Butler v. Drive Automotive Industries of America, Inc. , 793 F.3d 404 ( 2015 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1348
BRENDA BUTLER,
Plaintiff - Appellant,
v.
DRIVE AUTOMOTIVE INDUSTRIES OF AMERICA, INCORPORATED, d/b/a
Magna Drive Automotive,
Defendant – Appellee,
and
EMPLOYBRIDGE OF DALLAS INCORPORATED, d/b/a ResourceMFG;
STAFFING SOLUTIONS SOUTHEAST INCORPORATED, d/b/a
ResourceMFG,
Defendants.
Appeal from the United States District Court for the District of
South Carolina, at Greenville. Jacquelyn D. Austin, Magistrate
Judge. (6:12-cv-03608-JDA)
Argued: January 29, 2015 Decided: July 15, 2015
Before KEENAN, FLOYD, and HARRIS, Circuit Judges.
Reversed and remanded by published opinion. Judge Floyd wrote
the opinion, in which Judge Keenan and Judge Harris joined.
ARGUED: Jeffrey Parker Dunlaevy, STEPHENSON & MURPHY, LLC,
Greenville, South Carolina, for Appellant. Stephanie E. Lewis,
JACKSON LEWIS P.C., Greenville, South Carolina, for Appellee.
ON BRIEF: Brian P. Murphy, BRIAN MURPHY LAW FIRM, PC,
Greenville, South Carolina, for Appellant. Wendy L. Furhang,
JACKSON LEWIS P.C., Greenville, South Carolina, for Appellee.
2
FLOYD, Circuit Judge:
In this Title VII employment discrimination action, Brenda
Butler seeks to recover for sexual harassment she allegedly
experienced while working at a Drive Automotive Industries
(Drive) factory. In the proceeding below, Drive argued that
Butler was actually employed by a temporary staffing agency,
ResourceMFG, and therefore Drive was not an “employer” subject
to Title VII liability. Although the district court
acknowledged that in some instances an employee can have
multiple “employers” for Title VII purposes, it concluded that
in this case ResourceMFG was Butler’s sole employer.
Accordingly, the district court granted summary judgment to
Drive on Butler’s claims.
Like the district court, and several of our sister
circuits, we agree that Title VII provides for joint employer
liability. We further conclude that the so-called “hybrid”
test, which considers both the common law of agency and the
economic realities of employment, is the correct means to apply
the joint employment doctrine to the facts of a case. The
district court did not explicitly use the “hybrid” test in its
opinion. Under our de novo standard of review, we articulate
the hybrid test for the joint employment context and apply it to
the facts of this case, concluding that Drive was indeed
3
Butler’s employer. Accordingly, we reverse and remand for
consideration of Butler’s Title VII claims on the merits.
I.
Appellant Brenda Butler was hired by ResourceMFG, 1 a
temporary employment agency, to work at Drive Automotive
Industries in Piedmont, South Carolina. Drive manufactures
doors, fenders, and other parts for automotive companies. The
company hires some employees directly and employs others through
temporary employment agencies.
Drive and ResourceMFG each exercised control over various
aspects of Butler’s employment. For example, Butler wore
ResourceMFG’s uniform, was paid by ResourceMFG, and parked in a
special ResourceMFG lot. ResourceMFG also had ultimate
responsibility for issues related to discipline and termination.
Drive, however, determined Butler’s work schedule and arranged
portions of Butler’s training. Drive employees supervised
Butler while she worked on the factory floor. Butler said she
was told by ResourceMFG that she worked for “both” Drive and
ResourceMFG. J.A. 36-37 (“They always told me that both of them
1 Employbridge of Dallas Inc. and Staffing Solutions
Southeast Inc. do business as ResourceMFG.
4
w[ere] our employers. . . . [W]e w[ere] considered to be
working for both.”).
Butler claims that one of her Drive supervisors, John
Green, verbally and physically harassed her throughout her time
at Drive. Specifically, Butler alleges that Green made repeated
comments about Butler’s physical features, such as “You sure do
have a big old ass”; “I wish my girlfriend had a big old ass
like yours”; “Boy, I love women with big old asses”; and calling
her a “big booty Judy.” J.A. 94, 103, 132. Green also rubbed
his crotch against Butler’s buttocks. J.A. 98-100. Butler
reported Green’s conduct to ResourceMFG’s on-site
representative, Ryan Roberson, and to Green’s supervisor at
Drive, Lisa Gardner Thomas. According to Butler, however,
neither took any action to curb the harassment.
