Felder v. USTA
This text of 27 F.4th 834 (Felder v. USTA) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
19-1094 Felder v. USTA
1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 4 August Term 2020 5 6 (Argued: January 27, 2021 Decided: March 7, 2022) 7 8 No. 19-1094 9 10 –––––––––––––––––––––––––––––––––––– 11 12 SEAN G. FELDER 13 14 Plaintiff-Appellant 15 16 -v.- 17 18 UNITED STATES TENNIS ASSOCIATION 19 20 Defendant-Appellee, 21 22 UNITED STATES TENNIS ASSOCIATION INCORPORATED, REED SMITH LLP 23 24 Defendants. 1 25 26 –––––––––––––––––––––––––––––––––––– 27 On Appeal from the United States District Court 28 for the Southern District of New York ____________________________________ 29
1 The Clerk of Court is respectfully directed to amend the caption as set forth above. Plaintiff-Appellant does not appeal the District Court’s dismissal of his claims against Reed Smith LLP. See Reply Br. at 1 n.1.
1 1 Before: LIVINGSTON, Chief Judge, CABRANES and LYNCH, Circuit Judges. 2 3 Sean G. Felder appeals the dismissal by the United States District Court for 4 the Southern District of New York (Ramos, J.) of his amended complaint alleging 5 that the United States Tennis Association (“USTA”) discriminated and retaliated 6 against him in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 7 §§ 2000e–2, 2000e–3(a), and discriminatorily interfered with his employment 8 contract with AJ Squared Security, in violation of 42 U.S.C. § 1981, by rejecting his 9 temporary assignment as a security guard for the 2016 U.S. Open. We concur 10 with the District Court that Felder has failed to state any claim for relief under Title 11 VII or § 1981. First, Felder did not plausibly allege the existence of an employer- 12 employee relationship necessary to sustain his Title VII claims. Second, Felder 13 did not allege any facts to support his claim under § 1981 that, but for his race, the 14 USTA would not have interfered with his employment contract. However, 15 because Felder—represented by court-appointed counsel for the first time on 16 appeal—has indicated that he can plead further allegations of a “joint employer” 17 relationship, and because Felder has plausibly alleged that the USTA rejected his 18 assignment in retaliation for his protected activities against a USTA subcontractor, 19 we VACATE the District Court’s dismissal of Felder’s Title VII retaliation claim 20 under 42 U.S.C. § 2000e–3(a), and REMAND with instructions that Felder be 21 permitted to amend his complaint as to that claim. We otherwise AFFIRM the 22 District Court’s dismissal with prejudice of Felder’s remaining Title VII and § 1981 23 discrimination claims. 24 25 Judge Lynch dissents in part in a separate opinion. 26 27 FOR PLAINTIFF-APPELLANT: REBECCA LYN GUTHRIE, Michael W. Martin, 28 Ian Weinstein, Quinn D’Isa, Sophia 29 Porotsky, Elena Cicognani (on the brief), 30 Lincoln Square Legal Services Inc., Fordham 31 University School of Law, New York, NY 32 33 FOR DEFENDANT-APPELLEE: STEPHANIE WILSON, Reed Smith LLP, 34 Princeton, NJ 35
2 1 DEBRA ANN LIVINGSTON, Chief Judge: 2 3 This case presents the question of what a Title VII plaintiff must adequately
4 allege to plead the existence of an employer-employee relationship pursuant to the
5 “joint employer” doctrine. It has long been understood by our Court that “the
6 existence of an employer-employee relationship is a primary element of Title VII
7 claims.” Gulino v. N.Y.S. Educ. Dep’t, 460 F.3d 361, 370 (2d Cir. 2006). To that
8 end, we have remarked that when, for example, “a plaintiff is found to be an
9 independent contractor and not an employee . . . the Title VII claim must fail.”
10 Salamon v. Our Lady of Victory Hosp., 514 F.3d 217, 226 (2d Cir. 2008). The plausible
11 existence of a requisite employer-employee relationship is thus a cornerstone of
12 an adequately pled Title VII complaint.
13 Nonetheless, in alleging an employer-employee relationship, an employee
14 is not squarely limited to claims against his or her formal employer. Pursuant to
15 the “joint employer doctrine,” an employee may assert Title VII liability against a
16 “constructive employer”—an entity that shares in controlling the terms and
17 conditions of a plaintiff’s employment. See Arculeo v. On-Site Sales & Mktg., LLC,
18 425 F.3d 193, 198 (2d Cir. 2005). Most commonly, the “joint employer doctrine”
19 applies “where the plaintiff’s employment is subcontracted by one employer to
3 1 another, formally distinct, entity.” Gulino, 460 F.3d at 378. Although this Court
2 has not previously identified a specific test for determining what renders an entity
3 a “joint employer” in a Title VII case, today we join our sister Circuits in
4 concluding that non-exhaustive factors drawn from the common law of agency,
5 including control over an employee’s hiring, firing, training, promotion,
6 discipline, supervision, and handling of records, insurance, and payroll, are
7 relevant to this inquiry.
8 Defendant-Appellee, the United States Tennis Association (“USTA”),
9 contracts with security firms that employ and assign security guards to work at
10 USTA events—most notably, the U.S. Open Tennis Championships (“U.S.
11 Open”). 2 In 2016, AJ Squared Security (“AJ Security”), a security firm, hired
12 Plaintiff-Appellant Sean G. Felder (“Felder”) as a security guard and assigned him
13 to work at the 2016 U.S. Open. On August 29, 2016, Felder’s AJ Security
14 supervisor sent Felder to pick up his security credentials from the USTA. Felder
15 alleges, however, that the USTA refused to issue his security credentials, thereby
16 prohibiting him from working at the U.S. Open. Felder sued the USTA pursuant
2 “The US Open Tennis Championship is the premier professional tennis event in the United States and is one of the four most important tournaments in the world, which collectively comprise the prestigious ‘Grand Slam[]’ of tennis.” App’x 70.
4 1 to Title VII and also 42 U.S.C. § 1981, alleging that it denied his credentials because
2 of his race and in retaliation for a lawsuit that he had previously filed in 2012
3 against CSC Security Services (“CSC”), another firm providing security to the
4 USTA.
5 The parties do not dispute that AJ Security was Felder’s formal employer.
6 But Felder argues that his complaint adequately alleges that the USTA was his
7 joint employer and therefore subject to Title VII’s prohibitions on discrimination
8 and retaliation. We disagree. An entity can only be liable under Title VII as a
9 joint employer for rejecting the temporary assignment of a contractor’s employee
10 if the entity would have been the employee’s joint employer had it accepted his
11 assignment. To plausibly allege that the parties intended to enter into a joint-
12 employment relationship, then, a plaintiff must allege that the entity would have
13 exercised significant control over the terms and conditions of his employment by,
14 for example, training, supervising, and issuing his paychecks. Because Felder’s
15 complaint is devoid of any such allegations, his Title VII claims must fail.
16 We therefore find no error in the dismissal by the United States District
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19-1094 Felder v. USTA
1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 4 August Term 2020 5 6 (Argued: January 27, 2021 Decided: March 7, 2022) 7 8 No. 19-1094 9 10 –––––––––––––––––––––––––––––––––––– 11 12 SEAN G. FELDER 13 14 Plaintiff-Appellant 15 16 -v.- 17 18 UNITED STATES TENNIS ASSOCIATION 19 20 Defendant-Appellee, 21 22 UNITED STATES TENNIS ASSOCIATION INCORPORATED, REED SMITH LLP 23 24 Defendants. 1 25 26 –––––––––––––––––––––––––––––––––––– 27 On Appeal from the United States District Court 28 for the Southern District of New York ____________________________________ 29
1 The Clerk of Court is respectfully directed to amend the caption as set forth above. Plaintiff-Appellant does not appeal the District Court’s dismissal of his claims against Reed Smith LLP. See Reply Br. at 1 n.1.
