No. 12-6236

 

IN THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

 

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

          Plaintiff-Appellant,                                   [12-6236]

and

MAURICE KNOX,

          Intervening Plaintiff-Appellant,              [12-5967]

v.

SKANSKA USA BUILDING, INC.,

          Defendant-Appellee.

 

On Appeal from the United States District Court

for the Western District of Tennessee

No. 2:10cv2717

 

OPENING BRIEF OF THE EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION AS APPELLANT

 

P. DAVID LOPEZ

General Counsel

 

CAROLYN L. WHEELER

Acting Associate General Counsel

 

LORRAINE C. DAVIS

Assistant General Counsel

 

ELIZABETH E. THERAN

Attorney

 

U.S. EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION

Office of General Counsel

131 M St., N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4720

elizabeth.theran@eeoc.gov

TABLE OF CONTENTS

Table of Authorities.......................................................................... iii

 

STATEMENT REGARDING ORAL ARGUMENT................................... vi

 

STATEMENT OF JURISDICTION................................................................ 1

 

STATEMENT OF THE ISSUE....................................................................... 1

 

STATEMENT OF THE CASE....................................................................... 2

 

A.    Course of Proceedings.......................................................................... 2

 

B.     Statement of the Facts........................................................................... 3

 

1.         The Working Relationship Between Skanska and C-1................. 3

 

2.         The Alleged Racial Harassment of the Claimants...................... 15

 

3.         Litigation History.......................................................................... 25

 

C.    District Court’s Decision.................................................................... 26

 

STANDARD OF REVIEW........................................................................... 34

 

SUMMARY OF ARGUMENT..................................................................... 35

 

ARGUMENT................................................................................................ 36

 

A Reasonable Jury Could Find that Skanska Was A Joint Employer of the Buckhoist Operators Provided By C-1 at the Methodist Le Bonheur Hospital Site. 36

 

CONCLUSION............................................................................................. 56

 

CERTIFICATE OF COMPLIANCE............................................................ 57

 

CERTIFICATE OF SERVICE

 

ADDENDUM:

DESIGNATION OF RELEVANT DISTRICT COURT DOCUMENTS A-1

 

 

Table of Authorities

Cases

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).................................... 35

AT&T v. NLRB, 67 F.3d 446 (2d Cir. 1995)................................................ 33

Auger v. ABB Flexible Automation, Inc.,
34 F. App’x 160 (6th Cir. 2002)......................................................... 33, 54

Bechtel Constructors Corp. v. Detroit Carpenters Dist. Council,
610 F. Supp. 1550 (E.D. Mich. 1985)....................................................... 29

Boutin v. Exxon Mobil Corp., 730 F. Supp. 2d 660 (S.D. Tex. 2010)...... 30, 31

Bowling Transp., Inc. v. NLRB, 352 F.3d 274 (6th Cir. 2003)...................... 44

Carrier Corp. v. NLRB, 768 F.2d 778 (6th Cir. 1985)........................... passim

Celotex Corp. v. Catrett, 477 U.S. 317 (1986)................................................. 34

Donovan v. Brandel, 736 F.2d 1114 (6th Cir. 1984)...................................... 38

EEOC v. Foster Wheeler Constr., Inc.,
No. 98C1601, 1991 WL 515524 (N.D. Ill. July 14, 1999)....................... 29

Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28 (1961).......................... 38

Grace v. USCAR, 521 F.3d 655 (6th Cir. 2008).................................... passim

Hover v. Florida Power & Light Co.,
1994 U.S. Dist. LEXIS 19920 (S.D. Fla. Nov. 14, 1994)................... 30, 31

In re Enterprise Rent-A-Car Wage & Hour Emp’t Practices Litig.,
683 F.3d 462 (3d Cir. 2012)................................................................ 36-37

Johnson v. City of Saline, 151 F.3d 564 (6th Cir. 1998)..................... 28, 34, 43

Mahoney v. Nokia, 444 F. Supp. 2d 1246 (N.D. Fla. 2006),
aff’d, 236 F. App’x 574 (11th Cir. 2007)...................................... 40, 41, 42

Moreau v. Air France, 356 F.3d 942 (9th Cir. 2004).................... 40, 41, 51-52

Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992)............................. 42

NLRB v. Browning-Ferris Indus. of Pa., Inc.,
691 F.2d 1117 (3d Cir. 1982)....................................................... 27, 37, 49

NLRB v. Greyhound Corp., 368 F.2d 778 (5th Cir. 1966)............................ 29

Ondricko v. MGM Grand Detroit LLC, 689 F.3d 642 (6th Cir. 2012)..... 34, 35

Powell v. U.S. Cartridge Co., 339 U.S. 497 (1950)......................................... 37

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000)....... 34, 35, 50

Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947)............................... 38

Shah v. Deaconess Hosp., 355 F.3d 496 (6th Cir. 2004).................... 28, 29, 43

Simpson v. Ernst & Young, 100 F.3d 436 (6th Cir. 1996)...................... 29, 34

Solis v. Laurelbrook Sanitarium & Sch., Inc.,
642 F.3d 518 (6th Cir. 2011).............................................................. 38, 45

Swallows v. Barnes & Noble Book Stores, Inc.,
128 F.3d 990 (6th Cir. 1997).................................................. 27, 28, 37, 47

Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290 (1985)............. 37

 

Statutes

28 U.S.C. § 1291.............................................................................................. 1

28 U.S.C. § 1331.............................................................................................. 1

28 U.S.C. § 1343.............................................................................................. 1

28 U.S.C. § 1345.............................................................................................. 1

Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq.................. 36, 37

Family & Medical Leave Act of 1993, 29 U.S.C. §§ 2601 et seq......... passim

National Labor Relations Act, 29 U.S.C. §§ 151 et seq......................... 36, 37

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq... passim

 

Regulations & Rules

29 C.F.R. § 825.106....................................................................................... 36

29 C.F.R. § 825.106(a)............................................................................. 39, 40

29 C.F.R. § 825.106(b)............................................................................. 40, 47

29 C.F.R. § 825.106(c)................................................................................... 46

Fed. R. App. P. 4(a)(1)(B)............................................................................... 1

Fed. R. App. P. 32(a)(5)................................................................................ 57

Fed. R. App. P. 32(a)(6)................................................................................ 57

Fed. R. App. P. 32(a)(7)(B)........................................................................... 57

Fed. R. Civ. P. 56(a)...................................................................................... 34

6th Cir. R. 28(a)(1).......................................................................................... 1

 

STATEMENT REGARDING ORAL ARGUMENT

This appeal raises an important issue regarding the proper interpretation of Title VII and this Court’s standard for what constitutes a “joint employer” within the meaning of the federal labor and employment statutes.  Given the significance of this issue to the EEOC’s enforcement efforts, the Commission respectfully requests oral argument.

STATEMENT OF JURISDICTION

The Equal Employment Opportunity Commission (“EEOC” or “Commission”) brought this enforcement action against defendant Skanska USA Building, Inc. (“Skanska”) pursuant to Title VII of the Civil Rights Act of 1964 (“Title VII”), as amended, 42 U.S.C. §§ 2000e et seq.  The district court had jurisdiction under 28 U.S.C. §§ 1331, 1343, and 1345.  Final judgment was entered on August 8, 2012.  R.98/Judgment/PID-3776.[1]  The EEOC timely appealed on October 5, 2012.  R.105/Notice of Appeal/PID-3914.  See Fed. R. App. P. 4(a)(1)(B).  This Court has jurisdiction under 28 U.S.C. § 1291.

STATEMENT OF THE ISSUE

Did the district court err in holding that no reasonable jury could find that Skanska was a joint employer of the buckhoist operators who worked at the Methodist Le Bonheur Hospital site in 2009 pursuant to a subcontract agreement with C-1, Inc.?

STATEMENT OF THE CASE

A.        Course of Proceedings

This is an appeal from a final judgment of the district court dismissing this Title VII enforcement action.  The EEOC’s complaint, as amended, alleges that a class of African American buckhoist operators working on a site operated by Skanska were subjected to a hostile work environment on the basis of their race and retaliated against for complaining about it.  R.17/EEOC Amended Complaint/PID-125-26.  Class member Maurice Knox moved to intervene in the suit on October 8, 2010.  R.2/Knox Motion to Intervene/PID-13-24.  The district court granted Knox’s motion on November 30, 2010.  R.9/Order Granting Motion to Intervene/PID-44-45.

