Colorado Federal Court Expands Joint Liability

In the first case of its kind, the federal U.S. District Court for the District of Colorado has ruled that a joint employer is liable under Title VII based on its co-employer’s discriminatory conduct where it participated in the discrimination, or where it knew or reasonably should have known of the discrimination but failed to take prompt corrective measures within its control. Byorick v. CAS, Inc. (Dist. Colo. 2015),

Northrop was the primary contractor on a missile defense contract. Plaintiff Therese Byorick was employed by one of Northrop’s subcontractors, CAS. Byorick alleged harassment by an employee of another Northrop subcontractor, Boecore. The alleged harasser was removed from the contract, but Byorick reported to her direct employer, CAS, that she feared retaliation by Northrop. Eventually, Northrop eliminated her position, and CAS subsequently terminated her after it was unable to find her another contract to work on.

Byorick sued both CAS—her direct employer—and Northrop. CAS argued that it was not responsible for the elimination of Byorick’s position, but Byorick responded that CAS had a duty to protect her when she expressed fear of retaliation by Northrop.

The court considered guidance published by the Equal Employment Opportunity Commission (EEOC) that said a company supplying labor to another company on a contract is liable if it knew or should have known about the client’s discrimination, yet failed to undertake prompt corrective measures within its control.

Noting that Byorick had expressed concern to CAS human resources that Northrop would retaliate, the court concluded that CAS acquiesced in the retaliation against Byorick for fear of jeopardizing its relationship with Northrop.

Northrup’s motion to dismiss the lawsuit was therefore denied.

This is an important case for employers in Colorado and the other five states composing the Tenth Circuit. While liability is not automatic when a company’s joint employer makes a misstep, employers must provide adequate protection for any employee working elsewhere under contract who complains of a civil rights violation.