1 1 Before: LIVINGSTON, Chief Judge, CABRANES and LYNCH, Circuit Judges. 2 3 Sean G. Felder appeals the dismissal by the United States District Court for 4 the Southern District of New York (Ramos, J.) of his amended complaint alleging 5 that the United States Tennis Association (“USTA”) discriminated and retaliated 6 against him in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 7 §§ 2000e–2, 2000e–3(a), and discriminatorily interfered with his employment 8 contract with AJ Squared Security, in violation of 42 U.S.C. § 1981, by rejecting his 9 temporary assignment as a security guard for the 2016 U.S. Open. We concur 10 with the District Court that Felder has failed to state any claim for relief under Title 11 VII or § 1981. First, Felder did not plausibly allege the existence of an employer- 12 employee relationship necessary to sustain his Title VII claims. Second, Felder 13 did not allege any facts to support his claim under § 1981 that, but for his race, the 14 USTA would not have interfered with his employment contract. However, 15 because Felder—represented by court-appointed counsel for the first time on 16 appeal—has indicated that he can plead further allegations of a “joint employer” 17 relationship, and because Felder has plausibly alleged that the USTA rejected his 18 assignment in retaliation for his protected activities against a USTA subcontractor, 19 we VACATE the District Court’s dismissal of Felder’s Title VII retaliation claim 20 under 42 U.S.C. § 2000e–3(a), and REMAND with instructions that Felder be 21 permitted to amend his complaint as to that claim. We otherwise AFFIRM the 22 District Court’s dismissal with prejudice of Felder’s remaining Title VII and § 1981 23 discrimination claims. 24 25 Judge Lynch dissents in part in a separate opinion. 26 27 FOR PLAINTIFF-APPELLANT: REBECCA LYN GUTHRIE, Michael W. Martin, 28 Ian Weinstein, Quinn D’Isa, Sophia 29 Porotsky, Elena Cicognani (on the brief), 30 Lincoln Square Legal Services Inc., Fordham 31 University School of Law, New York, NY 32 33 FOR DEFENDANT-APPELLEE: STEPHANIE WILSON, Reed Smith LLP, 34 Princeton, NJ 35
2 1 DEBRA ANN LIVINGSTON, Chief Judge: 2 3 This case presents the question of what a Title VII plaintiff must adequately
4 allege to plead the existence of an employer-employee relationship pursuant to the
5 “joint employer” doctrine. It has long been understood by our Court that “the
6 existence of an employer-employee relationship is a primary element of Title VII
7 claims.” Gulino v. N.Y.S. Educ. Dep’t, 460 F.3d 361, 370 (2d Cir. 2006). To that
8 end, we have remarked that when, for example, “a plaintiff is found to be an
9 independent contractor and not an employee . . . the Title VII claim must fail.”
10 Salamon v. Our Lady of Victory Hosp., 514 F.3d 217, 226 (2d Cir. 2008). The plausible
11 existence of a requisite employer-employee relationship is thus a cornerstone of
12 an adequately pled Title VII complaint.
13 Nonetheless, in alleging an employer-employee relationship, an employee
14 is not squarely limited to claims against his or her formal employer. Pursuant to
15 the “joint employer doctrine,” an employee may assert Title VII liability against a
16 “constructive employer”—an entity that shares in controlling the terms and
17 conditions of a plaintiff’s employment. See Arculeo v. On-Site Sales & Mktg., LLC,
18 425 F.3d 193, 198 (2d Cir. 2005). Most commonly, the “joint employer doctrine”
19 applies “where the plaintiff’s employment is subcontracted by one employer to
3 1 another, formally distinct, entity.” Gulino, 460 F.3d at 378. Although this Court
2 has not previously identified a specific test for determining what renders an entity
3 a “joint employer” in a Title VII case, today we join our sister Circuits in
4 concluding that non-exhaustive factors drawn from the common law of agency,
5 including control over an employee’s hiring, firing, training, promotion,
6 discipline, supervision, and handling of records, insurance, and payroll, are
7 relevant to this inquiry.
8 Defendant-Appellee, the United States Tennis Association (“USTA”),
9 contracts with security firms that employ and assign security guards to work at
10 USTA events—most notably, the U.S. Open Tennis Championships (“U.S.
11 Open”). 2 In 2016, AJ Squared Security (“AJ Security”), a security firm, hired
12 Plaintiff-Appellant Sean G. Felder (“Felder”) as a security guard and assigned him
13 to work at the 2016 U.S. Open. On August 29, 2016, Felder’s AJ Security
14 supervisor sent Felder to pick up his security credentials from the USTA. Felder
15 alleges, however, that the USTA refused to issue his security credentials, thereby
16 prohibiting him from working at the U.S. Open. Felder sued the USTA pursuant
2 “The US Open Tennis Championship is the premier professional tennis event in the United States and is one of the four most important tournaments in the world, which collectively comprise the prestigious ‘Grand Slam[]’ of tennis.” App’x 70.
4 1 to Title VII and also 42 U.S.C. § 1981, alleging that it denied his credentials because
2 of his race and in retaliation for a lawsuit that he had previously filed in 2012
3 against CSC Security Services (“CSC”), another firm providing security to the
4 USTA.
5 The parties do not dispute that AJ Security was Felder’s formal employer.
6 But Felder argues that his complaint adequately alleges that the USTA was his
7 joint employer and therefore subject to Title VII’s prohibitions on discrimination
8 and retaliation. We disagree. An entity can only be liable under Title VII as a
9 joint employer for rejecting the temporary assignment of a contractor’s employee
10 if the entity would have been the employee’s joint employer had it accepted his
11 assignment. To plausibly allege that the parties intended to enter into a joint-
12 employment relationship, then, a plaintiff must allege that the entity would have
13 exercised significant control over the terms and conditions of his employment by,
14 for example, training, supervising, and issuing his paychecks. Because Felder’s
15 complaint is devoid of any such allegations, his Title VII claims must fail.
16 We therefore find no error in the dismissal by the United States District
17 Court for the Southern District of New York (Ramos, J.) of Felder’s Title VII claims
18 and affirm the dismissal of Felder’s Title VII discrimination claim under 42 U.S.C.
5 1 § 2000e–2. 3 However, we vacate the District Court’s dismissal of Felder’s Title
2 VII retaliation claim under § 2000e–3(a), because Felder has plausibly alleged that
3 the USTA denied his credentials in retaliation for the lawsuit he filed against his
4 former employer, CSC, and has further represented that he can plead additional
5 indicia of a joint employer relationship now that he is represented by counsel.
6 We therefore remand with instructions that Felder be permitted to amend his
7 complaint as to that claim. We separately affirm the District Court’s dismissal of
8 Felder’s § 1981 claim because he has failed to plausibly allege that the USTA
9 interfered with his employment contract with AJ Security because of his race.
10 BACKGROUND
11 I. Factual Background 4
12 The USTA contracts with security firms that hire and assign their security
13 guards to work at various USTA events, including the annual U.S. Open. From
As to his discrimination claim, Felder also failed to plausibly allege that the 3
USTA discriminated against him on the basis of race in refusing him security credentials. 4 “In determining the sufficiency of [Felder’s] Amended Complaint,” the District Court “consider[ed] the allegations of race discrimination and retaliation set forth in both [his] Original Complaint and [his] Amended Complaint,” because Felder had simply “restate[d] all of the allegations contained in [his] Original Complaint.” App’x 182 n.1. The District Court also considered additional factual allegations appearing in supplemental letters that Felder submitted to the court. Because we liberally construe the pleadings and submissions of pro se litigants, see McLeod v. Jewish Guild for the Blind, 864 F.3d 154, 156 (2d Cir. 2017), the factual background presented here is similarly
6 1 2002 to 2009, Felder, a Black man residing in New York City, worked as a security
2 guard for CSC, a USTA contractor, to provide seasonal security work for the
3 USTA. In 2012, Felder filed a lawsuit against CSC for discriminatory and
4 retaliatory refusal to hire under Title VII, 42 U.S.C. § 1981, and the New York City
5 Human Rights Law, alleging that CSC refused to hire him in 2010 after he
6 complained “[d]uring his employment [at the U.S. Open] in 2009 . . . that African
7 American security personnel were given inferior assignments and White security
8 personnel were given the better assignments.” See Plaintiff’s Second Amended
9 Complaint at 3, Felder v. Contemp. Sec. Servs., No. 1:12-cv-07486 (S.D.N.Y. Aug. 20,
10 2014), ECF No. 51. The parties reached a settlement for an undisclosed amount
11 in 2015. See Stipulation of Final Dismissal with Prejudice, Felder v. Contemp. Sec.
