The Third Circuit has joined the list of other federal courts (including the Fourth Circuit which covers Maryland, Virginia, West Virginia, North Carolina, and South Carolina) that have held that Title VII applies to claims raised by the temporarily assigned worker against the company operating the work site where assigned. In other words, Title VII applies to temporary employment. In Faush v. Tuesday Morning, Inc., No. 14-1452, (3d Cir. Nov. 18, 2015), the Third Circuit held that the proper test for determining whether such a company is an “employer” under Title VII is the common-law test set forth by the Supreme Court in Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318 (1992).
In Faush, Matthew Faush was an African-American worker for the staffing firm Labor Ready. He was sent to work at a Tuesday Morning store and claimed that while working there, he suffered from racially motivated accusations, slurs and then, ultimately, his termination. Some of the factors the Third Circuit considered in its decision included: the wage payments the company made to Labor Ready were factually indistinguishable from direct employee compensation (a set hourly rate and overtime if warranted as opposed to a fixed rate for a project); Tuesday Morning had the power to decide who could work at its store; Tuesday Morning personnel gave Mr. Faush his work assignments; directly supervised him; provided site-specific training; necessary equipment and materials; and tracked his hours. The work he did was the same as the work the direct employees were doing. The Third Circuit was seemingly motivated by believing Congress did not intend for temporary employees in the workplace “to fall through the cracks and be subjected to limitless discrimination at their places of work.” Clients of staffing firms, most of whom are already covered by Title VII as to their own employees, should not be exempted from compliance to others in their workplace, if sufficient indicia of an employment relationship exists.