Butler v. Drive Automotive Industries of America, Inc.

U.S. Court of Appeals7/15/2015

View on CourtListener

AI Case Brief

Generate an AI-powered case brief with:

📋Key Facts

⚖️Legal Issues

📚Court Holding

💡Reasoning

🎯Significance

Estimated cost: $0.001 - $0.003 per brief

Full Opinion

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1348

BRENDA BUTLER,

Plaintiff - Appellant,

v.

DRIVE AUTOMOTIVE INDUSTRIES OF AMERICA, INCORPORATED, d/b/a
Magna Drive Automotive,

Defendant – Appellee,

and

EMPLOYBRIDGE OF DALLAS INCORPORATED, d/b/a ResourceMFG;
STAFFING SOLUTIONS SOUTHEAST INCORPORATED, d/b/a
ResourceMFG,

Defendants.

Appeal from the United States District Court for the District of
South Carolina, at Greenville. Jacquelyn D. Austin, Magistrate
Judge. (6:12-cv-03608-JDA)

Argued: January 29, 2015 Decided: July 15, 2015

Before KEENAN, FLOYD, and HARRIS, Circuit Judges.

Reversed and remanded by published opinion. Judge Floyd wrote
the opinion, in which Judge Keenan and Judge Harris joined.

ARGUED: Jeffrey Parker Dunlaevy, STEPHENSON & MURPHY, LLC,
Greenville, South Carolina, for Appellant. Stephanie E. Lewis,
JACKSON LEWIS P.C., Greenville, South Carolina, for Appellee.
ON BRIEF: Brian P. Murphy, BRIAN MURPHY LAW FIRM, PC,
Greenville, South Carolina, for Appellant. Wendy L. Furhang,
JACKSON LEWIS P.C., Greenville, South Carolina, for Appellee.

2
FLOYD, Circuit Judge:

In this Title VII employment discrimination action, Brenda

Butler seeks to recover for sexual harassment she allegedly

experienced while working at a Drive Automotive Industries

(Drive) factory. In the proceeding below, Drive argued that

Butler was actually employed by a temporary staffing agency,

ResourceMFG, and therefore Drive was not an “employer” subject

to Title VII liability. Although the district court

acknowledged that in some instances an employee can have

multiple “employers” for Title VII purposes, it concluded that

in this case ResourceMFG was Butler’s sole employer.

Accordingly, the district court granted summary judgment to

Drive on Butler’s claims.

Like the district court, and several of our sister

circuits, we agree that Title VII provides for joint employer

liability. We further conclude that the so-called “hybrid”

test, which considers both the common law of agency and the

economic realities of employment, is the correct means to apply

the joint employment doctrine to the facts of a case. The

district court did not explicitly use the “hybrid” test in its

opinion. Under our de novo standard of review, we articulate

the hybrid test for the joint employment context and apply it to

the facts of this case, concluding that Drive was indeed

3
Butler’s employer. Accordingly, we reverse and remand for

consideration of Butler’s Title VII claims on the merits.

I.

Appellant Brenda Butler was hired by ResourceMFG, 1 a

temporary employment agency, to work at Drive Automotive

Industries in Piedmont, South Carolina. Drive manufactures

doors, fenders, and other parts for automotive companies. The

company hires some employees directly and employs others through

temporary employment agencies.

Drive and ResourceMFG each exercised control over various

aspects of Butler’s employment. For example, Butler wore

ResourceMFG’s uniform, was paid by ResourceMFG, and parked in a

special ResourceMFG lot. ResourceMFG also had ultimate

responsibility for issues related to discipline and termination.

Drive, however, determined Butler’s work schedule and arranged

portions of Butler’s training. Drive employees supervised

Butler while she worked on the factory floor. Butler said she

was told by ResourceMFG that she worked for “both” Drive and

ResourceMFG. J.A. 36-37 (“They always told me that both of them

1 Employbridge of Dallas Inc. and Staffing Solutions
Southeast Inc. do business as ResourceMFG.

4
w[ere] our employers. . . . [W]e w[ere] considered to be

working for both.”).