12 Servs., No. 1:12-cv-07486 (S.D.N.Y. July 22, 2015), ECF No. 103.
13 Felder was later hired as a security officer by AJ Security in August 2016.
14 AJ Security is alleged to be a subcontractor of CSC, which in turn contracts with
15 the USTA to provide security for USTA events. 5 AJ Security assigned Felder to
derived from allegations in Felder’s complaints and submissions to the District Court, which we accept as true in considering a motion to dismiss. 5It is unclear if AJ Security contracts directly with the USTA, or if AJ Security is a subcontractor of CSC. The District Court stated that “AJ Security appears to be a subcontractor of CSC,” App’x 182, and Felder does not dispute this characterization on appeal. We therefore presume for purposes of resolving this dispute that AJ Security is
7 1 work as a temporary security guard at the 2016 U.S. Open. Felder’s supervisor
2 at AJ Security, Terrence Rauls, told Felder to “go to the [USTA] credential office at
3 Flushing, Queens NY on August 29, 2016” to pick up his security credentials for
4 the U.S. Open. App’x 101. When Felder went to pick up his credentials, he was
5 told by an unidentified woman that his name was not in the system. Felder called
6 his supervisor at AJ Security, who allegedly told him that the USTA denied his
7 credentials as retaliation for his earlier employment discrimination complaint
8 against, and settlement with, CSC. 6 Without security credentials, Felder was
9 unable to work at the U.S. Open.
10 II. Procedural History
11 Shortly after the USTA denied Felder his security credentials, Felder filed a
12 verified complaint against the USTA with the New York State Division of Human
a subcontractor of CSC, which in turn contracts with the USTA. 6 Felder variously alleges that (1) the “USTA retaliated due to [the] 8/3/10 complaint [against] CSC Security,” App’x 14, that (2) the “USTA retaliated” because he “won” his case against CSC in 2015, id. at 15, (3) that “due to [the] Jan. 2015 settlement vs [sic] CSC Security” the USTA “blackball[ed]” him and denied his credentials “due to past bad press against CSC Security,” id. at 143, and (4) that “T[errence] Rauls” told him “on [the] phone . . . that [the] USTA den[ied him his] US Open Tennis work credential due to 8/3/10 incident with former CSC VP S. Dennison,” id. at 147. We understand these allegations to collectively assert that the USTA denied Felder’s work credentials due to the 2012 lawsuit he filed in connection with CSC’s refusal to hire him in 2010, resulting in a 2015 settlement between the parties.
8 1 Rights (“NYSDHR”) and the Equal Employment Opportunity Commission
2 (“EEOC”), alleging discriminatory and retaliatory treatment in violation of the
3 New York State Human Rights Law and Title VII. On February 27, 2017, the
4 NYSDHR dismissed his complaint, stating that “[t]he Division investigation
5 established that [the USTA] did not employ [Felder] in any capacity,” and that “the
6 Division [could not] conclude that there was a violation of the State Human Rights
7 Law as alleged.” App’x 67. On May 1, 2017, the EEOC adopted the findings of
8 the NYSDHR and issued Felder a notice of right-to-sue.
9 On July 5, 2017, Felder filed this lawsuit against the USTA, alleging claims
10 of discrimination and retaliation under Title VII and 42 U.S.C. § 1981, along with
11 an array of other claims. The USTA moved for judgment on the pleadings under
12 Federal Rule of Civil Procedure 12(c), arguing, inter alia, that Felder had not
13 alleged a prima facie case of employment discrimination or retaliation because
14 Felder “did not apply for a position at the USTA” and the USTA was therefore not
15 his employer. Memorandum of Law at 4, Felder v. U.S. Tennis Ass’n, No. 1:17-cv-
16 05045-ER (S.D.N.Y. May 25, 2018), ECF No. 30.
17 The District Court granted the USTA’s Rule 12(c) motion to dismiss Felder’s
18 complaint. The court determined that Felder had not stated a claim under Title
9 1 VII or § 1981 because he had not established that an employer-employee
2 relationship “existed between the parties at the time of the alleged unlawful
3 conduct.” App’x 127. First, the court noted that Felder was not a formal
4 employee of the USTA, because he was never hired by or compensated by the
5 USTA. Nor had Felder adequately alleged that he was entitled to relief under
6 any alternate theory of employer liability, including the “single employer
7 doctrine”—which applies “where two nominally separate entities are actually part
8 of a single integrated enterprise”—or the “joint employer doctrine”—which
9 applies when an “employee is at the same time constructively employed by
10 another entity.” App’x 128 (citations omitted). As to the joint employer
11 doctrine, the District Court remarked that “Felder ha[d] not alleged that the USTA
12 shared immediate control over him with AJ Security or CSC, and thus joint
13 employer liability [was] inapplicable.” App’x 130. The court therefore
14 dismissed Felder’s complaint but permitted Felder to replead his Title VII and §
15 1981 claims.
16 Felder replied by letter to the court that he was “not interested” in amending
17 his complaint, asking the court when it would “force [the] USTA to settle our
18 case.” App’x 133. Ultimately, Felder did amend his complaint, not only
10 1 regarding the Title VII and § 1981 claims, but also adding the USTA’s counsel,
2 Reed Smith LLP, as a defendant. Felder did not provide any additional factual
3 allegations to demonstrate that the USTA was either his formal or joint employer.
4 The USTA again moved to dismiss his complaint, this time under Rule
5 12(b)(6), arguing that Felder had failed to state a plausible claim for relief because
6 Felder was not an employee of the USTA. Memorandum of Law at 1, Felder v.
7 U.S. Tennis Ass’n, No. 1:17-cv-05045-ER (S.D.N.Y. Feb. 4, 2019), ECF No. 56. The
8 District Court granted the motion to dismiss with prejudice, again holding that
9 Felder had failed to allege that he was an employee of the USTA or that the USTA
10 was Felder’s joint employer, because he “did not assert any additional facts to
11 prove the USTA shared immediate control over him with either CSC or AJ
12 Security.” App’x 187–88. This appeal followed. 7
13 DISCUSSION
14 Felder appeals the dismissal of his amended complaint alleging that the
15 USTA violated Title VII, 42 U.S.C. §§ 2000e–2, 2000e–3(a), and 42 U.S.C. § 1981
16 when it refused to issue his security credentials, thereby rejecting him as a security
17 guard for the U.S. Open. We “review de novo a dismissal of a complaint for
7 On appeal, Felder is now represented by Court-appointed counsel.
11 1 failure to state a claim upon which relief may be granted.” Kelleher v. Fred A. Cook,
2 Inc., 939 F.3d 465, 467 (2d Cir. 2019). Because Felder was a pro se litigant in the
3 court below, we construe his submissions “liberally and interpret[] [them] to raise
4 the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons,
5 470 F.3d 471, 474 (2d Cir. 2006) (internal quotation marks, emphasis, and citation
6 omitted). Nevertheless, “even pro se plaintiffs asserting civil rights claims
7 cannot withstand a motion to dismiss unless their pleadings contain factual
8 allegations sufficient to raise a ‘right to relief above the speculative level.’”
9 Jackson v. N.Y.S. Dep’t of Labor, 709 F. Supp. 2d 218, 224 (S.D.N.Y. 2010) (quoting
10 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
11 I. Title VII
12 We start by addressing Felder’s Title VII claims. Title VII prohibits an
13 “employer” from “fail[ing] or refus[ing] to hire or to discharge any individual, or
14 otherwise to discriminate against any individual with respect to his compensation,
15 terms, conditions, or privileges of employment, because of such individual’s race,
16 color, religion, sex, or national origin.” 42 U.S.C. § 2000e–2. Title VII also
17 prohibits an “employer” from “discriminat[ing] against any of his employees or
18 applicants for employment . . . because he has opposed any practice made an
12 1 unlawful employment practice by this subchapter, or because he has made a
2 charge, testified, assisted, or participated in any manner in an investigation,
3 proceeding, or hearing under this subchapter.” Id. § 2000e–3(a). In other words,
4 an employer cannot “retaliat[e] on account of an employee’s having opposed,
5 complained of, or sought remedies for, unlawful workplace discrimination.”
6 Univ. of Texas Southwestern Med. Ctr. v. Nassar, 570 U.S. 338, 342, 133 S.Ct. 2517
7 (2013). Felder alleges that the USTA violated both provisions of Title VII when it
8 refused to issue his credentials, preventing him from working as a security guard
9 at the U.S. Open.
