January 05, 2016 Practice Points

First Circuit Affirms HHS Is Not "Employer" of Terminated Subcontractor

The court applied the joint-employer doctrine in its opinion.

By John Stock

The First Circuit Court of Appeals recently affirmed a district court’s summary judgment that the U.S. Department of Health and Human Services (HHS) was not the “employer” of a HHS subcontractor’s terminated employee under the joint-employer doctrine. Casey v. HHS,  No. 15-1115 (1st Cir. Dec. 7, 2015).

The plaintiff-employee in Casey was hired by STG International, Inc. HHS hired STG, ultimately as a subcontractor to another general contractor, to operate a Civilian Health Promotion Services (CHPS) Program at Hanscom Air Force Base in Bedford, Massachusetts. STG hired Casey as a nurse coordinator to teach health and wellness classes to government personnel at Hanscom.

STG paid plaintiff-Casey’s salary and benefits. STG provided W-2 forms to Casey. Casey’s immediate supervisor was Jesse Burk, an employee of the general contractor. Burk reported to Susan Steinman, an employee of defendant HHS.

In November 2011, Casey had an altercation at work with an employee of the general contractor. Casey reported to military police that the other employee had assaulted her. Shortly thereafter, a government employee in charge of overseeing the CHPS Program at Hanscom, Judith Holl, sent an email to Burk (Casey’s immediate supervisor) urging that Casey be terminated. Burk contacted Steinman (Burk’s immediate supervisor). Holl, Burk and Steinman all agreed that Casey should be terminated. Thereafter, Burk notified Casey, by telephone, that her employment was terminated. Military personnel escorted Casey off the Hanscom facility.

Casey sued STG, HHS, and others for gender discrimination in violation of Title VII. Casey asserted that she had been unlawfully terminated in retaliation for reporting to Hanscom authorities that she had been assaulted by a fellow employee. HHS moved for summary judgment on the basis that HHS was not Casey’s employer. The district court entered judgment for HHS on that basis.

The First Circuit affirmed HHS’s summary judgment, applying traditional joint-employment-doctrine factors to conclude that HHS was not Casey’s employer:

Control: HHS did not exert direct, daily control over the manner in which Cased performed her job.

Compensation: STG set Casey’s salary, provided her benefits, and sent W-2’s to Casey. DHHS had no involvement whatsoever regarding these compensation matters.

Right to Discharge: Only STG could actually terminate Casey’s employment. Although DHHS had some influence on STG, DHHS had no authority to accomplish the firing.

Belief of the Parties: Both Casey and DHHS understood that Casey was an employee of STG. All of Casey’s employment paperwork explicitly stated that Casey was an STG employee. Moreover, STG’s subcontract expressly provided that “[a]ll persons furnished by [STG] . . . shall be considered solely [STG’s] employees. . . .”

— John Stock, Benesch Friedlander Coplan & Aronoff LLP, Columbus, OH

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