Dive Brief:

• A group of African-American employees will get another chance at their Title VII claims after the 7th U.S. Circuit Court of Appeals reinstated their hostile work environment claim (Johnson et al. v. Advocate Health and Hospitals Corp. d/b/a Advocate Christ Medical Center, No. 16-3848 (7th Cir., June 8, 2018)).
• In court documents, the five environmental service technicians claimed that, shortly after Advocate Health and Hospitals Corp. contracted with Aramark Healthcare Support Services, three supervisors engaged in discrimination against the plaintiffs. The workers said they were subject to bias pay, promotions, firings and work assignments. The employees also said the supervisors, among other things, used racial slurs, attempted to mock them using what they perceived to be stereotypical African-American slang and, when one asked about a supervisor position, told her "honey, you’re the wrong color." 
• The district court granted summary judgment to the medical center and while the appeals court upheld that order with respect to some of the discrimination claims, it reversed on the hostile work environment claim. “A reasonable jury could find that these words, among them one of the most racially derogatory words in the English language, that the plaintiffs heard were unwelcome, and therefore there is an issue of material fact regarding subjective hostility,” the appeals court said, remanding the case.

Dive Insight:

As employers work to prevent employment law violations, front-line manager training must be a priority, experts say.

Businesses also may need to carefully consider the implications of their contracting arrangements. Joint employment has emerged as a major issue in franchising, contracting, temporary staffing and other arrangements in which companies use workers they do not directly employ. Courts remain split on how best to define "joint employment," and the tests vary for different laws as well. 

The U.S. Supreme Court declined in January to wade into the debate under the Fair Labor Standards Act, allowing a circuit split on vertical joint employer tests. Likewise, the National Labor Relations Board is working to undo an Obama-era standard setting out requirements for the National Labor Relations Act. Some business groups have turned to Congress for relief. The Save Local Business Act, which still sits at the Senate, aims to codify the "direct control" joint employer standard for both of those laws.

In this case, the appeals court noted that employer liability is “a bit muddy.” The defendant is Advocate; but, the alleged discrimination came from Aramark’s supervisors, the court observed. The 7th Circuit, which covers Illinois, Indiana and Wisconsin, uses a five-factor test to determine employer liability, the most important of which is the ability to supervise and control employees. The ability to hire and fire is the most significant element of supervision and control, the court said. Although Aramark approved overtime and vacation and created and changed schedules, Advocate maintained control over disciplinary, hiring and firing matters. The district court didn't bother addressing the question because it dismissed all claims, but the appeals court said "we think it worth a full airing by the district court as to the relationship between Advocate, Aramark and the plaintiffs."