On August 8, 2012, the district court granted Skanska’s motion for summary judgment with respect to all claims.  R.97/District Court Order/PID-3757-75.  The district court entered judgment the same day.  R.98/Judgment/PID-3776.  The EEOC filed a timely notice of appeal on October 5, 2012.  R.105/EEOC Notice of Appeal/PID-3914.

 

 

B.          Statement of the Facts

1.     The Working Relationship Between Skanska and C-1

The defendant, Skanska USA Building, Inc. (“Skanska”), is a construction management company.  Skanska was hired to manage construction of the Methodist Le Bonheur project, a 600,000-plus-square-foot replacement hospital located in Memphis, Tennessee.  R.56-1/Hicks 30(b)(6) dep./PID-748-50.  The project began construction in 2007 and was completed in early 2010.  Id. at PID-749.  The client was Methodist Health Care-Methodist Hospitals, an entity of Methodist Le Bonheur Health Care; David Rosenbaum was Le Bonheur Hospital’s Vice President of Corporate Facilities Management and the Owner’s Representative/Project Manager for the project.  R.56-2/Shavelson memo/PID-843; R.70-6/Rosenbaum decl./PID-2819.

As the construction manager at the Le Bonheur site, Skanska maintained “final authority and responsibility for what went on at its site,” “to the extent that the owner didn’t supersede [its] authority.” R.56-1/Hicks 30(b)(6) dep./PID-751.  With regard to the subcontractors it employed, Skanska’s recurring role was to “to coordinate work activities, schedule, assist subcontractors in coordinating . . . , material delivery, installation work, quality control, things along that line.”  Id. at PID-752.

One of the subcontractors hired by Skanska at Le Bonheur was a general contractor and Minority Business Enterprise called C-1, Inc., owned by company president Gerald Neely.  R.56-3/Neely dep./PID-876, 878.  As Neely explained to the EEOC, C-1 was a small business that “never employed more than six employees at any given time,” including Neely and his wife, who were the only two officers of the company.  R.70-11/Neely interview notes/PID-2887; R.56-3/Neely dep./PID-880.  C-1 was in the business of supplying temporary labor to various types of construction sites; Neely estimated that between the time of the company’s founding in 1998 and the date of his deposition in 2011, C-1 had been involved in “maybe 3 or 400 projects.”  R.56-3/Neely dep./PID-879.

For the Le Bonheur project, Neely testified that C-1 was hired to provide operators for two buckhoists, which are temporary elevators that run up and down the outside of a building structure under construction.  R.70-11/Neely dep. 34/PID-2877 (testifying that C-1 was hired “[t]o provide, for lack of a better word, like a temp service guys . . . to perform the task of running the buck hoist”); R.57-2/color photos/PID-1633-35.  At any given time, C-1 provided two workers to operate the buckhoists at Le Bonheur, one per buckhoist, resulting in a total of six or seven buckhoist operators over the course of the project.  R.56-3/Neely dep./PID-884-85. Skanska set the work hours of the project, which were 7:00 a.m. to 3:30 p.m., Monday through Friday.[2]  Id. at PID-900, 969-70.  Neely testified that he decided to set the rate of pay for the buckhoist operators at $9/hour, basing his calculations on the $18/hour per operator rate that Skanska was paying him, his desired profit margin, and on the suggestion of Mike Rayburn, Skanska’s Project Executive for the Le Bonheur site.  Id. at PID-886; R.70-11/Neely dep. 49-50/PID-2877-78.  Buckhoist operators would submit their time sheets directly to Skanska, who would record the hours worked, and Neely would then retrieve the recorded hours from Skanska, issue paychecks to the workers, and make the appropriate deductions.  R.70-11/Neely dep. 20-21/PID-2876; R.70-3/Burt dep. 26/PID-2773; R.70-10/Vassar dep. 92-93/PID-2862.

Neely testified that, after he signed the contract with Skanska, it was his job to go out and hire the workers he needed for the project, which he did “most[ly] through word of mouth.”  R.56-3/Neely dep./PID-885.  The workers he hired signed an employment agreement specifying that they were being hired to work on the “LeBonheur Children’s Medical Center directed by Skanska Project” and that their duties were to “[p]rovide temporary hoist/elevator operation services and general labor at the LeBonheur Children’s Medical Center construction site as directed by Skanska.”  R.56-5/Vassar C-1 employment agmt./PID-1281; R.57/Burt C-1 employment agmt./PID-1411; R.70-4/Knox C-1 employment agmt./PID-2810.  The contract also contained a provision specifying that “[t]he term of this Agreement shall begin on [the effective date] and shall continue for a [sic] the time required for the Corporation to complete its contractual duties in regard to the Project, but in no event shall the term exceed twelve months.  This Agreement shall not give the Employee any enforceable right to employment beyond this term.”  Id. at PID-1282, 1412, 2811.  Among those hired were the three claimants in this case: Maurice Knox, Samuel Burt, and Robert Vassar, all African American men who worked at the site at different times between February and December of 2009.

The subcontract agreement between Skanska and C-1 contained the following provision with respect to supervision:

Subcontractor shall engage a sufficient number of competent supervisory personnel as are necessary to perform the Work in accordance with the requirements of the Subcontract.  Subcontractor shall further have a competent superintendent continuously on the Project site during work hours and readily available on call.  The superintendent shall be fully acquainted with the Work and shall have the authority to administer the Subcontract on Subcontractor’s behalf and shall not be changed except with the consent of Contractor.

 

R.56-3/Skanska-C-1 subcontract agmt., Exh. E/PID-1004. 

However, both Skanska and C-1 employees unanimously testified that the terms of the subcontract agreement did not reflect the reality of how the buckhoist operators were supervised.  Adam Hicks, Skanska’s Project Manager for the Le Bonheur site, testified that C-1 did not have a foreman or supervisor (including Mr. Neely) on-site to manage the buckhoist operators on a daily basis in 2009, and that Skanska was fully aware that no such foreman or supervisor was present at the time.  R.56-1/Hicks 30(b)(6) dep./PID-761, 766.  Neely recounted that, during a period of approximately nine months, apart from picking up payroll, he came by the site “maybe three other times,” and was otherwise reachable on his cell phone.  R.70-11/Neely dep. 31/PID-2876.  His estimate was corroborated by Knox, who testified that Neely was “never on site” (R.70-4/Knox dep. 137/PID-2796), and by Bernie Smith, who worked for subcontractor LSI at Skanska’s direction, and who also estimated he’d seen Neely on site about three times total.  R.70-9/Smith dep. 57/PID-2841.[3]

Rather, the record testimony reflects that any day-to-day supervision or direction of the buckhoist operators was conducted either by Skanska employees or by Bernie Smith.  At a presentation on “Understanding Workforce Diversity” Skanska gave on September 17, 2009, one of the slides stated that “Brian Quigley and Norberto Jimenez, both Skanska Superintendents, oversee the buck hoist schedule and operations on a daily basis, and are the primary points of contact for all field personnel.”  R.56-2/Workforce Diversity Presentation/PID-855.  Rayburn testified that Quigley had been supervising and overseeing the buckhoist operations on the job site on a day-to-day basis “from day one” as part of his responsibilities for managing the exterior of the building.  R.70-8/Rayburn dep. 76/PID-2829.  Magee also testified that he assigned Quigley to supervise the buckhoist operations.  R.57-5/Magee dep./PID-1680.  Jones testified that Quigley, Bernie Smith, and Jimenez all supervised the buckhoist operations on a daily basis at different times.  R.70-12/Jones dep. 49-51, 121/PID-2890, 2892. 

Hicks testified that Skanska employees, including Quigley and Smith, “coordinated” the operations of the buckhoist, i.e., “[l]ooked at its efficiency and tried to improve efficiency; tried to help in the scheduling of material deliveries; get the hoist to operate more efficiently as far as moving people; dealing with material deliveries that were scheduled to come in; maintenance and care of the actual hoist equipment.”  R.56-1/Hicks 30(b)(6) dep./PID-761, 765.  Hicks further testified that Skanska employees gave the buckhoist operators regular directives when there was a need to pick up people or material on a floor of the building, or when a contingency from the owner was coming to the site.  Id. at PID-762.  According to Hicks, Jimenez and Jones were also involved in supervising the buckhoist operations as “the environmental health and safety managers that would observe all operations on the job site[.]” Id. at PID-765.

