Circuit Clarifies Factors to Consider When Litigating a Joint Employer Relationship for Title VII Liability | FordHarrison

Abstract: On March 7, 2022, a sharply divided Second Circuit panel (covering New York, Connecticut and Vermont) addressed the question of what a Title VII plaintiff must claim to adequately plead the existence of an employer-employee relationship within the framework of the joint employer doctrine. See Felder v. United States Tennis Association (2nd Cir. 2022). As a general rule, a company is only liable for discrimination against employees and applicants for employment; however, if a business does not directly employ a person, it may be liable as a joint employer. Felder This is the first time the Second Circuit has been faced with the question of what factors must be pleaded to adequately plead a joint employment relationship. In vigorous dissent, the court joined its sister circuits and concluded that non-exhaustive factors drawn from the common law of agency, including control over hiring, firing, training, promotion, discipline, supervision and records management, insurance, and payroll are relevant to this investigation.

In so ruling, the court upheld the lower court’s dismissal of the Title VII plaintiff’s claim against a defendant because he did not allege that the entity exercised significant control over the terms of his employment, including training, supervising and issuing his paychecks.

The case

Plaintiff Sean Felder sued the United States Tennis Association (USTA) for racial discrimination under Title VII. For several years, Felder worked as a seasonal security guard at USTA events, including the US Open in New York. During this time, Felder worked for various security companies that contracted with the USTA to provide security at The Open.

One such company hired Felder to compete in the 2016 Open. Felder’s supervisor told him to go to the USTA credential office to collect his security credentials for the Open. However, when Felder went to get his credentials, he was told his name was not in the system. Felder called his supervisor, who Felder said said the USTA denied him his credentials in retaliation for an earlier racial discrimination complaint (which was settled in 2015) he had filed against one of the security companies. Thus, Felder could not participate in the 2016 Open.

Felder sued the USTA under Title VII, alleging racial discrimination and retaliation. The district court denied his claims, finding that Felder had failed to sufficiently establish an employer-employee relationship with the USTA.

In relevant part, the Second Circuit upheld the dismissal. Both parties agreed that the USTA was not Felder’s direct employer. The issue was whether the USTA qualified as a joint employer. The court answered in the negative. He began by assessing the meaning Congress intended of the terms “employer” and “employee”, concluding that the Supreme Court interpreted these terms under the general common law of retainer. This meant that the court would apply a non-exhaustive set of factors, including:

  • the duration of the relationship between the parties
  • whether the principal has the right to assign additional work to the principal
  • the extent of the hired party’s discretion over when and how long to work
  • whether the alleged employer paid the employee’s wages
  • whether the alleged employer hired and fired the hired party
  • whether the alleged employer controlled the day-to-day operations of the job

The court therefore concluded that it would find a joint employer relationship when two or more entities share significant control over the same employee.

The court noted that in applying this test to the case before it, the factors presumed an existing relationship between the parties. But the USTA denied Felder his credentials before he could start working at the Open. Thus, the court wrote that it would assess the pleading standards applicable to the joint employer relationship in situations where there is no significant relationship between the parties.

Citing numerous other Title VII cases from its sister circuits, the court framed the issue as follows:[w]If the USTA had been Felder’s co-employer had Felder worked at the US Open? Otherwise, the USTA cannot be held liable under Title VII.

The court said no. Felder did not allege that the USTA had any control over his hiring or firing. Felder did not allege that the USTA asked the security company to fire Felder if his credentials were denied. He did not allege that the security firm hired him for the sole purpose of working at the USTA. He did not allege that the USTA had any control over his hiring, let alone a role in it. Finally, Felder did not allege that “the USTA had any involvement in his training, supervision, issuance of his paychecks, coverage of his insurance or other benefits, or control of other means.” of his job (such as providing his uniform or other tools necessary for the position).”

Felder’s only allegation of USTA screening was that it could effectively dismiss security firm employees by refusing to issue them credentials. This, the court wrote, is not sufficient to adequately plead a joint employer relationship. “The co-employer doctrine does not require an entity to exercise no control over who may or may not work in its facilities, only that it may not exercise important control without being subject to Title VII,” the court wrote.

Thus, the court upheld the dismissal of Felder’s Title VII claims.

Conclusion of the employers:

In just under a year, the Second Circuit has made it harder for plaintiffs to sue employers over wage and hour and discrimination claims. (See our May 6, 2021 alert, “Second Circuit Committee Adopts Seemingly Enhanced Advocacy Standard for Will in FLSA Overtime Cases.”) responsibility if they take precautions to ensure that they do not exercise significant control over the alleged employee’s relationship with them.

Comments are closed.