SI Review: July 2012


Benefit of Counsel

What’s a Supplier to Do?

Handling workplace discrimination claims with tact and sensitivity

By Frank Lyons

Workplace discrimination covers a wide range of employee characteristics: age, disability, equal pay/compensation, genetic information, national origin, pregnancy, race/color, religion, retaliation, sex, and sexual harassment; and those are only the items handled by the EEOC. There are more federal laws and regulations enforced by other agencies where discrimination and other employment-related issues can arise. Further, each state has its own laws protecting workers from harassment and discrimination.

As a temporary staffing provider, you are in a somewhat unique and vulnerable position, because not only must you be sensitive to your own policies, but you must also deal with those of your customers.

Here are a few things you can do to maintain a healthy workplace environment.

Written policy. First, be sure to have a clear, written anti-discrimination/anti-harassment policy in place for all of your employees, and make sure every new employee receives a copy and acknowledges it in writing (electronic signatures are fine). While not mandatory in every state, it’s simply smart business to provide an hour of anti- discrimination training to each new employee and to all employees annually.

Be sure your policy includes meaningful discipline, including termination of employment for serious or repeat violations. A “one strike and you’re out” policy is not unreasonable, as long as it is clearly stated and uniformly enforced.

Also, get copies of your customers’ anti-discrimination policies, and share them with each employee assigned to that customer. Make sure that each employee acknowledges having gotten a copy of the policy and agrees to comply with it, whether your customer requires that or not.

Reporting procedures. Set up clear procedures to enable your employees to report harassing behavior, and take all claims seriously. It may make sense to engage an outside agency to receive and process complaints from your employees to protect their privacy and ease any fear of retaliation. However, while your third-party facilitator can act as a buffer between you and the employee in the initial stages, it must be clear that in order to formally process a complaint, at some point the employee must identify him/herself.

If the complaint is against your contingent worker, there’s a good chance that your customer will terminate your employee’s assignment immediately. Still, you should investigate the report thoroughly. Gather the best evidence you can to defend your firm against any discrimination lawsuit that may be brought against you by the other party, or by your employee for wrongful discharge.

If your employee is the one alleging discrimination, follow the customer’s guidelines for reporting a complaint. If the customer accepts the complaint and takes appropriate action, you should be able to continue amicably. If, on the other hand, the customer chooses to ignore the complaint or, even worse, terminates your employee’s assignment to avoid having to deal with it, suggest to your customer that it is setting itself up for either a harassment or wrongful termination lawsuit by your employee.

Document. Document your (and your customers’) anti-harassment policy. Document the claim itself. And above all, document the steps you took to resolve it.

Check contracts. Finally, be sure your contracts with your clients don’t expose you to unfair liability. As Diane Geller pointed out in the March 2012

Benefit of Counsel column, you need to be very careful about the indemnification language in your contract. Because of unbalanced and unfair indemnification language, more than one supplier has been forced to defend a customer against a claim where the contingent worker was the victim of harassment by the customer’s employee. If you don’t have in-house expertise, an up-front investment of a few hundred dollars with a contract specialist to develop some standard contract language to avoid situations like this can save you thousands of dollars if you ever find yourself embroiled in a discrimination situation.

Frank Lyons is an attorney and senior legal associate with Brightfield Strategies LLC (, which helps Fortune 500 companies with contingent workforce strategy initiatives such as contract review and development, program design, VMS/MSP sourcing and selection, and global program compliance.


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