The harassment culminated on December 19, 2010, when Green
directed Butler to work on a particular machine called “the
laser.” Butler refused, saying she was tired from working
overtime the night before. Green said that his supervisor had
said “hell no.” J.A. 86. Green continued, “You have to run it.
If you can’t fucking run it, take your ass home. . . . [Y]our
assignment has ended.” Id. He also called her “big booty Judy”
again. Id. When Butler objected to Green’s language, he
informed her that she was a temp and could be easily fired.
5
When Butler informed Thomas of the encounter, Thomas asked
another supervisor at Drive that Butler be terminated. J.A.
383. The request was then sent to ResourceMFG. A few days
later, Green called Butler and implied that he could save her
job by performing sexual favors for him. Butler refused. A
ResourceMFG supervisor then called her to tell her she had been
terminated from Drive.
In November 2012, Butler filed suit against both Drive and
ResourceMFG in South Carolina state court. After Drive timely
removed the case to federal court, the parties agreed to dismiss
the case against ResourceMFG, leaving Drive as the sole
remaining defendant. In April 2013, the district court granted
Drive’s motion for summary judgment, 2 finding that Drive did not
exercise sufficient control over Butler’s employment such that
it could be liable as her employer under Title VII. Butler now
appeals the district court’s grant of summary judgment.
II.
Pursuant to 28 U.S.C. § 636(c)(3), we have jurisdiction of
this appeal from the judgment of the magistrate judge. We
review the district court’s grant of summary judgment de novo,
2
The parties consented to the jurisdiction of a magistrate
judge. For the sake of simplicity, we will refer to the
magistrate judge as the district court.
6
drawing “reasonable inferences in the light most favorable to
the non-moving party.” Dulaney v. Packaging Corp. of Am., 673
F.3d 323, 330 (4th Cir. 2012). We also review de novo questions
of statutory interpretation—in this case, the proper
construction of “employer” in Title VII. Stone v.
Instrumentation Lab. Co., 591 F.3d 239, 242-43 (4th Cir. 2009).
Summary judgment is proper “if the movant shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). To overcome a motion for summary judgment, however, the
nonmoving party “‘may not rely merely on allegations or denials
in its own pleading’ but must ‘set out specific facts showing a
genuine issue for trial.’” News & Observer Publ’g Co. v.
Raleigh–Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010)
(quoting Fed. R. Civ. P. 56(e)).
III.
An entity can be held liable in a Title VII action only if
it is an “employer” of the complainant. Title VII of the Civil
Rights Act of 1964 defines an “employer” as a “person engaged in
an industry affecting commerce who has fifteen or more employees
for each working day in each of twenty or more calendar weeks in
the current or preceding calendar year, and any agent of such a
person.” 42 U.S.C. § 2000e(b). In turn, an “employee” is “an
7
individual employed by an employer.” Id. § 2000e(f). As the
Supreme Court has noted, definitions of “employer” and
“employee” in federal law are often circular and “explain[]
nothing.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323
(1992).
The parties do not dispute that ResourceMFG employed
Butler. The dispositive question on appeal is whether Drive
also employed Butler for Title VII purposes. In answering this
question, we first must consider the threshold issue of whether
an employee can have multiple “employers” under Title VII. Our
review of this question of law is de novo. Cilecek v. Inova
Health Sys. Servs., 115 F.3d 256, 261 (4th Cir. 1997) (citing
MacMullen v. S.C. Elec. & Gas Co., 312 F.2d 662, 670 (4th Cir.
1963)). The district court accepted the possibility that both
entities could in theory be Butler’s “employer” for Title VII
purposes pursuant to the joint employment doctrine. As set
forth below, we conclude that the joint employment doctrine is
an appropriate construction of Title VII, and so affirm the
district court on that issue.
A.
