Security personnel stand with dogs at the entrance to the U.S. Open Championships tennis tournament in New York, August 31, 2015. REUTERS/Lucas Jackson

(Reuters) - A David and Goliath lawsuit was revived on Monday when a federal appeals court in New York decided that a Black security guard can refile a retaliation case against the United States Tennis Association.

The decision by a three-judge panel of the 2nd U.S. Circuit Court of Appeals is a temporary win for Sean Felder. But it’s a setback for workers’ rights, generally. The court’s ruling carves out a trapdoor in the main federal law banning discrimination in employment and allows companies wiggle room to engage in exactly the sort of discriminatory practices the statute is intended to prevent.

The court held that Felder, who initially sued without the help of an attorney, can amend his complaint to show that the USTA would have been his “joint employer” if he had been issued credentials to work at the 2016 U.S. Open in New York City. Felder alleges his supervisor at AJ Security told him the USTA denied his credentials as retaliation over Felder filing an earlier lawsuit alleging that white guards got better assignments than Black employees during the 2009 tournament.

A spokesperson for the USTA told me the organization does not comment on ongoing litigation. Felder didn’t respond to a request for comment. AJ Security did not immediately respond to a request for comment for this column.

Workplace laws and laws governing unions allow companies to be held liable as “joint employers” of an employee when multiple businesses share substantial control over their working terms and conditions.

Defining the entities that can be properly considered joint employers of a group of workers sometimes becomes surprisingly complex, as companies have leaned more and more on outsourcing, contract work and gig work. As of 2019, the “shadow work force” of temp workers and contractors at Google, for example, outnumbered its direct, full-time employees, The New York Times reported in May that year (Full-time workers get better pay and benefits).

In Felder’s case, he alleged his employer, AJ Security, was a subcontractor of CSC Security Services -- which in turn contracted with the USTA to provide security at tournaments. CSC was the defendant in Felder’s earlier race discrimination lawsuit, according to the opinion by Judge Debra Livingston (That case was settled for an undisclosed amount in 2015).

Felder's ongoing lawsuit, filed under Title VII of the 1964 Civil Rights Act, also alleged race discrimination. That claim was dismissed because Felder didn’t allege facts suggesting USTA denied him the credentials specifically because of his race.

But Felder did lay out a simple and straightforward story of retaliation -- premised on an allegation that someone at AJ Security openly admitted that USTA was retaliating against him. That assertion, plus his reference to the earlier lawsuit, made the retaliation claim more plausible than the bias charge, the court said.

The judges, however, then made an odd move in analyzing the retaliation claim.

Since Felder's formal employer was actually AJ Security -- and because Title VII bars an “employer” from retaliating against employees -- Felder would have to show that USTA would have been a joint employer of his “had it accepted his assignment” to do security work in the 2016 tournament, Livingston wrote. In other words, Felder now has to allege facts in his next complaint showing that USTA would have exercised significant control over his working terms and conditions, along with AJ Security.

But that’s a counter-intuitive reading of the statute. Not only does Title VII bar employers from retaliating against workers for “protected conduct” – which includes complaints about discrimination -- it also makes it unlawful for employers “to fail or refuse to hire” an individual under certain circumstances.

The statute “explicitly protects applicants for employment,” as Judge Gerard Lynch pointed out in a partial dissent.

And Felder's brief pro se complaint includes an explicit statement that he was denied work -- not to mention that he checked a box marked "did not hire me" in a section that asks plaintiffs what adverse employment action the defendant took against them.

Still, rather than focusing on the question of who is responsible for a refusal to hire, the court instead decided to focus on whether USTA would have had control over Felder’s working terms if it had decided to hire him.

That approach unnecessarily complicates what should be a relatively straightforward category of employment claims – and favors employers who use contractors.

“Per the majority’s interpretation,” a company “can avoid liability for discriminatory behavior prohibited by Title VII through the simple mechanism” of nominally outsourcing the work of selecting employees -- even if the company actually retains ultimate hiring power, Lynch explained.

And that's not such a tall order for many businesses.

The majority’s approach “makes sense in the context of a conditions-of-employment case,” where “an already-hired” worker complains about discriminatory terms and conditions, Lynch said.

But its ruling in Felder's case is likely to just muddy the analysis in similar future disputes. It leaves ample room for businesses to avoid liability for discriminatory hiring practices by outsourcing that function, even if they continue to exert control over final decisions.

That runs counter to the central purposes of the 1964 Civil Rights Act.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Source: Reuters

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