6th Circuit Adopts Theory of Joint Employer Liability Under Title VII

Author: Beth P. Zoller, XpertHR Legal Editor

January 23, 2014

A recent 6th Circuit decision provides employers with insight regarding what it means to be considered a joint employer under Title VII. In Maurice Knox v. Skanska USA Building, Inc., 6th Cir Nos. 12-5967; 12-6236 (Dec 10, 2013), the 6th Circuit held an employer liable for the racial discrimination claims of a subcontractor's worker, reversing a lower court's ruling.

Skanska USA Building (Skanska), subcontracted with C-1, Inc. (C-1) to hire construction workers (including Maurice Knox) to perform work at Skanska's worksite. Knox claimed that during the course of his employment, he was subjected to repeated acts of harassment and discrimination consisting of racial slurs and racially charged graffiti. The employee claimed that although he complained to his direct supervisors and then directly to Skanska, nothing was done to remedy the harassment.

The Equal Employment Opportunity Commission (EEOC) brought a lawsuit claiming harassment and retaliation against C-1 and Skanska alleging that, even though Skanska did not employ Knox directly, it was liable under Title VII as a joint employer. Although the District Court dismissed the claims against Skanska, the 6th Circuit reversed and held that Skanska could be held liable under a theory of joint employment.

The court noted that entities may be joint employers when they "share or co-determine" the essential terms and conditions of employment. To determine whether an entity is a joint employer, the court would evaluate the entity's ability to hire, fire or discipline employees, to affect their compensation and benefits and to direct and supervise their work performance. The 6th Circuit noted that this test has also been adopted by the 3rd, 9th and 11th Circuits.

Here, the court ruled that there was sufficient evidence to hold that Skanska acted as a joint employer because it supervised and controlled the workers' day-to-day activities by:

• Setting their hours and daily assignments;
• Assigning its own employees to supervise them;
• Handling worker complaints;
• Resolving their disagreements with their supervisors; and
• Repeatedly removing workers from the construction site without challenge from the subcontractor.

This case clarifies that in jurisdictions adopting a theory of joint employment, if an employer exercises enough control over another entity's employees (such as a subcontractor, staffing agency or other third party) to satisfy a court's particular test, the entities may be considered joint employers. In such a situation, both entities may be liable for discrimination and harassment under Title VII.