Other courts have found that two parties can be considered
joint employers and therefore both be liable under Title VII if
they “share or co-determine those matters governing the
8
essential terms and conditions of employment.” Bristol v. Bd.
of Cnty. Comm’rs, 312 F.3d 1213, 1218 (10th Cir. 2002) (en banc)
(quoting Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350,
1360 (11th Cir. 1994)). In other words, “courts look to whether
both entities ‘exercise significant control over the same
employees.’” Id. (quoting Graves v. Lowery, 117 F.3d 723, 727
(3d Cir. 1997)). “The basis for the finding that two companies
are ‘joint employers’ is that ‘one employer while contracting in
good faith with an otherwise independent company, has retained
for itself sufficient control of the terms and conditions of
employment of the employees who are employed by the other
employer.’” 3 Torres-Negrón v. Merck & Co., 488 F.3d 34, 40 n.6
(1st Cir. 2007) (quoting Rivas v. Federación de Asociaciones
Pecuarias de P.R., 929 F.2d 814, 820 n.17 (1st Cir. 1991)).
Although this Circuit has never expressly adopted the joint
employment doctrine in the Title VII context, district courts in
this Circuit have frequently applied it. See Murphy-Taylor v.
3
The joint employment doctrine is distinct from the “single
employer” or “integrated employer” doctrine, in which “a parent
company and its subsidiary can be considered a single employer
for purposes of Title VII liability.” Murphy-Taylor v. Hofmann,
968 F. Supp. 2d 693, 725 (D. Md. 2013) (citing Hukill v. Auto
Care, Inc., 192 F.3d 437, 442 (4th Cir. 1999), abrogated on
other grounds by Arbaugh v. Y & H Corp., 546 U.S. 500 (2006)).
Here, Drive and ResourceMFG are clearly discrete entities, and
the parties do not argue that they could constitute an
integrated employer.
9
Hofmann, 968 F. Supp. 2d 693, 725 (D. Md. 2013) (observing that
this Circuit “does not appear to have specifically considered
whether to apply [the joint employment doctrine] in the
employment discrimination context”). 4 Many of our sister
circuits, moreover, have considered the possibility that
multiple entities could be employers of a plaintiff and adopted
the joint employment doctrine. 5 We now hold that the joint
employment doctrine is the law of this Circuit.
The joint employment doctrine is wholly consistent with our
precedent. We have repeatedly used the joint employment
doctrine in cases involving analogous statutes to resolve
similar difficulties in defining “employer” and “employee.” See
Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298, 305-06 (4th
Cir. 2006) (Fair Labor Standards Act); Howard v. Malcolm, 852
F.2d 101, 102, 104-05 (4th Cir. 1988) (Migrant and Seasonal
4
See, e.g., Murphy-Taylor, 968 F. Supp. 2d at 725-28;
Simpson v. Greenville Transit Auth., No. 6:05-1087-HMH-BHH, 2006
WL 1148167, at *3-5 (D.S.C. Apr. 27, 2006); Williams v. Grimes
Aerospace Co., 988 F. Supp. 925, 934-36 (D.S.C. 1997); King v.
Dalton, 895 F. Supp. 831, 837-38 (E.D. Va. 1995); Magnuson v.
Peak Technical Servs., Inc., 808 F. Supp. 500, 507-10 (E.D. Va.
1992).
5
See, e.g., Arculeo v. On-Site Sales & Mktg., LLC, 425 F.3d
193, 197-98 (2d Cir. 2005); Graves, 117 F.3d at 727; EEOC v.
Skanska USA Bldg., Inc., 550 F. App’x 253, 256 (6th Cir. 2013);
Robinson v. Sappington, 351 F.3d 317, 332 n.9 & 337–39 (7th Cir.
2003); EEOC v. Pac. Mar. Ass’n, 351 F.3d 1270, 1277 (9th Cir.
2003); Bristol, 312 F.3d at 1218; Virgo, 30 F.3d at 1359-61.
10
Agricultural Worker Protection Act); NLRB v. Jewell Smokeless
Coal Corp., 435 F.2d 1270, 1271 (4th Cir. 1970) (per curiam)
(National Labor Relations Act). Nothing suggests a different
treatment is warranted here.