Smith testified that his job was “to ensure that everything ran smoothly on [the south] side of the site, and that deliveries made their way onto the loading dock, onto the buck hoist, and into the building.  My responsibilities included giving direction to the buck hoist operators as necessary as part of this process.”  R.58-4/Smith decl./PID-1750.  When he became concerned about Knox’s job performance, Smith kept detailed notes of how Knox performed his work.  Id. at PID-1751, 1755-59. 

Smith also testified that, when he wanted to make sure that “the buck hoist operators were clear on what they were expected to do on the site, and on what site safety standards were,” he “came up with the idea of putting into writing a list of standards and expectations that the buck hoist operators could review and sign.  These were all of the standards and expectations that had been in place since the beginning of the project I just thought it would be helpful to reiterate them.”  Id. at PID-1751-52.  Working in collaboration with Jones, Smith drafted a list of “Buck-hoist Operator Responsibilities,” on Skanska letterhead, which was circulated to all the buckhoist operators on the Le Bonheur site on approximately September 1, 2009.  Id. at PID-1751-52, 1761.

 Neely and the buckhoist operators themselves likewise testified that the only direction or supervision they received on the Le Bonheur job site was from Quigley, Jimenez, Jones, or Bernie Smith.  Neely testified that it was his understanding from the beginning, based on conversations he had with Rayburn, his Skanska liaison, that “Skanska would supervise, their superintendent would supervise the people I send to them, and that’s the way it was from start to finish.”  R.70-11/Neely dep. 30/PID-2876.  Knox testified that Jones, Jimenez, and Smith were his “supervisors” and that he was working “under their orders,” and that they were the ones who told him what to do on the job site.  R.70-4/Knox dep. 346, 391-92/PID-2804, 2808.  Knox also testified that, when problems arose on the site, he complained to Jimenez and to Jones.  R.70-4/Knox dep. 136, 169, 177/PID-2796, 2797.  Burt likewise testified that, when he encountered hostility and harassment on the job site, he reported it to Quigley and Jimenez, as well as to Neely.  R.70-3/Burt dep. 70-71, 85/PID-2776, 2778. Vassar testified that, “as far as [he] was concerned, Neely was [his] boss” because “[t]hat’s who hired [him] and sent [him] out here,” but he also recounted an incident where he was thrown off the job site by an individual who worked for Skanska, and Vassar responded by removing his hat and leaving the job site.  R.70-10/Vassar dep. 112/PID-2864.

Skanska also had the authority, in accordance with its subcontractor agreement, to remove workers from the job site for various reasons.  R.56-3/Skanska-C-1 subcontract agmt., Exh. E/PID-1004.  According to Exhibit E of the agreement, “If Contractor notifies Subcontractor in writing that any employee or agent of Subcontractor or one of its Sub-subcontractors is incompetent, disorderly, or otherwise unsatisfactory, such person shall immediately be removed, at subcontractor’s cost, from the Work and shall not thereafter be employed in the performance of the Work.”  Id.  However, Hicks testified that, in practice, written notice was seldom given; most removals were done verbally, unless the subcontractor disagreed in some way with the worker’s removal.  R.56-1/Hicks 30(b)(6) dep./PID-754-56.  Thus, for example, Quigley had Burt removed from the job site in June 2009 simply by placing a telephone call to Neely.  Id. at PID-767.  Neely likewise testified that, on August 21, 2009, when Magee called him and told him to remove Knox from the job site, he did as he was told despite the lack of a clear justification “[b]ecause I was directed to do so by one of [Skanska’s] superintendents or managers.”  R.70-11/Neely dep. 206/PID-2883.  Neely explained that Skanska had the authority to direct him to remove employees from the job.  Id. at 206-07.

When a C-1 employee was removed permanently from the Le Bonheur site, because his contract with C-1 specified that he was being employed only for this project, his employment relationship with both Skanska and C-1 was terminated.  Neely testified that he contracted with the buckhoist operators to be “employees for a specific job”—the Le Bonheur project—and that the effect of an employee being removed from the Skanska site meant that “[h]e wouldn’t be employed anymore.”  R.70-11/Neely dep. 207/PID-2883.  None of the buckhoist operators involved in this case was assigned to another job at C-1 while working at the Le Bonheur site or after leaving it.  See, e.g., R.70-11/Neely dep. 33/PID-2877 (Neely testimony that he did not reassign Burt or Willie Flynn, another buckhoist operator, because he “didn’t have anything for them at the time”); R.56-5/Vassar dep./PID-1248 (Vassar testimony that he had hoped that Neely would reassign him to another job after he picked up his final check from the Le Bonheur job, but Neely told him no); R.70-4/Knox dep./PID-2804 (Knox testimony that he continued to work at Le Bonheur, notwithstanding the hostility of the environment, but that he was “trying to find . . . another job”).  At most, after negotiation with Skanska managers and intervention from the client, Neely was eventually allowed at the end of August 2009 to reinstate Knox and Burt at Le Bonheur after they had each been ordered removed by Skanska, R.56-3/Neely dep./PID-953-55, but Skanska ordered Knox removed again on September 3, 2009, after an incident in which he was allegedly talking on his cell phone while operating the buckhoist.  R.70-4/Knox dep. 259-60/PID-2802.  Neely testified that, when Knox was ordered off the site in September, he (Neely) was not consulted or asked his opinion about whether or how Knox should be disciplined or terminated from the project—he simply received a call from Magee informing him that Knox had been removed.  R.70-11/Neely dep. 210/PID-2884.

2.     The Alleged Racial Harassment of the Claimants

The merits of this lawsuit involve claims that Knox, Burt, and Vassar were subjected to a hostile work environment on the basis of their race (African-American) while working on the Le Bonheur site and were retaliated against for complaining about it. Knox testified that he was called a “monkey” on the job site ten to fifteen times, and “nigger” at least eight times, between August 5 and 19, 2009.  R.70-4/Knox dep. 364-65/PID-2807.  He also testified that he  observed “racial graffiti in the portable toilets that included the words ‘nigger’ and ‘niggers need to leave,’” and  “a depiction on the toilet walls of a white person holding a shotgun and shooting a black person.”  R.70-15/Knox decl./PID-2912.[4]  Knox testified that he complained to Jimenez and to Jones about the graffiti and racial name-calling five or six times, including one time on August 19, 2009, but that he did not feel that they took his complaints seriously because they “just turned away from me, wouldn’t take action, wouldn’t say come on, let’s go to the floor where they are doing it at, have some kind of, you know, meeting with the guys or something.  I didn’t get that.”  R.70-4/Knox dep. 366/PID-2807. 

Burt testified that he heard the terms “nigger” and “black motherfucker” on the job site multiple times daily.  R.81-2/Burt dep./PID-3039-40.  He explained that, while they were generally not directed at him as epithets, they were used by other workers in conversation in close proximity to him, either on the buckhoist itself or on the dock: “black mother fuckers think they running something, and . . . them niggers they think they just . . . the bosses or something.”  Id. at PID-3040-41.  Burt testified that he understood those conversations as a way of directing racial slurs at him “because I know a lot of them probably was intimidated by me by my size so they wouldn’t say directly towards me so they’ll speak among themselves so if I was to say something, oh, we wasn’t even talking about you, like indirectly have their little conversations.”  Id. at PID-3041.  Burt testified that he complained to Quigley about the racial slurs sometime in mid-April 2009, and later to Jimenez, but that Jimenez simply told him “don’t worry about it because you know they’re going to say they wasn’t talking about you. They was talking among [themselves] about somebody else.”  R.70-3/Burt dep. 69-71/PID-2776.

Vassar began working at Le Bonheur in July 2009.  He testified that, while he worked there, “[i]f the buck hoist didn't stop on the dime,” Skanska employees and other workers would “think that you’re going to pass them and leave them and they’ll get on the walkie-talkie and say all kinds of stuff. . . .  you might get disrespected 20 or 30 times a day out there on that jobsite operating the buck hoist.”  R.70-10/Vassar dep. 128-29/PID-2865-66.  He testified that Skanska employees and other workers would say things like “I know your black ass seen me, you black ass monkey come on back up, we’ve been calling the walkie-talkie all of this time and you just going to pass us,” or “I see coons can’t work a buck hoist, get your black monkey ass back up here, and nigger this and nigger that,” every day he worked on the site.  Id.; R.81-3/Vassar dep./PID-3060.  Vassar further testified that Jimenez knew about the slurs on the walkie-talkies because he had his own radio on which he could hear all the communications pertaining to the buckhoist.  R.70-10/Vassar dep. 152/PID-2866.