10 Felder’s immediate hurdle to successfully litigating a Title VII claim against
11 the USTA is that “the existence of an employer-employee relationship is a primary
12 element of Title VII claims,” and both parties agree that the USTA was not Felder’s
13 direct employer. Gulino, 460 F.3d at 370; see also O’Connor v. Davis, 126 F.3d 112,
14 115 (2d Cir. 1997) (holding that Title VII does not apply to an “unpaid intern”
15 because she is not an “employee”); York v. Ass’n of Bar of City of New York, 286 F.3d
16 122, 123 (2d Cir. 2002) (holding that a volunteer for the Association of the Bar of
17 the City of New York was not an employee under Title VII); Eisenberg v. Advance
18 Relocation & Storage, Inc., 237 F.3d 111, 113 (2d Cir. 2000) (“Title VII . . . cover[s]
13 1 ‘employees,’ not independent contractors.”). We have recognized, however, that
2 “in certain circumstances” an employee may “assert employer liability against an
3 entity that is not formally his or her employer.” Arculeo, 425 F.3d at 197.
4 Pursuant to the “joint employer doctrine,” one such circumstance exists when “an
5 employee, formally employed by one entity” is “assigned to work in
6 circumstances that justify the conclusion that the employee is at the same time
7 constructively employed by another entity.” Id. at 198. “Where this doctrine is
8 operative . . . [the employee] may impose liability for violations of employment
9 law on the constructive employer, on the theory that this other entity is the
10 employee’s joint employer.” Id. Felder therefore argues that the USTA is
11 subject to Title VII as his joint employer.
12 Our Court has previously noted that the “joint employer doctrine”—which
13 has been employed in disputes regarding the National Labor Relations Act, see
14 Clinton’s Ditch Coop. Co. v. N.L.R.B., 778 F.2d 132 (2d Cir. 1985), and the Fair Labor
15 Standards Act, see Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61 (2d Cir. 2003)—is
16 applicable in the Title VII context. See Arculeo, 425 F.3d at 198. In Arculeo,
17 however, we caveated that we had “not yet fully analyzed or described a test for
18 what constitutes joint employment in the context of Title VII,” and because it was
14 1 “not necessary for our resolution of [the] case . . . decline[d] to do so [t]here.” Id.
2 at 199–200 n.7. To decide, then, whether the USTA is Felder’s joint employer we
3 must first determine “what constitutes joint employment in the context of Title
4 VII.”
5 A
6 In order to understand what makes an entity a joint employer, we start by
7 examining the meaning of the terms “employer” and “employee” in Title VII.
8 Title VII defines the term “employer” to “mean[] a person engaged in an industry
9 affecting commerce who has fifteen or more employees . . . and any agent of such
10 a person.” 42 U.S.C. § 2000e(b). The term “employee” is, in turn, defined as “an
11 individual employed by an employer.” Id. § 2000e(f). As we have remarked,
12 “neither definition is particularly helpful in deciding whether an employment
13 relationship exists,” because these definitions are “circular.” Gulino, 460 F.3d at
14 370–71, 370 n.11.
15 The Supreme Court has instructed that when statutes contain “completely
16 circular” definitions, as Title VII does, courts should apply the “‘well established’
17 principle that ‘[w]here Congress uses terms that have accumulated settled
18 meaning under . . . the common law, a court must infer, unless the statute
15 1 otherwise dictates, that Congress mean[t] to incorporate the established meaning
2 of these terms.’” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322–23, 112 S.Ct.
3 1344 (1992) (quoting Comm. for Creative Non-Violence v. Reid, 490 U.S. 730, 739, 109
4 S.Ct. 2166 (1989)). Accordingly, in determining Congress’s intended meaning of
5 the terms “employer” and “employee” in statutes mirroring the circular
6 definitions provided in Title VII, the Supreme Court has “relied on the general
7 common law of agency.” Reid, 490 U.S. at 740, 109 S.Ct. 2166; see, e.g., Clackamas
8 Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440, 444–45, 123 S.Ct. 1673 (2003)
9 (applying federal common law of agency to definition of “employee” under the
10 ADA); Darden, 503 U.S. at 323, 112 S.Ct. 1344 (applying federal common law of
11 agency to definition of “employee” under ERISA).
12 We have thus held that the common law of agency governs the meaning of
13 “employer” and “employee” in Title VII. See United States v. City of New York, 359
14 F.3d 83, 92 (2d Cir. 2004). This means that we apply a set of non-exhaustive
15 factors set forth by the Supreme Court that, when present, may indicate the
16 existence of an employer-employee relationship under the common law. See id.;
17 Gulino, 460 F.3d at 371. These factors include:
18 [T]he hiring party’s right to control the manner and means by which 19 the product is accomplished ….[;] the skill required; the source of the
16 1 instrumentalities and tools; the location of the work; the duration of 2 the relationship between the parties; whether the hiring party has the 3 right to assign additional projects to the hired party; the extent of the 4 hired party’s discretion over when and how long to work; the method 5 of payment; the hired party’s role in hiring and paying assistants; 6 whether the work is part of the regular business of the hiring party; 7 whether the hiring party is in the business; the provision of employee 8 benefits; and the tax treatment of the hired party.
9 Id. (quoting Reid, 490 U.S. at 751–52, 109 S.Ct. 2166); see generally RESTATEMENT
10 (SECOND) OF AGENCY § 220 (1958). Broadly, these factors examine whether the
11 alleged employer “paid [the employees’] salaries, hired and fired them, and had
12 control over their daily employment activities,” Faush v. Tuesday Morning, Inc.,
13 808 F.3d 208, 214 (3d Cir. 2015) (quoting Covington v. Int’l Ass’n of Approved
14 Basketball Offs., 710 F.3d 114, 119 (3d Cir. 2013)), and the crux of these factors is “the
15 element of control.” Gulino, 460 F.3d at 371; see also Peppers v. Cobb Cnty., 835 F.3d
16 1289, 1297 (11th Cir. 2016) (considering “(1) how much control the alleged
17 employer exerted on the employee, and (2) whether the alleged employer had the
18 power to hire, fire, or modify the terms and conditions of the employee’s
19 employment”).
20 We will therefore find a joint employer relationship when two or more
21 entities, according to common law principles, share significant control of the same
22 employee. See, e.g., Knitter v. Corvias Mil. Living, LLC, 758 F.3d 1214, 1226 (10th
17 1 Cir. 2014) (quoting Bristol v. Bd. of Cnty. Comm’rs of Cnty. of Clear Creek, 312 F.3d
2 1213, 1218 (10th Cir. 2002) (“Under the joint employer test, two entities are
3 considered joint employer . . . if they both ‘exercise significant control over the
4 same employees.’”); Plaso v. IJKG, LLC, 553 F. App’x 199, 204 (3d Cir. 2015)
5 (quoting Graves v. Lowery, 117 F.3d 723, 727 (3d Cir. 1997) (“[A] joint employment
6 relationship exists when ‘two entities exercise significant control over the same
7 employees.’”). This means that an entity other than the employee’s formal
8 employer has power to pay an employee’s salary, hire, fire, or otherwise control
9 the employee’s daily employment activities, such that we may properly conclude
10 that a constructive employer-employee relationship exists. 8 Because the exercise
8 We are not alone in looking to common law agency factors in discerning whether a joint employer relationship exists. The Ninth and Third Circuits similarly look to common law agency principles. See U.S. Equal Emp. Opportunity Comm’n v. Glob. Horizons, Inc., 915 F.3d 631, 638 (9th Cir. 2019); Faush, 808 F.3d at 214. The Fourth Circuit, however, applies a so-called “hybrid” test, that combines both common law agency principles with “the economic realities test.” Butler v. Drive Auto. Indus. of Am., Inc.., 793 F.3d 404, 414 (4th Cir. 2015). The “economic realities test,” which “originated . . . in a Supreme Court case from the 1940s, in which the Court was asked to resolve whether a defendant was an employee or independent contractor for purpose of determining Social Security taxes,” id. at 411 n.8, “focuses less on the legal parameters of employment, but more on the entity (or entities) . . . which the employee relies on for work and remuneration—irrespective of who is actually writing the paychecks and determining work status,” id. at 412. As some courts have aptly noted, the Fourth Circuit’s “hybrid” test is likely no more expansive than “the common-law inquiry,” as factors relevant under the “economic realities test” are also “relevant under the common law.” Faush, 808 F.3d at 219 n.9; see also Murray v. Principal Fin. Grp., Inc., 613 F.3d 943, 945 (9th Cir. 2010) (concluding that
18 1 of control is the guiding indicator, factors indicating a joint-employment
2 relationship may vary depending on the case, and any “relevant factor[]
3 may . . . be considered so long as [it is] drawn from the common law of agency that
4 Reid seeks to synthesize.” Eisenberg, 237 F.3d at 114 n.1. We are thus mindful
5 that “all of the incidents of the relationship must be assessed and weighed with no
