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Monday, February 17, 2014

A SUBCONTRACTOR’S HOSTILE WORK ENVIRONMENT CAN BE A GENERAL CONTRACTOR’S LIABILITY

     In December 2013, the Sixth Circuit Court of Appeals held that a general contractor could be liable under Title VII for a hostile work environment claim brought by a subcontractor’s employee under a “joint employer theory.” EEOC v. Skanska USA Building, Inc., No. 12-5967 (6th Cir. Dec 10, 2013). In Skanska, the subcontractor’s employees complained directly to the general contractor about the hostile work environment, alleging that they were the subject of racial slurs and epithets including “the n-word” and were subjected to graphic depictions such as a picture of a Caucasian person shooting an African-American posted in the port-a-potty. The alleged offenders were employees of the general contractor, other subcontractors, and third parties. Despite having knowledge of the complaints, the general contractor took no action to remedy the problem, instead directing the subcontractor to fire the complaining employee due to them being a “poor fit.”

     Why was the general contractor liable under a “joint employer theory”? The court found that the general contractor supervised and controlled its subcontractor’s employees’ daily activities, directed their performance, their hours and daily assignments, assigned supervisors, handled complaints, and handled employee disagreements. Further, the court found that the general contractor did not consult the subcontractor’s owners regarding the employees’ complaints. Additionally, the court considered the subcontractor a “nonentity” who did “nothing” with respect to its employees.

     This case is a cautionary tale to not only general contractors but to all employers. It evidences a changing tide in EEOC practice and discrimination jurisprudence, making it likely that the EEOC and other state agencies could extend this theory to borrowing employers, temporary labor companies and others using subcontractors. Therefore, under the joint employer theory, it is possible that an innocent general contractor or borrowing employer could be held responsible for discriminatory conduct and hostile comments from subcontractors or otherwise temporary employees.

    Title VII holds employers responsible for protecting their employees from other employees, customers and third-parties and prohibits employers from discriminating against any individual with respect to compensation, terms, conditions or privileges of employment because of that individual’s race, color, religion, sex or national origin. Other state and federal laws prohibit discrimination based on age, disability, veteran status, and other characteristics.

     In order to protect your business, it is imperative that you implement practices and procedures that prohibit such discriminatory conduct. The following practice pointers will help limit your liability under a joint employer theory:

 ▪          - Ensure that your subcontractors and independent contractors implement, maintain and enforce written 
              EEO policies, including anti-discrimination, anti-harassment and anti-retaliation policies
            - Incorporate such EEO policies by reference into any contract for services.
            - Carefully train all employees, supervisors and managers on how to better prevent, identify and remediate                            such issues.
            - Keep a written record of the complaint, how the employer addressed the complaint and how the                                             issue was resolved.
▪           - Handle complaints in a timely, discreet and confidential manner.
            - Thoroughly investigate any complaints and keep records of the investigation.
    - Take timely, appropriate action based on your findings. 

By: Christina L. Feyen, Esq.