To Be Or Not To Be An Employee? That is the (Agency) Question

To Be Or Not To Be An Employee? That is the (Agency) Question

by Joseph U. Leonoro

A few weeks ago in this forum, we talked about an important opinion from the Sixth Circuit Court of Appeals - the Circuit in which Kentucky and Ohio sit - on associational discrimination.  Well, that Court must be enjoying its time in the spotlight, because it recently issued another important decision to employers in the region, this time relating to how the term "employer" is defined under Title VII of the Civil Rights Act of 1964.

In Bryson v. Middlefield Volunteer Fire Department, 656 F.2d 348 (6th Cir. 2011) [an enhanced version of this opinion is available to subscribers / unenhanced version available from lexisONE Free Case Law] , the plaintiff filed a Title VII claim against the fire department, alleging that she had been subjected to sexual harassment and retaliation. The fire department sought dismissal of the case in District Court on the ground that the department did not have the minimum number of employees (15) to be covered as an employer under Title VII.

The District Court agreed with the fire department and dismissed the plaintiff's claim. In reaching this conclusion, the District Court determined that the benefits provided to the firefighters in the volunteer fire department was not enough to consider them employees as a threshold matter.

On appeal, the Sixth Circuit recognized that courts have taken different approaches to defining employees for purposes of Title VII because the statute itself simply defines an "employee" as "an individual employed by an employer."  Usually, according to the Court, this involves relying upon the common law of agency to determine whether an employment relationship exists for purposes of establishing a Title VII claim and focusing on the following factors:

  • the right to control the manner and means by which the product is accomplished;
  • the skill required;
  • the source of the tools used to perform the work;
  • the location of the work;
  • whether the hiring party has the right to assign additional work to the hired party;
  • the manner of compensation;
  • the hired party's role in hiring and paying assistants;
  • whether the work is part of the regular business of the hiring party;
  • whether the hiring party is in business;
  • whether employee benefits are provided; and,
  • the tax treatment of the putative employee.

In Bryson, the Sixth Circuit concluded that the District Court erred by requiring that the plaintiff first prove that the firefighters received significant compensation from the department, before undertaking an analysis of the above factors.  Notably, the Sixth Circuit did not say that the amount of remuneration (including benefits) couldn't be a factor in the overall analysis; simply that it could not be a sole prerequisite before examining the other considerations to the test.

The takeaway from this opinion is not so much in the Court's holding itself, but instead is the ongoing challenge that employers face in often having to apply different variations of this test.  Put another way, depending on why the inquiry is being made, a person may be considered an employee for one law but not an employee for another.

The news isn't all bad, though.  In most situations, the question of agency is not unlike the determination that is made in examining whether a person is an employee or independent contractor.  While it's a fact-specific inquiry and each situation is unique, the most important factor typically is whether the alleged employer has the right to control the manner and means of work.  Employers who aren't sure whether their workers are employees are not should use that as a preliminary guidepost, but always seek out competent legal counsel for further guidance on the issue.

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  • 04-23-2012

I like the way you expressed your views on this topic that is important for both employees and employers as well.