After Vassar broke his ankle in late July, he took a few days off work due to the pain but ultimately returned to work on August 3, 2009.  R.70-10/Vassar dep. 104-09/PID-2862-64.  Vassar testified that he showed up to the site on crutches and was heading for the buckhoist when he was stopped by someone he did not recognize wearing Skanska gear who said that “he was over the jobsite and he didn’t want me on his jobsite like that.”  R.70-10/Vassar dep. 111/PID-2864.  According to Vassar, the Skanska supervisor told him that “[y]ou niggers always think you-all are heroes, you coming on my goddamn jobsite like that, get the hell off my jobsite,” called him a safety hazard, and said to “get off his jobsite and don’t come back.[5]  Id. at 112; R.81-3/Vassar dep./PID-3057.  Vassar testified that he left the work site after that and never returned.  R.70-10/Vassar dep. 114/PID-2865, R.81-3/Vassar dep./PID-3054.

Knox testified that, on August 19, 2009, an unknown white worker wearing a blue hard hat and a white shirt threw a cup of liquid on him while he was operating the buckhoist.  R.70-4/Knox dep. 183, 413-14/PID-2798, 2809.  He recounted:

And I said, this is the shit out the port-a-potty, you know. . . .  I went up.  I heard them laughing, running away.  I get out.  I run out the buck hoist looking for them.  My eyes are hurting.  I am like I got to get this off of me.  I get back on the buck hoist.  You can hear it sizzling on my arms.  I get—run down. . . .  I get on the docks.  And I run—I run to the—where they got the portable restroom, the water.  So I get there.  I wash my arms, throwing water on my face, you know. . . . I called Gerald.  I said, Gerald somebody just threw something on me out the portable restroom on [me].  Some piss, some shit. . . .  He was already talking to somebody in the trailer about the other incidents that I had.  So he told me to come around there.  My eyes instantly swell up, you know. . . . So . . . I said, I just need to go home, man, and get this off of me.  So Norberto said, all right.  Go home.  Clean up.

 

R.70-4/Knox dep. 183-84/PID-2798; see also R.70-5/C. Smith decl./PID-2818.

On August 21, 2009, after Knox returned to work, there was a confrontation between him and two white employees from Morgan Thornburg, another subcontractor working on the site.  R.70-13/Jimenez dep. 136/PID-2899.  Jimenez testified that the Morgan Thornburg employees admitted to him that they had used racial slurs against Knox.  Id. at 137.  Nonetheless, according to Jimenez’ own testimony, although he spoke to the Morgan Thornburg employees separately, he did not speak to Knox separately, otherwise document or investigate the incident, connect it to the urine-throwing incident, or do anything other than recommend that Knox, and only Knox, be sent home from work.  R.70-13/Jimenez dep. 139-44/PID-2900-01.

Rayburn testified that after the incident with Knox on August 21, he decided to address the issue by replacing the C-1 buckhoist operators with Skanska employees.  R.56-4/Rayburn dep./PID-1187-88.  He testified:

I have 700 men and I have two buck hoist operators and I have a problem. What’s my easy—what’s—what’s my out? . . . I replaced the two buck hoist operators. . . .  I was going to replace C-1’s people with my own people, so I was going to take [Knox] off.  I was going to take the other C-1 employee off, and I was going to put my own guys to determine what was going on.

 

Id. at PID-1187.  Rayburn characterized this approach as “making a step forward in determining and doing our own sort of investigation by putting our own people on it.”  Id. at PID-1174.  Nonetheless, as Rayburn himself told EEOC investigator Timothy Pearson, “I authorized the ending of C-l’s assignment on August 21, 2009,” R.70-8/Rayburn interview notes/PID-2838, and Magee informed Neely that C-1’s contract with Skanska was being terminated entirely.  R.56-2/Shavelson memo/PID-843; R.70-6/Rosenbaum decl./PID-2820-21.

Neely responded to Rayburn in a letter of the same date.  R.56-2/Shavelson memo/PID-843; R.56-3/Rayburn e-mail/PID-1119; R.68-5/Neely letter/PID-2580.  In the letter, Neely stated that Magee told him that “C-1, Inc. has been asked not to supply any additional buck hoist operators.  He also stated that, ‘we are not going to continue with the program.’  He went on to say that he had identified another person to operate the buck hoist.”   R.68-5/Neely letter/PID-2580.  Neely also recounted the urine-throwing incident with Knox and Skanska’s lack of a response, Knox’s altercation with the Morgan Thornburg employees and the fact that only Knox was disciplined, abusive treatment of the buckhoist operators, and various operational issues with the buckhoist.  Id. 

Neely then contacted Luke Yancy, president of the Mid-South Minority Business Council, who had assisted C-1 in bidding on and obtaining the Le Bonheur contract, and told him what had transpired.  R.56-2/Shavelson memo/PID-844; R.70-11/Investigator’s memo/PID-2887; R.68-5/Neely e-mail/PID-2579. Yancy and Neely then contacted Rosenbaum, who stated in his declaration:

In August 2009, I was contacted by Mr. Gerald Neely and Mr. Luke Yancy regarding Skanska’s decision to terminate its contract with C-1, Inc.  I understood from my conversations that C-1, Inc.’s contract had been terminated after one of the buck hoist operators, Mr. Maurice Knox, complained of racial harassment. After my discussions with Messrs. Neely and Yancy and after speaking with Mr. Rayburn, I insisted that C-1, Inc. and Mr. Knox be reinstated.  Additionally, I demanded that Skanska take whatever steps necessary to rectify the problems of racial harassment toward the buck hoist operators.  I also informed them that they needed to make whatever changes in management were necessary to ensure this does not happen again.

 

R.70-6/Rosenbaum decl./PID-2820-21.  On August 24, 2009, Rosenbaum also contacted Skanska and demanded that Magee be removed from the Le Bonheur project.  R.56-2/Shavelson memo/PID-843.

The next day, August 25, 2009, Rayburn sent Neely an e-mail in which he outlined various steps Skanska had taken and/or would be taking in response to Neely’s concerns.  R.56-3/Rayburn e-mail/PID-1119-20.  He also characterized several of Neely’s remarks as “misstatements,” stating that Knox was at fault the day he was sent home after the Morgan Thornburg altercation and that “[a]s to the urine incident there was no apparent urine on Mr. Knox or in the area where it was to have been thrown after our staff spent some time investigating the incident.”  Id. at PID-1120.

According to Neely, by August 27, he was allowed to bring Knox and Burt back to the job site.  R.70-11/Investigator’s memo/PID-2887.  Burt remained at Le Bonheur until the end of the project in December 2009, although he continued to hear racial slurs like “nigger” and “black motherfucker” daily on the site even after Skanska implemented diversity training.  R.57/Burt dep./PID-1358; R.70-3/Burt dep. 138/PID-2783.  Knox worked at the site until September 3, 2009, when he was ostensibly removed from the site for personal use of his cell phone while on the job.  R.70-4/Knox dep. 259-66/PID-2802-04.  The buckhoist was ultimately dismantled on December 4, 2009.  R.56-3/Chapman e-mail/PID-1121.

3.     Litigation History

The EEOC filed suit against Skanska on September 30, 2010.[6]  R.1/EEOC Complaint/PID-1-9.  As later amended, the complaint alleged that “Defendant Skanska USA Building, Inc. subjected Mr. Knox and a class of African-American buck hoist operators working at its Memphis Methodist Le Bonheur construction site to a hostile work environment because of their race.”  R.17/EEOC Amended Complaint/PID-125.  The EEOC also alleged that Skanska retaliated against “African-American workers by terminating the contract of their employer, C-1 Inc. Construction Company, and causing the workers to lose pay,” and against Knox by terminating his employment because he complained about racial harassment.  Id. at PID-125-26.  Lastly, the EEOC alleged that Skanska failed to comply with Title VII’s posting requirements.  Id. at PID-126.

