Dive Brief:

• The Fourth Circuit Court of Appeals in Richmond, Va., issued a significant employment law decision on July 15, creating a blueprint for all federal courts in West Virginia, Virginia, Maryland and the Carolinas to determine joint employer status between a company and a temp agency for purposes of discrimination law, according to a National Law Review article.
• The Court established a nine-part test to determine if the customer company had sufficient control over the temp agency employee so that the customer was potentially liable for damages to the temp agency’s employee.
• The Court summarized what was most important: control. That is, the power to hire and fire, day-to-day supervision and where and how the work takes place, compared to the customer’s own employees.

Dive Insight:

There are lessons in this decision if a company uses a temp agency, Anna Dailey, managing partner of the Charleston office of the Dinsmore law firm, wrote. There are commercially important reasons to continue using a temp agency in one’s business model. But customer companies must be wary.

A company can still be liable to an agency’s employees if supervisors or management engage in unlawful conduct toward them, just as if they had been employed directly. Unless the temp agency is also doing all the supervision and the temp employee is working independently of the customer company's employees, HR must pay closer attention to their own employees’ conduct. The real solution, she writes, is training and effective investigation and handling of complaints about supervisory misconduct to avoid liability to persons working at a facility.