Sexual Harassment Lawsuit Raises Question of Whether Defendant Was an “Employer” Under State and Federal Law

The Third Circuit Court of Appeals recently affirmed summary judgment in favor of the defendant in a sexual harassment case, finding that the defendant was not the plaintiff’s “employer,” as state and federal law define the word. Plaso v. IJKG, LLC, No. 13-2565, slip op. (3rd Cir., Jan. 21, 2014). The plaintiff worked as a consultant assigned to the defendant’s office. When she filed the lawsuit, she had already settled claims against her supervisor and the company that assigned her to the defendant. The Third Circuit’s decision is based partly on New Jersey state law and lacks precedential value, but it offers guidance on the legal definition of “employer” for workers considering a sexual harassment claim.

The plaintiff worked for an Ohio-based consulting company, Healthcare MCR, under the immediate supervision of R. Brent Martin. Healthcare issued her paychecks, and her employment contract specified that only it and she had the authority to terminate her employment. Martin assigned her to work at Bayonne Medical Center (BMC) in New Jersey, where he also worked in an officer position. She worked at BMC five days a week; had her own office, email address, and telephone line; and interacted with Martin, BMC executives and BMC employees daily.

In June 2010, the plaintiff complained to BMC’s Vice President of Human Resources that Martin had sexually harassed her at various times since 2008. She told the CEO of BMC that she no longer wanted to work with Martin, and the CEO allegedly instructed her to pack up her office. She was not fired by anyone at Healthcare, including Martin.

She filed a complaint against Martin with the Ohio Civil Rights Commission, and against Healthcare with the New Jersey Division on Civil Rights. Both cases settled in October 2010, when her employment with Healthcare also ended. In 2011, she filed a lawsuit against BMC for hostile work environment, gender and quid pro quo discrimination, and retaliation under Title VII of the Civil Rights Act and the New Jersey Law Against Discrimination. The trial court granted summary judgment for BMC, holding that it was not the plaintiff’s employer.

The Third Circuit applied a three-part common law test to identify an “employer” used by the Supreme Court in a case involving a different federal statute: (1) who paid the plaintiff, (2) who had authority over hiring and firing, and (3) who could control her “daily employment activities.” National Mutual Ins. Co. v. Darden, 503 U.S. 318, 323-24 (1992). The Second Circuit Court of Appeals, whose jurisdiction includes New York, has adopted the same three-part test. See Salamon v. Our Lady of Victory Hosp., 514 F.3d 217, 226 (2nd Cir. 2008); Gulino v. New York State Educ. Dept., 460 F.3d 361, 370-71 (2nd Cir. 2006).

The plaintiff presented three arguments on appeal: BMC (1) directly employed her; (2) jointly employed her; or (3) formed an “integrated entity” with Healthcare that acted as a single employer. She claimed that her work for BMC evolved during her time there, and that the district court’s focus on her employment contract with Healthcare was incomplete. The court found, however, that Healthcare retained the bulk of the three “indicia of control” identified by Darden.

The sexual harassment lawyers at Phillips & Associates represent the rights of workers in New York City and surrounding areas, asserting claims for harassment and discrimination at the municipal, state, and federal levels. Contact us today online or at (212) 248-7431 to schedule a free and confidential consultation.

More Blog Posts:

Appeals Court Decision Shows Any Employer in New York and Elsewhere May be Held Accountable for Sexual Harassment, New York Employment Attorney Blog, January 8, 2014
11th Circuit Ruling in Sex Harassment and Hostile Work Environment Case Sends Tough Message to Employers in New York and Across the U.S., New York Employment Attorney Blog, December 18, 2013
New York Women Allege Same-Sex Harassment by Manager in Two Separate Lawsuits, New York Employment Attorney Blog, October 1, 2013

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