Butler v. Drive Auto. Indus. of Am. - 793 F.3d 404 (4th Cir. 2015)

Rule:

The U.S. Court of Appeals for the Fourth Circuit adopts the hybrid test for determining joint employment for purposes of Title VII of the Civil Rights Act of 1964. Factors for courts in the Circuit to use in assessing whether an individual is jointly employed by two or more entities are: (1) authority to hire and fire the individual; (2) day-to-day supervision of the individual, including employee discipline; (3) whether the putative employer furnishes the equipment used and the place of work; (4) possession of and responsibility over the individual's employment records, including payroll, insurance, and taxes; (5) the length of time during which the individual has worked for the putative employer; (6) whether the putative employer provides the individual with formal or informal training; (7) whether the individual's duties are akin to a regular employee's duties; (8) whether the individual is assigned solely to the putative employer; and (9) whether the individual and putative employer intended to enter into an employment relationship. None of these factors are dispositive, and the common-law element of control remains the "principal guidepost" in the analysis. Indeed, courts can modify the factors to the specific industry context.

Facts:

In this Title VII employment discrimination action, Brenda Butler seeks to recover for sexual harassment she allegedly experienced while working at a Drive Automotive Industries (Drive) factory. In the proceeding below, Drive argued that Butler was actually employed by a temporary staffing agency, ResourceMFG, and therefore Drive was not an "employer" subject to Title VII liability. Although the district court acknowledged that in some instances an employee can have multiple "employers" for Title VII purposes, it concluded that in this case ResourceMFG was Butler's sole employer. Accordingly, the district court granted summary judgment to Drive on Butler's claims.

Issue:

Did the district court err in finding that Drive was not a joint employer of Butler?

Answer:

Yes.

Conclusion:

The court held that the joint employment doctrine applies to Title VII of the Civil Rights Act of 1964. Multiple entities may simultaneously be considered employers for the purposes of Title VII. The hybrid test, incorporating both the common law test derived from principles of agency and the "economic realities" test, applies to the joint employment determination. Courts should use a number of factors, with control the principal guidepost in the analysis. The district court inappropriately discounted several considerations in finding that Drive was not a joint employer of Butler. Although ResourceMFG disbursed Butler’s paychecks and officially terminated her, Drive had a substantial degree of control over the circumstances of her employment.