Fourth Circuit Holds Hiring Through Temp Agency Does Not Evade Title VII

Randi Klein Hyatt
Randi Klein Hyatt
07/17/2015

In Butler v. Drive Automobile Industries of America, Inc., the Fourth Circuit joined seven (the Second, Third, Sixth, Seventh, Ninth, Tenth, and Eleventh) other federal appellate courts in holding that multiple companies can each be the “employer” of the same employee under Title VII.  In Butler, the appellate court concluded that Drive Automotive was the joint employer of a former factory worker who was hired through a temporary staffing agency, and therefore, could be liable for her claims of Title VII sexual harassment, along with the temporary staffing agency.

The Fourth Circuit articulated a nine-part test to determine an entity’s joint employer status, focusing on “control” of the worker’s employment as the primary consideration.  The three primary factors are (1) which entity has the power to hire and fire the worker; (2) which entity supervises the employee’s work; and (3) where and how the work takes place.  The first factor determines ultimate control.  The second factor assesses day-to-day practical control.  The third determines how similar the work functions are compared to those of a regular employee at the workplace.  The remaining factors look to responsibility for payroll, tax and other employment records, along with job training.  None of the nine factors alone is dispositive.  The Fourth Circuit recognized the factors may be modified depending on the industry involved.  The Fourth Circuit adopted this majority view because it seeks to prevent those businesses that effectively “employ” a worker from evading liability by hiding behind another, such as a staffing agency.

As to the case before it, Drive was a joint employer because the temporary and regular work staff worked side by side using the same equipment; the work Butler performed was part of Drive’s core business; and Drive exhibited significant control over Butler’s employment (she was fired by the staffing agency at Drive’s request).  The fact Butler wore a staffing agency uniform, received her pay from the staffing agency and parked in a lot used only by staffing agency workers was insufficient to tip the scales in Drive’s favor of avoiding employer status under Title VII.

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