Temporary Employees

Most employers are aware that they can be held liable for violating Title VII if an employee claims that he/she was discriminated against in the workplace. What happens if a temporary employee (someone assigned to a company by a staffing agency) alleges that he/she was discriminated against while assigned to the employer’s place of business?  Is the assigned company liable? A recent Third Circuit case analyzed this issue in Faush v. Tuesday Morning, Inc., No. 14-1452, 2015 U.S. App. LEXIS 19977 (3d Cir. Nov. 18, 2015) and found that in certain circumstances, “temporary employees” can be considered “employees” for purposes of Title VII and the Pennsylvania Human Relations Act, leading to liability for the assigned company.

The Facts:

Mathew Faush is an African American employee of Labor Ready, a staffing company that provides temporary employees to businesses. Labor Ready entered into an agreement with Tuesday Morning, Inc. (“Tuesday Morning”) to supply temporary employees and Faush was assigned to one of Tuesday Morning’s stores for a period of 10 days (8 hours a day). Faush never applied for employment with Tuesday Morning and Faush did not have a contract of employment with Tuesday Morning.

Each day that Faush was assigned to Tuesday Morning, a supervisor at Tuesday Morning would sign off on the number of hours that Faush had worked. Labor Ready then billed Tuesday Morning an hourly rate for Faush’s work. The agreement between Labor Ready and Tuesday Morning stated that once a temporary employee was at the store, Tuesday Morning “was responsible for supervising and directing his or her activities.” Tuesday morning was expected to determine the temporary employee’s skills and only assign the employee duties consistent with his/her skills and abilities. Tuesday Morning’s supervisor had supervisory control over the temporary employees, trained them and assigned them to each task. The agreement between Labor Ready and Tuesday Morning also required both companies to comply with all employment laws and both companies pledged to provide a workplace free of discrimination and unfair labor practices.

During the course of his assignment with Tuesday Morning, Faush alleged that his supervisor at Tuesday Morning accused him and another African American employee of stealing.  Moreover, Faush alleged that two days later, the store owner’s mother told Faush and two other African American employees to work in the back of the store with the garbage.  Faush asserted that when he and the African American employees went to speak with the supervisor, a white employee blocked their way and used a racial slur towards them. Faush also alleged that Tuesday Morning’s supervisor ignored his complaints of discrimination.

The Lawsuit:

Faush filed suit against Tuesday Morning alleging violations of Title VII and the Pennsylvania Human Relations Act. The Court initially dismissed Faush’s case, holding that Faush was not Tuesday Morning’s employee.  Faush appealed and the Third Circuit reversed the lower court, finding that Faush was Tuesday Morning’s employee for purposes of Title VII and the Pennsylvania Human Relations Act.

When analyzing whether or not Faush was Tuesday Morning’s employee, the Court focused on Tuesday Morning’s right to control the manner and means by which Faush’s work was accomplished. The Court held that a rational juror could find that Faush and Tuesday Morning had a common law employment relationship. Although Labor Ready set Faush’s pay rate, Tuesday morning paid for each hour that Faush worked (not per project) and had ultimate control as to whether or not Faush was permitted to work at its store.  Tuesday Morning’s control over Faush’s daily activities also favored the fact that he was an employee.  Finally, Tuesday Morning bore many legal responsibilities of a traditional employer, as set forth in its agreement with Labor Ready, including the duty to comply with Title VII and the Pennsylvania Human Relations Act.

What Does This Mean to Me?

Employers must make sure that their workplace is free of discrimination/unlawful practices for all employees, permanent AND temporary.  Although this case is fact specific, it is important to be aware that a company is not shielded from liability for discrimination claims brought by a “temporary employee” just because that employee was not hired directly by the company.