Companies who hire workers are more frequently outsourcing certain traditional responsibilities to another company. Under the New Jersey Law Against Discrimination, courts often treat two differently-named businesses, (or a parent company and its subsidiary) as "joint employers" if one company, or the parent company, exercises substantial control over some of the other’s operations, or employment decisions, HR policies, or conditions of work. Naming all connected entities ensures that the one company cannot use a technicality to avoid liability.
Sometimes an employee is hired by a company and his paychecks are paid by a different company. Or the hiring company tells the employees if they think there is discrimination, they should report it to HR, but the HR department is within another named company.
This article discusses the “Joint Employer Doctrine” which is when there are two companies that are each responsible because they are two joint employers of the plaintiff under the totality of the circumstances. A legal finding that companies are joint employers assumes that differently named companies are independent legal entities that have merely historically chosen to handle jointly important aspects of their employer-employee relationship.
Don’t sit on your rights. If you think your employer is discriminating against you, has fired you, or is considering terminating you for an illegal reason, you should contact this law office immediately for a free consultation. I have represented employees who were illegally discriminated against by their employer and was successful in recovering financial compensation for their emotional pain and suffering, and moneys for lost wages, both for past lost wages and projected future lost wages. Employment Civil Rights Law. This law office accepts cases from all over New Jersey and has locations in Southern, Central and Northern NJ to meet with clients. Call today for a free consultation.
Joint Employer Doctrine - Common-law Agency and Control Definition of “Employer” Applies to Employment Discrimination Claims in New Jersey.
The US Supreme Court held that where a statute containing the term “employer” does not define the term “employer” or shed light on the factors needed to presume one is an employer of the Plaintiff, it presumes that Congress intends a common-law agency and control definition should be applied to that particular statute. Generally, under common-law agency and control principles, it means to determine if an entity is an employer of the Plaintiff, the court considers if an entity exercises some control over the "manner and means" by which the work is accomplished. No one factor is determinative.
Numerous Factors under Common-law Agency and Control Meaning of “Employer”; Not All Have to Apply and None Alone Is a Controlling Factor
For cases brought New Jersey’s state discrimination statute, the New Jersey Law Against Discrimination (NJLAD), the employment analysis is substantially similar to the analysis under the federal discrimination statute, Title VII of the Civil Rights Act of 1964. New Jersey Race Discrimination Lawyer. Courts look to federal law Title VII precedents as a key source of interpretive authority when construing provisions of the NJLAD. This is true whether the NJLAD case is heard in State Court, Federal District Court or the 3rd Circuit Court of Appeals. Courts consider a wide array of factors in assessing the degree of agency and control exercised by the entities at issue to determine if they are joint employers.
In employment discrimination and retaliation matters, Courts consider various factors when assessing whether there is a joint employer relationship, including:
whether the entity as issue:
1) has authority to hire employees,
2) pays employees
3) can set work assignments,4) supervises employees,
5) handles HR issues and employee discipline
6) set rate of pay for work performed
7) set or be responsible for employee benefits
8) promulgate work rules
9) terminate employees
10. Control some or all employee records, including insurance, payroll and taxes.
An example of common-law agency and control to determine if one is an employer, was laid out in a federal appellate decision involving the NLRB, NLRB v. Greyhound Corp., 368 F.2d 778 (1966). Although it was not a discrimination case, the analysis of the Joint employer Doctrine applies. In this federal appellate decision at issue was whether two employers, Greyhound and Floors, were joint employers although they were separate entities. Floors had as employees janitors and maids who sought to be represented by the Union. The court held that “joint employers” applied to both employer Greyhound and a subcontractor of the employer, Floors, who had entered into an arrangement for performance of janitorial and loading services at Greyhound terminal. The court found that although they were separate entities, the evidence cogently demonstrated that Greyhound and Floors share, or co-determine, matters governing essential terms and conditions of employment of the porters, janitors, and maids in such a manner as to support a finding that their status is that of joint employers.
The Court found that whatever Floors' status was, as an independent contractor with Greyhound, that Greyhound has reserved to itself, both as a matter of express contractual agreement and in actual practice, rights over these employees which are consistent with its status as their employer along with Floors. The Court looked at the nature of the service agreements which bestow upon Greyhound the right to:
1) establish work schedules, and assign employees to perform the work;
2) specify the exact manner and means through which the work will be accomplished and issue orders or instructions to that effect;
3) control straight time wage rates and overtime hours and pay rates in accord with the fixed costs, percentages, and total amounts due to Floors for weekly and annual periods, and the role of the porters;
4) their use of Greyhound's equipment and supplies in their work performance; and,
5) finally, the fact that in the course of their duties, the porters are given detailed supervision by other Greyhound personnel.
Although the joint employer theory of liability was used in cases involving the NLRA, as in NLRB v. Greyhound Corp., above, the Joint employer theory of liability has been extended to discrimination cases such as in Graves v. Lowery, 117 F.3d 723 (3d Cir. 1997). In Graves v. Lowery, the court stated: “The proper inquiry under Title VII for determining employer status looks to the nature of the relationship regardless of whether that party may or may not be technically described as an "employer." .... The inquiry.... looks to the level of control an organization asserts over an individual's access to employment and the organization's power to deny such access.”
