New Jersey is one of the states comprising the United States Court of Appeals for the Third Circuit. In considering the scope of protections afforded workers by Title VII of the Civil Rights Act of 1964, 42 U.S.C § 2000 et seq. (“Title VII”), our Third Circuit defines an “employee” as including those workers placed by temporary staffing agencies. Faush v. Tuesday Morning, Inc., 808 F.3d 208, 213 (3d Cir. 2015). The Third Circuit arrived at this conclusion by applying the so-called “Darden Test” set down by our United States Supreme Court in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992). Under the Darden Test, a court looks at the following 12 steps to determine whether a worker qualifies as an “employee” for Title VII protection purposes: (1) the skill required; (2) the source of the instrumentalities and tools; (3) the location of the work; (4) the duration of the relationship between the parties; (5) whether the hiring party has the right to assign additional projects to the hired party; (6) the extent of the hired party’s discretion over when and how long to work; (7) the method of payment; (8) the hired party’s role in hiring and paying assistants; (9) whether the work is part of the regular business of the hiring party; (10) whether the hiring party is in business; (11) the provision of employee benefits; and (12) and the tax treatment of the hired party. However, in the Third Circuit, courts focus primarily on which entity paid the employees’ salaries, hired and fired them, and had control over their daily employment activities. Faush , supra.,808 F.3d 208 at 214.
In Faush, the Third Circuit concluded that a temporary agency worker who was “leased” to a store may be considered the store’s “employee” under Title VII, and therefore, can sue the store for discrimination. There, Tuesday Morning Inc. (“Tuesday Morning”) had leased Faush and other temporary workers from a temporary staffing agency to perform basic labor tasks for the store such as stocking shelves. Faush alleged Tuesday Morning subjected him and other black temporary workers to racial discrimination. In reversing the grant of summary judgment to Tuesday Morning by the District Court below, the Third Circuit applied the Darden Test and found that Tuesday Morning controlled and supervised where, when and how the temporary workers worked. Further, while Tuesday Morning did not directly pay the temporary workers, the store did pay the temps based on the hours they worked and compensated them for overtime. Therefore, the Third Circuit found the method of payment used by Tuesday Morning was indistinguishable from directly paying them as permanent W-2 employees. Consequently, Faush was able to sue Tuesday Morning for employment discrimination under Title VII.
Because New Jersey’s Law Against Discrimination (the “LAD”) is supposed to be “liberally construed”, Battaglia v. UPS, INC., 214 N.J. 518, 546 (2013), and given New Jersey Courts will often look to the federal courts and their construction of federal laws for guidance in construing the LAD , Bergen Commercial Bank v. Sisler, 157 N.J. 188, 200 (1999) (finding that to the extent federal standards are useful and fair, they will be applied to LAD in the interest of achieving a degree of uniformity in the discrimination laws), it may be fairly predicted that our state courts would likely follow the Third Circuit and conclude that temp workers are to be considered employees under LAD, and permit temp workers to sue employers under LAD where workplace discrimination can be proved.