In early November 2011, Knox and the EEOC moved for partial summary judgment on Skanska’s status as an employer under Title VII.  R.53/Knox Mot. for Partial Summ. J./PID-357-58; R.59/EEOC Mot. for Partial Summ. J./PID-1837-41.  At the same time, Skanska moved for summary judgment on all claims.  R.54/Skanska Mot. for Summ. J. re: EEOC/PID-428-30; R.55/Skanska Mot. for Summ. J. re: Knox/PID-567-69.  On March 21, 2012, the district court held a telephonic hearing on the pending summary judgment motions.  R.96/Minute Entry re: Hr’g of 3/21/12; R.106/Tr. of 3/21/12 Hr’g/PID-3915-47.

C.         District Court’s Decision

On August 8, 2012, the district court entered an order denying both Knox’s and the EEOC’s motions for partial summary judgment and granting Skanska’s motion for summary judgment.  The court based its ruling solely on its finding that “the undisputed evidence is insufficient to allow a reasonable juror to conclude that Skanska acted as a joint employer of the employees in question.”  R.97/District Court Order Granting Skanska USA Building, Inc.’s Mot. for Summ. J. (“Order”)/PID-3758.

The court began by stating that, although this Court has generally held that subcontractors fall outside Title VII’s definition of an “employee,” there are various court-fashioned doctrines “‘by which a defendant that does not directly employ a plaintiff may still be considered an “employer” under [federal employment-discrimination statutes].’”  R.97/Order/PID-3766 (quoting Swallows v. Barnes & Noble Book Stores, Inc., 128 F.3d 990, 992 (6th Cir. 1997) (alteration in district court opinion).  The court noted that joint employer liability is one such doctrine, explaining: “A party is a joint employer of another company’s employees when, ‘while contracting in good faith with an otherwise independent company, [it] has retained for itself sufficient control on the terms and conditions of employment of the employees who are employed by the other employer.’”  Id. (quoting Swallows, 128 F.3d at 993 n.4 (quoting NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1122-23 (3d Cir. 1982))).  The court further explained that this Court “has incorporated the definition of joint employer from its labor law case law into the civil rights context.”  Id. at PID-3766 n.3 (“Both the ‘single employer’ and ‘joint employer’ concepts developed in the labor relations context, and were subsequently imported into the civil rights context.”) (quoting Swallows, 128 F.3d at 993 n.3).

The district court then stated that “[t]he Sixth Circuit uses the common law agency test to determine whether a party is a joint employer.”  R.97/Order/PID-3766 (citing Shah v. Deaconess Hosp., 355 F.3d 496, 499 (6th Cir. 2004), and Swallows, 128 F.3d at 996).  According to the court, “[u]nder the common law agency test, joint employment exists when ‘two or more employers exert significant control over the same employees—where from the evidence it can be shown that they share or codetermine those matters governing essential terms and conditions of employment.’”  Id. at PID-3767 (quoting Carrier Corp. v. NLRB, 768 F.2d 778, 781 (6th Cir. 1985)).  The district court characterized this Court’s precedent as follows:

The Sixth Circuit has consistently held the “‘employer’s ability to control job performance and employment opportunities of the aggrieved individual’” to be the most important indicator of control.  See Johnson v. City of Saline, 151 F.3d 564, 568 (6th Cir. 1998) (quoting Simpson v. Ernst & Young, 100 F.3d 436, 442 (6th Cir. 1996)).  Other key indicators include: (1) “‘the hiring party’s right to control the manner and means by which the product is accomplished; . . . the hiring party’s right to assign additional projects; the hired party’s discretion over when and how to work; [and] the method of payment,’” Shah, 355 F.3d at 499-500 (quoting Simpson, 100 F.3d at 443); (2) an employer’s substantial control over day-to-day working conditions, Carrier, 768 F.2d at 781 (finding the fact that “Carrier exercised substantial day-to-day control over the drivers’ working conditions, while the drivers had only infrequent contact with [the subcontractor]” to support a finding of joint employment); NLRB v. Greyhound Corp., 368 F.2d 778, 781 (5th Cir. 1966); (3) substantial control over wages and employment benefit, see Carrier, 768 F.2d at 781; Greyhound, 368 F.2d at 781; and (4) an employer’s ability to terminate the agent’s employment, see Carrier, 768 F.2d at 781.

 

Id. at PID-3767-68 (alterations & omissions in district court opinion).  The court then cited various district court cases for the proposition that enforcement of site safety, property, and antidiscrimination rules, or routine supervision of a subcontractor’s employees, was insufficient to impose joint employer liability on a general contractor without further control over hiring, firing, or discipline of those employees.  Id. at PID-3768-69 (citing Bechtel Constructors Corp. v. Detroit Carpenters Dist. Council, 610 F. Supp. 1550, 1559 (E.D. Mich. 1985), EEOC v. Foster Wheeler Constr., Inc., No. 98C1601, 1991 WL 515524, at *7 (N.D. Ill. July 14, 1999), Hover v. Florida Power & Light Co., 1994 U.S. Dist. LEXIS 19920, at *12 (S.D. Fla. Nov. 14, 1994), and Boutin v. Exxon Mobil Corp., 730 F. Supp. 2d 660, 681 (S.D. Tex. 2010)).

The court then went through each of the four factors it had identified from this Court’s case law and concluded that none of them supported a finding of joint employer liability in this case.  Beginning with the right to control the manner and means of employment, the court found that “[t]he undisputed evidence in the record establishes that Skanska did not have the right to control the manner and means of employment of the buck hoist operators.”  R.97/Order/PID-3769-70.  The court noted that Skanska played no role in hiring the buckhoist operators or in setting their wages, and pointed to Knox’s testimony that all buckhoist training was conducted by a C-1 employee and Vassar’s testimony that he considered Neely his boss.  Id. at PID-3770.  The court also observed that all timesheets were turned in to C-1, and that C-1 issued all the buckhoist operators’ paychecks.  Id.  The court then stated:

Although the record indicates that Skanska provided the buck hoist operators with a document outlining their work hours, break times, and requiring them to return on time from breaks, the Court finds that Skanska’s actions are consistent with a general contractor’s duties in coordinating operation of the site.  See Boutin, 730 F. Supp. 2d at 681; Hover, 1994 U.S. Dist. LEXIS 19920 at *12.  Skanska dictated the hours for the buck hoist’s operations because the buck hoist was the means by which Skanska moved people and supplies around its construction site—its operation was therefore integral to the efficient management of the site. Similarly, the evidence demonstrates that Skanska coordinated break times and required the operators to report to work on time precisely to ensure that the buck hoist remained operational at all times.  Accordingly, the Court does not find that Skanska retained sufficient control of the manner and means of Plaintiffs’ employment.

 

Id. at PID-3770-71.

Next, the court found that “the undisputed evidence does not indicate that Skanska controlled the day-to-day working conditions of the buck hoist operators.”  R.97/Order/PID-3771.  The court based this conclusion on two facts from the record: first, that “when problems arose between the buck hoist operators and employees of other subcontractors, Rayburn did not meet with the buck hoist operators directly; instead, he held a meeting with all subcontractors to resolve the problem”; and, second, that “when the buck hoist operators could not come to work, they would contact Neely directly, not Skanska.”  Id.

Turning to control over wages and employment benefits, the court found that “[t]here is no evidence in the record indicating that Skanska exercised any control over the wages of the buck hoist operators.”  R.97/Order/PID-3771.  The court pointed to the record testimony that Skanska paid C-1 $18 per hour for each operator and that Neely then “independently” chose to pay the buckhoist operators $9 per hour.  Id. at PID-3771-72.  The court also observed that the buckhoist operators filled out C-1 timesheets and that all paychecks came directly from C-1.  Id. at PID-3772.  Lastly, the court noted, although the subcontract agreement required Skanska to carry Worker’s Compensation and Employer’s Liability insurance for all employees of the various subcontractors, including C-1, because this was a requirement of Tennessee law it did not rise to the level of joint employment.  Id.

Finally, the court found that “[t]he undisputed evidence indicates that, although Skanska had the ability to request that individual operators be removed from the work site, it did not have the ability to terminate the buck hoist operators.”  R.97/Order/PID-3772.  The court rejected the EEOC’s argument that Skanska’s ability to have buckhoist operators removed from the job site was the same as termination, given that C-1 hired them specifically for the Le Bonheur job.  The court stated:

[T]he right to bar an employee from a work site does [sic] equate to the right to terminate a worker. See Auger v. Abb Flexible Automation, Inc., 34 F. App’x 160, 168 (6th Cir. 2002) (“Sending an employee home is not synonymous with firing. Firing is the cessation of employment.”).  Although Skanska could bar an employee from the work site, it was ultimately C-1’s decision to continue to employ that worker.  Accordingly, the Court does not find Plaintiff’s argument persuasive.

