How Will Faush v. Tuesday Morning Impact New Jersey Employers?

In a case that will impact the hiring practices of New Jersey employers, the Third Circuit Court of Appeals recently held that temporary workers can bring discrimination lawsuits against the companies that retain their services. The decision in Faush v. Tuesday Morning will not impact all temp workers, but could result in liability in cases where the employer exerts a certain degree of control over the day-to-day activities of the employee.

The Facts of Faush v. Tuesday Morning

Plaintiff Matthew Faush, an African–American, is employed by Labor Ready, a staffing firm that provides temporary employees to several clients, including defendant Tuesday Morning, Inc. According to Faush, Labor Ready assigned him to work at one of Tuesday Morning’s stores, where he was subjected to racial slurs and racially motivated accusations and was eventually terminated.

Faush filed an employment discrimination suit against Tuesday Morning, claiming violations of Title VII of the Civil Rights Act and the Pennsylvania Human Relations Act, among other statutes. The District Court granted summary judgment to Tuesday Morning on the ground that, because Faush was not Tuesday Morning’s employee, Tuesday Morning could not be liable for employment discrimination. The plaintiff appealed.

The Court’s Decision on Faush v. Tuesday Morning

The Third Circuit concluded that Tuesday Morning should be considered the plaintiff’s employer for the purposes of Title VII. In reaching its decision, the Third Circuit relied heavily on the 1992 U.S. Supreme Court holding in Nationwide Mutual Insurance v. Darden, which established a multi-factor test for determining whether an employment relationship exists. As articulated by the appeals court, the primary factors include “which entity paid [the employees’] salaries, hired and fired them, and had control over their daily employment activities.”

With regard to how the plaintiff was paid, the Third Circuit highlighted that “although Tuesday Morning made its payments to Labor Ready, rather than to the temporary employees, those payments were functionally indistinguishable from direct employee compensation.”

The appeals court also noted that Tuesday Morning had control over hiring and firing. “If Tuesday Morning was unhappy with any temporary employee for any reason, it had the power to demand a replacement from Labor Ready and to prevent the ejected employee from returning to the store,” the panel noted.

In addition, as to control over the plaintiff’s day-day activities, the Third Circuit stated: “Tuesday Morning personnel gave Faush assignments, directly supervised him, provided site-specific training, furnished any equipment and materials necessary, and verified the number of hours he worked on a daily basis.”

The Message for New Jersey Employers

For New Jersey employees, the message is clear — hiring temporary workers will not shield you from liability from discrimination suits (and many other claims). For staffing agencies, the decision also highlights the need to educate clients and workers about the roles and responsibilities of all parties. Contracts should also clearly articulate the legal relationships.