Butler claims that one of her Drive supervisors, John

Green, verbally and physically harassed her throughout her time

at Drive. Specifically, Butler alleges that Green made repeated

comments about Butler’s physical features, such as “You sure do

have a big old ass”; “I wish my girlfriend had a big old ass

like yours”; “Boy, I love women with big old asses”; and calling

her a “big booty Judy.” J.A. 94, 103, 132. Green also rubbed

his crotch against Butler’s buttocks. J.A. 98-100. Butler

reported Green’s conduct to ResourceMFG’s on-site

representative, Ryan Roberson, and to Green’s supervisor at

Drive, Lisa Gardner Thomas. According to Butler, however,

neither took any action to curb the harassment.

The harassment culminated on December 19, 2010, when Green

directed Butler to work on a particular machine called “the

laser.” Butler refused, saying she was tired from working

overtime the night before. Green said that his supervisor had

said “hell no.” J.A. 86. Green continued, “You have to run it.

If you can’t fucking run it, take your ass home. . . . [Y]our

assignment has ended.” Id. He also called her “big booty Judy”

again. Id. When Butler objected to Green’s language, he

informed her that she was a temp and could be easily fired.

5
When Butler informed Thomas of the encounter, Thomas asked

another supervisor at Drive that Butler be terminated. J.A.

383. The request was then sent to ResourceMFG. A few days

later, Green called Butler and implied that he could save her

job by performing sexual favors for him. Butler refused. A

ResourceMFG supervisor then called her to tell her she had been

terminated from Drive.

In November 2012, Butler filed suit against both Drive and

ResourceMFG in South Carolina state court. After Drive timely

removed the case to federal court, the parties agreed to dismiss

the case against ResourceMFG, leaving Drive as the sole

remaining defendant. In April 2013, the district court granted

Drive’s motion for summary judgment, 2 finding that Drive did not

exercise sufficient control over Butler’s employment such that

it could be liable as her employer under Title VII. Butler now

appeals the district court’s grant of summary judgment.

II.

Pursuant to 28 U.S.C. § 636(c)(3), we have jurisdiction of

this appeal from the judgment of the magistrate judge. We

review the district court’s grant of summary judgment de novo,

2
The parties consented to the jurisdiction of a magistrate
judge. For the sake of simplicity, we will refer to the
magistrate judge as the district court.

6
drawing “reasonable inferences in the light most favorable to

the non-moving party.” Dulaney v. Packaging Corp. of Am., 673

F.3d 323, 330 (4th Cir. 2012). We also review de novo questions

of statutory interpretation—in this case, the proper

construction of “employer” in Title VII. Stone v.

Instrumentation Lab. Co., 591 F.3d 239, 242-43 (4th Cir. 2009).

Summary judgment is proper “if the movant shows that there

is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). To overcome a motion for summary judgment, however, the

nonmoving party “‘may not rely merely on allegations or denials

in its own pleading’ but must ‘set out specific facts showing a

genuine issue for trial.’” News & Observer Publ’g Co. v.

Raleigh–Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010)

(quoting Fed. R. Civ. P. 56(e)).

III.

An entity can be held liable in a Title VII action only if

it is an “employer” of the complainant. Title VII of the Civil

Rights Act of 1964 defines an “employer” as a “person engaged in

an industry affecting commerce who has fifteen or more employees

for each working day in each of twenty or more calendar weeks in

the current or preceding calendar year, and any agent of such a

person.” 42 U.S.C. § 2000e(b). In turn, an “employee” is “an

7
individual employed by an employer.” Id. § 2000e(f). As the

Supreme Court has noted, definitions of “employer” and

“employee” in federal law are often circular and “explain[]

nothing.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323

(1992).

The parties do not dispute that ResourceMFG employed

Butler. The dispositive question on appeal is whether Drive

also employed Butler for Title VII purposes. In answering this

question, we first must consider the threshold issue of whether

an employee can have multiple “employers” under Title VII. Our

review of this question of law is de novo. Cilecek v. Inova

Health Sys. Servs., 115 F.3d 256, 261 (4th Cir. 1997) (citing

MacMullen v. S.C. Elec. & Gas Co., 312 F.2d 662, 670 (4th Cir.

1963)). The district court accepted the possibility that both

entities could in theory be Butler’s “employer” for Title VII

purposes pursuant to the joint employment doctrine. As set

forth below, we conclude that the joint employment doctrine is

an appropriate construction of Title VII, and so affirm the

district court on that issue.