Second, the doctrine’s emphasis on determining which
entities actually exercise control over an employee is
consistent with Supreme Court precedent interpreting Title VII’s
definitions. The Supreme Court has held that “the common-law
element of control,” drawn from the law of agency, “is the
principal guidepost” to be followed when construing an analogous
claim under the Americans with Disabilities Act. Clackamas
Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440, 448
(2003). Likewise, the Fourth Circuit has consistently focused
on control, especially in the comparable instance where the
status of the plaintiff as an employee or independent contractor
is at issue. See, e.g., Cilecek, 115 F.3d at 260. The joint
employment doctrine captures instances in which multiple
entities control an employee.
Third, the joint employer doctrine serves Title VII’s
purpose of eliminating “discrimination in employment based on
race, color, religion, sex, or national origin.” Lucido v.
Cravath, Swaine & Moore, 425 F. Supp. 123, 126 (S.D.N.Y. 1977).
Title VII should be liberally construed in light of its remedial
purpose. Hernandez v. Aldridge, 866 F.2d 800, 803 (5th Cir.
11
1989), vacated on other grounds, Hernandez v. Rice, 494 U.S.
1013 (1990); see also Arnold v. Burger King Corp., 719 F.2d 63,
65 (4th Cir. 1983) (noting the “broad remedial purposes of Title
VII”). As the Eighth Circuit has noted, “[s]uch liberal
construction is also to be given to the definition of
‘employer.’” Baker v. Stuart Broad. Co., 560 F.2d 389, 391 (8th
Cir. 1977); see also Magnuson, 808 F. Supp. 500, 508 (E.D. Va.
1992) (noting the “broad, remedial purpose of Title VII which
militates against the adoption of a rigid rule strictly limiting
‘employer’ status under Title VII to an individual's direct or
single employer”).
Finally, the joint employment doctrine also recognizes the
reality of changes in modern employment, in which increasing
numbers of workers are employed by temporary staffing companies
that exercise little control over their day-to-day activities.
See Williams v. Grimes Aerospace Co., 988 F. Supp. 925, 933-34
(D.S.C. 1997) (“While the phenomenon of temporary employees
first gained momentum in the United States’ post-World War II
economy, ‘the temporary help industry has recently exploded,
especially since the 1980s.’” (brackets omitted) (quoting
Development in the Law—Employment Discrimination: V. Temporary
Employment and the Imbalance of Power, 109 Harv. L. Rev. 1647,
1648 (1996))); Lima v. Addeco, 634 F. Supp. 2d 394, 400
(S.D.N.Y. 2009) (“The joint employer doctrine has been applied
12
to temporary employment or staffing agencies and their client
entities.”).
The joint employment doctrine thus prevents those who
effectively employ a worker from evading liability by hiding
behind another entity, such as a staffing agency. Sibley Mem’l
Hosp. v. Wilson, 488 F.2d 1338, 1341 (D.C. Cir. 1973). Given
Title VII’s remedial intent, employers should not be able to
“avoid Title VII by affixing a label to a person that does not
capture the substance of the employment relationship.”
Schwieger v. Farm Bureau Ins. Co. of Neb., 207 F.3d 480, 484
(8th Cir. 2000).
Consequently, we hold that multiple entities may
simultaneously be considered employers for the purposes of Title
VII.
IV.
We turn next to whether the court correctly applied the
joint employment doctrine in this case. The object of the joint
employment doctrine is to determine whether a putative employer
“exercise[s] significant control over the same employees.”
Bristol, 312 F.3d at 1218 (quoting Graves, 117 F.3d at 727).
The question then is how to determine the extent to which an
employer “controls” an employee.
13
Courts have formulated at least three tests that could be
used in the joint employment context: the economic realities
test, the control test, and the hybrid test. All three tests
aim to determine, in a highly fact-specific way, whether an
entity exercises control over an employee to the extent that it
should be liable under Title VII. See Clackamas, 538 U.S. at
448 (stating in an ADA case that the “common-law element of
control is the principal guidepost that should be followed”).
The district court did not explicitly state which test it
used, but cited to some of our existing precedent in analogous
areas of the law. We find that the district court conducted an
inappropriate analysis under our articulation of the joint
employment doctrine today. Accordingly, under our de novo
standard of review, we reverse the district court and remand for
further proceedings.
A.
