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The Appellate Court once again reminds Employers who engage farm labor contractors and temp agencies that setting boundaries is an important defense to Fair Employment Housing Act (“FEHA”) claims. In Jimenez v. U.S. Continental Marketing, Inc. (2019), the Court held that a temporary employee working at a contract-employer location could have a viable claim under FEHA against its contract employer if facts establish an employer-employee relationship exists.

For a claimant to be entitled to relief under FEHA for harassment and retaliation claims, the claimant must establish an employment relationship exists with his or her alleged employer.  Plaintiff Jimenez worked for a temporary staffing agency, Ameritemps. Ameritemps placed Jimenez with U.S. Continental Marketing, Inc. (“USCM”) through a contract. Though Ameritemps maintained control over hiring, payments, benefits and timekeeping of Jimenez, USCM also exercised control over certain employment factors of Jimenez. While placed at USCM, Jimenez was subject to its handbook policies, received mandatory in-house training, she was subject to the disciplinary system, reported to a USCM employee as her direct supervisor, and worked in a supervisor role over several company employees.

In trial, USCM argued Jimenez’s employer was the company that exerted more control over her. The jury felt that Ameritemps maintained the most control over her and found that USCM was not Jimenez’s employer under FEHA. On appeal, the Court found that even though Ameritemps maintained many facets of control over Jimenez’s employment, USCM also exercised direction and control over Jimenez to the extent it met the requirements under FEHA.  The Court indicated USCM’s argument was unpersuasive and “[t]he key is that liability is predicated on the allegations of harassment and discrimination involving the terms, conditions, or privileges of employment under control of the employer.” Here, because USCM exercised control in regards to Jimenez’s terms and conditions of employment affected by harassment and retaliation, USCM was her employer for FEHA proposes.

COUNSEL TO MANAGEMENT:

For those Employers who feel they fall under an exception to FEHA because the employees performing work for the company are “managed” by a temporary agency, you may be open to liability for FEHA claims if you exercise control over the terms and conditions of employment that directly relate to the FEHA claim(s). Though joint-employer liability has always been available to claimants, appropriate boundaries between temporary employees and the Company will be the best defense to a FEHA claim.  If you are currently working with a temporary agency and need guidance on what boundaries to set, contact the experts at The Saqui Law Group, a division of Dowling Aaron Incorporated.

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