Employee Can Sue More Than One Employer For Discrimination

For the first time, the U.S. Court of Appeals for the Fourth Circuit has expressly adopted the joint employment doctrine for Title VII cases.  Now, an employee can potentially go after more than just the company that pays her when bringing a claim for unlawful discrimination or harassment.  The Fourth Circuit joins the Second, Sixth, Seventh, Ninth, Tenth, and Eleventh Circuits in holding that more than one company can be held liable for an employee’s claim under Title VII.

Brenda Butler was hired by ResourceMFG, a temporary staffing agency, to work at the Drive Automotive Industries (“Drive Automotive”) factory in South Carolina.  During her time at the Drive Automotive factory, Ms. Butler wore a ResourceMFG uniform, her paycheck came from ResourceMFG, she parked her car in a special ResourceMFG lot, and ResourceMFG had the power to discipline and fire her.  But Drive Automotive set Ms. Butler’s work schedule and arranged portions of her training, and Drive Automotive employees supervised Ms. Butler when she was on the factory floor.

Ms. Butler claimed that one of her Drive Automotive supervisors verbally and physically harassed her on the job.  She said that the supervisor commented on many occasions about her physical features, particularly her rear end, even giving her the nickname “big booty Judy.”  According to Ms. Butler, the supervisor also rubbed up against her in a sexually suggestive way.  She complained about the sexual harassment to management at ResourceMFG, but she says they did nothing.  After further complaints from Ms. Butler, Drive Automotive made a request to Resource MFG that she be terminated.  Shortly thereafter, Ms. Butler received a call from ResourceMFG terminating her employment at Drive Automotive.

In response, Ms. Butler brought Title VII claims against not only her official employer, ResourceMFG, but also against Drive Automotive, since it was a Drive Automotive supervisor who she claimed sexually harassed her.  A South Carolina district court dismissed Ms. Butler’s claims against Drive Automotive, after determining that ResourceMFG was her sole employer for purposes of liability under Title VII.  But on appeal, the Fourth Circuit reversed this dismissal of Ms. Butler’s Title VII case against Drive Automotive, after finding that Drive Automotive could be liable under the joint employer doctrine.

This decision is the first time that the Fourth Circuit has expressly adopted the joint employer doctrine for Title VII cases, joining several other federal appellate jurisdictions across the country.  The Court reasoned that, given the remedial purpose of Title VII in stamping out discrimination in the workplace, the joint employer doctrine prevents a company from evading liability by hiding behind another employer such as a staffing agency.

In order to determine whether a company is a joint employer for purposes of liability under Title VII, the Fourth Circuit adopted what it called the “hybrid test,” which is comprised of nine enumerated factors, to consider the level of control a company has over a particular worker.  The Court said that of those nine factors, the most important are the following three: 1) whether the entity has the power to hire and fire; 2) whether the entity has supervisory power over the employee; and 3) whether the entity controls the place and way in which the employee performs the work.  The Court made it clear that the degree of control that an entity exercises over a worker remains the principal guidepost for determining joint employment under Title VII.

While the impact of this case for staffing companies is obvious, this case could reverberate far beyond the staffing industry.  In the government contracting arena, it is common for prime contractors to use subcontractors whose employees are closely controlled by the prime.  Similarly, in the construction industry, the employees of prime contractors and subcontractors are often closely intertwined.  These types of companies will need to be extra careful not to exercise too much control over non-employees, or they may find themselves on the receiving end of a Title VII suit.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com. 

Employee’s Facebook Posting Not Enough To Put Her Employer On Notice Of Sexual Harassment

A restaurant employee, who claimed she was groped and fondled by a fellow employee, posted her complaints about the poor working conditions at the restaurant on Facebook.  The Facebook page was one that had been set up by employees of the restaurant to communicate about scheduling issues, but it also contained posts on problems in the workplace.  The employee conceded that she did not directly inform management at the restaurant about the sexual harassment prior to her termination, but she said that posting her complaints on the employee Facebook page was enough to put the restaurant on notice of what was going on.  She sued the restaurant for sexual harassment.

A federal judge in Indiana ruled that simply posting the complaints on a Facebook page set up by restaurant employees was not enough to show that the restaurant had notice of the conduct in order to find it liable, and dismissed the claim.  The judge noted that the restaurant employees made a concerted effort to keep restaurant management off of the Facebook page.  The judge also pointed to the fact that the restaurant had a specific handbook provision directing employees to report all incidents of harassment to management, and even had a hotline that employees could use for anonymous reporting.  Because the employee did not follow these established procedures for reporting the harassment, the judge refused to hold the restaurant liable.

This case underscores just how important it is for employers to have an established written policy for employees to use to report complaints, and to make sure that the policy is followed.

Posted by Declan Leonard, Managing Partner of Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.

Did Boss's Shoulder Touching and Suggestive Comment Constitute Sexual Harassment?

A female sales manager for an office furniture company alleged that on two separate occasions, her male supervisor acted inappropriately while driving her back to her hotel after company-sponsored training sessions. In the first instance, the pair had been at dinner with a group of co-workers when the supervisor insisted on driving the female employee back to the hotel. During this drive, the supervisor reached his arm around the female employee who was sitting in the passenger seat, and he put his hand on her right shoulder where he left it for about a minute. During the ride, the supervisor is alleged to have said that he had done a lot to get the female employee the job, and that she owed him to do “the right thing by him.” A few nights later after a similar post-training group dinner, the supervisor again insisted on driving the female employee back to the hotel. He again extended his arm to put his hand on her right shoulder, leaving it there for most of the fifteen- to twenty-minute drive back to the hotel.

The female employee was eventually fired for poor performance in a decision made by the male supervisor, and she then sued the company for sexual harassment. But her claim for sexual harassment was dismissed. A Massachusetts federal appeals court acknowledged that it would be “uncomfortable” for a female employee to have her male supervisor’s unwelcome arm around her while commenting that she owed him for hiring her. But the court noted that the two incidents ended quickly, and for the next ten months of employment there was no allegation of further inappropriate conduct by the supervisor. Citing the well-established legal standard for hostile work environment claims, the court concluded that the supervisor’s objectionable conduct was not pervasive by any measure, and that compared to other sexual harassment cases that had come before that court, this case was not even close.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.