Whose employees are they? Determining whether you’re subject to ‘joint employer’ liability

The Signore decisions, and others like them, highlight the need for companies to evaluate their contract labor policies

In the modern workplace, it is common for companies to contract outside labor forces to meet their business objectives. “Contractors” often work side-by-side with a company’s traditional employees, and it is sometimes difficult to discern to whom workers “belong.” The answer to this question becomes particularly important when problems arise, such as allegations of discrimination, harassment or retaliation. To whom should the worker complain? Whose responsibility is it to investigate? Who should impose discipline if necessary? Who is liable if discrimination laws were violated? The answers to these questions relate to what company is considered to be the worker’s “employer” — and it could be more than one.

The analysis begins with the definitions of “employer” and “employee” under applicable anti-discrimination laws, which are similarly circular.

In response to the amended pleading, the defendants filed another round of motions to dismiss, including a motion by DISYS that the pleading did not sufficiently allege an employment relationship for purposes of the claims presented. In evaluating DISYS’s motion, the court engaged in a similar inquiry, noting at the outset that the mere fact that the plaintiff received her paycheck from DISYS was not determinative.

After assessing the degree of control exerted by DISYS and the other Garrett factors, the court held that the plaintiff alleged sufficient facts to establish that DISYS was her employer, as well as BANA. In reaching this conclusion, the district court cited the plaintiff’s allegations that DISYS had hired her, placed her with BANA, told her to “go back to her desk” and not to “make waves” in response to her age discrimination complaints, and later informed her that she had been placed on “final warning.”

Contributing Author

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Andrew P. Sherrod

Andrew P. Sherrod is a partner in the litigation section of Hirschler Fleischer (Richmond, Va.), who has an active practice before federal and state courts,...

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