Escaping the Allure of Joint Employment: Using Fault-Based Principles to Impose Liability for the Denial of Employee Statutory Rights

Using joint employment alone to impose liability requires an extension of the strict imputed liability theory embodied in respondeat superior. Employers, including incorporated businesses, under the common law are strictly liable for harms to their employees, as they are for harm to third parties, because of actions of their agents or other employees taken within the scope of their employment. The liability is strict because it does not depend on a finding that the employer, the principal, was negligent or otherwise at fault. Expanding liability through joint employment, even if based on a demonstration of joint control of statutorily protected employees, extends this strict imputed liability by imposing responsibility on one of the businesses for the acts of managers or others who may not be under its control. There are both a practical political problem and a related legal doctrinal problem with using joint employment to draw the boundaries of assigned liability for the denial of employee statutory rights. The legal doctrinal problem is that the common law definition of employment is too constricted to reach all actions of agents of independent businesses that sometimes cause the denial of statutory employee rights. Before treating a business as an employer on whom strict respondeat superior liability can be imposed, the common law has required that a business have sufficient control over workers to ensure that their work is aligned with its interests. Yet employers may intentionally or negligently cause the denial of employee rights without having such control. Franchisors, for instance, that do not meet the common law definition of employer for their franchisees’ employees, typically do have enough influence over their franchisees to cause violations of federal or state wage and hour laws or the National Labor Relations Act. The practical political problem is that expanding joint employment liability from its common law dimensions to reach businesses that may have not caused the denial of employee statutory rights seems unfair to business owners and managers, in part because it is disruptive of efficient business relationships. The imposition of strict liability on one employer for a second employer’s denial of rights to its employees may compel the first employer to assert full control over the second employer’s employment relations. Whether or not this benefits the employees, it may also disrupt efficient relationships that have been set contractually between two solvent businesses for reasons other than the evasion of liability through insolvency. Not surprisingly, not only the business community, but also the judiciary has resisted imposing liability on employers whose agents have not been the cause of statutory harm. An alternative fault-based approach to extending liability for the deprivation of statutory rights can reach more culpable businesses, whether or not joint employers, without the disruption of efficient business relationships. Many statutes, including Title VII of the 1964 Civil Rights Act and the National Labor Relations Act, have been reasonably read to embody this fault-based approach, and those that cannot, including the Fair Labor Standards Act, can be read to permit non-preempted supplementary common law actions based on implied duties not to interfere actively with another employer’s grant of statutory benefits. This fault-based approach would allow businesses to determine the efficient level of control they exert over the employment policies of subordinate independent businesses, but require them to take reasonable steps to ensure that whatever control they do exert does not result in the deprivation of the rights of the employees of the subordinate businesses