A.

Other courts have found that two parties can be considered

joint employers and therefore both be liable under Title VII if

they “share or co-determine those matters governing the

8
essential terms and conditions of employment.” Bristol v. Bd.

of Cnty. Comm’rs, 312 F.3d 1213, 1218 (10th Cir. 2002) (en banc)

(quoting Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350,

1360 (11th Cir. 1994)). In other words, “courts look to whether

both entities ‘exercise significant control over the same

employees.’” Id. (quoting Graves v. Lowery, 117 F.3d 723, 727

(3d Cir. 1997)). “The basis for the finding that two companies

are ‘joint employers’ is that ‘one employer while contracting in

good faith with an otherwise independent company, has retained

for itself sufficient control of the terms and conditions of

employment of the employees who are employed by the other

employer.’” 3 Torres-Negrón v. Merck & Co., 488 F.3d 34, 40 n.6

(1st Cir. 2007) (quoting Rivas v. Federación de Asociaciones

Pecuarias de P.R., 929 F.2d 814, 820 n.17 (1st Cir. 1991)).

Although this Circuit has never expressly adopted the joint

employment doctrine in the Title VII context, district courts in

this Circuit have frequently applied it. See Murphy-Taylor v.

3
The joint employment doctrine is distinct from the “single
employer” or “integrated employer” doctrine, in which “a parent
company and its subsidiary can be considered a single employer
for purposes of Title VII liability.” Murphy-Taylor v. Hofmann,
968 F. Supp. 2d 693, 725 (D. Md. 2013) (citing Hukill v. Auto
Care, Inc., 192 F.3d 437, 442 (4th Cir. 1999), abrogated on
other grounds by Arbaugh v. Y & H Corp., 546 U.S. 500 (2006)).
Here, Drive and ResourceMFG are clearly discrete entities, and
the parties do not argue that they could constitute an
integrated employer.

9
Hofmann, 968 F. Supp. 2d 693, 725 (D. Md. 2013) (observing that

this Circuit “does not appear to have specifically considered

whether to apply [the joint employment doctrine] in the

employment discrimination context”). 4 Many of our sister

circuits, moreover, have considered the possibility that

multiple entities could be employers of a plaintiff and adopted

the joint employment doctrine. 5 We now hold that the joint

employment doctrine is the law of this Circuit.

The joint employment doctrine is wholly consistent with our

precedent. We have repeatedly used the joint employment

doctrine in cases involving analogous statutes to resolve

similar difficulties in defining “employer” and “employee.” See

Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298, 305-06 (4th

Cir. 2006) (Fair Labor Standards Act); Howard v. Malcolm, 852

F.2d 101, 102, 104-05 (4th Cir. 1988) (Migrant and Seasonal

4
See, e.g., Murphy-Taylor, 968 F. Supp. 2d at 725-28;
Simpson v. Greenville Transit Auth., No. 6:05-1087-HMH-BHH, 2006
WL 1148167, at *3-5 (D.S.C. Apr. 27, 2006); Williams v. Grimes
Aerospace Co., 988 F. Supp. 925, 934-36 (D.S.C. 1997); King v.
Dalton, 895 F. Supp. 831, 837-38 (E.D. Va. 1995); Magnuson v.
Peak Technical Servs., Inc., 808 F. Supp. 500, 507-10 (E.D. Va.
1992).
5
See, e.g., Arculeo v. On-Site Sales & Mktg., LLC, 425 F.3d
193, 197-98 (2d Cir. 2005); Graves, 117 F.3d at 727; EEOC v.
Skanska USA Bldg., Inc., 550 F. App’x 253, 256 (6th Cir. 2013);
Robinson v. Sappington, 351 F.3d 317, 332 n.9 & 337–39 (7th Cir.
2003); EEOC v. Pac. Mar. Ass’n, 351 F.3d 1270, 1277 (9th Cir.
2003); Bristol, 312 F.3d at 1218; Virgo, 30 F.3d at 1359-61.

10
Agricultural Worker Protection Act); NLRB v. Jewell Smokeless

Coal Corp., 435 F.2d 1270, 1271 (4th Cir. 1970) (per curiam)

(National Labor Relations Act). Nothing suggests a different

treatment is warranted here.

