Can a Staffing Agency Be Liable for Discrimination?

While more employers are using staffing agencies to fill certain positions, issues arise regarding who the actual employer is and, even more importantly, who is responsible for discrimination. In cases where the company using a staffing agency retains substantial control to the point that they are actually employers in all but name. The Fifth Circuit addressed this particular issue in a recent case.

Nicholson v. Securitas Security Services USA, Inc.

The plaintiff, Helen Nicholson, was an 83-year-old receptionist for Fidelity. Her employer asked that she be removed from that position. So the staffing agency, Securitas, replaced her with a 29-year-old woman. The staffing agency could not find another position for Nicholson, so she was terminated 10 days later. Nicholson sued both her employer and the staffing agency for age discrimination. Her employer, Fidelity, settled but the staffing agency moved for summary judgment to have the case dismissed.

Who is the responsible employer?

Securitas responded to the suit by claim first, that it was not Nicholson’s employer. However, the contract between the employee and the staffing agency clearly identifies Securitas as her employer. Also, because Securitas admitted in its answer to the complaint that it was her employer, the court did not apply the “right to control” test to make an official determination. The issue, though, was whether Securitas, as the staffing agency, was ever aware of the alleged discrimination by Fidelity. Their position was that, as the staffing agency, they were simply asked to replace one employee with another and they did so without questioning the reason for Fidelity's decision.

Evidence of knowledge of discriminatory motive required

The plaintiff conceded that there was, in fact, no evidence that Securitas knew Fidelity’s action was based on a discriminatory motive (i.e., age discrimination). On the other hand, the plaintiff argued that Securitas had a policy requiring counseling when an employee is reported to have substandard performance. Yet, there was no counseling performed in this situation and no investigation of any kind into the reasons for replacing the plaintiff. Because Securitas did not follow its own policies and procedures, the appellate court reversed the decision and reinstated the discrimination case.

Title VII of the Civil Rights Act of 1964

Title VII makes it unlawful to discriminate against someone on the basis of race, color, religion, national origin, or sex. It is also unlawful to retaliate against someone because they complain about such discrimination, file a charge of discrimination with the EEOC, and participate in a discrimination investigation or lawsuit. Title VII also requires an employer to provide reasonable accommodations for religious practices that are

“sincerely held,” as long it the accommodation would not create an undue hardship on the employer’s business.

If you feel you have been the victim of discrimination or retaliation, or if you have any questions regarding your employment rights, please contact Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.

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