6TH CIRCUIT HOLDS GENERAL CONTRACTOR IS JOINT EMPLOYER OF SUBCONTRACTOR’S EMPLOYEES

A few months ago I wrote a blog post which discussed how companies that use temporary services or subcontractors can, in certain circumstances be held to be the joint employer of the employees of the temporary service or subcontractor.  You can read that blog post here.  Earlier this month the United States Court of Appeals for the 6th Circuit applied the factors I discussed in that blog post to hold that a general contractor for a construction site in Memphis, Tennessee was the joint employer of one of its subcontractors’ employees.

In EEOC and Maurice Knox v. Skanska U.S.A. Building, Inc. the EEOC and Knox sued Skanska alleging racial discrimination and retaliation in violation of Title VII.  Knox was employed by a subcontractor on the construction site named C-1 Inc. (“C-1”).   Despite this fact the EEOC and Knox argued that Skanska was Knox’s joint employer.  The District Court disagreed with the Plaintiffs and granted summary judgment to Skanska.  On appeal the 6th Circuit reversed.

The 6th Circuit held that Skanska was a joint employer because it could “share or co-determine those matters governing essential terms and conditions of employment.”  In making this finding the Court focused on the following facts:

  • Skanska could remove Knox and other C-1 employees from the jobsite if the employee was “incompetent, disorderly or otherwise unsatisfactory”
  • Skanska routinely exercised its ability to direct and supervise Knox’s performance.
  • Skanska set Knox’s hours and daily assignments.
  • Skanska assigned Knox’s supervisors.
  • Skanska responded to any complaints asserted by Knox.
  • Skanska was responsible for responding to any complaints asserted by Knox and did not consult with C-1 about those complaints.
  • Skanska had Knox sign a document on Skanska letterhead setting forth his job responsibilities.
  • Skanska repeatedly removed C-1’s personnel from the jobsite without any challenge from C-1.

The Skanska decision reinforces that when a company exercises the right to control subcontractor and temporary employees the company will most likely be considered a joint employer of those employees.  Employers should keep this in mind when making staffing decisions and, if controlling the temporary employee or subcontractor’s employee is not important, take the appropriate sets to eliminate or minimize the right to control in an effort to avoid a successful joint employer argument.

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