Second, the doctrine’s emphasis on determining which

entities actually exercise control over an employee is

consistent with Supreme Court precedent interpreting Title VII’s

definitions. The Supreme Court has held that “the common-law

element of control,” drawn from the law of agency, “is the

principal guidepost” to be followed when construing an analogous

claim under the Americans with Disabilities Act. Clackamas

Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440, 448

(2003). Likewise, the Fourth Circuit has consistently focused

on control, especially in the comparable instance where the

status of the plaintiff as an employee or independent contractor

is at issue. See, e.g., Cilecek, 115 F.3d at 260. The joint

employment doctrine captures instances in which multiple

entities control an employee.

Third, the joint employer doctrine serves Title VII’s

purpose of eliminating “discrimination in employment based on

race, color, religion, sex, or national origin.” Lucido v.

Cravath, Swaine & Moore, 425 F. Supp. 123, 126 (S.D.N.Y. 1977).

Title VII should be liberally construed in light of its remedial

purpose. Hernandez v. Aldridge, 866 F.2d 800, 803 (5th Cir.

11
1989), vacated on other grounds, Hernandez v. Rice, 494 U.S.

1013 (1990); see also Arnold v. Burger King Corp., 719 F.2d 63,

65 (4th Cir. 1983) (noting the “broad remedial purposes of Title

VII”). As the Eighth Circuit has noted, “[s]uch liberal

construction is also to be given to the definition of

‘employer.’” Baker v. Stuart Broad. Co., 560 F.2d 389, 391 (8th

Cir. 1977); see also Magnuson, 808 F. Supp. 500, 508 (E.D. Va.

1992) (noting the “broad, remedial purpose of Title VII which

militates against the adoption of a rigid rule strictly limiting

‘employer’ status under Title VII to an individual's direct or

single employer”).

Finally, the joint employment doctrine also recognizes the

reality of changes in modern employment, in which increasing

numbers of workers are employed by temporary staffing companies

that exercise little control over their day-to-day activities.

See Williams v. Grimes Aerospace Co., 988 F. Supp. 925, 933-34

(D.S.C. 1997) (“While the phenomenon of temporary employees

first gained momentum in the United States’ post-World War II

economy, ‘the temporary help industry has recently exploded,

especially since the 1980s.’” (brackets omitted) (quoting

Development in the Law—Employment Discrimination: V. Temporary

Employment and the Imbalance of Power, 109 Harv. L. Rev. 1647,

1648 (1996))); Lima v. Addeco, 634 F. Supp. 2d 394, 400

(S.D.N.Y. 2009) (“The joint employer doctrine has been applied

12
to temporary employment or staffing agencies and their client

entities.”).

The joint employment doctrine thus prevents those who

effectively employ a worker from evading liability by hiding

behind another entity, such as a staffing agency. Sibley Mem’l

Hosp. v. Wilson, 488 F.2d 1338, 1341 (D.C. Cir. 1973). Given

Title VII’s remedial intent, employers should not be able to

“avoid Title VII by affixing a label to a person that does not

capture the substance of the employment relationship.”

Schwieger v. Farm Bureau Ins. Co. of Neb., 207 F.3d 480, 484

(8th Cir. 2000).

Consequently, we hold that multiple entities may

simultaneously be considered employers for the purposes of Title

VII.

IV.

We turn next to whether the court correctly applied the

joint employment doctrine in this case. The object of the joint

employment doctrine is to determine whether a putative employer

“exercise[s] significant control over the same employees.”

Bristol, 312 F.3d at 1218 (quoting Graves, 117 F.3d at 727).

The question then is how to determine the extent to which an

employer “controls” an employee.

13
Courts have formulated at least three tests that could be

used in the joint employment context: the economic realities

test, the control test, and the hybrid test. All three tests

aim to determine, in a highly fact-specific way, whether an

entity exercises control over an employee to the extent that it

should be liable under Title VII. See Clackamas, 538 U.S. at

448 (stating in an ADA case that the “common-law element of

control is the principal guidepost that should be followed”).

The district court did not explicitly state which test it

used, but cited to some of our existing precedent in analogous

areas of the law. We find that the district court conducted an

inappropriate analysis under our articulation of the joint

employment doctrine today. Accordingly, under our de novo

standard of review, we reverse the district court and remand for

further proceedings.