 

Id. at PID-3773.  Accordingly, the court concluded:

The Court finds that the undisputed evidence is insufficient to allow a reasonable juror to conclude that Skanska acted as a joint employer to the buck hoist operators.  To the contrary, the evidence shows that Skanska retained no more control than the control that is typical of a contractor operating a large work site.  The evidence shows that Skanska provided general oversight of the buck hoist operators.  The evidence also shows that this supervision was limited to ensuring the coordinated operation of the buck hoist and only occurred because Neely failed to provide adequate supervisory personnel.  Cf. [AT&T v. NLRB, 67 F.3d 446, 452 (2d Cir. 1995)] (“While on ‘occasions’ the building supervisor Thompson ‘made work assignments,’ these evidently occurred only when ‘cleaning problems came up [and the ECS supervisor] was not in the area.’” (emphasis added)). Furthermore, the evidence is that Skanska did not control the employees’ wages; all paychecks were issued by C-1 and the rate of pay was determined by C-1.  The evidence is also insufficient to indicate that Skanska retained an ability to terminate the buck hoist operators.  Accordingly, the Court finds that the evidence is insufficient to show that Skanska “‘control[led the] job performance and employment opportunities of the aggrieved individual.’”  See Johnson v. City of Saline, 151 F.3d 564, 568 (6th Cir. 1998) (quoting Simpson v. Ernst & Young, 100 F.3d 436, 442 (6th Cir. 1996)).

 

R.97/Order/PID-3774.

STANDARD OF REVIEW

This Court reviews a grant of summary judgment de novo.  Ondricko v. MGM Grand Detroit LLC, 689 F.3d 642, 648 (6th Cir. 2012).  “Summary judgment is appropriate if there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Id. (citing Fed. R. Civ. P. 56(a) (2010)).  “[T]he party seeking summary judgment [] bears the burden to show there are no genuine issues of material fact.”  Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)).

At summary judgment, the court must “review all of the evidence in the record.”  Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).  “[T]he court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.”  Id. at 150-51 (internal citation omitted); see also Ondricko, 689 F.3d at 648 (“’Credibility determinations, the weighing of the evidence, and the drawing of legitimate inference from the facts are jury functions, not those of a judge[.]’”) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).  The reviewing court “must disregard all evidence favorable to the moving party that the jury is not required to believe” and “give credence to the evidence favoring the nonmovant . . . .”  Reeves, 530 U.S. at 151.

SUMMARY OF ARGUMENT

Based on the evidence in the record, a reasonable jury could find that Skanska was a joint employer of the buckhoist operators at the Le Bonheur site.  This case raises the question of whether Skanska and C-1 shared responsibility for the terms and conditions of the buckhoist operators’ employment sufficiently to be deemed joint employers, a standard addressed by this Court on several occasions but most notably in Grace v. USCAR, 521 F.3d 655 (6th Cir. 2008).  The district court erred by applying an inapposite and heightened legal standard to this question, relying on cases addressing the question of when a worker is an employee versus an independent contractor.  The district court also erred in failing to view the record evidence in the light most favorable to the EEOC as the nonmoving party on summary judgment.

ARGUMENT

A Reasonable Jury Could Find that Skanska Was A Joint Employer of the Buckhoist Operators Provided By C-1 at the Methodist Le Bonheur Hospital Site.

As the district court observed, the concept of a “joint employer” as used in this case originated in labor law, including regulations promulgated by the Department of Labor and case law construing statutes such as the Family & Medical Leave Act of 1993, 29 U.S.C. §§ 2601 et seq. (“FMLA”), the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq. (“FLSA”), and the National Labor Relations Act, 29 U.S.C. §§ 151 et seq. (“NLRA”).  See, e.g., 29 C.F.R. § 825.106; Grace, 521 F.3d 655 (FMLA); Carrier Corp. v. NLRB, 768 F.2d 778 (6th Cir. 1985) (NLRA); In re Enterprise Rent-A-Car Wage & Hour Emp’t Practices Litig., 683 F.3d 462 (3d Cir. 2012) (FLSA).  This Court has held:

[T]he proper legal standard to determine if a joint employer relationship exists is, “[W]here two or more employers exert significant control over the same employees—where from the evidence it can be shown that they share or co-determine those matters governing essential terms and conditions of employment—they constitute ‘joint employers’ within the meaning of the NLRA.”

 

Carrier, 768 F.2d at 781 (quoting Browning-Ferris, 691 F.2d at 1124); see also Swallows, 128 F.3d at 993 n.4 (“‘The “joint employer” concept recognizes that the business entities involved are in fact separate but that they share or co-determine those matters governing the essential terms and conditions of employment.’”) (quoting Browning-Ferris, 691 F.2d at 1123) (emphasis in original).  Commenting on the analysis of employment relationships under the FLSA, this Court observed:

Whether an employment relationship exists under a given set of circumstances “is not fixed by labels that parties may attach to their relationship nor by common law categories nor by classifications under other statutes.”  Powell v. U.S. Cartridge Co., 339 U.S. 497, 528 (1950).  Rather, it is the “economic reality” of the relationship between parties that determines whether their relationship is one of employment or something else. [Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 301 (1985)] (quoting Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33 (1961)).  “The issue of the employment relationship does not lend itself to a precise test, but is to be determined on a case-by-case basis upon the circumstances of the whole business activity.”  Donovan v. Brandel, 736 F.2d 1114, 1116 (6th Cir. 1984) (citing Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947)).

 

Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 522 (6th Cir. 2011).

This Court explained the proper application of the “joint employer” test in great detail in Grace v. USCAR, an FMLA and Title VII case.  In Grace, “[a]t all times during her service to USCAR,” the plaintiff was “a contract employee employed by agencies providing workers for USCAR”; her employer was a placement agency called Bartech Technical Services.  521 F.3d at 659-60.  The plaintiff sued both Bartech and USCAR after her employment was terminated, and the district court granted summary judgment to both defendants, holding, inter alia, that USCAR was not her “employer” within the meaning of the relevant statutes.  Id. at 661.

This Court affirmed in part and reversed in part, holding, in relevant part, that the record supported a finding that USCAR and Bartech were “joint employers” of the plaintiff.  521 F.3d at 665-67.  The Court began by noting that “[this] case presents the increasingly common and often complex situation where two entities—a staffing agency and client employer—exercise some level of joint control over a common employee.  Correctly describing the nature of Bartech’s and USCAR’s relationship with Grace, and the attendant ramifications under the FMLA, presents an important first step in resolving this case, one for which little precedent exists.”  Id. at 662-63.

The Court then observed:

The regulations promulgated by the Department of Labor interpreting the FMLA also elaborate a test for joint employment under the Act.  At its core, joint employment encompasses situations where “two or more businesses exercise some control over the work or working conditions of the employee.”  29 C.F.R. § 825.106(a).  “In a joint employer relationship the analysis assumes separate legal entities exist but that they have chosen to handle certain aspects of their employer-employee relationships jointly.”  Unlike integrated employers, which are treated as a single legal entity, joint employers “may be separate and distinct entities with separate owners, managers, and facilities.”  29 C.F.R. § 825.106(a).  The regulations describe three employment relationships where joint employment will “generally . . . be considered to exist”:

 

(1) Where there is an arrangement between employers to share an employee’s services or to interchange employees;

 

(2) Where one employer acts directly or indirectly in the interest of the other employer in relation to the employee; or,

 

(3) Where the employers are not completely disassociated with respect to the employee’s employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer.

 

29 C.F.R. § 825.106(a) (emphasis added).  The second situation—in which one employer acts in the interest of another—describes the situation in the instant case: Bartech, a staffing agency responsible for providing specialized technical staff, is acting in USCAR’s interests by managing Grace and ensuring that USCAR’s staffing needs for its IT division are met.  Furthermore, the regulations specifically state that “joint employment will ordinarily be found to exist when a temporary or leasing agency supplies employees to a second employer.”  29 C.F.R. § 825.106(b) (emphasis added).  Thus, the language from the Department of Labor’s regulations indicates that Bartech and USCAR are joint employers.

