Faush v. Tuesday Morning, Inc.
| Decision Date | 18 November 2015 |
| Docket Number | No. 14–1452.,14–1452. |
| Parties | Matthew FAUSH, Appellant v. TUESDAY MORNING, INC. |
| Court | U.S. Court of Appeals — Third Circuit |
Wayne A. Ely, Esq., Argued, Timothy M. Kolman, Esq., W. Charles Sipio, Esq., Kolman Ely PC, Penndel, PA, Attorneys for Appellant.
Stephen C. Baker, Esq., Alan M. Kidd, Esq., Drinker Biddle & Reath LLP, Philadelphia, PA, Molly B. Cowan, Esq., Robert E. Luxen, Esq., Argued, Hallett & Perrin, P.C., Dallas, TX, Attorneys for Appellees.
Before: FUENTES, FISHER, and KRAUSE, Circuit Judges.
Appellant Matthew Faush is an African–American employee of Labor Ready, a staffing firm that provides temporary employees to several clients, including Appellee Tuesday Morning, Inc. According to Faush, Labor Ready assigned him to work at one of Tuesday Morning's stores, where he was subjected to racial slurs and racially motivated accusations and was eventually terminated.
Faush filed suit against Tuesday Morning, claiming violations of Title VII and the Pennsylvania Human Relations Act, among other statutes. The District Court granted summary judgment to Tuesday Morning on the ground that, because Faush was not Tuesday Morning's employee, Tuesday Morning could not be liable for employment discrimination. Because a rational jury applying the factors announced by the Supreme Court in Nationwide Mutual Insurance Co. v. Darden could find on these facts that Faush was Tuesday Morning's employee for purposes of Title VII and the Human Relations Act, we vacate in part the grant of summary judgment and remand for further proceedings.
Matthew Faush was employed by Labor Ready, a staffing firm that provides temporary employees to a number of clients, including closeout home-goods retailer Tuesday Morning, Inc. Over the course of a month, Labor Ready sent temporary employees to a new Tuesday Morning store in Pennsylvania overseen by store manager Keith Davis. The temporary employees were asked to unload merchandise, set up display shelves, and stock merchandise on the shelves in preparation for the store's opening the following month. Faush was assigned to the store for ten days; each day, he generally worked for eight hours with nine other temporary employees.
Faush alleges in his complaint that when he and other African–American temporary employees were working at the Tuesday Morning store, Davis accused them of stealing two eyeliner pens, insisting that "[his] people wouldn't do that." (App. 30 ¶ 18.) A few days later, the store owner's mother told Faush and two other African–American temporary employees to work in the back of the store with the garbage until it was time to leave. When Faush and his coworkers went to speak with Davis, a white employee blocked their path and referred to them using a racial slur. Davis refused to hear their complaints regarding the slur. Instead, he informed them that he would not let them on the floor because an alarm had been triggered and he was concerned about loss prevention. Faush alleges that he and his African–American coworkers were "terminated," but his complaint provides no further detail. (App. 31 ¶ 34.)
Faush filed suit against Tuesday Morning in federal court for racial discrimination in violation of Title VII of the Civil Rights Act of 1964, the Pennsylvania Human Relations Act, and 42 U.S.C. § 1981. The parties conducted limited discovery on the threshold issue of whether Faush could be considered Tuesday Morning's employee. Tuesday Morning subsequently filed a motion for summary judgment on the grounds that it had never employed Faush or entered into a contract with him, as is a predicate for his various claims.
Labor Ready assigned Faush to work at a Tuesday Morning store under an "Agreement to Supply Temporary Employees" (the "Agreement") between Labor Ready and Tuesday Morning. (App. 55.) There was no contract between Faush and Tuesday Morning, and Faush never formally applied for employment at the store.
Labor Ready provided the temporary employees with time cards on which they recorded the amount of time they spent working at Tuesday Morning. Under the Agreement, Tuesday Morning was expected to "approve [the] time card for each [temporary employee], or otherwise accurately report the daily hours worked." (App. 56 ¶ 2(a).) Accordingly, at the end of each day, Davis signed a document indicating how many hours each temporary employee had worked. Labor Ready billed Tuesday Morning $13.52 per hour of work plus tax.
