Worker Hired Through Temporary Agency Protected by Title VII

The Third Circuit Court of Appeals recently recognized that an employee can bring a lawsuit under Title VII against the company where he works, even though he was hired and paid through a staffing firm. Title VII is a federal anti-discrimination law that prohibits employment discrimination based on gender, race, national origin, and religion.

Retail employee experiences race discriminationMatthew Faush was an employee of Labor Ready, a staffing firm. Labor Ready assigned Mr. Faush to work at Tuesday Morning, Inc., a retail business, at one of its stores. His job was to set up display shelves, unload and stock merchandise, remove garbage, and perform other similar tasks. Mr. Faush, who is African-American, claims Tuesday Morning made a racially-motivated accusation that he stole merchandise, subjected him to racial slurs, and fired him because of his race.

Mr. Faush filed a lawsuit against Tuesday Morning, claiming it discriminated against him because of his race in violation of Title VII. The District Court granted summary judgment to Tuesday Morning, finding Mr. Faush was not an employee of the store. Unlike the New Jersey Law Against Discrimination, Title VII protects only employees and not independent contractors.

On appeal, applying a previous United States Supreme Court case, the Third Circuit explained that when determining whether someone is an employee for purposes of Title VII a court should consider factors such as:

  • Whether the business can give additional assignments to the worker;
  • How much discretion the business has over the worker’s hours;
  • The way the worker is paid;
  • Whether the individual’s job is part of the company’s regular business;
  • The skill required;
  • Who provides the tools and equipment;
  • The length of the relationship between the worker and the business;
  • The work location;
  • Whether the business provides the worker employee benefits; and
  • The tax treatment of the hired party.

Under this test, it is possible an individual can be an “employee” of more than one entity, as either “co-employers” or “joint employers.”

Applying this test, in Faush v. Tuesday Morning, Inc., the Third Circuit ruled that a jury could conclude that Mr. Faush is an employee of Tuesday Morning. Among other things, the Court considered evidence that under Labor Ready’s Agreement to Supply Temporary Employees to Tuesday Morning, Tuesday Morning:

  • Was responsible for supervising and training Mr. Faush;
  • Had the right to reject Mr. Faush as its temporary employee for any reason;
  • Was required to provide Mr. Faush any equipment he needed;
  • Paid Labor Ready based on the number of hours Mr. Faush worked, and had to ensure he was paid in accordance with applicable wage and hour laws;
  • Agreed to comply with all applicable federal, state and local employment laws, including Title VII, and to “provide a workplace free from discrimination”; and
  • Referred to Mr. Faush as a “temporary employee,” rather than as an “independent contractor.”

Based on these and other facts, the Third Circuit concluded that a rational jury could find Mr. Faush was Tuesday Morning’s employee. Accordingly, it reversed the ruling granting summary judgment to Tuesday Morning, and remanded the case to the District Court.

The Court recognized its ruling means Mr. Faush and other temporary employees working for Tuesday Morning can be counted to determine the number of employees who work for Tuesday Morning. This is significant, since Title VII applies only to companies that have 15 or more employees. Tuesday Morning apparently only has 15 employees if you count its temporary employees.