When it comes to using temporary employees, the set-up is all too familiar.  An employer engages a staffing firm, which hires, pays, and places temps to meet the employer’s needs.  The employer’s costs are fixed and payable to the staffing firm, and all of the liability risks that are part and parcel to the employment relationship remain with the staffing firm.  Or do they?

The Third Circuit’s recent decision in Faush v. Tuesday Morning, Inc. suggests otherwise.  In that case, Tuesday Morning, a retail store, engaged a staffing firm to provide workers to unload shipments of merchandise, stock store shelves, and set up product displays.  Upon arriving to begin work, Matthew Faush, an African American, and two other minority temporary workers, were allegedly ordered to work in the back of the store cleaning up trash.  When Mr. Faush complained about the assignment, he was purportedly told by the store manager that the minority temps were not allowed to work the floor due to concerns about theft.  Mr. Faush was allegedly terminated shortly after the exchange.

Mr. Faush filed a complaint against Tuesday Morning, alleging that he was discharged and discriminated against on the basis of his race, in violation of Title VII and the Pennsylvania Human Rights Act.  Pointing to its engagement of a staffing firm, the company denied that it was liable to Faush because he was not an employee.  The district court agreed and granted summary judgment, finding that Tuesday Morning was not Mr. Faush’s employer, and as such, could not be liable under the discrimination statutes.  Mr. Faush appealed to the Third Circuit.

The Third Circuit examined the following factors to determine whether Tuesday Morning could be held liable to Mr. Faush as a “joint” employer:  the skill required to do the job, the location of the work, the right of the company to assign additional projects, the duration of the relationship, the method of payment and the provision of employee benefits.  The Third Circuit reversed the District Court, holding that because the company indirectly paid Faush’s wages, had the power to demand replacement workers, gave assignments and directly supervised temporary workers, provided all necessary job-specific training and equipment, and dictated the number of hours worked, a reasonable jury could find that Tuesday Morning was Faush’s employer (and a joint employer along with the temporary agency).  In other words, Tuesday Morning could be liable for discrimination against Mr. Faush.

So what does this all mean for Pennsylvania employers?  First, the fact that a worker is provided through a staffing firm isn’t a “get out of jail free card” to easily defeat a discrimination claim.  Rather, the precise nature of the relationship between the employer, the temp, and the staffing agency will be examined to determine if a joint employer relationship exists.  These questions are fact issues, and it is therefore unlikely that an employer can win such a case on summary judgment.  Second, employers that use staffing agencies should carefully review their contracts and ensure that those agreements provide protection from liability.  Including adequate indemnity language will help to ensure that the financial impact of any claim filed by a temporary employee is reduced or eliminated altogether, even if joint employer liability is established.