The Second Circuit revived a portion of a Black security guard’s suit alleging that United States Tennis Association illegally blocked him from working at the U.S. Open, using the case to lay out how litigants can assert that two or more businesses are jointly liable for workplace discrimination.
A split three-judge panel held that plaintiff Sean Felder can pursue a claim against the USTA alleging he was unlawfully denied being able to work security at the Grand Slam tennis event because of a suit he had filed suit against previous employer. But in order for that retaliation claim to be viable, the panel said Felder has to offer more details showing that he qualifies as a joint employee of both USTA and the security contractor that sought to place him at the U.S. Open in 2016.
Chief U.S. Circuit Judge Debra Ann Livingston, who wrote for the majority, said the case poses a broader legal question for the appeals court: What does a Title VII plaintiff have to allege to show that a joint employment relationship exists between them and two or more entities?
The Second Circuit "has not previously identified a specific test" for evaluating joint employment in the context of Title VII, according to the panel, which said such an analysis should look at a series of factors rooted in common law to assess whether two or more business entities "share significant control" over the same employee.
That includes assessing whether entities have the power to hire, terminate or otherwise control the day-to-day activities of a purported employee, with the majority noting that the Third Circuit and the Ninth Circuit are among those that look to "common law agency factors" to assess whether employment relationships exist.
"Today we join our sister circuits in concluding that non-exhaustive factors drawn from the common law of agency, including control over an employee's hiring, firing, training, promotion, discipline, supervision, and handling of records, insurance, and payroll, are relevant to this inquiry," the majority said.
Although the panel vacated U.S. District Judge Edgardo Ramos' dismissal of Felder's retaliation claim under Title VII of the Civil Rights Act with directions that Felder update his claim, it upheld the judge's decision to toss Felder's claims that he was discriminated against because he is Black.
Felder's suit arises out of incidents that took place in 2016, when AJ Squared Security hired him and assigned him to work at the U.S. Open Tennis Championships.
However, when Felder's supervisor directed him to pick up his security credentials from the USTA on Aug. 29, 2016, Felder claimed the tennis association refused to give it to him, which effectively barred him from working security at the tournament.
In the July 2017 suit, Felder alleged that the USTA violated Title VII and other civil rights statutes when it denied him credentials both because he is Black and as punishment for him having filed a suit several years earlier against a different security firm that contracted with the USTA.
Felder represented himself at the trial court and retained counsel during proceedings at the Second Circuit.
In one of his orders tossing Felder's suit, Judge Ramos said there was no allegation included in the worker's pleadings that the USTA "exercised the type of control over Felder that would be necessary" to establish it as a joint employer.
In Monday's ruling, the Second Circuit majority similarly said Felder's complaint lacked enough details to qualify him as a joint employee of the USTA and AJ Squared for Title VII purposes.
Upon reaching that conclusion, the panel claimed that a business entity can only be liable as a joint employer for Title VII violations if it rejects the "temporary assignment" of someone employed by a contractor "if the entity would have been the employee's joint employer had it accepted his assignment."
"To plausibly allege that the parties intended to enter into a joint employment relationship, then, a plaintiff must allege that the entity would have exercised significant control over the terms and conditions of his employment by, for example, training, supervising, and issuing his paychecks," the panel said. "Because Felder's complaint is devoid of any such allegations, his Title VII claims must fail."
Considering Felder plausibly alleged that the USTA didn't credential him in retaliation for the lawsuit he had filed against his former employer, it said Felder could amend that particular claim with "additional indicia of a joint employer relationship."
"We … hold that Felder did not plausibly allege that the USTA was his employer merely by asserting that it refused to issue his credentials," the majority said. "Absent further allegations that the USTA would have significantly controlled the manner and means of Felder's work as a security guard, the complaint does not cross the line from speculative to plausible on the essential Title VII requirement of an employment relationship."
U.S. Circuit Judge Gerard Lynch, however, filed a partial dissent chastising his colleagues for effectively creating a loophole in Title VII that would allow companies to discriminate so long as they outsource the task of finding employees while the company still "retains and exercises the ultimate power to decide whether the employee can work" for it.
"When a company that subcontracts a necessary staffing function intercedes in the contracting agency's hiring decisions and asserts its own control over the assignment of workers in a discriminatory manner, it should be held accountable for its actions," Judge Lynch said. "The best interpretation of Title VII supports that result."
The majority's ruling, Judge Lynch added, effectively allows employers to reject a subcontractor's assignment of a worker on the basis of things like race or sex without having to worry about Title VII liability. It also puts subcontractors in the position of having to choose between losing a contract or violating Title VII itself by hiring and assigning workers based on what a contracting company will accept.
"Employers cannot be permitted to replace a sign that says 'No Irish need apply to work here' with one that says, 'No Irish will be given credentials to work here if they are hired by our security contractor and assigned to work at our premises,'" Judge Lynch said.
Michael W. Martin, director of clinical programs at Fordham University School of Law and an attorney for Felder, said Monday that "we are very proud of the work teams of Fordham Law students have done on this case."
Martin further claimed, "We are studying the opinion and will continue to seek justice for Mr. Felder."