November 13, 2012

Once upon a time, there were two African American carpenters who worked at a construction site. The carpenters were subjected to racial harassment and discrimination by coworkers, managers, and supervisors, who apparently entertained themselves by making racially derogatory comments, hanging a picture of a hooded KKK clansman, and putting up a noose made out of carpentry tools at a job site. When the carpenters complained to the general contractor, no investigation was conducted. Rather, the carpenters were simply transferred to another job site. Soon afterwards, one carpenter was fired, and the other was forced to resign due to racial harassment and discrimination that continued unabated.

While this type of conduct is reprehensible, it doesn’t always make headlines. However, this case is worthy of attention because the perpetrators included both employees of the subcontractor for whom the carpenters worked, and employees of the general contractor that engaged the subcontractor.

The carpenters sued not only their employer, but also the general contractor for harassment, discrimination, retaliation, and unlawful termination. Not surprisingly, the general contractor asked the court to dismiss the claims against it, suggesting that the subcontractor – not the general contractor – was the carpenters’ employer.

The U.S. District Court for the Northern District of Illinois disagreed, allowing the claims against the general contractor to go forward. As the court noted, an employee may have multiple “employers” for purposes of liability under Title VII of the Civil Rights Act of 1964. This is the federal law that prohibits discrimination against employees on the basis of race as well as color, gender, religion, and national origin. In essence, a company can be considered a “de facto or indirect employer” if it exercises enough control over the employment relationship or directs the illegal conduct.

In this instance, the court found that the general contractor controlled the job operations, subcontractors, and day-to-day duties at some job sites where the carpenters worked. The court also noted that the general contractors’ employees were involved in the harassing behavior. And when the carpenters complained to the general contractor about the harassment, the general contractor transferred them to a different job site. The court found that the general contractor “exerted a certain degree of control over (the carpenters’) employment” and “was at least partially responsible for the unlawful employment practices at issue.”

  • The lesson this case teaches us is that general contractors can be held liable for discriminatory conduct committed not only by their own employees, but by the employees of their subcontractors. With that in mind, it is critical that general contractors take the following steps:
  • Implement a policy applicable to all of the general contractor’s employees that includes prohibitions on discrimination and harassment, reporting procedures, and anti-retaliation provisions;
  • Require subcontractors to implement a comparable policy (or adopt the general contractor’s policy);
  • Conduct anti-harassment/discrimination training of all employees, and require subcontractors to certify that they have conducted similar training for their employees;
  • Take complaints of harassment and discrimination seriously, investigate conduct that violates your policy, and if a violation is found to have occurred, take prompt, appropriate action designed to put an end to the offending conduct;
  • Refrain from retaliating against any employee who asserts a good faith complaint of harassment or discrimination or participates in an investigation; and
  • Document all measures taken to prevent harassment and discrimination, including those set forth above.

Implementing the policies and procedures outlined above will help general contractors prevent harassment, deter an internal complaint from escalating and, in the event that a claim is filed, provide a framework for asserting viable defenses.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.