A QUICK REFRESHER ON JOINT EMPLOYER LIABILITY
Joint employment is not a concept that every employer is familiar with, probably because it most commonly arises in the contractor setting. Generally speaking, when joint employment is found, it serves to impute liability on a general contractor for the actions of an employee of a subcontractor, based on the idea that the general contractor has sufficient control over the work done by the subcontractor employees. As you can probably tell, the definition alone suggests there’s a lot of gray area, so it’s not always clear who qualifies as a joint employer. A recent case decided by the Sixth Circuit Court of Appeals – which covers Ohio, Kentucky, Tennessee, and Michigan – is a good refresher on this issue, particularly since it arose in the context of who may be liable for discrimination under Title VII of the Civil Rights Act of 1964.
In EEOC v. Skanska USA Building, Inc., three African-American men were employed by the subcontractor (C-1), who in turn had been engaged by the general contractor (Skanska). The employees were subjected to frequent racial slurs and other discriminatory behavior. The employees complained to the general contractor, but the general contractor did not take any action. Soon after the job ended, the EEOC filed a race-based hostile work environment suit against the general contractor.
The district court first hearing the case dismissed it because the general contractor did not employ the employees; however the Sixth Circuit reversed, pointing out that entities are joint employers if they share or co-determine matters governing the essential terms and conditions of employment. Specifically, the Court analyzed Skanska’s ability to hire, fire, or discipline C-1’s employees, affect their compensation and benefits, and direct and supervise their performance. The Court found that the Skanska had sufficient control over C-1’s employees in these areas.
The case is a good reminder that employers need to be mindful of how much control they exercise over another company’s employees, and the legal liability that doing so may bring. Even if you don’t directly employ workers, you could be liable for their conduct if you supervise them closely enough. If you feel you may be in a similar situation, talking with competent counsel who can review your workplace policies and practices and help you minimize potential exposure is advised.