Sixth Circuit Reverses Employer’s Summary Judgment in EEOC Race Harassment Lawsuit Because Defendant Was a Joint Employer of Harassed Employees

On Tuesday, the Sixth Circuit reversed summary judgment for the defendant employer in a racial harassment lawsuit brought by the EEOC under Title VII and §1981.   EEOC v. Skanska USA Building, Inc. Nos. 12-5967 and 12-6236 (6^th Cir. 12-10-13).  In that lawsuit, the EEOC alleged that the employees of a construction subcontractor were subjected to daily name-calling and other harassment by workers on the construction site, were supervised almost exclusively by the general contractor and were subjected to retaliation by the general contractor for complaining about the unlawful racial harassment. The EEOC alleged that the general contractor was a joint employer with the subcontractor of the harassed employees.   The district court granted summary judgment to the defendant general contractor on the basis that it was not the employer of the harassed employees. The Sixth Circuit reversed on the basis that the general contractor was a joint employer of the harassed employees. “Entities are joint employers if they “share or co-determine those matters governing essential terms and conditions of employment.’”

 

Construing the evidence most favorably to the non-moving EEOC, the Court found the evidence showed that the subcontracting employer played a minimal role in employing and supervising the harassed employees.  While it selected, hired and paid the employees, the general contractor supervised them, monitored their performance, removed them from the job site with minimal explanations, and covered them with workers compensation insurance, etc.  The Court rejected the defendant employer’s argument that the subcontractor was required by contract to exercise supervisory authority over its own employees:  “That the terms of C-1’s contract with Skanska envisioned a more active role for C-1 is besides the point.” 

 In a rather direct analysis, the Sixth Circuit explained its reversal as follows:

To determine whether an entity is the plaintiff’s joint employer, we look to an entity’s ability to hire, fire or discipline employees, affect their compensation and benefits, and direct and supervise their performance. Id. Here, Skanska supervised and controlled the operators’ day-to-day activities without any oversight from [the subcontractor’s owner]. As a general matter, Skanska routinely exercised its ability to direct and supervise the operators’ performance. Skanska set the operators’ hours and daily assignments. Skanska assigned the operators’ supervisors. When the operators complained about the conditions on site, Skanska handled their complaints. When the operators had disagreements with their supervisors, Skanska arranged a meeting to discuss the situation. Moreover, Skanska did not consult with [subcontractor’s owner] about the operators’ complaints or their conflicts with Skanska’s supervisors. And when the operators called [the subcontractor’s owner] to ask him to improve conditions at the site, [he] did nothing.

Particular incidents likewise demonstrate Skanska’s control over the operators. As discussed above, Skanska executive Mike Rayburn called a meeting with [two harassed employees] and a  Skanska designated supervisor because “[the buck-hoist operators] were representing Skanska” and the operators “work, you know, under our direction.” No one told [the subcontractor’s owner] about this meeting. Skanska also had [two of the harassed employees] sign a document— typed on Skanska letterhead—entitled “Buck-hoist Operator  Responsibilities.” And Skanska repeatedly removed C-1’s operators from the job site without any challenge from [the subcontractor’s owner].  

The reality is that C-1 was a nonentity on the construction site. That the terms of C-1’s contract with Skanska envisioned a more active role for C-1 is besides the point. Viewed in the light most favorable to the plaintiffs, the record here is enough to support a determination Skanska jointly employed the operators.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.