because of her race. This action was covered by Title VII if Clay was the defendant's employee. Generally, a staffing firm worker is jointly employed by the staffing firm and the client to which he or she is assigned, but the existence of an employer-employee relationship must be evaluated on a case-by-case basis.
"Standing," on the the other hand, refers to whether an individual has the right to bring a lawsuit to seek a remedy for an allegedly discriminatory act. In the vast majority of cases, a plaintiff has alleged that he or she was personally subjected to discrimination, so standing is not in dispute. In rare cases, such as here, a plaintiff has alleged that he or she has standing to seek a remedy where a third party has been subjected to discrimination. Under Title VII, any "person aggrieved" by an alleged statutory violation has the right to bring a lawsuit.
In order for White Glove to pursue a Title VII claim, it must establish both coverage and standing. Coverage, as noted, requires that Clay have been the defendant's employee. Standing is more complicated, but it is not precluded merely because White Glove was not the defendant's employee. In Thompson v. North American Stainless, the Supreme Court rejected the contention that standing is limited to plaintiffs who were personally subjected to discrimination. Instead, the term "person aggrieved" allows a lawsuit by "any plaintiff with an interest 'arguably [sought] to be protected by the statutes.'"
Of course, even if, as I contend, Judge Kinkeade, has confused coverage and standing, it does not necessarily follow that White Glove has standing to bring a lawsuit alleging that it was aggrieved by discrimination against Clay. A plaintiff might find it easier to establish third-party standing if he is an employee. Indeed, in Thompson, the Court noted that Eric Thompson's former status as an employee weighed in favor of third-party standing where he was allegedly fired to retaliate against his girlfriend because she had alleged sex discrimination. But after Thompson, other courts have recognized third-party standing even in the absence of an employment relationship between the plaintiff and the defendant, such as where a contractor was harmed by retaliation against an employee. During oral arguments in Thompson, some Justices raised absurd examples of plaintiffs claiming to be aggrieved, such as a barber alleging that he was harmed by the unlawful termination of a client who could no longer afford to get as many haircuts. The injury alleged by White Glove -- loss of revenue from the defendant's alleged refusal to accept assignments by non-Hispanic workers -- by contrast, seems to be much more closely tied to the central purpose of Title VII.
And so while not a slam dunk, White Glove's Title VII suit shouldn't be rejected solely because of the absence of an employment relationship with the defendant.
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.