Court Of Appeal Finds That Temporary Employment Agency And Its Client That Employed A Temporary Employee Are Dual Employers For The Purposes Of FEHA

Issue

In Mathieu v. Norrell Corporation, (2004 Daily Journal, D.A.R. 2210, Cal. App. 2 Dist., February 19, 2004), the California Court of Appeal, Second Appellate District, examined whether an employee stated a claim of sexual harassment and retaliation against the temporary employment agency that placed her at a job where she was allegedly subjected to sexual harassment by a coworker.

Facts

The Norrell Corporation, a temporary employment agency, offered Laura Mathieu a position with one its clients, Gulfstream Aerospace Corporation. She accepted the position even though her former lover was also employed by Gulfstream. Gulfstream retained the sole authority to hire and fire Ms. Mathieu and to also set her salary. Ms. Mathieu complained to Gulfstream that her former lover was waging a campaign of harassment against her. However, she waited six months to inform Norrell about her difficulties. A Norell employee contacted Gulfstream and was informed that the man had been told to stop his rude behavior. Norrell made a follow-up call to Ms. Mathieu and she informed the Norrell employee that the situation had calmed down. A short time later, Gulfstream contacted Norrell to report that it was releasing Ms. Mathieu from her position due to cost containment measures. Norrell contacted Gulfstream after Ms. Mathieu expressed her concern that the layoff was in response to her complaints about the coworker. Gulfstream assured Norrell that the layoff was for economic reasons. Ms. Mathieu did not accept another assignment from Norrell after the layoff.

Ms. Mathieu brought suit against Norrell for retaliation, wrongful termination, and sexual harassment and discrimination in violation of the Fair Employment and Housing Act (FEHA). The trial court granted summary judgment in favor of Norrell and Ms. Mathieu appealed.

Appellate Court Decision

The Court of Appeal held that the trial court erred in granting summary judgment on Ms. Mathieu’s retaliation claim, but did not err in granting summary judgment on her remaining claims. The Court determined that Gulfstream and Norrell are dual employers for purposes of the FEHA, and, therefore, her claim was for sexual harassment by a coworker rather than harassment by a third party. The Court noted that, in workers’ compensation cases, a worker may look to both a general employer and a special employer for benefits. The Court concluded that an employee injured by a violation of the FEHA should likewise be permitted to look to both general and special employers for redress. The Court opined that to hold otherwise would allow “temporary employment agencies to send their employees into hostile and discriminatory workplaces and to ignore complaints of harassment without fear of liability.”

Under the FEHA, Government Code § 12940, subd. (j)(1), “[a]n employer is not liable for non-supervisor, coworker harassment if it takes prompt, reasonable, and efficacious remedial action.” The Court concluded that Ms. Mathieu failed to state a claim of sexual harassment against Norrell because it took appropriate corrective measures in response to her complaint. Norrell investigated her complaint and made a follow up call to Ms. Mathieu, who reported that things had calmed down. She made no further complaints to Norrell about her coworker’s behavior.

However, the Court concluded that Norrell was not exonerated from potential liability as to the retaliation claim. To establish a claim of retaliation, Ms. Mathieu must show that (1) she engaged in a protected activity, (2) she was subjected to an adverse employment action, and (3) there is a causal connection between her engaging in the protected activity and the adverse employment action. The Court noted that Norrell accepted Gulfstream’s statement that the layoff was for economic reasons and didn’t pursue the matter although Ms. Mathieu claimed that the layoff was in retaliation for her complaint of harassment. Thereafter, Norrell only called her two or three times for potential placements. She claims that Norrell did not offer her an opportunity to work in a similar position, but only offered short term, low-paying positions. The Court concluded that Ms. Mathieu presented a triable issue as to whether Norrell engaged in its own retaliation for her making the harassment complaint while at Gulfstream. The Court sent the matter back to the trial court for further proceedings on Ms. Mathieu’s retaliation claim.

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