6 one factor being decisive.” Darden, 503 U.S. at 324, 112 S.Ct. 1344 (quoting
7 N.L.R.B. v. United Ins. Co. of Am., 390 U.S. 254, 257, 88 S.Ct. 988 (1968)).
8 B
9 With these principles in mind, we assess how the joint employer doctrine
10 applies in this case. Our challenge is that most of the joint-employment factors—
11 i.e. discipline, pay, insurance, record-keeping, and supervision—presume an
“there is no functional difference” between the “common law agency test, an economic realities test, and a common law hybrid test”) (internal quotation marks omitted)); cf. Frankel v. Bally, Inc., 987 F.2d 86, 90 (2d Cir. 1993) (“[T]here is little discernible difference between the hybrid test and the common law agency test. Both place their greatest emphasis on the hiring party’s right to control the manner and means by which the work is accomplished and consider a non-exhaustive list of factors as part of a flexible analysis of the ‘totality of the circumstances.’”). Indeed, the Fourth Circuit has itself noted that, “the common-law element of control remains the ‘principal guidepost’ in the analysis” of a joint employer relationship. Butler, 793 F.3d at 414. We therefore do not find it necessary to distinguish between these tests, emphasizing as other Circuits have that, in discerning a joint employment relationship, “‘the principal guidepost’ is the element of control,” Glob. Horizons, Inc., 915 F.3d at 638, and the totality of the circumstances should be considered.
19 1 existing relationship between two parties. But here, the USTA allegedly denied
2 Felder his credentials before he could start work as a temporary security guard.
3 This leaves us to consider how to assess the pleading standards applicable to the
4 joint employer relationship in situations where the relationship has not yet
5 commenced in any meaningful way.
6 Fortunately, a different set of Title VII cases provides us with guidance:
7 cases involving independent contractors. Under Title VII, a job applicant can sue
8 a potential employer for discrimination. See Gulino, 460 F.3d at 374. However,
9 because Title VII only protects employees and not independent contractors, see
10 Salamon, 514 F.3d at 226, Title VII similarly only protects applicants for
11 employment and “not . . . applicants for independent contractor positions.”
12 Knitter, 758 F.3d at 1232; E.E.O.C. v. MCI Telecomms., Inc., No. 98-1195, 1999 WL
13 547906, at *3 (4th Cir. 1999) (“Title VII’s protective reach extends beyond
14 employees to cover job applicants, but only in the context of a potential
15 employment relationship.”).
16 “[A] plaintiff who has never been employed by the defendant” must
17 therefore “prove that he or she was an ‘applicant[] for employment,’” and not an
18 applicant for an independent contractor position. Knitter, 758 F.3d at 1232
20 1 (quoting 42 U.S.C. § 2000e–3(a)). To do so, she must successfully allege that “if
2 she had been hired,” her relationship with the alleged employer “would have been
3 more like a traditional employee than like a traditional independent contractor.”
4 See Fabian v. Hosp. of Central Conn., 172 F. Supp. 3d 509, 518 (D. Conn. 2016)
5 (emphasis added). To determine whether she would be “more like a traditional
6 employee” than an independent contractor, she must plead, under common law
7 agency principles, that her alleged employer would have exerted control over the
8 terms and conditions of her anticipated employment by, for example, training,
9 supervising, and disciplining her. See, e.g., id. at 516–17; Thomas v. Texaco, Inc.,
10 998 F. Supp. 368, 370 (S.D.N.Y. 1998) (examining “common law agency principles”
11 to discern whether the plaintiff would have entered into an employer-employee
12 relationship had the plaintiff been “chosen for the position”). Absent any
13 allegations indicating that the parties intended to enter into an employer-
14 employee relationship, her Title VII claim must fail. See, e.g., Adcock v. Chrysler
15 Corp., 166 F.3d 1290, 1293–94 (9th Cir. 1999) (holding that Chrysler could not be
16 liable under Title VII for discriminatory failure to hire because the intended
17 relationship between the parties “was to be one of independent contractual
18 affiliation”); cf. Mangram v. Gen. Motors Corp., 108 F.3d 61, 64 (4th Cir. 1997)
21 1 (dismissing the plaintiff’s employment discrimination claim under the ADEA
2 because “Mangram asks us to find that he held ‘employee’ status as a prospective
3 [General Motors] dealer when he would not have held that status if he had actually
4 become a General Motors dealer”).
5 We think that the joint employer analysis in this case should be the same, as
6 we are tasked with assessing the same fundamental question: Did the parties
7 contemplate an employer-employee relationship that would permit Title VII
8 liability? As in the cases cited above, the operative question here must be: Would
9 the USTA have been Felder’s joint employer had Felder worked at the U.S. Open?
10 If not, the USTA cannot be liable under Title VII.
11 C
12 At the motion to dismiss stage, a plaintiff’s burden to answer this question
13 is not great. It must only be plausible and not merely speculative, that the USTA,
14 as Felder’s alleged joint employer, would have exerted significant control over the
15 terms and conditions of his employment as a security guard. See Twombly, 550
22 1 U.S. at 556. But Felder’s complaint is devoid of any allegations directed at this
2 issue.
3 First, Felder does not allege that the USTA had any control over his hiring
4 or firing. As our sister Circuits have remarked, a company does not fire a
5 subcontractor’s employee merely by requesting that the subcontractor “no longer
6 assign” the employee to work at its facilities. Knitter, 758 F.3d at 1229; see also
7 Redd v. Summers, 232 F.3d 933, 936–37, 940 (D.C. Cir. 2000) (noting that while “the
8 [defendant] had the right to reject any tour guide [hired by its
9 subcontractor] . . . [the subcontractor] did all the hiring and firing”). This is
10 because such a request does not terminate the employee’s continued employment
11 with the subcontractor, nor prohibit the employee from working for other clients
12 of the subcontractor. See Knitter, 758 F.3d at 1217; Redd, 232 F.3d at 940 (“[W]hile
13 the contract gives the [defendant] the right to reject any guide . . . the decision to
14 terminate the guide’s employment with [the subcontractor] is solely within [the
15 subcontractor’s] power.”).
16 Felder did not allege, for example, that the USTA instructed AJ Security to
17 fire Felder upon refusing to issue his credentials. He also did not allege that AJ
18 Security hired him for the sole purpose of working at the USTA and that the USTA
23 1 was aware that by denying his credentials it was effectively terminating his
2 employment with AJ Security. Nor did he allege that the USTA exerted any
3 control over AJ Security’s independent hiring process.
4 Felder also did not allege that the USTA would have been involved in
5 training him, supervising him, issuing his paychecks, covering his insurance or
6 other benefits, or controlling other means of his employment (such as providing
7 his uniform or other tools needed for the position). Cf. Faush, 808 F.3d at 216
8 (“Tuesday Morning personnel gave Faush assignments, directly supervised him,
9 provided site-specific training, furnished any equipment and materials necessary,
10 and verified the number of hours he worked on a daily basis”). Absent these
11 types of factual allegations, we simply have no basis to conclude that the USTA
12 would have been Felder’s joint employer.
13 In fact, there is some reason to doubt that the USTA would have exercised
14 significant control over Felder. First, the “work functions” that security guards
15 are asked to perform for the USTA “compared to those of an ordinary [USTA]
16 employee,” appear to be different. Butler v. Drive Auto. Indus. of Am., Inc., 793
17 F.3d 404, 414–15 (4th Cir. 2015) (considering “whether the individual’s duties are
18 akin to a regular employee’s duties” in determining “whether an individual is
24 1 jointly employed by two or more entities”). The USTA is “the national governing
2 body for tennis in the United States,” App’x 160, and does not appear to be in—
3 nor does Felder make any allegation that it is in—the security guard business.