 

521 F.3d at 665-66 (internal case citations omitted) (emphases in Grace).

The Grace Court then went on to observe that the existing case law on the subject of joint employment under the FMLA was “limited,” but proceeded to compare two relevant decisions: Moreau v. Air France, 356 F.3d 942 (9th Cir. 2004), and Mahoney v. Nokia, 444 F. Supp. 2d 1246 (N.D. Fla. 2006), aff’d, 236 F. App’x 574 (11th Cir. 2007).  In Moreau, the Court observed, the Ninth Circuit found that no joint employer relationship existed because “Air France did not have the authority to control any of the workers of the companies providing the services.  Air France did not, for example, have the ability to hire or fire Dynair employees or even to determine the salaries of their employees; instead, Air France merely verified that Dynair’s work complied with applicable airline regulations.”  521 F.3d at 666 (internal citations and quotation marks omitted).  In Mahoney, on the other hand, even though “Spherion managed the plaintiff’s benefits and performed all payroll functions for the employees it leased to Nokia” and “the plaintiff [] acknowledged that Spherion was his employer,” “Nokia also exercised considerable control over the employee: it supervised his day-to-day work, fixed his salary, and determined the number of hours that it needed the employee’s services.”  Id.

The Court then reasoned that Grace’s case was more like Mahoney than Moreau.  It explained:

First, as in Mahoney but unlike in Moreau, USCAR and Bartech both exercised significant control over Grace.  Bartech performs essentially the same [role] as Spherion: it has loaned an employee to a client employer (i.e. USCAR v. Nokia) and manages her payroll and benefits.  Moreover, Grace specifically acknowledges that Bartech is her employer. . . .  Also, as in Mahoney, the client employer in the instant case, USCAR, maintained significant control over Grace and did so for eight years, including supervising her day-to-day work and determining her salary and hours.  It is undisputed, for example, that Flaherty, USCAR’s Executive Director since January 2003, supervised Grace’s everyday work responsibilities. . . .  Consequently, both employers exercise some control over Grace.  And second, while both parties contest that they are “employers” under the FMLA definition, they effectively concede that a joint employment would otherwise exist. . . . Hence, the joint employment definition elaborated by the Department of Labor provides the appropriate standard for analyzing the plaintiff’s claims in the instant case.

 

521 F.3d at 667.

In its analysis of this case, the district court applied a legal framework dealing with a totally different issue: the distinction between an employee and an independent contractor.  Much of the case law relied on by the court reflects this error, as it addresses the question of when and on what terms an independent contractor may be deemed an “employee.” See, e.g., Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323-24 (1992) (applying common law agency test to determine whether individual insurance agent was an “employee” under ERISA); Shah, 355 F.3d at 498-99 (“The first issue we must address . . . is whether Shah’s relationship with Deaconess, employee or independent contractor, qualifies him for the statutory relief he seeks. . . . Like the Seventh Circuit, we apply the common law agency test to determine whether a hired party is an independent contractor or an employee.”); Johnson, 151 F.3d at 568 (applying Darden to question of whether individual contractor was a city employee for purposes of ADA).

The distinction here is a critical one.  The question before this Court is not, and has never been, whether the buckhoist operators were employees versus whether they were independent contractors—no one disputes that they were employees and that they worked for C-1.  Rather, the issue is whether Skanska and C-1 shared control over the buckhoist operators such that Skanska could be deemed their joint employer.  What this means is that, as this Court has explained on numerous occasions, Skanska did not have to perform all of the functions an employer would normally perform vis-à-vis an employee, or even most of them.  It only had to “share” those responsibilities with another employer in a significant way.  See, e.g., Grace, 521 F.3d at 667 (“USCAR and Bartech both exercised significant control over Grace.”); Bowling Transp., Inc. v. NLRB, 352 F.3d 274, 281 n.8 (6th Cir. 2003) (“Two or more employers are deemed ‘joint employers’ if they exert significant control over the same employee(s) with respect to key terms and conditions of employment.”); Carrier, 768 F.2d at 781.

The facts of this case are extremely similar to Grace in almost all material respects.  The uncontroverted record evidence reflects that C-1 functions almost exactly the same (albeit in a different industry) as Bartech did in Grace—it is a temporary employment agency that loans employees to a client employer, here Skanska, and manages their payroll and benefits.  See supra at 4-6.  It is undisputed on this record that Skanska determined the number of hours it would need the buckhoist operators’ services on a daily basis, R.56-3/Neely dep./PID-900, 969-70, and that Skanska supervised their day-to-day work operations on the job site “from day one.”  R.70-8/Rayburn dep. 76/PID-2829; see also, e.g., R.57-5/Magee dep./PID-1680; R.70-12/Jones dep. 49-51, 121/PID-2890, 2892; R.58-4/Smith decl./PID-1750; R.56-1/Hicks 30(b)(6) dep./PID-761, 765-66; R.70-11/Neely dep. 30-31/PID-2876.  The fact that the subcontract agreement may have stated otherwise in theory was entirely beside the point, as the reality on the ground was that Skanska knew from the beginning that Neely was not onsite and provided its own supervisors to manage the buckhoist operation.  Cf. Laurelbrook, 642 F.3d at 522 (stating that nature of employment relationship “is not fixed by labels that parties may attach” but by the “economic reality” of their relationship).  In fact, according to Skanska’s own evidence, even after Skanska requested in late August 2009 that Neely “spend more time” on the buckhoist, the record reflects that supervision on the buckhoist continued exactly as it had before, with Skanska employees continuing to provide day-to-day supervision of the buckhoist operations.  R.56-1/Hicks 30(b)(6) dep./PID-775.  Skanska was certainly in a position to demand that the terms of the contract it had signed with C-1 be enforced as written, but it did not do so, and Quigley, Jones, Jimenez, and Smith continued to be the ones who supervised the buckhoist operators on a daily basis.

In Grace, just as in this case, the placement agency—there, Bartech; here, C-1—fulfilled a number of employment functions that the client or joint employer did not: “(1) the authority/responsibility to hire and fire; (2) the ability to assign/place the employee; (3) the employer making payroll; and (4) the employer responsible for providing employment benefits.”  521 F.3d at 668 (citing 29 C.F.R. § 825.106(c)).  Critically, however, as this Court explained in Grace, these factors did not weigh against a finding of joint employment—rather, they presumed a joint employment relationship and were relevant to a determination under the FMLA of which entity was the “primary” employer versus the “secondary” employer, a consideration not relevant for Title VII purposes.  Id.  In other words, the fact that C-1, like Bartech, hired the buckhoist operators, handled their payroll and employment benefits, and had the non-exclusive authority to fire them is not enough as a matter of law to defeat a joint employment relationship between Skanska and C-1.

Moreover, Grace clarifies the nature of the district court’s legal error with respect to its ruling on termination power.  See R.97/Order/PID-3773 (“Although Skanska could bar an employee from the work site, it was ultimately C-1’s decision to continue to employ that worker.”).  As in any joint employer case, Skanska and C-1 are, of course, two different entities.  See Swallows, 128 F.3d at 993 n.4 (“[T]he ‘joint employer’ concept recognizes that the business entities involved are in fact separate but that they share or co-determine those matters governing the essential terms and conditions of employment.”) (emphasis in original).  It is truly rare for one business entity to have direct power to terminate the employees of another entity from the employ of that second entity; if this were a prerequisite for a finding of joint employment, such a finding would be virtually impossible to make.  However, as this Court noted in Grace, findings of joint employment are far from impossible: on the contrary, the Department of Labor regulations counsel that “‘joint employment will ordinarily be found to exist when a temporary or leasing agency supplies employees to a second employer.’”  521 F.3d at 666 (quoting 29 C.F.R. § 825.106(b)) (emphasis modified).  That general proposition is further bolstered here by the record evidence, which reflects that Skanska not only had the unquestioned authority to dismiss the buckhoist operators from the job site, but, in effect, also had the power to end their employment relationship with C-1 because of the job-specific nature of the operators’ employment contracts.  R.56-1/Hicks 30(b)(6) dep./PID-754-56; R.70-11/Neely dep. 207/PID-2883.  See infra at 52-54.