A.

We will briefly review the three tests, as developed by our

sister circuits, along with our own precedent, that could be

used for the joint employment doctrine under Title VII.

14
Drive contends that this Circuit should adopt the “control”

test, which is drawn solely from basic principles of agency law. 6

Some other circuits and district courts in this Circuit use the

control test. 7 E.g., EEOC v. Skanska USA Bldg., Inc., 550 F.

App’x 253, 256 (6th Cir. 2013); Graves, 117 F.3d at 727-28; NLRB

v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1123 (3d

Cir. 1982); Allen v. Tyco Elecs. Corp., 294 F. Supp. 2d 768, 774

(M.D.N.C. 2003); see also Haavistola v. Cmty. Fire Co. of Rising

6 Drive cites in support, among other authority, enforcement
guidance issued by the Equal Employment Opportunity Commission.
Enforcement Guidance: Application of EEO Laws to Contingent
Workers Placed by Temporary Employment Agencies and Other
Staffing Firms, EEOC Notice No. 915.002, 1997 WL 33159161 (Dec.
3, 1997). Drive concedes that the EEOC notice does not warrant
Chevron deference, although it may warrant Skidmore deference.
See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (noting
that courts can be persuaded by an agency’s rule, in the absence
of formal Chevron deference, when the agency has a “body of
experience and informed judgment to which courts and litigants
may properly resort for guidance”). In any event, the EEOC
guidance document does not support Drive’s position. In
defining an “employee” for the purposes of federal employment
discrimination laws, the guidance document contains a list of
considerations that very closely approximate the Spirides
factors (discussed below), suggesting that the EEOC looks to the
hybrid test, not to the control test.
7 Some cases have framed the analysis in terms of the
“master-servant” or “loaned-servant” doctrine, in which
“employees placed in a work position through a temporary agency
are considered ‘loaned servants.’ . . . [A]n employment
relationship is created between the special employer and the
temporary employee only when the special employer controls the
means and manner of the temporary employee’s work.” Allen, 294
F. Supp. 2d at 774 (quoting Mullis v. Mechs. & Farmers Bank, 994
F. Supp. 680, 684 (M.D.N.C. 1997)).

15
Sun, Inc., 6 F.3d 211, 220 (4th Cir. 1993) (“The common-law

standard traditionally used when deciding whether an individual

can claim employee status emphasizes the importance of the

employer’s control over the individual.”).

Courts in the Third Circuit, for example, have used three

factors to determine whether an entity exercises sufficient

control over an employee for Title VII liability:

1) authority to hire and fire employees,
promulgate work rules and assignments, and
set conditions of employment, including
compensation, benefits, and hours;
2) day-to-day supervision of employees,
including employee discipline; and
3) control of employee records, including
payroll, insurance, taxes and the like.

Butterbaugh v. Chertoff, 479 F. Supp. 2d 485, 491 (W.D. Pa.

2007) (quoting Cella v. Villanova Univ., No. CIV.A.01-7181, 2003

WL 329147, at *7 (E.D. Pa. Feb. 12, 2003)); see also Plaso v.

IJKG, LLC, 553 F. App’x 199, 205 (3d Cir. 2014). The Sixth

Circuit looks to a similar set of factors, looking to “an

entity’s ability to hire, fire or discipline employees, affect

their compensation and benefits, and direct and supervise their

performance.” Skanska USA Bldg., Inc., 550 F. App’x at 256.

The control test is somewhat formal in that it tends to look to

the legal parameters of employment such as hiring and firing,

supervision and from where an employee receives his or her

paychecks.

16
Butler, by contrast, argues, that the economic realities

test applies. 8 This test differs from the control test in that

it focuses on “degree of economic dependence of alleged

employees on the business with which they are connected that

indicates employee status.” 9 EEOC v. Zippo Mfg. Co., 713 F.2d

32, 37 (3d Cir. 1983) (brackets and ellipsis omitted) (quoting

Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311 (5th Cir.

