Employers may be liable for discrimination under the federal laws for claims made by non-employees. Consider an organization which subcontracts certain types of work to be performed by the employees of a staffing agency. This is a fairly common practice, and it frequently happens when an organization needs temporary staffing assistance for secretarial support or other types of work. The mere fact that the organization does not directly employ the “outside staffer” is not a defense to a discrimination or a retaliation claim where the organization has immediate control over the staffing agency’s employee. In such a case, the organization who has retained the services of a temporary staffing agency may be considered a “constructive employer” or a “joint employer” under the anti-discrimination laws, and it can be held accountable for discrimination and retaliation claims.

Relevant factors which the courts will consider in determining whether a joint employment relationship exists include common control, commonality of hiring, discipline and discharge, pay, insurance, records, and supervision. Recent cases where a joint employment relationship has been found tend to show that the courts put a good deal of weight on evidence tending prove that the organization had immediate control and supervision over the employee of the temporary staffing agency. Recently in Hexemer v General Electric Co, 1:12-CV-1808 (LEK/CFH)September 11, 2013, Kahn, L, it was determined that the plaintiff had properly pleaded a claim of unlawful retaliation against General Electric because it could be held liable as a joint employer.

In the Hexemer case, the plaintiff, who was of Persian descent, was employed by a temporary staffing agency and was assigned to General Electric’s Schenectady, NY, plant to update and verify their power plant manuals, provide Microsoft training, and design a web page. Her employment agreement with the temporary staffing agency required her to “adhere to the GE travel and living policies” and other specified GE policies. The plaintiff subsequently brought suit against GE and her temporary staffing agency, alleging that both employers terminated her in retaliation for her complaint about a disparaging remark made by a GE employee in the workplace about the plaintiff’s nationality. 

GE filed a motion to dismiss the plaintiff’s claims on grounds that GE was not her employer.  The District Court for the Northern District of New York refused to grant GE’s motion for dismissal of the plaintiff’s complaint. Specifically, the court took note of the fact that the plaintiff worked at the GE facility, had a GE e-mail address, used GE equipment on the job, was supervised by GE managers, worked exclusively at GE in the same department for more than a year, was required to adhere to GE policies, was told by her staffing agency that GE had terminated her, and believed that GE was her employer. In sum, these facts were sufficient to support a plausible claim that GE was her employer.

Companies that have workers who are not directly employed by them need to assess their exposure to claims made by non-employees. In cases where the work of a non-employee is nonetheless directed and controlled by employees of a different company from the direct employer, all anti-harassment and anti-retaliation policies and procedures should be available to these workers. It is always beneficial for the employer to make workplace harassment and anti-retaliation training available to its own employees and the other workers on site. Managers should always be properly trained so that they recognize their responsibility to avoid conduct, which could be viewed as retaliatory with respect to employees and subcontractors or temporary staffers from outside agencies. It simply does not pay to be shortsighted about establishing defenses against workplace discrimination claims when the courts are broadening the scope of employer liability.