Liability under Title VII is premised on an employer-employee relationship. Parties not in an employment relationship cannot be found liable for discrimination, harassment or retaliation claims. Last month, the Sixth Circuit Court of Appeals found an exception to this rule, holding a general contractor potentially liable for harassment and retaliation claims brought by its subcontractor’s employees.
 
EEOC v. Skanska USA Bldg., Inc., involved claims brought by employees at a Tennessee construction site. The plaintiffs alleged that they were subjected to racial harassment at the job site, despite multiple complaints to their actual employer as well as ones made to the general contractor. Skanska claimed that it could not be liable for the conduct under Title VII because it was not the plaintiffs’ statutory employer.
 
The Sixth Circuit rejected this defense, concluding that the general contractor controlled the subcontractor’s employees’ daily work. The court stated that this level of control made the general and sub “joint employers” under Title VII. Skanska had the ability to hire, fire, discipline and supervise the plaintiffs’ work. In comparison, the subcontractor had minimal control over its employees' work at the jobsite, and was almost never present at the worksite.
 
Federal courts rarely apply the joint employment theory under Title VII. Construction general contractors are more familiar with attempts by OSHA to hold them liable under this theory for subcontractors’ employees exposed to safety hazards. As with the OSHA cases, this decision places general contractors in a difficult position. The more supervision they exercise over the subcontractors’ employees, the more likely they will be found to be liable to those workers under various federal labor laws. However, by foreswearing such supervision, the general contractor risks increased safety and production problems involving such employees.
 
The written agreement with the subcontractor should clearly spell out respective responsibilities for legal compliance. To the extent legally allowed, the agreement should also provide indemnification for the general contractor faced with claims from subcontractors’ employees. Beyond the written agreement, general contractors need to carefully plan and implement a legal compliance strategy with respect to all workers on the job site, whether or not they are directly employed by the general contractor.