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Are you a coemployer with the government?

published in Oklahoma Employment Law Letter | August 1, 2012

By Michael Avery

Several employment claims require an employee to demonstrate an employment relationship between himself and the employer. That’s the case for claims filed under Title VII and the Americans with Disabilities Act (ADA). If you work for a company that is contractually obligated to provide services to the government or a government entity, one of your current or former employees may file a lawsuit against you and the government under one or more of those statutes. Let’s look at the standards applicable to those claims and discuss what you can do to avoid ending up in court.

Background

If a current or former employee attempts to establish an employment relationship between himself and a government entity that you contract with, a court will decide whether you and the government entity are joint employers. In doing so, the court will determine on a case-by-case basis whether you and the government share control of the essential terms and conditions of the individual’s employment. Most significant to the court’s analysis is whether the government has or shares the right to terminate the individual’s employment.

Thus, it’s important to structure your contractual relationship with a government entity in a specific manner. Most importantly, you should ensure to the greatest extent possible that the government entity doesn’t have control over the day-to-day conditions of employees’ work and doesn’t have the power to terminate workers. The greater your organization’s ability to control, the more persuasive your argument will be that the government shouldn’t be dragged into the mire of any employment litigation.

The issue recently came up in Mitchem v. Edmond Transit Management et al., filed in the U.S. District Court for the Western District of Oklahoma. In that case, a current employee of a company that had a contract to provide bus services to the city of Edmond filed various employment claims against both the company and the city.

As you might expect, to preserve its relationship with the city, the company was eager to ensure that the city wouldn’t have to participate in the litigation. Fortunately for it, the city was dismissed from the lawsuit at the earliest stage possible based on the employee’s inability to demonstrate that it had any control over the day-to-day conditions and circumstances of his employment.

Importantly for the employer, the court’s dismissal of the city from the case also helped the company narrow the scope of the claims the employee sought to bring against it. More specifically, once the city was out, the company gained the added benefit of not having to defend against claims that were based on the idea that its supervisors had wronged the employee while acting under the color of state law.

Takeaway

To preserve your relationships with government clients, you should, to the extent possible and practical, ensure that your government clients aren’t too heavily involved in controlling the conditions of your employees’ day-to-day work.