• California Court Finds that Temporary Employment Agency Can Be Held Liable for Retaliation Under State Law
  • February 25, 2004 | Author: Helene J. Wasserman
  • Law Firm: Ford & Harrison LLP - Los Angeles Office
  • The California Court of Appeal for the Second Appellate District (Los Angeles) has held that a temporary employment agency cannot be held liable under California's Fair Employment and Housing Act (FEHA) for harassment about which it had no knowledge, but it can be held liable for retaliation against a temporary employee after she complained of the alleged harassment. See Mathieu v. Norrell Corporation.

    The plaintiff in this case, Mathieu, was placed by Norrell at Gulfstream Aerospace Corporation. Mathieu claimed that her former boyfriend, Fluck, who also worked at Gulfstream, harassed her during the seven months she worked there. Mathieu complained about the harassment to her supervisor at Gulfstream and to Gulfstream's human resources department and she and Fluck were told to stay away from each other.

    Although she was required to report any workplace problems to Norrell, Mathieu waited six months before reporting the conduct to Dunn, her contact at Norrell. At that time, an investigation was conducted and Dunn was told that Fluck was admonished about his inappropriate conduct. Dunn told Mathieu to report any further problems. Mathieu explained that the conduct had "calmed down." A few weeks later, Dunn checked with Mathieu to inquire about the situation with Fluck and Mathieu responded that everything had "calmed down."

    Shortly after that, Gulfstream told Mathieu that her assignment was being ended as a cost containment measure. At that time, Mathieu told Norrell that she believed she was released because of her complaints about Fluck. Dunn responded that she was told that the release was due to budget cuts and assured Mathieu that Norrell would continue to look for another position for her. Dunn offered Mathieu a new short-term placement, but Mathieu opted to work through another placement agency.

    Mathieu later sued Gulfstream, Fluck, and Norrell. By the time Norrell filed its motion for summary judgment motion, Gulfstream and Fluck had been dismissed from the suit. The trial court granted Norrell's motion and Mathieu appealed. The Court of Appeals first addressed whether both Norrell and Gulfstream were properly considered Mathieu's employer for purposes of liability for sexual harassment and retaliation. The Court found that they were, based on the traditional labor law doctrine of "dual employers." The court explained that holding otherwise would allow temporary employment agencies to send employees into hostile and discriminatory workplaces and then ignore complaints of harassment without fear of liability.

    The court further held that Norrell could not be held liable for the alleged harassment by Fluck, because Norrell was not aware of the conduct until it had already ceased.

    The court did, however, find that Norrell could be held liable for retaliation. When Mathieu informed Dunn that she believed Gulfstream's decision to lay her off was motivated by her complaints about Fluck, Dunn inquired of Gulfstream's human resources department. The person with whom she spoke stated that she had not been involved in the situation with Fluck, nor had that situation been mentioned in the context of the decision to release Mathieu. Upon hearing this, Dunn did not pursue the matter further, nor did she recommend that Gulfstream retain Mathieu. Additionally, there was disputed evidence as to whether Norrell agreed to reassign Mathieu to a comparable position to that which she had at Gulfstream.

    Norrell questioned how it could be held liable for retaliation when Mathieu did not engage in any protected activity. Norrell did not believe that the conduct about which Mathieu complained gave rise to liability for sexual harassment. The court concluded that at least some of the conduct complained of could give rise to liability for sexual harassment. Accordingly, the court found a triable issue of fact as to whether Norrell reasonably understood Mathieu's complaints to be about actionable harassment.

    The court also found a triable issue of fact as to whether Dunn adequately investigated or attempted to correct the alleged retaliation by Gulfstream (i.e. the layoff.) Further, there was evidence that Mathieu was subject to retaliatory action by Norrell's failure to offer her comparable employment.

    This case raises significant issues for temporary employment agencies, as well as for employers who utilize the services of temporary employment agencies. Temporary agencies need to recognize that, due to the "dual employer" doctrine, they could be held liable for conduct occurring at the workplace at which they place employees. Procedures and mechanisms need to be in place for communicating with employees about conduct at the worksite, as well as for investigating that conduct. Failure to have these mechanisms in place could give rise to liability for conduct not even engaged in by the agency's employees. Employers who use temporary employees must be aware that these employees have the same rights as "regular" employees. These employers also need to be aware that they should cooperate if a temporary employment agency needs to conduct an investigation regarding conduct involving a temporary employee.