September 13, 2023

Are You My Employer? 5th Circuit says, “Yes”

A small business provided at-home, non-medical care and companion services. It employed ten employees and engaged the services of 50 independent contractors (IC).  Two of those 50 were a mother and daughter. The company owners were husband and wife. The daughter repeatedly complained to the owner-wife that her husband was subjecting her to a sexually, hostile work environment.

After complaining three times with no result, the daughter contacted the EEOC. The next day, she and her mother were fired by the owner-wife. They sued for unlawful retaliation under Title VII of the Civil Rights Act, which covers employers with 15 or more employees.

The company’s defense was that it was not a covered employer because it employed only ten employees. The other 50 workers were independent contractors. Did the court agree? No, or I would not be writing this article.  Here’s some reminders and lessons learned.

The 5th U.S. Circuit Court of Appeals (covering LA, TX, MS) found the company exercised sufficient control over the IC’s and affirmed the lower court’s award of over $80,000, in part, because the company:

  • hired and fired caregivers;
  • set their work schedules;
  • exercised substantial control over the details and means by which the work was performed;
  • required orientation at the time of hiring to learn company’s policies, were quizzed on them, and had to initial their assent to them;
  • the policies proscribed certain behaviors during caregiver-client interactions, dictated a dress code, and imposed rules about hours, scheduling, and pay days;
  • reviewed caregivers on an annual basis regarding their work performance;
  • caregivers were subject to reprimand for failure to adhere to company policy or for performance issues; and
  • if a caregiver turned down several assignments, the company would no longer contact them.

Sound familiar
? If you engage the services of one or more independent contractors, ensure you have properly classified them as such. Also, talk to your company’s employment counsel. This court used the economic matters/right to control test. Different courts, states, federal and state regulatory agencies use different tests to classify workers as employees versus independent contractors.  Ensure you use the test that is most conservative or worker-friendly for your jurisdiction.

NOTE: Why was the mother awarded damages for unlawful retaliation when only the daughter made any complaints or engaged in any protected activity? The court found the mother was “an aggrieved person…due to her close association with her daughter.”

Check your policies and practices. Remember that employees may be legally protected from discrimination, harassment, and retaliation if they associate with a protected individual.