4 This suggests that the USTA would have left control over Felder’s work as a
5 security guard to his formal employer, AJ Security. Second, the USTA’s influence
6 over AJ Security employees may have been diluted by the fact that AJ Security was
7 a subcontractor of CSC and thus two steps removed from the USTA’s immediate
8 control.
9 Felder’s only allegation about the control the USTA exerted is that it could
10 effectively reject AJ Security employees by refusing to issue them credentials. We
11 cannot conclude that this allegation alone is enough to adequately plead a joint-
12 employment relationship. Cf. N.L.R.B. v. W. Temp. Servs., Inc., 821 F.2d 1258,
13 1266–67 (7th Cir. 1987) (finding a joint employer relationship where the company
14 could “refuse[] a referral” but also where the company had “exclusive control over
15 the day-to-day activities of the part-time workers who [were] referred to it”
16 including “train[ing], assign[ing] work, and supervis[ing] them.”). There are
17 many reasons why an entity might reasonably reject the temporary services of a
18 subcontractor’s employee. It may decide, for example, that it is already
25 1 sufficiently staffed for a particular event. Or it may determine that the individual
2 lacks the requisite skill set needed for the particular role, or is otherwise unfit for
3 the position. Cf. Redd, 232 F.3d at 940 (“[T]he client’s command to remove a
4 specific worker (say, on grounds of rudeness or just personal incompatibility)
5 would hardly render the worker an employee of the client.”); Zinn v. McKune, 143
6 F.3d 1353, 1356–58 (10th Cir. 1998) (holding that the Kansas Department of
7 Corrections was not rendered an employer when it requested the reassignment of
8 a contractor’s employee for “inappropriate behavior”). The joint employer
9 doctrine does not require that an entity exert no control over who may or may not
10 work at its facilities, only that it may not exert significant control without being
11 subject to Title VII.
12 Moreover, were it enough to say that the USTA’s refusal to issue credentials
13 automatically rendered it a joint employer to Felder, we would be required to say
14 that issuing credentials also renders it a joint employer, as both equally
15 demonstrate the exertion of some control over who may work as a security guard
16 at the U.S. Open. But this would eliminate the need to consider any other indicia
17 of a common law agency relationship in applying the joint employer doctrine;
18 would vastly expand Title VII liability in a manner that no other Circuit has
26 1 endorsed; and would contravene the Supreme Court’s instruction that we turn to
2 a multi-factor analysis under the common law of agency for discerning whether
3 an employer-employee relationship exists. See, e.g., Clackamas, 538 U.S. at 449–51,
4 123 S.Ct. 1673.
5 This, of course, is not to say that we are not without concern for a
6 subcontractor’s employee who, like Felder, believes that he has been denied an
7 opportunity for discriminatory or retaliatory reasons. And we recognize, as the
8 dissent notes, that if outside the scope of Title VII, subcontractors’ employees may
9 be vulnerable to discrimination or retaliation from companies like USTA that
10 subcontract work rather than hire employees themselves. But Congress did not
11 “extend Title VII liability in a general way,” limiting it instead to “traditional
12 common-law employers” and a few “additional groups” not relevant here.
13 Gulino, 460 F.3d at 375. Absent further pleading to “justify the conclusion that
14 [Felder] is being employed jointly by two distinct employers,” Arculeo, 425 F.3d at
15 199, we cannot circumvent Congress’s intent by expanding Title VII liability in this
16 case. “[I]t is for Congress, if it should choose to do so, and not this court, to
17 provide a remedy under . . . Title VII . . . for plaintiffs in [Felder]’s position.”
18 O’Connor, 126 F.3d at 119.
27 1 We therefore hold that Felder did not plausibly allege that the USTA was
2 his employer merely by asserting that it refused to issue his credentials. Absent
3 further allegations that the USTA would have significantly controlled the manner
4 and means of Felder’s work as a security guard, the complaint does not cross the
5 line from speculative to plausible on the essential Title VII requirement of an
6 employment relationship. For this reason, the District Court did not err in
7 dismissing Felder’s Title VII claims.
8 II. 42 U.S.C. § 1981
9 That leaves us to consider Felder’s remaining claim under 42 U.S.C. § 1981.
10 Section 1981 provides that all persons “shall have the same right in every State and
11 Territory to make and enforce contracts, to sue, be parties, give evidence, and to
12 the full and equal benefit of all laws and proceedings for the security of persons
13 and property as is enjoyed by white citizens.” Felder asserts that the USTA
14 violated § 1981 by “intentionally thwart[ing his] employment contract, or efforts
15 to contract for employment [with AJ Security], because of intentional racial
16 discrimination.” 9 Appellant Br. at 28.
9 In addition to claims of discriminatory interference with contract, “42 U.S.C. § 1981 encompasses claims of retaliation.” CBOCS West, Inc. v. Humphries, 553 U.S. 442, 457 (2008). On appeal, however, Felder only argues that the USTA “discriminatorily denied Mr. Felder’s credentials to work the 2016 US Open,” thereby “depriv[ing him] of
28 1 “[U]nlike Title VII,” § 1981 plaintiffs can “under certain circumstances . . .
2 sue persons other than [their] employers.” Turley v. ISB Lackawanna, Inc., 774 F.3d
3 140, 151 n.6 (2d Cir. 2014); see also Patterson v. Cnty. of Oneida, 375 F.3d 206, 226 (2d
4 Cir. 2004). We need not address, however, whether Felder can appropriately sue
5 the USTA under § 1981 even though it is not his employer, because even assuming
6 he can, we find that Felder has failed to plausibly allege a claim of racial
7 discrimination.
8 “To establish a claim under 42 U.S.C. § 1981,” a plaintiff “must allege facts
9 supporting” that “(1) [the plaintiff is a] member[] of a racial minority; (2)
10 defendant[’s] intent to discriminate on the basis of race; and (3) discrimination
11 concerning one of the statute’s enumerated activities.” Brown v. City of Oneonta,
12 221 F.3d 329, 339 (2d Cir. 2000); see also Comcast Corp. v. Nat’l Ass’n of African
13 American-Owned Media, 140 S.Ct. 1009, 1019 (2020) (“[A] plaintiff must initially
the right to contract for gainful employment with AJ Security.” Appellant Br. at 27; see also id. (“Mr. Felder’s pro se complaint states a plausible claim that the USTA interfered with his right to be free of racial discrimination in making and enforcing an employment contract.”). Because Felder does not argue that his § 1981 claim is based on retaliatory interference with contract, we consider that argument waived. See Chevron Corp. v. Donziger, 990 F.3d 191, 203 (2d Cir. 2021).
29 1 plead and ultimately prove that, but for race, [he] would not have suffered the loss
2 of a legally protected right.”).
3 Felder pled no facts suggesting that the USTA denied his security
4 credentials because of his race. Nor did he offer any allegations suggesting that the
5 USTA had a policy of not accepting Black security guards, or that he was treated
6 differently than other “similarly situated” security guards. See Ruiz v. Cnty. of
7 Rockland, 609 F.3d 486, 493 (2d Cir. 2010). We therefore affirm the District Court’s
8 dismissal of Felder’s claim under § 1981.
9 III. Request for Leave to Amend
10 Finally, Felder asks us to remand to the District Court so that he can amend
11 his complaint for a second time. Ordinarily, “[w]hen a plaintiff has not moved
12 for leave to amend in the district court, we are . . . disinclined to exercise our
13 discretion to grant his belated request on appeal.” Kirsch v. Fleet St., Ltd., 148 F.3d
14 149, 171 (2d Cir. 1998). And we certainly see no error or abuse of discretion in the
15 District Court’s dismissal of Felder’s complaint with prejudice, as Felder did not
16 request leave to re-amend until this appeal, and “no court can be said to have erred
30 1 in failing to grant a request that was not made.” Gallop v. Cheney, 642 F.3d 364,
2 369 (2d Cir. 2011).