We will briefly review the three tests, as developed by our
sister circuits, along with our own precedent, that could be
used for the joint employment doctrine under Title VII.
14
Drive contends that this Circuit should adopt the “control”
test, which is drawn solely from basic principles of agency law. 6
Some other circuits and district courts in this Circuit use the
control test. 7 E.g., EEOC v. Skanska USA Bldg., Inc., 550 F.
App’x 253, 256 (6th Cir. 2013); Graves, 117 F.3d at 727-28; NLRB
v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1123 (3d
Cir. 1982); Allen v. Tyco Elecs. Corp., 294 F. Supp. 2d 768, 774
(M.D.N.C. 2003); see also Haavistola v. Cmty. Fire Co. of Rising
6 Drive cites in support, among other authority, enforcement
guidance issued by the Equal Employment Opportunity Commission.
Enforcement Guidance: Application of EEO Laws to Contingent
Workers Placed by Temporary Employment Agencies and Other
Staffing Firms, EEOC Notice No. 915.002, 1997 WL 33159161 (Dec.
3, 1997). Drive concedes that the EEOC notice does not warrant
Chevron deference, although it may warrant Skidmore deference.
See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (noting
that courts can be persuaded by an agency’s rule, in the absence
of formal Chevron deference, when the agency has a “body of
experience and informed judgment to which courts and litigants
may properly resort for guidance”). In any event, the EEOC
guidance document does not support Drive’s position. In
defining an “employee” for the purposes of federal employment
discrimination laws, the guidance document contains a list of
considerations that very closely approximate the Spirides
factors (discussed below), suggesting that the EEOC looks to the
hybrid test, not to the control test.
7 Some cases have framed the analysis in terms of the
“master-servant” or “loaned-servant” doctrine, in which
“employees placed in a work position through a temporary agency
are considered ‘loaned servants.’ . . . [A]n employment
relationship is created between the special employer and the
temporary employee only when the special employer controls the
means and manner of the temporary employee’s work.” Allen, 294
F. Supp. 2d at 774 (quoting Mullis v. Mechs. & Farmers Bank, 994
F. Supp. 680, 684 (M.D.N.C. 1997)).
15
Sun, Inc., 6 F.3d 211, 220 (4th Cir. 1993) (“The common-law
standard traditionally used when deciding whether an individual
can claim employee status emphasizes the importance of the
employer’s control over the individual.”).
Courts in the Third Circuit, for example, have used three
factors to determine whether an entity exercises sufficient
control over an employee for Title VII liability:
1) authority to hire and fire employees,
promulgate work rules and assignments, and
set conditions of employment, including
compensation, benefits, and hours;
2) day-to-day supervision of employees,
including employee discipline; and
3) control of employee records, including
payroll, insurance, taxes and the like.
Butterbaugh v. Chertoff, 479 F. Supp. 2d 485, 491 (W.D. Pa.
2007) (quoting Cella v. Villanova Univ., No. CIV.A.01-7181, 2003
WL 329147, at *7 (E.D. Pa. Feb. 12, 2003)); see also Plaso v.
IJKG, LLC, 553 F. App’x 199, 205 (3d Cir. 2014). The Sixth
Circuit looks to a similar set of factors, looking to “an
entity’s ability to hire, fire or discipline employees, affect
their compensation and benefits, and direct and supervise their
performance.” Skanska USA Bldg., Inc., 550 F. App’x at 256.
The control test is somewhat formal in that it tends to look to
the legal parameters of employment such as hiring and firing,
supervision and from where an employee receives his or her
paychecks.
16
Butler, by contrast, argues, that the economic realities
test applies. 8 This test differs from the control test in that
it focuses on “degree of economic dependence of alleged
employees on the business with which they are connected that
indicates employee status.” 9 EEOC v. Zippo Mfg. Co., 713 F.2d
32, 37 (3d Cir. 1983) (brackets and ellipsis omitted) (quoting
Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311 (5th Cir.