The Third Circuit has extended the joint employer theory of liability to the Title VII context. A joint employer relationship may exist for the purposes of Title VII when two entities exercise significant control over the same employees.
THREE-FACTOR ANALYSIS
District courts in the Third Circuit have distilled the joint employer analysis to three factors:
1) authority to hire and fire employees, promulgate work rules and assignments, and set conditions of employment, including compensation, benefits, and hours;
2) day-to-day supervision of employees, including employee discipline; and
3) control of employee records, including payroll, insurance, taxes and the like.
No single factor is dispositive and a weak showing on one factor may be offset by a strong showing on the other two. The parties' beliefs and expectations regarding the relationship between the plaintiff and defendant are also relevant. Myers v. Garfield & Johnson Enters., 679 F. Supp. 2d 598.
Applying the joint employer doctrine, when a company uses a temporary staffing agency, both the agency and the host employer are frequently considered joint employers under federal labor and employment laws.
In the Third Circuit, two distinct entities may be liable for the same Title VII violation not only when they constitute a single employer but also when they are joint employers of the plaintiff or when one entity acted as the agent of the other. In Myers v. Garfield & Johnson Enters., 679 F. Supp. 2d 598 (E.D. Pa 2010), the court stated:
“The Third Circuit has extended the "joint employer" theory of liability to the Title VII context. Graves v. Lowery, 117 F.3d 723, 727 (3d Cir. 1997). As in the NLRA context, a joint employer relationship may exist for the purposes of Title VII when "two entities exercise significant control over the same employees." Id. (citing Browning-Ferris, 691 F.2d at 1123). District courts in the Third Circuit have distilled the "joint employer" analysis to three factors: 1) Authority to hire and fire employees, promulgate work rules and assignments, and set conditions of employment, including compensation, benefits, and hours; 2) day-to-day supervision of employees, including employee discipline; and 3) control of employee records, including payroll, insurance, taxes and the like.”
The New Jersey whistleblower statute, the Conscientious Employee Protection Act, (CEPA) has its own test to distinguish whether a worker is an employee of an entity, or is an independent contractor, New Jersey Whistleblower Laws Attorney. But the CEPA test is not transferable to employment discrimination law, because the emphasis is on defining who is an employee as opposed to an independent contractor; not whether the “Joint Employer Doctrine” applies. See NJ Employment Attorney, Independent Contractor? Independent Contractors and Department of Labor Proposed Rules of Classification. To read further on how courts decide if a worker is an independent contractor or an employee under the CEPA statute, see NJ Independent Contractors and Whistleblowing, Am I Protected? Labels Can Be Illusory, Part 3.
The mere existence of a parent company does not mean the company automatically and without further examination, is a joint employer along with its subsidiary. A federal court held that without any evidence to the contrary, there is a strong presumption that a parent company is not the employer of a subsidiary’s employees.” Brown v. Fred’s Inc., 494 F. 3d 736, 739 (8th Cir. 2007).
Note: When there are two named companies, both may be liable for discriminatory acts against employees under two accepted legal theories: the “Integrated Employer Doctrine” or the “Joint Employer Doctrine.” Each of these accepted legal theories has different requirements and tests
The Joint Employer Doctrine differs from the Integrated Employer Doctrine, in that in the Joint Employer Doctrine, it is recognized the entities are separate and distinct entities, but they share responsibilities as to the essential terms and conditions of employment. Federal and state employment discrimination law recognize that more than one entity can be responsible as an employer, even if there is only one “employer of record.” One employer of record means only one entity holds itself out publicly as the employer.
The “Integrated Employer Doctrine” which was discussed in detail in the June 15, 2026 article, see NJ Employment Attorney, Who Is My Real Employer? Identifying the Correct Employer When Filing a Discrimination Claim, is when both companies upon examination of certain facts, are one single employer, not two distinct employers. Both concepts of “Joint Employers” and “Integrated Employer” are recognized by New Jersey law.
You have certain legal rights as an employee. Employee Performance Evaluations must be utilized by employers in a manner that is not discriminatory. See NJ Employment Attorney, Is My Employer Discriminating with a Performance Improvement Plan, a PIP? Women and older workers are sometimes hesitant to bring claims when they believe their sex or age age is a factor in receiving poor evaluations. Bergen County, New Jersey Sex Discrimination Lawyer.
Illegal biases may influence and downgrade a supervisor’s perception of the quality of an employee’s work based on race, sex, age or other protected characteristic. Bergen County, New Jersey Sex Discrimination Lawyer. Government statistics indicate that there has been a rise in age discrimination claims. See NJ Employment Attorney, Older Chief Executives and Senior Executives Fired Due to Age.
Note: This article is not legal advice and is not to be construed as giving legal advice in any situation or case. There are numerous changes and amendments in discrimination law and employment law that are mandated every year. If you have a legal question, you should consult with an employment attorney to discuss the specifics of your situation.
Don’t Sit on Your Rights
I have represented employees who were illegally discriminated against by their employers, and was successful in recovering financial compensation for their emotional pain and suffering and moneys for lost wages, both for past lost wages and projected future lost wages. If you think you are being discriminated against, you should contact this office immediately for a free consultation. I accept discrimination and whistleblower cases from all over New Jersey and have locations in Southern, Central and Northern NJ to meet with clients.
Contact Hope A. Lang, Attorney at Law today for a free consultation.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.