Employment Law Daily Employee who protested discriminatory practices of agency's client may be able to sue staffing agency
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Tuesday, January 12, 2016

Employee who protested discriminatory practices of agency's client may be able to sue staffing agency

By Kathleen Kapusta, J.D. Observing that the Tenth Circuit has not yet squarely addressed the role of a staffing agency in Title VII litigation, a federal magistrate recommended denying a staffing agency’s motion to dismiss the retaliation claim of an employee fired after allegedly opposing the discriminatory hiring practices of the agency’s client. Although the magistrate acknowledged that courts in the Tenth and other circuits have concluded that staffing agencies are not liable for ensuing adverse employment actions taken by an employer once the agency places an individual with that company, the employee here alleged that both the employer and the staffing agency terminated him following his complaints of gender discrimination (Basulto v. Exact Staff, Inc., January 6, 2016, Wang, N.). No “broom pushers.” After Exact Staff hired the employee, it arranged for him to interview with Electronic Recyclers. Hired as an on-site HR rep, he alleged that during his first week of employment, Electronic managers told him the company did not want female employees working at the plant. He also claimed they referred to women generally as “broom pushers” and the company had a disproportionately large number of men working there. When he asserted that women were equally capable of performing jobs at the plant, he was purportedly told he “did not understand the job well enough and, as a result, could not understand why females could not perform the job.” Nonetheless, he hired two female workers within his first two weeks of work. The first resigned not long after she was hired, when she was told “not to get too comfortable,” and the second was fired the same day she was hired for being “too slow.” The employee complained to both companies about what he perceived as discriminatory hiring practices, telling Exact Staff’s national HR manager: “Our facility is willing to take male applicants with felonies and others who are currently on parole/probation but they are not willing to give a chance to a female candidate with a much better background the same opportunity. I understand this has been the case for a very long time. But these are not the hiring practices that I follow.” Exact Staff’s HR manager thanked him for alerting her to the plant’s practices, advised him that she had been happy with his performance, and told him she had to let him go because Electronic had asked that he be removed from the plant. He then sued both companies for retaliation. Joint employers? Moving to dismiss, Exact Staff argued that the employee did not allege it took a materially adverse action in response to his complaints of gender discrimination and that employment agencies’ clients, rather than the agencies, qualify as the employer for purposes of Title VII retaliation claims. Observing that the employee claimed he was employed by both companies and that Exact Staff conceded that it hired him into a temporary associate position and later arranged for him to interview with Electronic, the magistrate, for purposes of the instant motion, accepted as true that Exact Staff and Electronic were joint employers. Protected activity. Noting that the employee alleged he engaged in protected activity when he complained to Exact Staff’s HR manager during his first week with Electronic about the managers’ discriminatory statements regarding the hiring of female applicants, when he advised the HR manager by email that Electronic “is not giving an equal opportunity to females as they are to male applicants,” and wrote that “if this is the way the facility wishes to hire employees, then I’d rather not have any part of it,” and when he again reiterated his concerns about gender discrimination at the plant, the magistrate observed that informal complaints constitute protected activity. Terminated by both? While Exact Staff argued that, as a staffing company, it did not have the power to control the employee’s assignment with Electronic or the power to terminate him from that temporary assignment, the magistrate pointed out that he alleged both companies terminated him following his protected activity. Further, he contended that Exact Staff failed to place him “in another temporary position at a different Exact Staff client,” and reasserted that the staffing agency ended its employment relationship with him after Electronic asked that he be removed from the plant. Unpersuaded that dismissal was appropriate at this stage, the magistrate found that the employee sufficiently alleged that both companies employed him and then terminated his employment following his protected activity. Based on the record before it, the magistrate determined that Exact Staff’s argument regarding the duration of its relationship with the employee, or any argument disputing its status as his employer, was better suited for determination after further factual development.

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