The Third Circuit issued a decision last week holding that a temporary worker at a staffing agency can proceed with discrimination claims against the agency’s client to which he was assigned. In Faush v. Tuesday Morning, Inc., the plaintiff was employed by Labor Ready, a staffing agency, and assigned to work at the defendant, Tuesday Morning, Inc. Mr. Faush contended that Tuesday Morning employees subjected him to racially discriminatory comments and terminated his assignment because of his race. After his termination, he initiated a lawsuit against Tuesday Morning for violations of Title VII of the Civil Rights Act of 1964 and the Pennsylvania Human Relations Act. The District Court dismissed Mr. Faush’s claims, concluding that Tuesday Morning was not his employer and therefore was not liable under the statutes. The Third Circuit reversed.

The Third Circuit first determined that the “joint employer” test articulated in Nationwide Mut. Ins. Co. v. Darden, and not the arguably more expansive Enterprise test for claims under the Fair Labor Standards Act, applied in the Title VII context. The Darden test focuses on the “right to control” and considers the following non-exhaustive list of relevant factors: the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. Analyzing these factors, the Court found sufficient evidence of joint employment to defeat summary judgment.

Among other indicia of employment, the Court found compelling that, although Tuesday Morning paid Labor Ready, not Mr. Faush, the payments, made in the form of an hourly rate per worker with overtime obligations, were “functionally indistinguishable” from direct compensation to the temporary workers. In addition, Tuesday Morning retained sole control over whether the temporary workers were permitted to work at the store, although it could not require their termination from Labor Ready. And, Tuesday Morning exercised complete control over the temporary workers’ day-to-day activities. The Court also noted that the Equal Employment Opportunity Commission takes the position that a client of a temporary staffing agency typically qualifies as an employer of the temporary workers under Title VII during the job assignment because of the supervisory control the client exercises over those workers.

Although the Faush decision clarifies the test for joint employment over temporary workers, it does not significantly alter the best practices for preventing and correcting discrimination—training employees that they are expected to comply with all antidiscrimination statutes in all instances and investigating all claims of discrimination regardless of the status of the party raising the complaint.