Temporary Workers Can Sue For Discrimination

Temporary Workers Can Sue For Discrimination

The Third Circuit has opened the door for temporary workers to bring discrimination actions against the companies in which they are temporarily placed. The Court concluded in Faush v. Tuesday Morning, Inc. that the test set forth in Nationwide Mut. Ins. Co. v. Darden is appropriately applied to temporary employees to determine whether an employment relationship exists.  The Darden factors include the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

The Faush Case

Plaintiff Matthew Faush was an employee of Labor Ready, a staffing firm. Labor Ready provides temporary employees to various companies including Tuesday Morning, Inc., a closeout home goods store. Plaintiff was assigned by Labor Ready to temporarily work at a Tuesday Morning store location, and during his assignment there, he alleges that he was subjected to racial slurs and accusations that were motivated by his race before he was ultimately terminated. He filed suit against Tuesday Morning and alleged violations of the Title VII and the Pennsylvania Human Relations Act.

Procedural History

The District Court granted Tuesday Morning’s motion for summary judgment because it determined that Tuesday Morning was not Faush’s employer and therefore was not liable under Title VII or the Pennsylvania Human Relations Act.

The Court’s Decision

On review, the Third Circuit determined that the District Court’s ruling on the motion for summary judgment was in error given that a reasonable jury could find that Faush was a joint employee of Tuesday Morning regardless of his status as a temporary worker. In particular, the court noted that:

  • Although Labor Ready paid the temporary workers, Tuesday Morning retained responsibility for ensuring compliance with prevailing-wage laws;
  • The payments that Tuesday Morning made to Labor Ready were “functionally indistinguishable from direct employee compensation;”
  • Tuesday Morning held the ultimate authority to determine whether Faush could continue working at its store;
  • Faush worked at Tuesday Morning’s store location instead of off site, and Tuesday Morning directly supervised all his work, provided the tools to complete the job, verified the number of hours he worked, and trained him as necessary;
  • He was hired as a general laborer as opposed to a worker with a specialized and specific skill set; and
  • Labor Ready and Tuesday Morning characterized the workers as temporary employees.

A Word of Advice

To the extent that companies are using staffing agencies to avoid a direct employment relationship, this decision should give them pause as it is clear that they may still be considered a joint employer. Employers should not assume that they are not liable for discrimination and harassment claims brought by temporary workers; indeed, prudent employers should treat temporary workers the same as permanent workers for purposes of discrimination and harassment prevention and investigation.

In light of this decision, employers should carefully evaluate their relationships with all temporary workers and the staffing agencies from which they are sourced. Namely, they should ensure that they educate their own employees on harassment and discrimination prevention in addition to verifying that the staffing agency provides the temporary workers with similar training. They should also ensure that the staffing agency communicates the company’s anti-discrimination policy to the temporary workers prior to placement and then verify that the policy is continuously and uniformly enforced within the workplace.

Contributor:  Katherine P. Sandberg, Associate | Weintraub Tobin