3 Nevertheless, Felder, now represented by counsel for the first time on
4 appeal, has provided us with some “detail about . . . proposed new allegations”
5 and “explained how they could cure the deficiencies that led to the dismissal of
6 his complaint.” Wilson v. Merrill Lynch & Co., Inc., 671 F.3d 120, 140 (2d Cir. 2011).
7 Felder asserts that he can “ple[a]d additional USTA control mechanisms based on
8 information and belief gleaned over years of prior experience” working at the U.S.
9 Open, and can also “reference[] . . . the written agreement between [the] USTA and
10 its security subcontractors” to establish the proposed relationship between the
11 USTA and the security guards. Appellant Reply Br. at 21–22.
12 Moreover, we conclude that Felder’s complaint, liberally read, may suggest
13 that the USTA did in fact retaliate against him for his earlier complaint against a
14 USTA security contractor—namely, CSC. Felder alleged that he was “hired . . .
15 by AJ Squared Security,” that AJ Security sent him to pick up his security
16 credentials at the USTA, that the USTA denied those credentials, and that he was
17 then informed by his AJ Security supervisor that the USTA denied his credentials
18 because of his earlier discrimination claim against CSC. App’x 143, 174. If true,
31 1 and if the USTA were indeed Felder’s joint employer, this could plausibly set forth
2 a retaliation claim under Title VII. See McMenemy v. City of Rochester, 241 F.3d
3 279, 284–85 (2d Cir. 2001) (finding a retaliation claim “especially appropriate
4 where . . . two employers have a relationship that may give one of them an
5 incentive to retaliate for an employee’s protected activities against the other.”).
6 We therefore agree that Felder should be permitted to amend his complaint
7 regarding his Title VII retaliation claim under 42 U.S.C. § 2000e–3(a) so that he
8 may allege, if possible, additional indicia of a joint employer relationship. Felder
9 has not demonstrated, however, that his failure to plead allegations necessary to
10 support a race discrimination claim under Title VII or § 1981 can be remedied
11 through a second amended complaint. Absent any “indication as to what
12 [Felder] might add to [his] complaint in order to make [these claims] viable,”
13 Wilson, 671 F.3d at 140 (citation and quotation marks omitted), we solely exercise
14 our discretion to vacate and remand the District Court’s dismissal of Felder’s Title
15 VII retaliation claim.
16 CONCLUSION
17 For the foregoing reasons, we AFFIRM the District Court’s dismissal of
18 Felder’s discrimination claims under Title VII, 42 U.S.C. § 2000e–2, and 42 U.S.C.
32 1 § 1981. We VACATE the District Court’s dismissal of Felder’s retaliation claim
2 under Title VII, 42 U.S.C. § 2000e–3(a) and REMAND with instructions that Felder
3 be permitted to amend his complaint as to this remaining claim.
33 GERARD E. LYNCH, Circuit Judge, dissenting in part:
The majority opinion today reads into the text of Title VII a loophole that
allows companies to engage in precisely the type of discriminatory behavior that
the statute was designed to prevent. Per the majority’s interpretation of Title VII,
companies can avoid liability for discriminatory behavior prohibited by Title VII
through the simple mechanism of outsourcing the work of finding employees to
outside agencies, even though the company, and not the outside agency, retains and
exercises the ultimate power to decide whether the employee can work for the
company. In the present case, it is plausibly alleged that a covered employer
demanded of a security agency it had contracted to provide security guards that
an employee who had displeased the company on an earlier assignment by
complaining of perceived racial discrimination, a quintessential protected activity,
not be assigned to work for it on a later occasion when it needed security
personnel. When a company that subcontracts a necessary staffing function
intercedes in the contracting agency’s hiring decisions and asserts its own control
over the assignment of workers in a discriminatory manner, it should be held
accountable for its actions. The best interpretation of Title VII supports that result,
and I therefore respectfully dissent from the majority’s disposition of this case. As frequently occurs when a case is terminated on a motion to dismiss a
handwritten complaint from a legally unsophisticated pro se plaintiff, much is
murky about the facts that a lawyer or judge might want to know about the present
case. It is not clear, for example, whether the plaintiff Sean Felder was a regular
employee of AJ Security, the security contractor that sent him to work as a security
guard at the 2016 US Open tennis tournament run by defendant USTA, or whether
he applied to AJ Security for the very purpose of working at the tournament. 1 But
he clearly maintains that USTA delegated the provision of security guards for the
tournament to AJ Security, that he sought to work at the US Open, that AJ Security
both hired him and assigned him to work at USTA’s tournament, and that USTA
rejected him, refusing to issue him credentials and sending him back to AJ
Security. It is unclear whether AJ Security had other work for him or whether he
1 The tennis tournament is an annual event that runs for several weeks, and draws tens of thousands of spectators, with attendant seasonal security needs. In a number of letters to the district court, Felder talks about filling out an “application” to work at the tournament, and says that AJ Security “hired” him on August 26, 2016, the same day it sent him to pick up his credentials at the offices of USTA. Felder alleges that he had worked security at the US Open on multiple occasions, apparently (at least on some occasions) under the auspices of a different security firm. He alleges that he filed a lawsuit against that firm alleging racial discrimination he claimed to have suffered at the tournament, which resulted in a settlement, leading him to become persona non grata with USTA. Other statements made by Felder can be read as implying that he already worked, or had worked, for AJ Security on other assignments.
2 was interested in working for them other than for the seasonal assignment at the
US Open.
I agree with the majority that Felder has neither pled nor proffered concrete
facts to support his conclusory allegation that this rejection was based on his race.
But he does offer tangible support for his claim that he was rejected by USTA based
on his past opposition to perceived racial discrimination in the treatment of
security employees at the US Open. He alleges that he obtained a settlement of a
previous claim against CSC Security, a security contractor that had previously
employed him to work at an earlier iteration of the US Open; that after AJ Security
accepted his application to work at the 2016 US Open and sent him to USTA to
receive credentials, USTA rejected him as a candidate, refused him credentials,
and sent him back to AJ Security; and that Terence Rauls, the AJ Security
supervisor who had hired him and sent him to USTA, later told him that USTA
rejected him because of his history of protesting alleged discrimination. Those
allegations may or may not prove true. But because USTA seeks dismissal of the
complaint without even being required to deny them, we must assume them to be
true, and the majority opinion does not dispute that these allegations are sufficient
3 to plausibly state a claim that USTA rejected him because of his previous protected
activity.
My colleagues nevertheless affirm the dismissal of the complaint on the
ground that Felder has not sufficiently alleged that if USTA had permitted him to
work at its tournament instead of rejecting him at the threshold, USTA would then
have been considered his employer under the joint employer doctrine, as that
doctrine has been applied by the courts in the context of Title VII conditions of
employment cases and other labor-law obligations that apply to persons already
hired. Op. at 13.
The majority’s opinion rests on a reading of Title VII that makes little sense
in the context of a failure-to-hire claim such as Felder’s. According to the majority,
because an “employer-employee relationship” is “a cornerstone of an adequately
pled Title VII complaint,” Op. at 3, Title VII requires us to apply “a set of non-
exhaustive factors” derived from the common law of agency which “may indicate
the existence of an employer-employee relationship under the common law” even
where the plaintiff is directly employed by a different party, Op. at 17.
That reasoning is questionable on its face. The very nature of a refusal-to-
hire claim implies that the plaintiff does not have an “employer-employee
4 relationship” with the defendant. Such a plaintiff is not complaining that his
employer has mistreated him; he is complaining, rather, that he has been denied
any chance at employment, because the company controlling the workplace
discriminates against applicants for work on a prohibited ground.
Nothing in the language of the relevant statute refers to joint employers or
otherwise creates any specific rule for claims involving a statutory “employer”
that permits or requires a staffing agency to which it delegates the hiring of
workers to provide services to it to discriminate against protected categories of
applicants when assigning workers to provide those services. Title VII of the Civil
Rights Act of 1964, the principal source of the rights Felder claims, makes it
unlawful for “employers” to “to fail or refuse to hire or to discharge any individual
. . . because of such individual’s race, color, religion, sex, or national origin,” 42
U.S.C. § 2000e-2(a)(1), or to “discriminate against any . . . applicants for
employment . . . because [the applicant] has opposed any practice made an
unlawful employment practice by this subchapter, or because he has made a
charge, testified, assisted, or participated in any manner in an investigation,
proceeding, or hearing under this subchapter,” id. § 2000e–3(a). The statutory text
itself defines “employer” simply as “a person engaged in an industry affecting
5 commerce who has fifteen or more employees . . . and any agent of such a person,”
other than various federal entities and private clubs. 42 U.S.C. § 2000e(b). The
purpose of the definition is to limit the class of individuals and corporations who
are subject to federal anti-discrimination legislation, and not to define a required
relationship between a statutory “employer” and the party who alleges
discrimination.