1976)); see also Hopkins v. Cornerstone Am., 545 F.3d 338, 343

(5th Cir. 2008) (applying the test in an FLSA case). In other

words, the economic realities test focuses less on the legal

parameters of employment, but more on the entity (or entities)

8 The economic realities test originated in a different
context in a Supreme Court case from the 1940s, in which the
Court was asked to resolve whether a defendant was an employee
or independent contractor for the purpose of determining Social
Security taxes. See Bartels v. Birmingham, 332 U.S. 126, 130
(1947) (“[I]n the application of social legislation employees
are those who as a matter of economic reality are dependent upon
the business to which they render service.”).
9 Drive cites one of our decisions, Garrett v. Phillips
Mills, Inc., for the proposition that this Circuit has already
rejected the economic realities test. 721 F.2d 979 (4th Cir.
1983). In some respects, this characterization is accurate,
because Garrett did in fact reject the economic realities test.
But it is not helpful to Drive’s case because the Court in
Garrett clearly adopted the hybrid test, discussed infra, and
rejected the individual control test. Id. at 981-92 (stating
that the Court was “convinced that whether an individual is an
employee in the ADEA context is properly determined by analyzing
the facts of each employment relationship under a standard that
incorporates both the common law test derived from principles of
agency and the so-called ‘economic realities’ test”).

17
on which the employee relies on for work and remuneration—

irrespective of who is actually writing the paychecks and

determining work status. An entity that is a mere front might

be an employer under the control test, but it would not be under

the economic realities test.

This Circuit has applied the economic realities test in the

context of the Migrant and Seasonal Agricultural Worker

Protection Act and the Fair Labor Standards Act. See Howard,

852 F.2d at 104-05 (deciding whether there was joint

employment); Schultz, 466 F.3d at 304-05 (deciding whether the

plaintiff was an employee or independent contractor). In

Schultz, for example, we said that the joint employment question

must “take into account the real economic relationship between

the employer who uses and benefits from the services of workers

and the party that hires or assigns the workers to that

employer. The ultimate determination of joint employment must

be based upon the circumstances of the whole activity.” 10 466

10
Drive correctly notes, however, that the FLSA uses a
different definition of “employee” such that the statute is not
directly analogous to Title VII. Darden, 503 U.S. at 326
(noting that the FLSA’s definition “stretches the meaning of
‘employee’ to cover some parties who might not qualify as such
under a strict application of traditional agency law
principles”). As such, FLSA cases employing the economic
realities test—and indeed any test—are not particularly
transferrable to Title VII cases.

18
F.3d at 306 (citations, brackets, and internal quotation marks

omitted).

Finally, below and on appeal, neither Butler nor Drive

argued in favor of the hybrid test, even though we have

consistently adopted it in analogous Title VII cases. The

hybrid test combines aspects of the economic realities and

control tests. In Garrett v. Phillips Mills, Inc., we adopted

the hybrid test in an ADEA independent contractor case,

describing the test as “analyzing the facts of each employment

relationship under a standard that incorporates both the common

law test derived from principles of agency and the so-called

‘economic realities’ test.” 721 F.2d 979, 981 (4th Cir. 1983).

We noted that “the test applied in Title VII cases was

appropriate for resolving employee status issues in ADEA cases.”

Id.

The Garrett court adopted a list of factors (the “Spirides

factors”) to evaluate along with the entity’s degree of control:

(1) the kind of occupation, with reference
to whether the work usually is done under
the direction of a supervisor or is done by
a specialist without supervision;
(2) the skill required in the particular
occupation;
(3) whether the “employer” or the individual
in question furnishes the equipment used and
the place of work;
(4) the length of time during which the
individual has worked;
(5) the method of payment, whether by time
or by the job;

19
(6) the manner in which the work
relationship is terminated; i.e., by one or
both parties, with or without notice and
explanation;
(7) whether annual leave is afforded;
(8) whether the work is an integral part of
the business of the “employer”;
(9) whether the worker accumulates
retirement benefits;
(10) whether the “employer” pays social
security taxes; and
(11) the intention of the parties.

Id. at 982 (quoting Spirides v. Reinhardt, 613 F.2d 826, 832

(D.C. Cir. 1979)). Under the hybrid test, “control is still the

most important factor to be considered, but it is not

dispositive.” Id.