If a temporary employee was unable to report to work at the store, he or she was expected to inform Labor Ready rather than Tuesday Morning. Once a temporary employee was at the store, however, the Agreement provided that Tuesday Morning was "responsible for supervising and directing [his or her] activities." (App. 55, 56 ¶ 4(a).) Tuesday Morning acknowledged that Labor Ready was "not a licensed general contractor or subcontractor," was not responsible for Tuesday Morning's project, and would "not be providing supervision services for its [temporary employees]." (App. 55, 56 ¶ 4(a)-(b).) Indeed, Tuesday Morning was required to provide any necessary "site specific safety orientation and training," as well as any "Personal Protective Equipment, clothing, or devices necessary for any work to be performed." (App. 56 ¶ 3(a).)
Tuesday Morning was expected to determine whether the temporary employees met its "skill, competency, license, experience, or other requirements, and only assign [them] duties consistent with their skills and abilities." (App. 56 ¶ 2(d).) The Agreement did not permit Tuesday Morning to "entrust [temporary employees] with the care of unattended premises, custody or control of cash, credit cards, valuables or other similar property," or to "allow [temporary employees] to operate machinery, equipment or motor vehicles without [Labor Ready's] prior written permission." (App. 56 ¶ 4(c).)
Davis, the Tuesday Morning store manager, testified at his deposition that he had "supervisory control over the temporary employees," trained them to assemble shelves, and "assigned them tasks to perform on a daily basis." (App. 101, 104.) Significantly, the work they were assigned was no different from the work Davis assigned to his own employees. Davis further testified that the temporary employees were "a stop[gap] measure" because his store was "brand new" and did not yet have "a full compl[e]ment of Tuesday Morning employees." (App. 104.)
A Labor Ready supervisor did visit the store on two occasions. On her first visit, she ensured that the temporary employees were moving at an acceptable pace, but the tasks were assigned by Davis, and the Labor Ready supervisor passed Davis's instructions on to the temporary employees. On the second visit, she simply verified that all of the temporary employees were present.
None of the temporary employees was provided with a key to the store. At his deposition, however, Davis referred to the "assistant managers of the store" as his "key holders." (App. 101.) Presumably, then, not every permanent employee at Tuesday Morning was provided with a key.
Pursuant to the Agreement, if Tuesday Morning was "unhappy with any [temporary employee] for any reason," it could inform Labor Ready "within the first two (2) hours," and Labor Ready would "send out a replacement immediately." (App. 55.) Davis testified that Tuesday Morning regional manager Kathy Beromeo had the authority to request that a temporary employee not be allowed to return to the store; however, to his knowledge, this never occurred. Tuesday Morning had no authority to terminate a temporary employee's employment with Labor Ready, although the record is silent as to what, if any, other temporary employment would be made available to a temporary employee by Labor Ready if that employee were rejected by Tuesday Morning. And after Faush ended his work at the store, Tuesday Morning never received any claim for unemployment compensation benefits.
Labor Ready set the temporary employees' pay rate; paid their wages, taxes, and social security; maintained workers' compensation insurance on their behalf; and completed their I–9 employment eligibility verification forms. Tuesday Morning, on the other hand, never had Faush's social security number.
In certain respects, however, Tuesday Morning shared responsibility for the wages paid to the temporary employees. As explained above, Tuesday Morning paid Labor Ready for each hour worked by each temporary employee. The Agreement provided that Labor Ready could adjust the rates charged to Tuesday Morning to reflect increases in its "actual or government mandated cost for wages, withholding amounts, governmental taxes, assessments, health care, [and] Workers' Compensation insurance." (App. 55, 56 ¶ 2(f).) Tuesday Morning could also be required to "pay overtime charges as applicable to overtime paid according to law." (App. 56 ¶ 2(b).) Moreover, the Agreement required Tuesday Morning to notify Labor Ready "if a prevailing wage, living wage, or any other government mandated minimum statutory wage should be paid to [temporary employees]" and did not "relieve[ ] [Tuesday Morning] of its primary responsibility for ensuring complete and accurate compliance with all local, state, and federal laws relating to prevailing wages." (App. 56 ¶ 3(c).)
Finally, the Agreement required both Labor Ready and Tuesday Morning to "comply with all applicable federal, state and local laws and regulations concerning employment, including but not limited to: wage and hour, breaks and meal period regulations, the hiring and discharge of employees, Title VII and the FLSA." (App. 56 ¶ 3(b).) Moreover, both companies pledged to "provide a workplace free from discrimination and unfair labor practices." (Id. )
The District Court granted Tuesday Morning's motion for...
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