There is one respect in which the facts of this case differ somewhat from Grace: apparently, in Grace, USCAR set Grace’s salary, whereas in this case Neely set the buckhoist operators’ salary, albeit after consultation with Rayburn.  521 F.3d at 667; R.56-3/Neely dep./PID-886; R.70-11/Neely dep. 49-50/PID-2877-78.  Even this, though, was not a decision made in a vacuum—Neely’s decision was based not only on advice from Rayburn but also on the $18/hour per buckhoist operator rate that Skanska was paying C-1.  R.56-3/Neely dep./PID-886.  If anything, Neely’s testimony is consistent with a finding that both Skanska and C-1 “exerted significant control” over the buckhoist operators, and that both companies made decisions that contributed to the ultimate level at which the operators’ salaries were set.  See Carrier, 786 F.2d at 781 (counting in support of a finding of joint employment “evidence suggesting that Pacemaker [the subcontractor] officials consulted the Carrier officials over wages and fringe benefits for the drivers”).  In any case, setting of compensation is only one factor to be considered in determining whether “‘from the evidence it can be shown that [two employers] share or co-determine those matters governing essential terms and conditions of employment,’” and it is not outcome-determinative on its own.  Id. (quoting Browning-Ferris, 691 F.2d at 1124).

Accordingly, the district court erred by applying the “employee/independent contractor” standard to the question of whether Skanska was a joint employer of the buckhoist operators in this case.  As a result, the district court faulted the EEOC for failing to show that Skanska fulfilled all of the functions of an employer vis-à-vis the buckhoist operators, including payroll, hiring, and compensation.  In so doing, the district court erred as a matter of law.

The district court also failed to accord the appropriate significance to several categories of evidence in the record regarding the relationship between Skanska and C-1, particularly on summary judgment where the EEOC was the non-moving party.  See Reeves, 530 U.S. at 150-51 (“[T]he court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.”).  First, in concluding that the record evidence “does not indicate that Skanska controlled the day-to-day working conditions of the buck hoist operators,” R.97/Order/PID-3771, the district court either disregarded or significantly mischaracterized the nature of the supervision Skanska provided to the buckhoist operators.  As discussed supra at 8-12, the uncontroverted evidence in the record, including the testimony of Skanska’s own employees, reflects that any and all onsite supervision at Le Bonheur came from Skanska employees or from Bernie Smith, working at Skanska’s direction.  Skanska set the working hours of the project and the buckhoist, and Skanska directed the buckhoist operators as to what to do when, when to move certain items around the site, and handled complaints of conflicts between C-1 employees and other subcontractors’ employees around the site.  Whether Rayburn chose to meet with the buckhoist operators directly or with the subcontractors in response to the complaints of racial harassment at Le Bonheur, simply put, has no bearing on the question of joint employment.  As to the buckhoist operators’ reporting their work absences to Neely directly rather than to Skanska, again, this was one aspect of the employment relationship that C-1 handled, but by itself it is far from sufficient to demonstrate that Skanska and C-1 did not share responsibility for the essential terms and conditions of the buckhoist operators’ employment.

It bears emphasizing that this is not a case like Moreau where the contractor’s supervision was limited only to safety standards or compliance with general industry regulations.  See Grace, 521 F.3d at 666 (observing that the Ninth Circuit’s finding of no joint employment relationship in Moreau “focused on the fact that Air France did not have the ‘authority to “control” any of the workers’ of the companies providing the services” because “Air France merely verified that Dynair’s work complied with applicable airline regulations.”).[7]  Rather, the testimony in the record reflects that Quigley, Jones, and Smith supervised all aspects of the buckhoist operators’ work and conduct, from how they operated the buckhoist and what they transported to handling their complaints about workplace hostility.  See supra at 8-12.  Smith even took detailed notes on Knox’s every move when he felt his performance was deficient and drafted a list of “Buck-hoist Operator Responsibilities” to facilitate compliance with site rules and standards.  R.58-4/Smith decl./PID-1751, 1755-59.  The evidence in the record is more than sufficient to support a jury finding that Skanska exercised very significant control over the buckhoist operators’ work environment on a day-to-day basis for the entire time of their employment on the Le Bonheur project.

The district court also misconstrued the record evidence on Skanska’s power to discipline the buckhoist operators and terminate their employment.  On the particular facts of this case, the record would support a finding that Skanska was a client employer with de facto, almost complete termination power.  It is undisputed that Skanska had the authority to order buckhoist operators removed from the job site for any reason it deemed fit, whether temporarily or permanently, and that it in fact used that authority on multiple occasions.  R.56-3/Skanska-C-1 subcontract agmt., Exh. E/PID-1004; R.56-1/Hicks 30(b)(6) dep./PID-754-56, 767; R.70-11/Neely dep. 206/PID-2883.  When Skanska permanently dismissed a C-1 employee from the Le Bonheur site, that individual’s employment with C-1 perforce ended as well, because all C-1 employment contracts were specific to the Le Bonheur project only and extended no further.  R.56-5/Vassar C-1 employment agmt./PID-1281-82; R.57/Burt C-1 employment agmt./PID-1411-12; R.70-4/Knox C-1 employment agmt./PID-2810-11.[8] 

The uncontroverted evidence in the record is that no C-1 employee who was dismissed from Le Bonheur was retained at C-1 unless, after Rosenbaum’s intervention, Skanska allowed Neely to bring him back to Le Bonheur; there were no reassignments to other C-1 projects.  R.70-11/Neely dep. 32-33/PID-2877; R.56-5/Vassar dep./PID-1248; R.70-4/Knox dep. 313/PID-2804; R.56-3/Neely dep./PID-953-55.  As Neely put it, he hired the buckhoist operators to be “employees for a specific job,” and if an operator was dismissed by Skanska “[h]e wouldn’t be employed anymore.”  R.70-11/Neely dep. 207/PID-2883.[9]  Even if Neely might have wanted to rehire one of the buckhoist operators for another job—and there was no evidence in the record that this ever occurred—that would have required an entirely new contract and a new employment relationship. 

A reasonable jury could find that, throughout the relevant time period here, Skanska—and only Skanska—supervised the buckhoist operations on a daily basis, was in charge of time sheets, and possessed and used its authority to discipline and terminate buckhoist operators from the project and, accordingly, from their employment with C-1.  Based on this Court’s proper standard for what constitutes joint employment, the record is more than sufficient to support a finding that Skanska was a joint employer of the buckhoist operators in this case.

 

CONCLUSION

For the foregoing reasons, the judgment of the district court should be reversed and the case remanded for further proceedings.

Respectfully submitted,

 

P. DAVID LOPEZ

General Counsel

 

CAROLYN L. WHEELER

Acting Associate General Counsel

 

LORRAINE C. DAVIS

Assistant General Counsel

 

s/Elizabeth E. Theran

ELIZABETH E. THERAN

Attorney

U.S. Equal Employment

Opportunity Commission

Office of General Counsel

131 M St. N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4720

elizabeth.theran@eeoc.gov

 

 

 

CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation of Fed. R. App. P.  32(a)(7)(B) because it contains 10,911 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2007 in Palatino Linotype 14 point.

 

s/Elizabeth E. Theran

ELIZABETH E. THERAN

Attorney

U.S. Equal Employment

Opportunity Commission

Office of General Counsel

131 M St. N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4720

elizabeth.theran@eeoc.gov

 

Dated:  January 14, 2013

CERTIFICATE OF SERVICE

I, Elizabeth E. Theran, hereby certify that I electronically filed the foregoing brief with the Court via the appellate CM/ECF this 14th day of January, 2013.  I also certify that the following counsel of record, who have consented to electronic service, will be served the foregoing brief via the appellate CM/ECF system:

 

Counsel for Intervening Plaintiff-Appellant:

Donald A. Donati

Donati Law Firm

1545 Union Ave.

Memphis, TN 38104

(901) 278-1004

Don@donatilaw.com

Counsel for Defendant-Appellee:

Jacqueline E. Kalk

Littler Mendelson

80 S. Eighth St.

Suite 1300 IDS Center

Minneapolis, MN 55402

(612) 313-7645

jkalk@littler.com

 

 

 

 

s/Elizabeth E. Theran

ELIZABETH E. THERAN

Attorney

U.S. Equal Employment

Opportunity Commission

Office of General Counsel

131 M St. N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4720

elizabeth.theran@eeoc.gov

 

 

 

 

 

 

 

 

 

 

 

 

ADDENDUM

DESIGNATION OF RELEVANT DISTRICT COURT DOCUMENTS