Ninth Circuit Adopts Common-Law Agency Test for Joint Employment Under Title VII


The U.S. Court of Appeals for the Ninth Circuit determined that common-law agency principles should be utilized in determining whether joint employer relationship exists under Title VII.

In EEOC v. Global Horizons, Inc., the issue was whether fruit growers were joint employers with a recruiter of orchard workers for purposes of liability for discriminatory treatment under Title VII. The Ninth Circuit rejected an economic realities test, which focuses on the worker’s economic dependence on the alleged joint employer, and chose to adopt a common law agency test set forth by the Supreme Court, under which the “principal guidepost” is the extent of control exercised by the secondary employer over the details of the work performed. (In so doing, the Ninth Circuit acknowledged that there may be little functional difference between the two tests and a third hybrid version, as all are fact-intensive and would likely produce the same outcome).

In analyzing whether a requisite level of control exists under the common-law agency test, the Supreme Court has identified a non-exhaustive list of factors: the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. In the present case, the Ninth Circuit found the growers had the power to control housing, meals, transportation and wages, even though they delegated such control to the recruiter, and this power was sufficient to establish joint employer status.

The Ninth Circuit went on to acknowledge that, even in a joint employer situation, one employer is not automatically liable for the actions of the other. Rather, “[l]iability may be imposed for a co-employer’s discriminatory conduct only if the defendant employer knew or should have known about the other employer’s conduct and failed to undertake prompt corrective measures within its control.” (Internal quotation omitted). In this case, the EEOC sufficiently alleged such knowledge and failure to take action on the part of the growers.