Hiring Through Temp Agency No Title VII Shield

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By Patrick Dorrian

July 16 — Drive Automotive Industries of America Inc. was the joint employer of a former factory worker at its Piedmont, S.C., plant who was hired through a temporary staffing agency, and it may be liable to her for sexual harassment under Title VII of the 1964 Civil Rights Act, the U.S. Court of Appeals for the Fourth Circuit ruled July 15.

Reviving Brenda Butler's claim against Drive, the Fourth Circuit joined seven other federal appeals courts in holding that multiple companies each may be the “employer” of the same employee under Title VII. The ruling may add momentum to efforts by employee advocates to end the perceived practice of some employers hiring through temp agencies to mask their discriminatory staffing preferences, which is an area of focus for the Equal Employment Opportunity Commission.

The Fourth Circuit crafted a nine-part “hybrid test” for determining an entity's joint employer status, under which “control” of the worker's employment is the “principal guidepost.”

Three Key Factors

The three primary factors, the court said, are which entity has the power to hire and fire the worker, which entity supervises the employee's work, and where and how the work takes place.

The first of those factors “is important to determining ultimate control,” Judge Henry F. Floyd wrote. The second “is useful for determining the day-to-day, practical control of the employee,” and the third, “for determining how similar the work functions are compared to those of an ordinary employee” at the work site, he said.

The other six factors, the court said, include who maintains the worker's payroll, tax and other employment records and which entity provides the worker with job training.

None of the nine factors is alone dispositive, the court stressed.

The approach, Floyd said, combines aspects of the “control” test used by some courts, which focuses on the formal “legal parameters of employment,” such as hiring and firing, and the “economic realities” test used by other courts, which focuses more on the entity the worker relies on for work and pay regardless of which company actually is writing the paychecks.

Applying the hybrid test to Butler, the Fourth Circuit found that she was an employee of both Drive and the staffing agency that hired her and assigned her to work for the automotive parts manufacturer.

It said Drive supervised both its temporary and permanent work staff, who worked “side by side,” using the same equipment, and that the work Butler performed wasn't tangential to Drive's core business. “Most importantly, Drive exhibited a high degree of control over the terms of Butler’s employment,” the court added, finding that she was fired by the staffing agency at Drive's request.

Text of the opinion is available at http://www.bloomberglaw.com/public/document/Butler_v_Drive_Auto_Indus_of_Am_Inc_No_141348_2015_BL_226147_4th_.