Temp Workers Can Sue for Discrimination ... Maybe

The battle over workers' rights and employers' desire to conduct business lawsuit-free turned another page recently. In Faush v. Tuesday Morning. Inc,The Third Circuit overturned a grant of summary judgment in favor of the defendant temp-employer, remanding the case back to the lower court for further findings. The language applied in the court's opinion spells more trouble ahead for employers seeking to blur the distinction between 'temp' and 'employee.'

Matthew Faush's Lawsuit

Matthew Faush was a worker with Labor Ready, a staffing firm that provides temporary employees to various companies including Tuesday Morning, defendants. Mr. Faush alleged that Labor Ready assigned him to one of Tuesday Morning's stores, where he suffered racial slurs, racially biased accusations of wrongdoing, and was eventually fired.

Faush brought suit against Tuesday Morning under Title VII and Pennsylvania laws. The district court granted Tuesday's MSJ because it found that Faush was not Tuesday's employee and thus had no cause of action for employment discrimination.

The circuit court, however, disagreed. In its application of SCOTUS's Nationwide Mut. Ins. v. Darden, it found that Tuesday Morning was Faush's employer under a variety of factors: who pays the employee's salary, who hires and fires, and who controls the worker's daily employment activities.

• Employee's Salary: The court found that even though Tuesday Morning paid labor ready instead of Faush, the payments made were "functionally indistinguishable" from direct payments to Faush.
• Hiring and Firing: The court also found that Tuesday Morning called the shots in such a way as to hiring and firing that Tuesday morning was, for all intents and purposes, Faush's employer.
• Control: The court too also found that Tuesday Morning directly supervised and controlled Faush's daily employment activities.

Temp Employee = Employee

Employers should be worried because there are getting to be fewer and fewer ways to call a temporary employee something else. "Temp worker" is the most favored, but it would be inadvisable for employers to try such language limbo. Mislabeling temporary workers as independent contractors is also a risk that is somewhat dubious, and may actually end up in punitive fees.

Related Resources:

• BOA Fined $2 Million for Race Discrimination (CNN Money.com)
• Cat's Paw: Headache for Employers and In-House Counsel (FindLaw's In-House)
• 7th Circuit Interprets Proximate Cause in Cat's (FindLaw's Seventh Circuit Blog)
• Is Employment Discrimination Ever Legal? (FindLaw's Free Enterprise)