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EEOC Holds Both Staffing Firms and Staffing Clients Responsible Under EEO Laws

By Martha J. Zackin

Recently, the EEOC filed a lawsuit against Hire Dynamics, a staffing firm (click here for the EEOC press release).  According to the complaint, after a Hire Dynamics employee filed a charge of discrimination against one of its clients, the staffing firm retaliated by failing to give the employee any further job assignments or opportunities.  As this case highlights, it is important that staffing companies and their clients work together to comply with applicable fair employment practice laws.

Staffing is a vibrant and growing industry, employing more than 2 million workers per day.  Effective use of temporary labor helps the 90% of U.S. companies that use staffing agencies to ramp up and down, as production needs fluctuate, without incurring the costs associated with managing employment processes.

Staffing agencies lease employees to their clients to perform work that is part of the routine operations of the client’s business, typically side-by-side with and doing the same work as the client’s employees.  Notwithstanding the interrelatedness of staffing agencies’ and clients’ workforces, it is common for client companies to assume that they have no EEO obligations towards staffing firm employees assigned to their work site.  It is also common for staffing firms to assume that they are not responsible for any discrimination, retaliation or harassment that their employees face at their clients' work sites.  Both assumptions are often wrong.

According to EEOC guidance and applicable case law, staffing agencies are responsible for discrimination, retaliation, and harassment that their employees confront at clients’ work sites.  Further, to the extent that the working conditions of staffing firms’ employees are controlled in whole or in part by the clients to whom the employees are assigned, clients are responsible, too.  As the EEOC guidance makes clear, staffing firms must hire and make job assignments in a non-discriminatory manner and client companies must treat staffing firm workers assigned to them in a non-discriminatory manner.  Further, staffing firms must take immediate and appropriate corrective action if it learns that a client has discriminated against one of its workers. 

The nature of the staffing firm/client company relationship makes dealing with EEO issues and employment laws even more difficult than is typically the case.  When in doubt about how to handle a particular situation, consult your employment counsel.

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Martha Zackin