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On November 18, 2015, the Third Circuit held that companies contracting with employment agencies can be held liable for discrimination towards temporary workers. This recent case overturned in part the District Court’s decision granting summary judgment in favor of the company.
Matthew Faush is an African American employee of Labor Ready, a staffing company that provides temporary employees to clients, including home-goods discount retailer Tuesday Morning, Inc. Faush was sent by Labor Ready to a new Tuesday Morning store in Pennsylvania to unload merchandise, set up display shelves, and stock merchandise on the shelves in preparation for the store’s opening.
While working at the Tuesday Morning store, the manager, Keith Davis, accused Faush and other African American temporary workers of stealing two eyeliner pens. Davis said, “His people wouldn’t do that.” The owner’s mother later told Faush and two other African American temporary employees to work in the back of the store with the trash until it was time to leave. A white employee of Tuesday Morning made a racial slur to Faush and his coworkers when they went to speak with Davis. Davis refused to hear their complaints about the racial slur, and told them that he would not let them on the floor because he was concerned with loss prevention. Faush and his African American coworkers were then terminated shortly thereafter.
Faush filed suit against Tuesday Morning in federal court for racial discrimination in violation of Title VII of the Civil Rights Act of 1964, the Pennsylvania Human Relations Act, and 42 U.S.C. § 1981. Tuesday Morning filed a motion for summary judgment on the grounds that it never employed Faush or entered into a contract with him, as is a predicate for his various claims. The District Court granted Tuesday Morning’s motion for summary judgment, holding that Tuesday Morning was not Faush’s employer, and could not be liable under Title VII or the Pennsylvania Human Relations Act. An appeal followed.
The Third Circuit vacated the District Court’s decision with respect to Faush’s Title VII and Pennsylvania Human Rights Act claims and remanded for further proceedings. The Court explained that Title VII forbids, among other things, “status-based discrimination by employers, employment agencies, labor organizations, and training programs.” Faush v. Tuesday Morning, Inc., 2015 U.S. App. LEXIS 19977 (3d Cir. Pa. Nov. 18, 2015) (slip op. at 10).
The Third Circuit stated that in order to prevail on his Title VII claim, Faush must demonstrate the existence of an employment relationship with Tuesday Morning. The Court explained that because Title VII’s definition of employee is devoid of content, the test outlined in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992) governs the definition in the Title VII context. The Court outlined the non-exhaustive factors from Darden used to determine whether a hired party is an employee. The factors are as follows:
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.
The Appeals Court found that Faush’s evidence was more than sufficient to preclude summary judgment. The Court held that a rational jury applying the Darden factors could find that Faush and Tuesday Morning had a common-law employment relationship, and therefore, that Faush was Tuesday Morning’s employee for purposes of Title VII and the Human Relations Act.
The Appeals Court affirmed the District Court’s holding regarding the 1981 claim since the record did not indicate that Faush entered into a contract with Tuesday Morning, a requirement to bring the claim.