Employment anti-discrimination statutes, such as the New York City Human Rights Law or Title VII of the Civil Rights Act of 1964, allow workers to assert claims against their employers for certain unlawful actions. Determining an employee-employer relationship, however, is not always easy. In situations in which more than one business might play a role in a worker’s employment, courts have developed the concept of a “joint employer.” A recent series of sexual harassment complaints against a major restaurant chain could require a joint employer analysis.
Discrimination in employment on the basis of sex is prohibited under city, state, and federal laws. The definition of “sex discrimination” has expanded over the years, through both court decisions and legislation, to include practices like sexual harassment and pregnancy discrimination. In a typical sexual harassment claim, a plaintiff must demonstrate that an employer is either directly liable due to actions against the plaintiff by a manager or supervisor, or liable for failing to address harassment by a co-worker of the plaintiff, about which it knew or should have known. Before that analysis even begins, however, a plaintiff must establish that an employment relationship exists.
A worker may receive a paycheck from one company but work at a different company’s site because of a contract between the two companies. When one company handles payroll, but another company directs the employee’s daily work, which one is the “employer?” Another common example of this problem involves franchised businesses. An individual might appear to be employed by a company that operates a national chain of stores or restaurants, but their employer is actually a local company operating under a franchise agreement with a larger company. The local business, or franchisee, would be the employer on paper, but the larger company, or franchisor, might still exercise considerable control over the conditions of employment.