GPSolo Magazine - March 2005

Labor and Employment Law

Temporary Workers May Get “Two Bites” At Recovery Under The Employment Discrimination Laws

A company has a non-discrimination policy, an affirmative action plan, and a sexual harassment policy, all contained in a handbook distributed to its employees. Acknowledgement forms memorializing the employees’ receipt of the handbook are maintained in the personnel files. Appropriate postings of Equal Employment Oppor-tunity (EEO) notices appear on company bulletin boards. To support the anti-harassment policy, the company has engaged a firm to provide training and maintains a hotline. A full-time human resources manager is present on-site with an office located right by the building entrance. Through these activities, the company believes it has adequately protected itself from claims of harassment by instituting a comprehensive policy, providing education and access for complaints.

The company hires a temporary worker for a project scheduled to take several weeks. She is directed by the temporary agency to ask for a specific supervisor when she reports for work the first day and is supervised by that company manager during her placement. Each morning, she meets with him to get her assignments. Each evening, she reports to him to explain her progress. If she has any questions, she directs those to the same manager.

The company does not give the temporary worker a copy of its employee handbook. She claims never to have seen the EEO postings on any company bulletin board. She also claims not to know how to complain if she has a problem because no one explained the procedures to her when she came on-site. The employee makes no complaint during her assignment but quits before it is complete. She then complains to the agency that she was harassed at the placement. She files a complaint claiming sexual harassment at the company where she worked for ten weeks, naming the company where she was placed as the defendant.

Although the company has done everything right for its own employees, is the company vulnerable to suit by the temporary worker? Under pertinent case law, the temporary employee indeed has a number of legal theories to support her claim.

Theories of liability. The definition of “employer” under most anti-discrimination laws is not that informative. Given the lack of legislative guidance, courts rely on several analyses to determine the employer (or employers) of temporary workers.

Joint employer theory. The most popular theory under which more than one entity may be responsible to a temporary worker for employment discrimination is the “joint employer” analysis. The basis for this analysis is that one employer, while contracting in good faith with an otherwise independent company, may have retained sufficient control of the terms and conditions of employment of the individuals employed by the other employer so as to be considered their “employer” under the federal anti-discrimination laws.

In the Third Circuit, courts look to the totality of the circumstances focusing on three key factors: (1) authority to hire and fire employees, promulgate work rules and assignments, and set conditions of employment, including compensation, benefits, and hours; (2) day-to-day supervision of employees, including employee discipline; and (3) control of employee records, including payroll, insurance, taxes, and the like. NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1124 (3d Cir. 1982).

In dealing with situations involving a temporary employee, these factors generally are easy to meet. The temporary workers are hired by the agency, which then places them on assignments at various other facilities. The contracting entity often may remove the temporary worker simply by making a telephone call. The second factor generally is performed by the contracting entity. If the contracting entity determines that there is a problem with the performance of a temporary worker, the temporary agency replaces the individual with someone new. Although the third factor generally rests with the temporary agency, the combination and strength of the other factors often lead to a conclusion that the contracting entity is the joint employer.

A recent case where the “joint employer” argument was rejected is Cella v. Villanova University and Aramark Facilities Serv., Inc., 2003 U.S. Dist. LEXIS 2192, at *21-*24 (E.D. Pa. Feb. 12, 2003), affirmed without pub. op., 2004 U.S. App. LEXIS 21740 (3d Cir. Oct. 19, 2004). In Cella, a member of the housekeeping staff and an employee of Villanova University claimed he was subjected to disability discrimination. In addition to suing his employer, Villanova, he sued a subsidiary of Aramark, a company that had a contract with his employer to provide management services for the housekeeping department. The company placed just one employee at Villanova who served as department manager. The plaintiff claimed that this individual subjected him to harassment, even though his direct supervisors all were Villanova employees.

The district court rejected this claim. Of importance were the following factors: (1) the plaintiff was a union member whose termination was controlled by the applicable collective bargaining agreement between the union and Villanova; (2) Aramark had no input into that collective bargaining agreement or the termination decision; and (3) the plaintiff’s direct supervisors on a day-to-day basis were Villanova employees.

Other theories. There are two other theories that could extend liability to the contracting entity. Under the “indirect employer” theory, an employee can raise a claim against an entity if the individual was an “aggrieved person” whose employment was interfered with by that entity, making the entity an “indirect” employer. The discriminatory conduct has to take place at facilities controlled by the party sought to be brought in as an “indirect employer.”

Under the third theory, the “commonality of interest test,” parties that are not named in an administrative charge may still be named as defendants in an employment discrimination lawsuit. A court in the Third Circuit will allow a party to be named in a suit that was not named in an EEOC action if: (1) the unnamed party has notice of the complaint; and (2) there is a commonality of interest between the unnamed and named party.

Ramifications and recommendations. A contracting party generally will have liability to temporary employees imposed under the employment discrimination laws through one of these theories. However, employers do not generally consider employees of temporary agencies on the same level as company employees. Certain policies should have a broader reach to include temporary workers.

For example, temporary employees should be made aware of the contracting company’s EEO policy and policy against harassment. Indeed, if the procedure for reporting harassment is not made known to a temporary employee, a company may have no affirmative defense to a harassment suit. Failing to inform temporary employees of certain policies may heighten a contracting entity’s potential liability in these other areas—liability that may be very significant. A balance must be maintained with temporary workers. The way to maintain the balance is not difficult.

• Have an orientation for temporary workers.

• Provide copies of policies that apply to them.

• Identify the appropriate personnel for two-way communications.

• Post notices in high-traffic areas.

• Consider preparing an abbreviated manual for temporary workers.

• Have the temporary worker sign off on receipt of the policies or manual.

• Include temporary workers in any training programs on employment-related topics.

• Where possible, have a representative of the temporary agency on-site and communicate any comments about performance through that representative.

• Treat the temporary workers with the same respect as regular company employees.

Hope A. Comisky is a partner in the Labor and Employment Group at Pepper Hamilton, LLP; she can be reached at comiskyh@pepperlaw.com. Natalie Abbott is an associate in the same group; she can be reached at abbottn@pepperlaw.com.

For More Information About The Section Of International Law

- This article is an abridged and edited version of one that originally appeared on page 6 of International Law News, Spring 2004 (33:2).

- For more information or to obtain a copy of the periodical in which the full article appears, please call the ABA Service Center at 800/285-2221 or go to www.ababooks.org.

- Website: www.abanet.org/intlaw/.

- Periodicals: The International Lawyer, quarterly journal; International Law News , quarterly.

- Books and Other Recent Publications: Careers in International Law, 2d ed.; Negotiating and Structuring International Commercial Transactions, 2d ed.; ABA Guide to International Business Negotiations, 2d ed.; Joint Ventures in the International Arena; ABA Guide to Foreign Law Firms, 3d ed.; International Lawyer’s Deskbook, 2d ed.; International Trademarks and Copyrights: Enforcement and Management, International Practitioner’s Deskbook Series.

 

 

 

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