Opinion
Civil No. 00-314-HA
August 31, 2000
Kerry M.L. Smith Smith Fjelstad Gresham, OR Attorney for Plaintiff.
Stacey E. Mark Ater Wynne, LLP Portland, OR Attorney for Defendants.
OPINION AND ORDER
Pending before the court is defendants' motion for reconsideration of the court's previous ruling that Defendant Intem, Inc. is a qualified employer under Title VII, having "15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year." 42 U.S.C. § 2000e(b). Plaintiff has alleged that Intem fired her because she was pregnant. In an earlier motion to dismiss, Intem argued that the court lacked jurisdiction over her Title VII claim because it had less than 15 employees and therefore is not a qualified employer. The court concluded, however, that Intem did meet the jurisdictional requirement because it serves as a local agent under a detailed licence agreement for Uniforce Staffing Services, Inc. ("USSI"), which does have more than the requisite 15 employees. As a result of this agency relationship, the court found that it was proper to aggregate the employees of USSI with those of Intem so that the jurisdictional prerequisite had been met. See Childs v. Local 18, International Brotherhood of Electrical Workers, 719 F.2d 1379 (9th Cir. 1983) (recognizing the applicability of agency theories to employers in Title VII cases); Baker v. Stuart Broadcasting Co., 560 F.2d 389 (8th Cir. 1977) (aggregating the employees of two business to meet the jurisdictional requirement). Intem has now requested that this ruling be reconsidered on the basis of additional case law.
As explained in the court's previous Opinion and Order, employees of two separate employers can be aggregated to meet the jurisdictional requirement when they are in fact "joint employers" of the employee, when one employer is acting as the agent of the other employer, or when other factors such as common ownership and control demonstrate that the two entities in reality constitute a single employer. Miller v. Zee's, Inc., 31 F. Supp.2d 792, 806 (D.Or. 1998).
USSI and Intem are in the business of hiring "temporary personnel" and matching them, for a fee, with clients such as businesses that are in need of temporary workers. USSI is a nationwide business whose headquarters are in New York and owns the rights to the "Uniforce" tradename. Intem, a local company, is a licensee of the "Uniforce" tradename, and is responsible for recruiting, screening, and placing employees in temporary, temp-to-hire, and direct hire positions in Clackamas, Oregon on behalf of USSI. USSI subsidiary Uniforce Payrolling Services, Inc. ("USPI") pays the temporary employees. Clients in need of temporary employees pay USSI an agreed-upon rate for work performed by USSI/UPSI employees, and USSI then pays Intem a commission. The license agreement provides USSI with the power to set Intem's employee training, set Intem's office hours, and set work performance standards for Intem employees. (Schultz Decl., Ex. 2 at ¶ 5(d) and (g).) In addition, USSI can require Intem to remove an Intem employee from working on USSI's business if USSI so desired. (Id., Ex. 2 at ¶ 5(g).)
While USSI has a great deal of authority over Intem's employees, Intem also exercises almost exclusive authority over USSI's temporary employees hired through the Clackamas office. Intem, without any assistance from USSI, makes the sole decision on which persons to hire as temporary employees, whether they will be retained, and the clients with which they will be placed. (Stewart Decl. at ¶¶ 9-32.) Even though USSI paid the temporary employees and received the compensation from the clients, the clients and the temporary employees had no contact with the New York offices of USSI. (Id. at ¶¶ 28 and 33-36.) Instead, the clients and temporary employees are led to believe Intem is the local office of USSI. Intem uses USSI's tradename "Uniforce" in practically all of its business dealings. (Id. at ¶ 4.) USSI's Internet webcite lists the Clackamas office as a "Uniforce office location" and USSI refers to itself as Uniforce's "corporate headquarters." (Smith Decl., Ex. C.) Intem answers its telephone as "Uniforce" or "Uniforce staffing," advertises itself as "Uniforce," and uses "Uniforce" stationary to communicate with the temporary employees and clients. (Stewart Decl. at ¶¶ 7-8 and Exs. D and E.) Even though temporary employees are on USSI's payroll, not Intem's, the temporary employees are not told that USSI is a separate company distinct from Intem. (Id. at ¶ 28.) Rather, the employees apparently believe they are employed by a single company known as "Uniforce." (See id. at ¶¶ 9-32.)
