Staffing Firm Can Sue Buyer For Discrimination, Court Rules

The 5th US Circuit Court of Appeals ruled that a staffing firm could sue its client in a racial bias case, overturning a previous court ruling that the provider had no standing.

Temporary agency White Glove Staffing Inc. had been in contract negotiations with Methodist Hospitals of Dallas and was asked to supply kitchen staff while negotiations were taking place. A Methodist representative allegedly told White Glove that the chef preferred Hispanics, according to court documents.

The staffing firm sent Carolyn Clay, an African American, who worked in the kitchen as a prep cook May 19-21 and May 23, 2016, without incident. A hospital representative on May 23 asked White Glove to send an Hispanic worker the next day instead, allegedly citing the chef’s preference. On May 24, White Glove again sent Clay because she was the only prep cook available on short notice, but the hospital asked her to leave. The hospital called off contract negotiations, saying the chef did not want to work with the staffing provider because it failed to send Hispanic workers, according to court documents.

The case was dismissed in September 2017, by district court Judge Ed Kinkeade, who ruled the staffing firm did not have standing to sue for employment discrimination because it did not have an employment relationship and because the company, itself, does not have a racial identity.

White Glove appealed. Citing a prior court ruling that “the determination whether a corporation has a racial identity is not determinative of whether that corporation has standing to bring a discrimination claim,” the 5th Circuit ruled the staffing firm does have standing.

“The court’s decision in this case seems the logical conclusion of what the statute was trying to protect,” said Fiona Coombe, director of legal and regulatory research for Staffing Industry Analysts. “It cannot be right for a client to issue discriminatory instructions to a staffing firm which then, in turn, discriminates against an employee on racial grounds, and in the process opens itself up to a claim while at the same time losing business.”

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