1976)); see also Hopkins v. Cornerstone Am., 545 F.3d 338, 343
(5th Cir. 2008) (applying the test in an FLSA case). In other
words, the economic realities test focuses less on the legal
parameters of employment, but more on the entity (or entities)
8 The economic realities test originated in a different
context in a Supreme Court case from the 1940s, in which the
Court was asked to resolve whether a defendant was an employee
or independent contractor for the purpose of determining Social
Security taxes. See Bartels v. Birmingham, 332 U.S. 126, 130
(1947) (“[I]n the application of social legislation employees
are those who as a matter of economic reality are dependent upon
the business to which they render service.”).
9 Drive cites one of our decisions, Garrett v. Phillips
Mills, Inc., for the proposition that this Circuit has already
rejected the economic realities test. 721 F.2d 979 (4th Cir.
1983). In some respects, this characterization is accurate,
because Garrett did in fact reject the economic realities test.
But it is not helpful to Drive’s case because the Court in
Garrett clearly adopted the hybrid test, discussed infra, and
rejected the individual control test. Id. at 981-92 (stating
that the Court was “convinced that whether an individual is an
employee in the ADEA context is properly determined by analyzing
the facts of each employment relationship under a standard that
incorporates both the common law test derived from principles of
agency and the so-called ‘economic realities’ test”).
17
on which the employee relies on for work and remuneration—
irrespective of who is actually writing the paychecks and
determining work status. An entity that is a mere front might
be an employer under the control test, but it would not be under
the economic realities test.
This Circuit has applied the economic realities test in the
context of the Migrant and Seasonal Agricultural Worker
Protection Act and the Fair Labor Standards Act. See Howard,
852 F.2d at 104-05 (deciding whether there was joint
employment); Schultz, 466 F.3d at 304-05 (deciding whether the
plaintiff was an employee or independent contractor). In
Schultz, for example, we said that the joint employment question
must “take into account the real economic relationship between
the employer who uses and benefits from the services of workers
and the party that hires or assigns the workers to that
employer. The ultimate determination of joint employment must
be based upon the circumstances of the whole activity.” 10 466
10
Drive correctly notes, however, that the FLSA uses a
different definition of “employee” such that the statute is not
directly analogous to Title VII. Darden, 503 U.S. at 326(noting that the FLSA’s definition “stretches the meaning of
‘employee’ to cover some parties who might not qualify as such
under a strict application of traditional agency law
principles”). As such, FLSA cases employing the economic
realities test—and indeed any test—are not particularly
transferrable to Title VII cases.
18
F.3d at 306 (citations, brackets, and internal quotation marks
omitted).
Finally, below and on appeal, neither Butler nor Drive
argued in favor of the hybrid test, even though we have
consistently adopted it in analogous Title VII cases. The
hybrid test combines aspects of the economic realities and
control tests. In Garrett v. Phillips Mills, Inc., we adopted
the hybrid test in an ADEA independent contractor case,
describing the test as “analyzing the facts of each employment
relationship under a standard that incorporates both the common
law test derived from principles of agency and the so-called
‘economic realities’ test.” 721 F.2d 979, 981 (4th Cir. 1983).
We noted that “the test applied in Title VII cases was
appropriate for resolving employee status issues in ADEA cases.”
Id.The Garrett court adopted a list of factors (the “Spirides
factors”) to evaluate along with the entity’s degree of control:
(1) the kind of occupation, with reference
to whether the work usually is done under
the direction of a supervisor or is done by
a specialist without supervision;
(2) the skill required in the particular
occupation;
(3) whether the “employer” or the individual
in question furnishes the equipment used and
the place of work;
(4) the length of time during which the
individual has worked;
(5) the method of payment, whether by time
or by the job;
19
(6) the manner in which the work
relationship is terminated; i.e., by one or
both parties, with or without notice and
explanation;
(7) whether annual leave is afforded;
(8) whether the work is an integral part of
the business of the “employer”;
(9) whether the worker accumulates
retirement benefits;
(10) whether the “employer” pays social
security taxes; and
(11) the intention of the parties.
Id. at 982 (quoting Spirides v. Reinhardt, 613 F.2d 826, 832
(D.C. Cir. 1979)). Under the hybrid test, “control is still the
most important factor to be considered, but it is not
dispositive.” Id.A decade later, we implicitly adopted the hybrid test in a
Title VII case to determine whether a plaintiff was an
independent contractor or an employee. Haavistola, 6 F.3d at
219-20. Referencing Garrett, we remarked that “the operative
language in ADEA is identical to the operative language in Title
VII, so the analysis utilized under either act is
interchangeable.” Id. at 219 n.2. We further described “a
standard that incorporates both the common law test derived from
principles of agency and the so-called ‘economic realities’
test,” which asks whether employees “as a matter of economic
reality are dependent upon the business to which they render
service.” Id. at 220 (citations omitted).