A decade later, we implicitly adopted the hybrid test in a

Title VII case to determine whether a plaintiff was an

independent contractor or an employee. Haavistola, 6 F.3d at

219-20. Referencing Garrett, we remarked that “the operative

language in ADEA is identical to the operative language in Title

VII, so the analysis utilized under either act is

interchangeable.” Id. at 219 n.2. We further described “a

standard that incorporates both the common law test derived from

principles of agency and the so-called ‘economic realities’

test,” which asks whether employees “as a matter of economic

reality are dependent upon the business to which they render

service.” Id. at 220 (citations omitted).

20
Subsequently, in Cilecek, we re-emphasized the importance

of the traditional common law of agency, while citing the hybrid

test used in Garrett and Haavistola approvingly. 115 F.3d at

260. Cilecek did not purport to overturn our existing

precedent. Indeed, we cited a Supreme Court case, Nationwide

Mutual Insurance Co. v. Darden, that emphasized the importance

of the common law of agency, while using factors markedly

similar to our decisions in Garrett and Haavistola. 11 Id. at 259

(citing Darden, 503 U.S. at 322-23); see also id. at 260

(calling the Spirides factors “similar” to the ones in Darden).

We also modified the Darden factors to make them more applicable

to the specific industry context present in Cilecek. Id. at

260-61; see also Bender v. Suburban Hosp., 998 F. Supp. 631, 635

(D. Md. 1998) (observing that the hybrid test was modified “to

make it more applicable to the hospital context”).

Guided by these decisions, we conclude that the hybrid test

best captures the fact-specific nature of Title VII cases, such

as the one before us. Cf. Haavistola, 6 F.3d at 222 (“Title VII

11
In Darden, the Supreme Court reversed a decision from
this Circuit, which held, drawing from the purpose of ERISA,
that an “ERISA plaintiff can qualify as an ‘employee’ simply by
showing” that the plaintiff had a reasonable expectation of
benefits, relied on this expectation, and lacked the bargaining
power to contract out of forfeiture provisions. Id. at 321.
Instead, the Supreme Court referred to a list of factors from a
copyright case. That list of factors is virtually the same as
the ones in Spirides.

21
claims involved fact-intensive determinations for which the

district court was not equipped to rule on the basis of a

summary judgment record alone.”); Hunt v. State of Mo., Dep’t of

Corr., 297 F.3d 735, 741 (8th Cir. 2002) (finding that an

employer-employee relationship is a “fact-intensive

consideration of all aspects of the working relationship between

the parties” (citation and internal quotation marks omitted)).

The hybrid test also allows for the broadest possible set of

considerations in making a determination of which entity is an

employer. Moreover, it best captures the reality of modern

employment in which “control” of an employee may be shared by

two or more entities. The hybrid test correctly bridges the

control test and the economic realities test.

Accordingly, we adopt the hybrid test. We find, however,

that our previous statements of the hybrid test, involving the

analogous but legally distinct independent contractor context,

do not adequately capture the unique circumstances of joint

employment. The factors used in Spirides and Cilecek include

considerations that are irrelevant to the joint employment

context. Drawing on our existing precedent and joint employment

cases in other circuits, we now articulate a new set of factors

for courts in this Circuit to use in assessing whether an

individual is jointly employed by two or more entities:

(1) authority to hire and fire the individual;

22
(2) day-to-day supervision of the individual, including
employee discipline;
(3) whether the putative employer furnishes the equipment
used and the place of work;
(4) possession of and responsibility over the individual's
employment records, including payroll, insurance, and
taxes;
(5) the length of time during which the individual has
worked for the putative employer;
(6) whether the putative employer provides the individual
with formal or informal training;
(7) whether the individual’s duties are akin to a regular
employee's duties;
(8) whether the individual is assigned solely to the
putative employer; and
(9) whether the individual and putative employer intended
to enter into an employment relationship. 12

We note that none of these factors are dispositive and that the

common-law element of control remains the “principal guidepost”

in the analysis. Indeed, consistent with our opinion in

Cilecek, courts can modify the factors to the specific industry

context. See id. at 261 (refashioning factors for a controversy

arising in a hospital setting); Darden, 503 U.S. at 323-324

(prefacing its list of factors with “[a]mong the other factors

relevant to this inquiry are”).

