In Faush v. Tuesday Morning, Inc., 2015 U.S. App. LEXIS 19977 (3d Cir. 2015), the Third Circuit Court of Appeals recently found that a temporary worker provided by a staffing agency could proceed to trial on a claim of race discrimination under federal and state law against the company that contracted with the staffing agency. The plaintiff in this case, Mathew Faush, was employed Labor Ready, a staffing agency providing temporary workers to a variety of companies, including defendant Tuesday Morning, a home-goods retailer. These temporary workers performed routine tasks such as unloading merchandise, setting up displays, and stocking merchandise on shelves.
Prior to his assignment to Tuesday Morning, Mr. Faush was interviewed and hired by Labor Ready. Mr. Faush came to be assigned to Tuesday Morning via an “Agreement to Supply Temporary Employees” (the “Agreement”) between Labor Ready and Tuesday Morning. Mr. Faush only worked at Tuesday Morning for ten days. However, he eventually commenced this lawsuit, alleging race discrimination pursuant to Title VII of the Civil Rights Act of 1964 (“Title VII”) and the Pennsylvania Human Relations Act (“PHRA”). Mr. Faush’s allegations included: the store manager accused Mr. Faush and other African-American temporary workers of stealing eyeliner pens, and they were then told to work in the back of the store with the garbage; when Mr. Faush and these fellow temporary workers attempted to speak with the store manager, a white employee blocked their path and used a racial slur; the store manager refused to hear their complaints and thereafter did not allow these workers in the front of the store because he was worried about loss prevention.
Fausch filed a discrimination lawsuit against Tuesday Morning under both Title VII and the PHRA. The trial court dismissed the lawsuit finding that Tuesday Morning was not Mr. Faush’s employer, and thus could not be liable under Title VII and/or the PHRA. The Third Circuit Court of Appeals, however, came to the contrary conclusion.
First, the Court of Appeals ruled that the appropriate test for determining whether an employment relationship existed arose from the United States Supreme Court’s decision in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992). In Darden, the Supreme Court wrote that “[i]n determining whether a hired party is an employee under the general common law of agency, we considers the hiring party’s right to control the manner and means by which the product is accomplished.” The Supreme Court also provided the following non-exhaustive list of relevant factors: “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.” Moreover, Darden made it clear that two entities may be considered joint or co-employers.
Turning to its own precedent, the Court of Appeals explained that the Third Circuit generally focuses on “which entity paid [the workers’] salaries, hired and fired them, and had control over their daily employment activities.” In light of all of the factors above, the Third Circuit determined that dismissal of the lawsuit was inappropriate, and that a jury should decide whether Mr. Faush was “employed” by Tuesday Morning. In reaching its decision, the Third Circuit found the following facts weighted against dismissal of the lawsuit: Tuesday Morning bore certain responsibilities for temporary workers’ wages and it retained responsibility for compliance with wage laws; Tuesday Morning paid Labor Ready for each hour worked by each temporary employee, including overtime, as opposed to a fix rate that would be paid to an independent contractor; Tuesday Morning had ultimate control over whether Mr. Faush and others were permitted to work at its store; and Tuesday Morning personnel gave temporary workers their assignments, provided direct supervision, provided site-specific training, furnished equipment and materials, and verified the number of hours worked.
Additionally, in the Agreement, Tuesday Morning pledged to provide a workplace free from discrimination and to comply with federal, state, and local laws concerning employment, including Title VII. Finally, although non-controlling, the Third Circuit gave some weight to the EEOC guideline that “[a] client of a temporary employment agency typically qualifies as an employer of the temporary worker during the job assignment” for purposes of Title VII.