In Faush v. Tuesday Morning, Inc., an employee who worked for a temp. agency was permitted to raise the inference that the client where he worked was a co-employer for purposes of his race discrimination claim. 808 F.3d 208 (Cir. 3d 2015). The Third Circuit Court of Appeals held that the client’s payment to the temp agency was essentially the same as though they had paid the employee directly and further, that the client directed, supervised and controlled the employee’s work. On the other hand, where the employer exercises no control over the work, they will not be deemed to be a joint employer, holding that a nurse would not be considered an employee of the county where the county did not exert any control over the performance as a nurse. Chrisanthis v. County of Atlantic, 361 N.J. Super. 448 (App. Div. 2003)
Clearly, I have deviated from my usual blog style to discuss case law. The reason is that you, either as an employee or a business owner, will need to be wary of the outcomes in these cases.
As we move towards a virtual working environment, hiring virtual assistants, receptionists, bookkeepers, marketing staff, there are certain fact patterns under which you would be deemed to be an employer. Most virtual agencies will tell you that the employee assigned to you work is the Agency’s employee or independent contractor. But don’t forget that you, as the hiring company, are assigning the work, tasks, hours, and supervising their work product. Even though you are paying the Agency, under Faush, you may be found to be a co-employer.
This means that should your virtual employee claim that they were harassed or retaliated as a result of their work for your company, you could be liable, at the very least to defend yourself, and at the most, for a judgment entered against your company. Remember that claims for harassment and discrimination can still arise even in the virtual working environment, and this time, there are likely to be emails and/or video or audio recordings of the wrongful conduct alleged by the employee.
The best way to protect yourself is to plan as though you are a direct employer. This means that you need an employee handbook because the EEOC considers employers who don’t have one to have failed to take the very basic steps to prevent discrimination and harassment in the workplace. You should also do a short, annual training on the key provisions of that handbook. And for small businesses who do not have an internal HR structure, make sure that you use a reasonable, external reporting structure so that the EEOC would deem that the employees actually had a reasonable mechanism to report harassment and discrimination without having to report to the harasser or the business owner. This is particularly important in small family owned businesses where courts have found that the company lacked a meaningful reporting mechanism where the employee was required to report harassment to the harasser’s close relative.
The Bottomline: Don’t assume that you are not a direct employer just because you are hiring through a temp agency or a virtual agency. Be prepared and behave as though you are so that you are prepared should someone, a court, decide that you are.