Companies who use staffing agencies to supply workers may be
considered joint employers of those workers, even if the staffing
agency hires and pays the workers. Both companies may be held
liable for retaliation and wrongful termination, a federal court in
New York has just ruled. While this decision is consistent
with previous rulings by federal and state courts, it should serve
as a reminder that companies are not insulated from defending
employment discrimination claims just because the worker is
technically employed by a staffing agency.
In Hexemer v. General Electric Company, et al.,
Case No. 1:12-cv-1808 (N.D. N.Y), the plaintiff had been working as
a project consultant for staffing agency GID Global, LLC, where she
was assigned to a General Electric facility in Schenectady, New
York. Her responsibilities included updating GE power plant
manuals, providing Microsoft Office training, and designing a web
page for GE. She was hired and paid by GID, not GE, and her
employment contract with GID specified that she was an employee of
GID, not GE.
In October 2012, Hexemer made a comment to two other workers
that sitting at their desks promoted weight gain. One of the
other workers, a GE employee, allegedly berated her for the
comment, calling her uncivilized and saying that such talk might be
acceptable in Hexemer's home country of Iran, but not in the
United States. Hexemer tried to complain to supervisors at GE
but they were unavailable, so she complained to a GID supervisor
instead. Six days later, GID terminated Hexemer's
GID told Hexemer that GE had made the decision to
terminate her from the project after learning of the
confrontation. Since GID had no other work lined up for her,
GID terminated her employment.
Hexemer sued both GID and GE. She alleged that she was
retaliated against for having complained of a hostile work
environment and discriminatory treatment. GE filed a motion
to dismiss all claims against GE, arguing that Hexemer was not a GE
employee and that GE therefore could not be held liable for
The Court denied the motion to dismiss, allowing the claims
against GE to proceed. The Court explained that Hexemer's
allegations were sufficient to consider GE her joint employer.
The Court explained that to determine whether a staffing agency
employee is a joint employee of the company benefitting from the
work, "the predominant focus is the control exercised by the
putative joint employer over the plaintiff's work."
Four factors are typically considered in making this
Whether the proposed joint employer selected or hired the
Whether the proposed joint employer pays the worker;
Whether the proposed joint employer had the ability to dismiss
the worker; and
Whether the proposed joint employer had the power to control
the worker's conduct.
Even though GE neither hired nor paid Hexemer, and even though
Hexemer's contract specifically stated that she was not an
employee of GE, the court ruled that the third and fourth factors
leaned toward joint employment and that those two factors were
sufficient to consider GE a joint employer, at least at this stage
of the lawsuit.
Companies who retain staffing agency employees for discrete
tasks and projects may be considered joint employers in
discrimination and retaliation claims, even if the staffing agency
fires the worker.
Joint employment will depend on the facts in each case.
Contract language identifying the individual as an employee of
only the staffing agency does not end the inquiry.
There are steps employers can take to try to reduce the chances
of being considered a joint employer, but the risk is real:
Companies may be held liable for discriminating or
retaliating against the employees of a staffing agency, based on
the legal theory that these workers are joint employees of both
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Though the two guides are quite similar in form and content, the November publication further specifies the rights of applicants and employees under federal laws such as the Fair Credit Reporting Act when an employer runs a background check.
In prior articles, we have discussed various decisions by the National Labor Relations Board ("NLRB" or the "Board") protecting employee social media activity as concerted activity under Section 7 the National Labor Relations Act (the "Act").