20
Subsequently, in Cilecek, we re-emphasized the importance
of the traditional common law of agency, while citing the hybrid
test used in Garrett and Haavistola approvingly. 115 F.3d at
260. Cilecek did not purport to overturn our existing
precedent. Indeed, we cited a Supreme Court case, Nationwide
Mutual Insurance Co. v. Darden, that emphasized the importance
of the common law of agency, while using factors markedly
similar to our decisions in Garrett and Haavistola. 11 Id. at 259
(citing Darden, 503 U.S. at 322-23); see also id. at 260
(calling the Spirides factors “similar” to the ones in Darden).
We also modified the Darden factors to make them more applicable
to the specific industry context present in Cilecek. Id. at
260-61; see also Bender v. Suburban Hosp., 998 F. Supp. 631, 635
(D. Md. 1998) (observing that the hybrid test was modified “to
make it more applicable to the hospital context”).
Guided by these decisions, we conclude that the hybrid test
best captures the fact-specific nature of Title VII cases, such
as the one before us. Cf. Haavistola, 6 F.3d at 222 (“Title VII
11
In Darden, the Supreme Court reversed a decision from
this Circuit, which held, drawing from the purpose of ERISA,
that an “ERISA plaintiff can qualify as an ‘employee’ simply by
showing” that the plaintiff had a reasonable expectation of
benefits, relied on this expectation, and lacked the bargaining
power to contract out of forfeiture provisions. Id. at 321.
Instead, the Supreme Court referred to a list of factors from a
copyright case. That list of factors is virtually the same as
the ones in Spirides.
21
claims involved fact-intensive determinations for which the
district court was not equipped to rule on the basis of a
summary judgment record alone.”); Hunt v. State of Mo., Dep’t of
Corr., 297 F.3d 735, 741 (8th Cir. 2002) (finding that an
employer-employee relationship is a “fact-intensive
consideration of all aspects of the working relationship between
the parties” (citation and internal quotation marks omitted)).
The hybrid test also allows for the broadest possible set of
considerations in making a determination of which entity is an
employer. Moreover, it best captures the reality of modern
employment in which “control” of an employee may be shared by
two or more entities. The hybrid test correctly bridges the
control test and the economic realities test.
Accordingly, we adopt the hybrid test. We find, however,
that our previous statements of the hybrid test, involving the
analogous but legally distinct independent contractor context,
do not adequately capture the unique circumstances of joint
employment. The factors used in Spirides and Cilecek include
considerations that are irrelevant to the joint employment
context. Drawing on our existing precedent and joint employment
cases in other circuits, we now articulate a new set of factors
for courts in this Circuit to use in assessing whether an
individual is jointly employed by two or more entities:
(1) authority to hire and fire the individual;
22
(2) day-to-day supervision of the individual, including
employee discipline;
(3) whether the putative employer furnishes the equipment
used and the place of work;
(4) possession of and responsibility over the individual's
employment records, including payroll, insurance, and
taxes;
(5) the length of time during which the individual has
worked for the putative employer;
(6) whether the putative employer provides the individual
with formal or informal training;
(7) whether the individual’s duties are akin to a regular
employee's duties;
(8) whether the individual is assigned solely to the
putative employer; and
(9) whether the individual and putative employer intended
to enter into an employment relationship. 12
We note that none of these factors are dispositive and that the
common-law element of control remains the “principal guidepost”
in the analysis. Indeed, consistent with our opinion in
Cilecek, courts can modify the factors to the specific industry
context. See id. at 261 (refashioning factors for a controversy
arising in a hospital setting); Darden, 503 U.S. at 323-324(prefacing its list of factors with “[a]mong the other factors
relevant to this inquiry are”).
