Paying for the Sins of Their Clients: The EEOC's Position that Staffing Firms Can Be Liable When Their Clients Terminate an Assigned Employee for a Discriminatory Reason

Abstract

The Equal Employment Opportunity Commission (EEOC ) takes the remarkable position that an employment staffing firm should be liable under the federal employment-discrimination statutes when the firm's client terminates an employee assignment for a discriminatory reason, unless the firm takes “corrective measures within its control.” The position is remarkable because it presumes an employer can be liable for an adverse employment action taken by neither it nor any of its agents. It also presumes an employer can be liable when neither it nor any of its agents acted with a discriminatory motive. The EEOC is attempting to extend the rule of liability for coworker and third-party harassment to tangible employment actions by third parties, despite such extension being inconsistent with the statutes. While no one disagrees that a staffing firm must hire and make job assignments in a non-discriminatory manner, the EEOC's position that a staffing firm can be liable for a client's discriminatory termination of an employee assignment should be rejected by the courts.

Keywords: EEOC, employment law, contract termination, staffing firms

JEL Classification: K20, K31, K12