Academic journal article Texas Law Review

Contingent Worker Protection from Client Company Discrimination: Statutory Coverage, Gaps, and the Role of the Common Law*

Academic journal article Texas Law Review

Contingent Worker Protection from Client Company Discrimination: Statutory Coverage, Gaps, and the Role of the Common Law*

Article excerpt

The American workforce is evolving. While the American economy continues to rebound from the dotcom collapse and the events of September 11, the number of full-time jobs has declined.1 Companies are increasingly drawing from a growing transient and contingent workforce, one that has no long-term connection to any particular entity nor any long-term job security, and one that often receives few or no benefits and substantially less pay than its full-time counterparts.2 Companies hire independent contractors or easily expendable temporary and leased employees to work alongside their own regular workforces; this practice smoothes out virulent manufacturing cycles or seasonal sales periods at relatively little expense and without long-term commitment.3 Alternatively, outsourcing entire segments of nonessential operations has become increasingly popular as companies hire staffing firms at home and abroad to take control of their technical support, engineering, and call centers, often for pennies on the dollar.4

The contingent workforce, while having no precise definition, essentially encompasses the class of individual workers who are not regular, full-time employees of a company.5 Such workers can be divided into two broad categories: (1) contingent employees, that is, those individuals hired to work for a client company by staffing firms; and (2) independent contractors, who, unlike contingent employees, have no direct attachment to any employer at all.6 Given the fact that the contingent workforce appears to be increasing in size, several commentators have criticized the general failure of labor and employment laws to protect it and have called for either increased statutory protection for these workers or independent regulation of the industry.7 It has been argued that one of the primary motivations of employers who hire contingent workers is the entire avoidance of employment regulations.8 By supplementing their core employment force with contingent workers, some employers can keep their employment numbers below the statutorily defined minimum for qualification as an "employer," which allows such employers to completely escape the reach of certain employment regulations.9 In a related argument, commentators also maintain that individual contingent workers often do not receive federal employment discrimination protection because they do not meet the statutory or common law definitions of "employee."10

This Note reacts primarily to the latter complaint that individual contingent workers lack protection from client company discrimination.11 While this argument carries some force, individuals in contingent work arrangements are not entirely left out in the cold when it comes to remedies for client company discrimination. Although some commentators have called for the amendment of federal employment discrimination statutes to specifically address contingent workers, these broad reforms may not be necessary. In order to adequately assess the necessity of such reforms, one must first take a principled look at both the plain language and judicial interpretations of the federal antidiscrimination laws to determine the protections, and gaps in protection, created by the statutory scheme. Then, in a step that most commentators seem to have omitted,12 one must investigate the existing and potential common law alternatives for contingent workers who do not benefit from the antidiscrimination scheme's protections. Thus, this Note examines both the adequacy of the contingent-worker protections afforded by Title VII of the Civil Rights Act of 1964(13) and the possible common law alternatives.

Part I explores in detail the nature of contingent employment arrangements, i.e., where staffing firms assign individuals to work for client companies. It concludes that, despite the general prevailing view to the contrary,14 these workers have adequate protection from discrimination under Title VII via two judicial interpretations of Title VII's span of coverage: (1) the acknowledgment of indirect or de facto employment relationships between contingent employees and client companies;15 and (2) the adoption of an interference theory under Title VII, whereby an individual can obtain a remedy from an employer who discriminatorily interferes with her existing or prospective third-party employment relationships. …

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