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Temps supplied by agency might count in ADEA’s 20-employee threshold

By Marjorie Johnson, J.D.

A 61-year-old employee who was discharged by an employer that had no more than 16 regular employees on its payroll during the relevant time period defeated a company’s motion for partial summary judgment on her ADEA claim since a staffing agency supplied the company with eight temporary workers who could arguably be counted in the ADEA’s 20-employee threshold. Applying the five-factor agency test to determine whether an employment relationship existed, a federal district court in Illinois found ample evidence suggesting that the employer exercised a great deal of control over the temporary workers, trained them, and provided the tools necessary to do their jobs as production operators  (Rodriguez v. Dynamesh, Inc., February 24, 2015, Gettleman, R.).

The Hispanic employee had worked for her employer, which was in the screen printing supply business, since 2006. Her Title VII and ADEA lawsuit claimed that in 2014, she was treated less favorably than non-Hispanic, younger coworkers and that she was discharged in January of that year due to her age and race. At issue was the employer’s motion for partial summary judgment, in which it asserted that it was not an “employer” under the ADEA since it employed less than 20 employees during the relevant time period.

It was undisputed that during the time period in question, the employer had between 15 and 16 regular employees on its payroll. However, during that same period, a staffing agency supplied it with eight temporary workers. These workers were all assigned to the position of production operator and were supervised by the production manager. Four of the workers continually provided services to the employer between January 2013 and December 2014. The other four workers provided services at different times throughout the period.

Temps arguably employees. Because the alleged discrimination occurred in 2014, the employee was required to show that her employer employed 20 or more employees for 20 or more weeks during 2013 or 2014. During both years, it had 16 or fewer employees who appeared on its payroll every week. However, both parties agree that the 20-employee threshold would be satisfied if defendant’s temporary workers were employees.

Because the employment relationship is most readily demonstrated by an individual’s appearance on the employer’s payroll, payroll records are usually the starting point to determine whom the defendant employed during the relevant period, explained the court. However, an individual’s absence from the payroll “does not necessarily ring the death knell.” Rather, because the ultimate touchstone is whether an employer has employment relationships, temporary workers may be considered temporary employees and thus included in the count toward the employee threshold.

To be counted as an employee, a person must have an “employment relationship” under the traditional principles of agency law.” This analysis required the consideration of five factors, which the employer failed to address. Among those, the employer’s right to control was the most important when determining whether an individual is an employee or an independent contractor.

Significant control. Briefly addressing each factor, the court suggested that three of them clearly indicated that the temporary workers were employees. First, the employer exerted significant control over temporary workers by tracking their time, controlling their schedule, supervising their work, subjecting them to its workplace rules and policies, retaining the discretion to transfer them to a new department or change their work duties, conducting semi-annual performance reviews, and exercising some control over their raises and salaries. Moreover, their work as production operators mostly involved manual labor, and defendant taught them all the necessary skills. Third, the employer provided all the tools and equipment they used.

The fifth factor weighed only slightly in the employee’s favor. Although the record did not extensively reveal how the temporary workers’ job commitment or expectations differed from those of its at-will employees, it did continually employ half the temporary workers during 2013 and 2014, a relatively significant commitment. Only the fourth factor clearly weighed in the employer’s favor since the staffing agency paid the temporary workers. Considered together, these factors establish that the temporary workers were employees.

The employer unsuccessfully contended that the court could not look to the employment relationships of the temporary workers if such an analysis would lead to the conclusion that they were joint employees. The joint employer theory of liability was equally applicable in the context of Title VII and the ADA, and, thus also in the context of the ADEA, stated the court. Indeed, the Seventh Circuit found joint employer status between a temporary services agency and its client in the labor law context where two employers exert significant control over the same employees. Accordingly, since the employee provided some basis for concluding that the employer’s temporary workers were employees, partial summary judgment was not warranted.