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Co-Employment is a Reality in Employment Discrimination Claims

I have written in the past about staffing firms suffering from their client's alleged sins. Here are two more cases illustrating the trend, both of which just happen to involve Spherion.

Takaro Jamison v. Daye North America and Spherion Staffing. This Charleston, South Carolina, U.S. District Court case (attached below) contains the usual joint employment allegations:

Defendant Spherion employed the Plaintiff by providing pay, benefits, leave, supervision, Human Resources support, and by having the ability to terminate the Plaintiff. Defendant Daye also employed the plaintiff as a “joint employer” by providing direct supervision of the Plaintiff, training on how to perform her job functions, providing all tools and machinery necessary to perform her job functions, and by having the ability to effectuate the termination of the Plaintiff.

The Complaint then alleges a litany of discriminatory conduct by the client:

On or about December 14, 2020, the Plaintiff, an African American female, was placed at Defendant Daye by Defendant Spherion. At all times relevant to this Complaint, the Plaintiff was effective and efficient in her employment.
Beginning on or about December 21, 2020, the Plaintiff was subjected to racial discrimination by her supervisor, Mike Frapper, while working for Defendants.
Mr. Frapper would make derogatory comments on the basis of race when speaking to other Caucasian employees, like “you don’t have to be like them” (referring to African American employees, including the Plaintiff).
In addition, throughout the remainder of Plaintiff’s employment, Mr. Frapper would not allow Caucasian employees to speak to African American employees, including the Plaintiff.
For a brief period of time, Plaintiff was working in the front office but Defendant Daye’s General Manager, Joel, quickly moved the Plaintiff to the back office so that only Caucasian employees would be visible to the public.

Yet Spherion was also sued and now will be obligated, at a minimum, to spend money defending the case, because Employment Practices Liability insurance policies typically have large deductibles.

Client indemnity obligations can make it worse

But it can be worse, because clients sometimes include language in their contract forms that requires the staffing firm to defend and indemnify the client for all claims brought by the temporary workers, including discrimination claims. This is manifestly unreasonable, of course, and I fight it all the time when negotiating contracts for staffing firms. One effective argument I have used is this: "When a client requires indemnity for the discriminatory wrongs that it commits, it is leading its own employees to believe that they can unlawfully discriminate with impunity. Are you telling me that's your company policy, and do you think the EEOC would approve of it?" This generally does the trick.

Peter Avarez v. Weaver Popcorn Manufacturing and Sperion Staffing. This Pennsylvania case alleges that the Plaintiff was terminated, presumably by the client, after staying out sick for several days with COVID-19. Clients often fail to realize that temporary workers have the same rights as their own employees under employment discrimination laws.

How to protect your firm

In a situation like this, what the staffing firm should do is attempt to educate the client and gently advocate on behalf of the worker it placed.  Field personnel should be trained to recognize these situations and take action, including immediately getting their own Human Resource Department involved. This does not always work with the client, but it will provide a strong defense when a lawsuit comes around.