The U.S. Court of Appeals for the Sixth Circuit recently issued an important decision regarding the rights of subcontractor employees to sue the general contractor or business owner for workplace racial harassment. The case, Equal Employment Opportunity Commission v. Skanska USA Building, Inc., (Case No. 12-5967; 6th Cir. December 10, 2013), could have an important impact for Cleveland area employees who perform work that benefits multiple employers at the same time. More on that below.
Title VII, and its Ohio counterpart Revised Code Chapter 4112, prohibit employers from discriminating against or harassing employees on the basis of race. The question of who is the “employer,” however is not always that obvious. When employees of staffing agencies, independent contractors, or subcontractors face workplace discrimination, which of the companies involved may be held liable as an “employer” is often hotly debated. In these situations, the company to whom the employee is loaned out (e.g. the general contractor) might be considered the “employer” for purposes of an employment discrimination lawsuit under a “joint employer” theory. Joint employment exists where two separate employers share or co-determine matters regarding the basic terms and conditions of employment, such as hiring, firing, discipline, and pay. Whether such a relationship existed was the issue the Court had to resolve in Skanska.
In the Skanska case, a general contractor hired a subcontractor to provide employees at a hospital construction site. Several of the subcontractor’s African-American employees were subjected to terrible racial slurs (and even a despicable assault with liquid from a porta-potty) at the construction site by employees of the general contractor. Because the general contractor supervised and controlled the day-to-day activities of all employees at the worksite without any oversight or input from the subcontractor, the Court held that the general contractor was an “employer” for purposes of the Title VII race discrimination lawsuit.
A joint employment relationship is not uncommon for Cleveland employees. Typical examples include staffing agencies, subcontractors, and delivery drivers. Where the direct employer loans out the employee, but the “main” employer dictates matters like discipline, hiring and firing, hours, and pay, a joint employment relationship likely exists. When employment discrimination or harassment occurs in a joint employment situation, both employers are responsible under Title VII and Ohio law.