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Dec. 9 — A mobile phone repair and testing facility in Texas must face trial on claims by the EEOC that the company illegally failed to hire or accommodate two deaf applicants for temporary work referred by a staffing agency, a federal judge ruled ( EEOC v. S&B Indus., Inc. , 2016 BL 408238, N.D. Tex., No. 3:15-CV-0641-D, 12/8/16 ).
The decision is one step toward a potential victory for the Equal Employment Opportunity Commission in its continuing crackdown on businesses it believes hire temporary workers through staffing agencies to evade federal employment discrimination laws. The agency reaffirmed its commitment to holding companies that do so accountable when it added to its five-year strategic enforcement priorities emerging issues relating to “complex employment relationships.”
The U.S. District Court of the Northern District of Texas found Dec. 8 that S&B Industry Inc., doing business as Fox Conn S&B, may have been the prospective “employer” of the rejected job applicants under the Americans with Disabilities Act, or at least their prospective “joint employer” with the staffing agency. A jury could find that S&B had control over the employment relationship it formed with temporary workers. That’s because S&B employees directly supervised workers on its production floors, the company issued specific instructions to temporary workers and it had the right to end the workers’ temporary assignments, the court said.
The EEOC sued S&B in February 2015 alleging the company failed to hire Katelynn Baker and Tia Rice, who had been referred for employment by Staff Force, a temporary staffing agency S&B used at the time to fill certain work assignments.
S&B contends that Baker’s and Rice’s hearing impairments rendered them unqualified for the positions they were interviewed for, which involved testing smartphone functionality, including volume, or troubleshooting smartphone issues. But the EEOC asserts that they were qualified for at least one of the jobs as well as numerous other positions that didn’t involve listening to devices.
The EEOC also claims S&B failed to provide Baker and Rice with the services of a sign language interpreter during their interviews for the various jobs, even though a Staff Force recruiter told the workers such services would be provided. According to S&B, however, Baker and Rice didn’t request interpreters and Staff Force never mentioned the need for such services.
Judge Sidney A. Fitzwater said the U.S. Court of Appeals for the Fifth Circuit’s governing standard for determining whether an employment relationship exists is a “hybrid economic realities/common law control test.” However, the most important factor, he said, is whether a staffing agency client such as S&B has the right to control the conduct of workers referred to it by a staffing agency.
Thus, that “most, if not all,” of the economic realities factors—including S&B’s agreement with Staff Force and Staff Force’s arrangement with its temporary workers under which the staffing agency set and directly paid their compensation—pointed to Staff Force being their employer didn’t entitle S&B to judgment without a trial, the court said. Rather, disputed issues on whether Staff Force or S&B would have had the right to control Baker and Rice mean a jury must decide if S&B can be held liable as an employer under the ADA, the court said.
The proof raises similar jury issues on the EEOC’s argument under the joint employer theory of liability, which is governed by a different test that likewise focuses on “control,” the court added.
The EEOC, Fitzwater said, “has adduced sufficient evidence to permit a reasonable jury to find that, as to assignments at S&B, S&B has the ultimate authority to hire and fire its workers. The EEOC has also adduced evidence that S&B directly supervised employees working in its production lines.”
Protecting temporary and other contingent workers from workplace discrimination has been a focus for the EEOC for years, and the agency issued guidance documents specifically addressing the responsibilities of staffing agencies and their clients under the ADA almost 20 years ago. The commission has also litigated the issue with some frequency under the various federal employment bias laws.
The agency’s announcement of its strategic enforcement plan for fiscal years 2017 through 2021 would seem to herald a recommitted and in some ways new chapter in its mission on the issue, as the EEOC indicated that independent contractor relationships and the on-demand or “gig” economy are part of the “complex employment relationships” it will be investigating and perhaps suing over.
The issue also has the attention of private plaintiffs’ lawyers. On Dec. 6, Cohen Milstein Sellers & Toll PLLC, a leading class action law firm in Washington, filed a lawsuit against Illinois staffing agency MVP and seven of its client companies alleging MVP honored the clients’ racially discriminatory preferences by not referring black laborers for temporary assignment with the companies.
It was the third such lawsuit his firm had filed against MVP in federal court in Illinois and the fourth overall involving staffing agencies in the state, lead class counsel Joseph M. Sellers told Bloomberg BNA at the time.
Lawyers for the parties didn’t respond Dec. 9 to Bloomberg BNA’s request for comment.
Robert A. Canino, Suzanne M. Anderson and Joel Philip Clark of the EEOC in Dallas represented the commission. James R. Staley and Heidi H. Harrison of Ogletree Deakins Nash Smoak & Stewart P.C. represented S&B .
To contact the reporter on this story: Patrick Dorrian in Washington at email@example.com
Text of the opinion is available at http://www.bloomberglaw.com/public/document/EEOC_v_SB_Indus_Inc_No_315CV0641D_2016_BL_408238_ND_Tex_Dec_08_20.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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