Dive Brief:

• The U.S. Equal Employment Opportunity Commission has alleged that Staffing Solutions, a firm based in Buffalo, New York, instructed staff to comply with clients' race and sex preferences, in violation of federal nondiscrimination laws.
• Specifically, EEOC contends that the staffing company either refused to hire highly qualified black applicants or placed them in the lowest paying, least desirable jobs, and that the owner used a racial slur to refer to black applicants. The company also placed employees in positions based on race and sex, and regularly rejected pregnant applicants, those older than 50 and those with a disability, EEOC said.
• The commission also has alleged that when an office manager complained about the hiring practices and use of slurs, she was threatened with termination.

Dive Insight:

EEOC has made clear that client preference is no defense to discrimination charges. "Employers may not rely on the discriminatory preferences of coworkers, customers, or clients as the basis for adverse employment actions in violation of Title VII," it said in its Enforcement Guidance on National Origin Discrimination.

"An employment decision based on the discriminatory preferences of others is itself discriminatory," it continues, noting that even a  "corporate look" or "image" policy may serve as a proxy for discriminatory customer preference that could not justify an employment decision.

Additionally, it's important to note that the use of a staffing company often doesn't absolve an employer of its compliance responsibilities or related liability. As employers hire more contingent workers, more third parties are involved. In light of that shift, federal agencies have increasingly considered joint-employment liability, especially around concerted activity and wage and hour issues.

That interest means employers may want to ensure that everyone involved in employment decisions has been trained on relevant nondiscrimination policies — and that HR enforces them.