August 22, 2012

CONTRACTOR DEEMED EMPLOYER FOR RACIAL DISCRIMINATION BY SUBCONTRACTOR WORKERS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The Case is Hall v. Walsh Construction decided on August 9, 2012 [2012 U.S. Dist. LEXIS 112111] by Judge Joan Humphrey Lefkow of the Northern District of Illinois, Eastern Division. The case itself is a racial harassment/retaliation claim. The interest here is that the alleged perpetrators worked for a subcontractor (Internal Decorators, Inc. (IDI) and the alleged victims (Wilson Hall & Jason Winfrey) sued the prime contractor (Walsh Construction Company). Judge Lefkow ruled that Walsh was the employer for purposes of remedies.

The facts of the case are Hall and Winfrey worked at various Walsh job sites and that IDI controlled their terms of employment and job responsibilities, whereas Walsh controlled the operations, subcontractors, and day-to-day duties at various sites. The allegations are that Hall and Winfrey, African Americans, were subject to racial harassment in the form of derogatory names (“spook”, “shadow-man” & “Batman”), pictures of a hooded KKK clansman, and a noose at one of the job sites by IDI and Walsh employees, managers, and supervisors. Hall and Winfrey were transferred after they complained, and they ultimately terminated for reasons that could be deemed pretextual.

Judge Lefkow ruled that an individual may have multiple employers, and that for the facts in this case, Walsh was a “defacto” or “indirect” employer when it “control[s] the plaintiff’s employment relationship.” Walsh contended that it was “merely a general contractor and that plaintiffs’ allegations show that IDI, not Walsh, was plaintiffs’ employer.” Judge Lefkow disagreed and ruled that Hall and Winfrey may proceed with their claims of racial harassment and retaliatory transfers. The charges of unlawful termination by IDI were dismissed because they were deemed beyond the scope of the original claim filed with the EEOC.

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