General Contractor Held Liable for Hostile Work Environment Against Subcontractor’s Employee

Contributed by Noah A. Frank

Title VII prohibits employers from discriminating against any individual with respect to compensation, terms, conditions, or privileges of employment, because of that individual’s race, color, religion, sex, or national origin.  Other state and Federal laws prohibit discrimination based on age, disability, veteran status, and other characteristics.

Recently, the Sixth Circuit Court of Appeals held that a general contractor could be liable for a hostile work environment directed towards its subcontractor’s employee under a joint employer theory.  EEOC v. Skanska USA Building, Inc., No. 12-5967 (6th Cir. Dec. 10, 2013). The court found the general contractor supervised and controlled its subcontractor’s employees’ daily activities, directed their performance, determined their hours and daily assignments, assigned their supervisors, handled complaints, held meetings regarding disagreements, and did not consult the subcontractor’s owners regarding its employees’ complaints.  In essence, the court found that the subcontractor generally did “nothing” with respect to his employees and was a “nonentity.”  The court noted that the subcontractor’s African-American employees were allegedly called a variety of hostile names and epithets including the “n-word,” and were subjected to graphic depictions, including a picture in the port-a-potty of a Caucasian person shooting an African-American person.  The offenders included the general contractor’s employees, other subcontractors, and third-parties.  The victims allegedly reported the conduct to the general contractor, which did nothing to resolve their complaints, and eventually directed the subcontractor to fire them as a “poor fit.”  The court held that there was enough evidence to support a determination that the general contractor jointly employed the subcontractor’s employees, and therefore could be liable under Title VII.

While this case is an example of an extreme hostile work environment, its impact is directly applicable to all employers, and shows a changing tide in EEOC practice and discrimination jurisprudence.  Under Title VII, employers are responsible for protecting their workers from other workers, customers, and third-party vendors.  Under the joint employer theory, it is conceivable that a court could find an innocent general contractor or borrowing employer responsible for discriminatory conduct and hostile comments made towards another at their workplace.  Further, while this case addresses a construction general contractor’s responsibilities, it is likely that the EEOC and state agencies would attempt to extend this argument to borrowing employers (including those using temporary staffing agencies) and others using subcontractors.

Practice pointer for best practices:

Employers should ensure that subcontractors and independent contractors have, maintain, and enforce EEO policies, including anti-harassment and anti-retaliation policies. These policies should be incorporated by reference into any contract for services.  In light of the recent decision, employers should ensure that they not only have written policies and procedures in place to handle discrimination, harassment and retaliation issues, but must also carefully train all employees, supervisors and managers on the need to better identify, prevent and remediate such issues.