Plaintiff, a staffing manager, was hired as a temporary employee by USSI to work in Intem's offices for a few days before becoming a permanent employee paid by Intem. (Schultz Decl. at ¶ 10.) Intem argues that plaintiff was employed solely by Intem at the time of her dismissal and that even if an agency relationship exists between Intem and USSI, USSI's employees cannot be aggregated with Intem's. Intem cites Morgan v. Safeway Stores, Inc., 884 F.2d 1211 (9th Cir. 1989), for the proposition that "active participation in the challenged program" by the principal is required in order to aggregate the principal's employees under an agency theory. 884 F.2d at 1213. As plaintiff has offered no evidence that USSI actively participated in the decision to terminate plaintiff's employment, Intem is correct that she cannot establish Title VII jurisdiction based on an agency theory. That conclusion does not end the matter, however.
A Title VII plaintiff may also establish that an employer has more than the requisite number of employees if the employer acts in conjunction with another entity as the employee's "joint employers." "[W]here two entities contract with each other for the performance of some task, and one company retains sufficient control over the terms and conditions of employment of the other company's employees, [the court] may treat the entities as `joint employers' and aggregate them." Lyes v. City of Riviera Beach, Fla., 166 F.3d 1332, 1341 (11th Cir. 1999). Joint employment is determined from a totality of the circumstances, while considering factors such as authority to hire employees, authority to fire employees, authority to set conditions of employment, day-to-day supervision of employees, and control of employee records such as payroll, insurance, and taxes. Zarnoski v. Hearst Business Comm., No. Civ. A. 95-3854, 1996 WL 11301 (Jan. 11, 1996 E.D. Pa.) (citing cases).
See also Sun-Maid Growers of Cal. v. NLRB, 618 F.2d 56, 59 (1980) (employing the "joint employer" test in a labor relations case); Miller, 31 F. Supp.2d at 806 (recognizing joint employers in the Title VII cases); Horvath v. Dalton, No. C-97-0441, 1999 WL 13714 (Jan. 7, 1999 N.D. Cal.), aff'd, 215 F.3d 1333 (9th Cir. 2000) (recognizing joint employers in Title VII cases).
In this case the court finds both that USSI and Intem were joint employers of plaintiff and that the temporary employees were also joint employees of USSI and Intem. First, both companies jointly employed plaintiff. USSI originally hired plaintiff as a temporary employee placed with Intem for a day and half before Intem hired plaintiff as a permanent employee. (Schultz Decl. at ¶ 10.) In addition, the license agreement provides USSI with the power to set Intem's employee training requirements, set Intem's office hours, and set work performance standards for Intem employees. (Id., Ex. 2 at ¶ 5(d) and (g).) Further, Intem had the practical ability to fire plaintiff by requiring that Intem (a company with apparently little or no other business) remove plaintiff from all USSI business if USSI so desired. (Id., Ex. 2 at ¶ 5(g).) Although other factors weigh against finding joint employment (Intem paid plaintiff and provided day-to-day supervision), the court finds it particularly relevant that Intem, at USSI's behest, represented itself both to its temporary employees and the business community at large as a single entity. As such, aggregation of USSI's employees with Intem's employees is proper.
Although the USSI/Intem license agreement proclaims that one company's employees shall not be considered employees of the other, (Schultz Decl., Ex. 2 at ¶ 16), such an agreement clearly does not bind the court with respect to the Title VII rights of non-party employees such as plaintiff.
Second, Intem itself is the joint employer of an apparently substantial number of temporary employees. Although USSI pays the temporary employees, Intem is responsible for their day-to-day supervision, hires them, places them with clients, and has the power to terminate them. As a result, Intem is the joint employer of the temporary employees, and Intem has failed to produce any evidence that if these temporary employees are aggregated with its permanent employees, it has less than 15 full-time employees. (Stewart Decl. at ¶¶ 9-32.) As a result, the motion to dismiss plaintiff's Title VII claim fails.
IT IS HEREBY ORDERED that defendants' motion to reconsider is granted, (doc. 26), and defendants' motion to dismiss plaintiff's Title VII claim is denied, (doc. 10).