"Not my employee, not my problem." Oh, yeah?

Employers, has this ever happened to you?

A guy (we'll call him "Ryan") comes to work for you through a temporary agency. The agency issues the paychecks and generally acts as Ryan's "HR" representative. Your company pays the agency but does not directly pay Ryan.

But when Ryan comes to work, he is supervised by Michael, who is one of your employees. Michael takes Ryan under his wing, and he monitors Ryan's performance very closely. If Ryan can't make it to work, he is directed to notify Michael immediately. If Ryan responds well to Michael, Michael may recommend that Ryan be brought on as a regular employee. If Ryan does not do well, Michael may ask the temp agency to reassign Ryan.

In other words, a pretty typical "temp" arrangement.

https://www.youtube.com/watch?v=dU0o_cSvxS0

One day, after Ryan declines an invitation to go to Benihana's, Michael tells the representative of the temp agency to remove Ryan from his assignment. A few weeks later, your company gets a charge of discrimination filed by Ryan. Ryan claims that Michael let him go because Ryan would not submit to Michael's sexual advances.

You immediately call your pal at the temp agency and tell her, "I have bad news for you. Ryan filed an EEOC charge against us. I'll send you the charge so you and your lawyers can handle it."

How does your pal respond?

What do you mean, "our lawyers"? We were fine with Ryan. You were the ones who wanted him out of there.

(Of course, your pal will convey this message more tactfully because she doesn't want to lose your business.)

So you call your company lawyer and tell him about the charge, adding while laughing nervously, "Of course, you can get this thrown out right away without having to bill any time because we weren't Ryan's employer. Right? Right?"

How does your lawyer respond?

'Fraid not. Since you were the ones who supervised him and asked for him to be released, we'll have to respond to the charge.

You see, by providing day-to-day supervision of Ryan's work, your company in all likelihood became a joint employer of Ryan. In other words, legally, Ryan was the employee of both your company and the temp agency. And since it was your guy who asked for him to be released from his assignment, your company is primarily responsible for the decision.

https://www.youtube.com/watch?v=TASUgN5PRZo

I got the idea to write about this from a real-life court decision that was issued this week. In Scheurer v. Fromm Family Foods, LLC, the plaintiff claimed that she was sexually harassed by a Fromm supervisor while she worked there as a temp. She also claimed that Fromm directed that she be released from her assignment in retaliation for her complaints about the alleged harassment.

The U.S. Court of Appeals for the Seventh Circuit wasn't deciding whether any of that was true.*

*Instead, it was deciding whether Ms. Scheurer could be forced to arbitrate her claims. Ms. Scheurer had signed an arbitration agreement, not with Fromm, but with the temp agency. Fromm argued that Ms. Scheurer's arbitration agreement with the temp agency -- which she had not sued -- should apply to her lawsuit against Fromm. (The Court said it didn't, so Ms. Scheurer's lawsuit against Fromm will be allowed to proceed.)

But listen to what the Court said about Ms. Scheurer's harassment and retaliation allegations. Fromm admitted that Ms. Scheurer had complained about sexual harassment by the supervisor, but said that it promptly investigated and took action against the supervisor. It even tried to separate Ms. Scheurer and the supervisor. But that "proved 'impossible.'" So Fromm told the temp agency to reassign Ms. Scheurer to some other company.

As the Court said (correctly, in my opinion), temps are not expendable:

That action seems to amount to Fromm terminating [Ms.] Scheurer's employment with it, assuming she can show joint employment. From the sequence of the complaint, unspecified discipline of the supervisor, an unsuccessful effort to separate the two people, followed by termination of the complaining subordinate, the inference of retaliatory intent would not seem unreasonable.

Sexually harassing temps strikes me as particularly low-down because temps are often insecure about their positions and thus more reluctant than regular employees to feel that they can report the harassment.

https://www.youtube.com/watch?v=blfAiHSvZ8s

Now, the good news:

I've had this kind of "who's responsible?" issue come up frequently, and it almost always turns out fine. What I generally advise employers who use temporary employees is this:

No. 1: Take all "hot button" complaints by or about temps seriously. This would include complaints of harassment or discrimination or retaliation, as well as complaints about compliance with wage and hour laws, compliance with safety standards, and even general terms and conditions of employment (might be protected concerted activity if made with or on behalf of at least one other employee).

No. 2: Do not let your supervisors think they are free to release a temp for an unlawful reason. Temps are protected by our EEO and other laws, just the way a regular employee is. Even though you may not have to go through progressive discipline with temps, the reasons for release should be legitimate (for example, poor performance, bad behavior, erratic attendance, no-call/no-show, etc.). In other words, something you can defend if necessary.

No. 3: Do not allow yourself to have a false sense of security because the employee you released was a temp. You will often have to defend EEOC charges or other administrative or legal actions if the temp claims that your company, rather than the temp agency, was the "bad actor."

No. 4: Do cooperate with your temp agency. Rather than pointing fingers or saying "not my problem," coordinate as much as possible on your defenses. If you asked for the temp to be released, then tell the temp agency in advance that you don't plan to dispute that. (On the other hand, the temp agency should be equally willing to take responsibility for any decisions made by it.) To the extent that you and your temp agency can form a "united front," this will increase your chance of success in front of the EEOC or other government agency, or in court.

No. 5: As long as you followed Rule No. 2, and released your temp for a legitimate reason, you should be able to defend a claim brought by a temp against your company.

No. 6: Do make sure that whatever training your temp agency provides on important subjects like harassment, workplace safety, workplace violence, discrimination, and retaliation meets your company's standards. Or require temps to go through your own training. Some lawyers believe this is tantamount to admitting to a joint employment relationship. That may be true, but if your own employees are supervising the work of the temps, then you are likely to be a joint employer anyway. For that reason, I'd rather be sure that everything is done right.

Image Credit: Dunder Mifflin photo from flickr, Creative Commons license, by Marcin Wichary. YouTube clips of Ryan the temp from The Office (NBC).

Robin Shea has 30 years' experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act). 
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