Suppose you work at or own, a staffing agency. Your company provides contingent workers “temps” to companies looking to, well, temporarily, augment their workforce. Maybe your client has specific preferences as to who it hires. Maybe they prefer their workers be of a particular ethnic background or a certain age. Maybe they don’t state such preferences, but minority workers report issues with discrimination or harassment. Is your company responsible for that? If the client says they want certain candidates and not others, isn’t that their prerogative? If they choose not to do anything about discrimination, well, that’s their responsibility, right?
What if your company is the client? You retained the staffing agency to be the employer of record. The “temps” aren’t really your employees, are they? So you don’t really have any responsibility toward them, right? Isn’t that why you pay a staffing agency? Both parties in this scenario are wrong. Welcome to the wonderful world of joint employment! Both parties can be on the hook in this scenario. Read on, and we’ll, as always, explore a real, live case and discuss… So let’s just jump right in. The case is EEOC v. Cardinal Health and Howroyd-Wright Employment Agency dba AppleOne Employment Services. In a nutshell, here’s what went down:
Cardinal Health is an Ohio-based manufacturer and distributor of medical and laboratory products. AppleOne is a temporary staffing firm. AppleOne assigned temporary employees to work on-site at Cardinal Health’s warehouse. African American employees assigned by AppleOne to the warehouse were allegedly subjected to racial epithets and degrading comments from co-workers. Employees who complained were retaliated against, disciplined, terminated, or even forced to quit. According to the EEOC, neither Cardinal Health nor AppleOne took any corrective action.
The EEOC filed suit against both companies on May 21, 2019. The parties have now settled. Cardinal Health will pay $1.45m and both companies have agreed to 1)retain an EEOC monitor, 2)conduct audits; 3) review and revise policies prohibiting discrimination and the distribution of those policies to direct and temporary employees; 4) establish an internal complaint procedure, and 5) maintain a toll-free complaint hotline and provide discrimination training for all employees.
Why are both companies on the hook? Cardinal Health and AppleOn are joint employers. Yes, AppleOne as the staffing agency is the primary employer of record. It takes care of just about all the administrative tasks (e.g. application process, pre-employment screening, I-9’s payroll, scheduling, placement, etc.) But AppleOne is not supervising, directing, or controlling these employees’ work or work environment/conditions. Cardinal Health did. Cardinal Health had certain privileges as an employer and therefore, legally had certain obligations. Both parties were legally obligated to provide their workers a safe, discrimination-free workplace. Given that the employees were working on Cardinal Health’s premises, Cardinal Health would likely have been found primarily liable, but that didn’t excuse AppleOne from at least trying to address the issue and refraining from providing additional workers to Cardinal Health until the issue was resolved.
A staffing company may also not discriminate on behalf of a client and attempt to excuse itself by claiming it was merely complying with a customer’s request. Again, both parties in such a scenario can be held jointly liable for employment discrimination. Did AppleOne get off “easy” in this case? If you see not having to contribute to the settlement as getting off easy, then perhaps. On the other hand, they had to pay 2 years’ worth of legal fees, and, with all the monitoring in place, AppleOne, for the foreseeable future, now has a new best friend it didn’t choose. So does Cardinal Health. I don’t know about you, but I prefer to choose my friends.
The conduct alleged is patently illegal. I do not for one minute believe that anyone engaging in such behavior doesn’t know it’s illegal. Do they really “get” that it’s wrong, though? I can’t say for sure. Many probably do not. In any case, employers need to make sure that all their employees “get” that it’s unacceptable and that they (the employers) will not tolerate it–unless the employer doesn’t mind getting sued. I’m assuming, however, that most of you mind.
Point taken? I hope so. See you next time.
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