It is no secret that businesses today are increasingly outsourcing human resources functions in an effort to cut costs. But absent careful planning, the outsourcing employer may still bear legal liability for workplace discrimination issues. Here’s what the Fourth Circuit had to say about the subject in a case decided this week. Quintana v. City of Alexandria, et al., No. 16-1630 (4th Cir. 6/6/17).
The case arose from the City of Alexandria’s contract with Randstad US, L.P. for the handling of payroll and other administrative functions. Plaintiff Quintana at the time was working in a phone operator capacity for the City. Quintana claims she was told all aspects of her employment would remain the same after the deal, including the City’s responsibility for hiring and firing. She also alleged that it was the City who determined her pay amount, despite Randstad’s administration of payroll.
Quintana claims that on January 9, 2014, she notified her City supervisor of a need for extended leave to care for her comatose husband. According to Quintana, after her supervisor said she could take up to three months leave, she reported to Randstad that she was taking City approved leave. Quintana claims she was terminated January 17, via email from the City stating she failed to report to work without any notice.
Quintana sued both Randstad and the City in the United States District Court for the Eastern District of Virginia for interference and retaliation under the Family and Medical Leave Act (“FMLA”). She strategically pled in the alternative that each was her primary employer, recognizing that for joint employers, it is the primary employer who is responsible for providing FMLA notice and leave. Her suit against the City was dismissed, and she appealed to the Fourth Circuit.
Explaining “[i]t is not fatal to Quintana’s complaint that all factors do not strongly indicate that the City is her primary employer,” the Fourth Circuit held Quintana could proceed on her FMLA claims against the City, including failure to provide notice, job restoration, and termination while on leave. The Court also held that the City could be liable as a secondary employer for interfering with Quintana’s right to take leave from Randstad by approving her leave without authority to do so.
The case underscores the importance of having clearly defined roles when entering into a business relationship that could possibly be construed as joint employment. Businesses should also understand that they’ll likely be on the hook if they have authority to control employment decisions and benefits, regardless of who is administering these functions.