12We pause to note that the ninth factor regarding the
subjective intentions of the parties ordinarily will be of
minimal consequence in the joint employment analysis. For
example, the fact that an employee signs a form disclaiming an
employment relationship will not defeat a finding of joint
employment. Similarly, an individual’s failure to appreciate an
entity as an employer should not be dispositive. Instead, the
intent of the parties should be part of the overall fact-
specific inquiry into the putative employee’s circumstances.
23
Three factors are the most important. The first factor,
which entity or entities have the power to hire and fire the
putative employee, is important to determining ultimate control.
The second factor, to what extent the employee is supervised, is
useful for determining the day-to-day, practical control of the
employee. The third factor, where and how the work takes place,
is valuable for determining how similar the work functions are
compared to those of an ordinary employee. When applying the
joint employment factors, however, “no one factor is
determinative, and the consideration of factors must relate to
the particular relationship under consideration.” Cilecek, 115
F.3d at 260. Courts should be mindful that control remains the
principal guidepost for determining whether multiple entities
can be a plaintiff’s joint employers.
B.
We next consider, under our de novo standard of review,
whether the district court correctly applied the hybrid test in
this case. The district court did not explicitly state which
test it was using, but the language in the opinion emphasized
the importance of the “common law of agency.” J.A. 427-28. The
district court, however, also cited Cilecek and referred to the
Darden factors, which, as explained above, suggests a broader
set of considerations than what the somewhat narrow control test
24
would entail. J.A. 432 (citing Farlow v. Wachovia Bank of North
Carolina, N.A., 259 F.3d 309, 314 (4th Cir. 2001)).
Under the set of factors we state above, the district court
inappropriately discounted several considerations that militate
in favor of finding that Drive and ResourceMFG are joint
employers of Butler. Most importantly, Drive exhibited a high
degree of control over the terms of Butler’s employment (factor
1). The uncontradicted evidence shows that a Drive employee
sent an e-mail to Roxanne Lombard, an ResourceMFG employee,
directing that Butler be “add[ed] to the list for replacement.”
J.A. 383. ResourceMFG then, after a delay, terminated Butler.
Although ResourceMFG was the entity that formally fired Butler,
Drive had effective control over Butler’s employment. Charlie
Sanders, the ResourceMFG branch manager in Greenville, South
Carolina, could not recall an instance when Drive requested an
ResourceMFG employee to be disciplined or terminated and it was
not done. J.A. 330-31.
Second, Drive employees supervised both sets of workers
(factor 2). Indeed, Drive--specifically Green and Thomas--
handled the day-to-day supervision of Butler on the factory
floor.
Third, Drive and ResourceMFG employees worked “side by
side,” performed the same tasks, and used the same equipment
(factor 3). J.A. 332. Although Butler wore a ResourceMFG
25
uniform on the factory floor, there was little or no effective
difference between the work performed by the two sets of
employees.
Fourth, Butler’s labor was not tangential or peripheral to
Drive. Instead, she performed the same tasks as Drive employees
and produced goods that were Drive’s core business (factor 7).
The hybrid test, as we have articulated it, specifically
aims to pierce the legal formalities of an employment
relationship to determine the loci of effective control over an
employee, while not discounting those formalities entirely.
Otherwise, an employer who exercises actual control could avoid
Title VII liability by hiding behind another entity. Here,
although ResourceMFG disbursed Butler’s paychecks, officially
terminated her, and handled employee discipline, it did not
prevent Drive from having a substantial degree of control over
the circumstances of Butler’s employment. Accordingly, we
reverse the district court and hold, as a matter of law, that
Drive and ResourceMFG are Butler’s joint employers. 13
13
The outcome of this case would have been the same even if
we adopted the list of factors in Cilecek or Spirides for use in
this case. The factors we outlined overlap greatly with Cilecek
and Spirides, and the three factors that we stated are most
important to the joint employment context are present in Cilecek
and Spirides as well.
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C.
The district court concluded that Drive was not Butler’s
employer and could therefore not be held liable for Butler’s
hostile work environment and retaliation claims. Because we
reverse the district court’s finding that Drive was not an
employer of Butler, the district must now consider the merits of
Butler’s claims. Consequently, we remand those claims for
consideration by the district court in the first instance.
V.
The judgment of the district court is
REVERSED AND REMANDED.
27