12We pause to note that the ninth factor regarding the
subjective intentions of the parties ordinarily will be of
minimal consequence in the joint employment analysis. For
example, the fact that an employee signs a form disclaiming an
employment relationship will not defeat a finding of joint
employment. Similarly, an individual’s failure to appreciate an
entity as an employer should not be dispositive. Instead, the
intent of the parties should be part of the overall fact-
specific inquiry into the putative employee’s circumstances.

23
Three factors are the most important. The first factor,

which entity or entities have the power to hire and fire the

putative employee, is important to determining ultimate control.

The second factor, to what extent the employee is supervised, is

useful for determining the day-to-day, practical control of the

employee. The third factor, where and how the work takes place,

is valuable for determining how similar the work functions are

compared to those of an ordinary employee. When applying the

joint employment factors, however, “no one factor is

determinative, and the consideration of factors must relate to

the particular relationship under consideration.” Cilecek, 115

F.3d at 260. Courts should be mindful that control remains the

principal guidepost for determining whether multiple entities

can be a plaintiff’s joint employers.

B.

We next consider, under our de novo standard of review,

whether the district court correctly applied the hybrid test in

this case. The district court did not explicitly state which

test it was using, but the language in the opinion emphasized

the importance of the “common law of agency.” J.A. 427-28. The

district court, however, also cited Cilecek and referred to the

Darden factors, which, as explained above, suggests a broader

set of considerations than what the somewhat narrow control test

24
would entail. J.A. 432 (citing Farlow v. Wachovia Bank of North

Carolina, N.A., 259 F.3d 309, 314 (4th Cir. 2001)).

Under the set of factors we state above, the district court

inappropriately discounted several considerations that militate

in favor of finding that Drive and ResourceMFG are joint

employers of Butler. Most importantly, Drive exhibited a high

degree of control over the terms of Butler’s employment (factor

1). The uncontradicted evidence shows that a Drive employee

sent an e-mail to Roxanne Lombard, an ResourceMFG employee,

directing that Butler be “add[ed] to the list for replacement.”

J.A. 383. ResourceMFG then, after a delay, terminated Butler.

Although ResourceMFG was the entity that formally fired Butler,

Drive had effective control over Butler’s employment. Charlie

Sanders, the ResourceMFG branch manager in Greenville, South

Carolina, could not recall an instance when Drive requested an

ResourceMFG employee to be disciplined or terminated and it was

not done. J.A. 330-31.

Second, Drive employees supervised both sets of workers

(factor 2). Indeed, Drive--specifically Green and Thomas--

handled the day-to-day supervision of Butler on the factory

floor.

Third, Drive and ResourceMFG employees worked “side by

side,” performed the same tasks, and used the same equipment

(factor 3). J.A. 332. Although Butler wore a ResourceMFG

25
uniform on the factory floor, there was little or no effective

difference between the work performed by the two sets of

employees.

Fourth, Butler’s labor was not tangential or peripheral to

Drive. Instead, she performed the same tasks as Drive employees

and produced goods that were Drive’s core business (factor 7).

The hybrid test, as we have articulated it, specifically

aims to pierce the legal formalities of an employment

relationship to determine the loci of effective control over an

employee, while not discounting those formalities entirely.

Otherwise, an employer who exercises actual control could avoid

Title VII liability by hiding behind another entity. Here,

although ResourceMFG disbursed Butler’s paychecks, officially

terminated her, and handled employee discipline, it did not

prevent Drive from having a substantial degree of control over

the circumstances of Butler’s employment. Accordingly, we

reverse the district court and hold, as a matter of law, that

Drive and ResourceMFG are Butler’s joint employers. 13

13
The outcome of this case would have been the same even if
we adopted the list of factors in Cilecek or Spirides for use in
this case. The factors we outlined overlap greatly with Cilecek
and Spirides, and the three factors that we stated are most
important to the joint employment context are present in Cilecek
and Spirides as well.

26
C.

The district court concluded that Drive was not Butler’s

employer and could therefore not be held liable for Butler’s

hostile work environment and retaliation claims. Because we

reverse the district court’s finding that Drive was not an

employer of Butler, the district must now consider the merits of

Butler’s claims. Consequently, we remand those claims for

consideration by the district court in the first instance.

V.

The judgment of the district court is

REVERSED AND REMANDED.

27

Butler v. Drive Automotive Industries of America, Inc.

AI Case Brief

Ask AI About This Case

Full Opinion

Additional Information