In the ordinary case, of course, the party alleging discrimination is an
employee or an applicant for employment, and so it will ordinarily be the case that
an employment relationship between the plaintiff and defendant either exists or is
being sought by the plaintiff.
In the modern workplace, employers frequently outsource the provision of
services that might once have been performed by persons they directly employ to
agencies that specialize in providing particular sorts of workers. Such practices
provide numerous benefits to the employer company. As in the case of seasonal
work such as that involved in this case, it may be inefficient for the company to
recruit, screen and supervise specialized workers who are needed only for a
limited (if recurring) period of time. Moreover, even for longer-term workers, a
specialized agency may be better able to identify and manage employees for
6 particular function. In addition, the employer company may legitimately seek to
avoid the administrative and legal burdens of assuring compliance with a variety
of regulatory requirements, leaving it to the subcontracting agency to manage
those burdens.
While the language of Title VII does not address such situations directly, the
courts have imported doctrines from other workplace regulations, such as wage
and hour laws, to allocate liability between the contracting employer and the
subcontracting agency for violations of those regulatory requirements. In the
ordinary case, those doctrines assign responsibility to the agency, which is the
formal contractual employer of the worker. At the same time, however, courts and
regulators have crafted a “joint employer” doctrine, the purpose of which is to
“prevent” the delegating company from “evading liability by hiding behind
another entity, such as a staffing entity.” Butler v. Drive Auto Indus. of Am., Inc., 793
F.3d 404, 410 (4th Cir. 2015). In order to balance the legitimate economic reasons
to permit such labor subcontracting, and to be wary of improperly attributing the
mistreatment by the subcontractor agency of those workers it has selected,
managed and supervised to the entity for whom the services are supplied, against
the need to protect both workers and the subcontracting agency from
7 mistreatment dictated solely or jointly by the company receiving the services, the
joint employer doctrine relies on the complicated multi-factorial test cited by the
majority in this case. Id. at 414. That test makes sense in the context of cases
involving discrimination or violations of other workplace standards with respect
to the terms and conditions of employment, and I have no quarrel with its use in
such cases.
At the same time, Title VII explicitly protects applicants for employment.
That protection is one of the primary purposes of anti-discrimination law: to
prohibit the formerly common and once entirely legal practice of employers
overtly refusing to hire members of disfavored groups for all or selected functions.
Applicants for employment, by definition, do not yet have an employment
relationship with the entity alleged to have discriminated against them. When they
are refused employment, allegedly for a discriminatory reason, determining the
responsibility for the refusal should be a relatively straightforward task. Like all
judicial fact-finding, that task may be difficult, given the possibilities of deceit and
mutual misunderstanding that are the grist of decisions by judges or juries in
determining facts. But there is not the same need to sort out the complexities of
interactions in the workplace between workers and supervisors formally
8 employed by the subcontracting agency and the officials of the contracting
employer to whom they report. There is a simple binary decision, to hire or not to
hire, to accept a worker’s presence or reject it. Someone, at one company or the
other, is the ultimate decisionmaker in the hiring choice.
Felder alleges that he was denied credentials by USTA to work at what may
have been the sole event for which he was employed by AJ Security, in retaliation
for complaining about race discrimination, a protected activity under Title VII,
years earlier when he had worked for USTA while employed by a different
contractor. He asserts that he was hired by AJ Security, chosen by it to work at the
US Open, and sent by them to USTA, that USTA rejected him, and that he was
informed by AJ Security that he was rejected because he had engaged in the
protected activity of complaining about alleged discrimination that had nothing
to do with AJ Security, but that had taken place while he was providing services
to USTA under the auspices of a different security subcontractor. If his concrete
factual allegations are true, there is no reason to think that the retaliatory animus
emanated from AJ Security; the facts alleged place that animus squarely with
USTA.
9 In this context, to read Title VII as requiring Felder to plead the full scope of
factors that would have created a joint employer-employee relationship with both
USTA and AJ Security if Felder had been permitted to work seems strange. The
majority recognizes, correctly, that nearly all of the factors it would typically
consider in determining the existence of a joint employer relationship are
inapplicable here, because they “presume an existing relationship between two
parties . . . [and] the USTA allegedly denied Felder his credentials before he could
start work as a temporary security guard.” Op. at 20 (emphasis in original).
However, instead of acknowledging the necessity of a corresponding change in
the calculus of relevant factors, the majority concludes that in the context of a
failure to hire claim, plaintiffs like Felder must show that “the USTA [would] have
been Felder’s joint employer had Felder worked at the U.S. Open.” Op. at 22-23
(emphasis in original).
As a practical matter, that obligation would be extremely difficult for most
applicants to meet. 2 A rejected applicant would be hard put to collect, in advance
2 The Court acknowledges that, as an applicant who had prior experience working security for USTA through a former contractor, Felder might have such information, and remands to permit him to amend his complaint to attempt to satisfy the burden that the Court imposes on him. Op. at 31-32. An applicant without such experience would have a much harder time developing such facts. In any event, I believe that as a matter of law a
10 of discovery, evidence about who would have controlled which decisions in a
hypothetical relationship that was never allowed to exist. But putting that practical
objection aside, the more fundamental flaw in the majority’s approach is that it
chooses to rely on factors that it acknowledges are irrelevant to the sole decision
that was made, in order to determine whether that decision was prohibited by Title
VII.
That a failure-to-hire claim must be treated differently from other types of
adverse employment actions precisely because it arises prior to the establishment
of an employer-employee relationship is not a novel concept. As one district court
in this Circuit has observed, a “failure-to-hire claim is distinguishable from other
employment discrimination claims in that it necessarily applies in most
circumstances to non-employees seeking employment positions rather than
current employees.” Hughes v. Twenty-First Century Fox, Inc., 304 F. Supp. 3d 429,
445 (S.D.N.Y. 2018) (quoting Suri v. Foxx, 69 F.Supp.3d 467, 475–76 (D.N.J. 2014))
(emphasis added). The majority’s insistence that the existence of an employer-
employee relationship is a necessary element of every claim under Title VII
plaintiff asserting a claim of discriminatory refusal to hire should not bear such a burden of pleading or proof in the first place.
11 neglects to recognize a key distinction between failure-to-hire claims and other
types of discrimination claims, and relies all too heavily on a body of case law
developed solely in the latter context.
The majority’s approach makes sense in the context of a conditions-of-
employment case, in which an already-hired employee complains that he has been
subjected to discriminatory terms or conditions of employment. In that setting, a
court looks to the details of the tripartite relationship between the worker, his
nominal employer, and the entity to which he provides services in order to figure
out whether decisions ostensibly made by the subcontracting agency should be
attributed to the ultimate recipient of the services. That test is appropriately
difficult to meet, because it seeks to sort out what are often joint responsibilities
for supervision and management of staff.
But the majority’s approach makes little sense in the context of a failure-to-
hire claim. Here, the relevant question in determining Title VII liability is who is
responsible for the refusal to hire. That is not because the power to hire and fire is the
dispositive factor in determining joint employer status as a general matter, but
because it is the most – indeed the only – relevant factor in a failure-to-hire case.
The allegations of responsibility in such a case are, as a practical matter, simple
12 and direct. Nor is there any policy reason to protect an employer such as USTA
from the consequences of decisions for which it, on the facts alleged, is solely
responsible. If USTA hired its own security guards, the Civil Rights Act would not
permit it to maintain a security staff that was all-white, all-male, all-straight or all-
gentile, or to refuse employment on its premises to “troublemakers” who
complained of discriminatory treatment of black, female, gay, or Jewish
employees. The majority finds it significant that USTA does not insist that AJ
Security fire employees of protected groups, or not to assign them to work for other
entities to whom it contracts to provide security guards. Op. at 24. But Title VII
does not impose liability only on employers who seek to require other companies
to maintain exclusionary workforces; it seeks to prevent employers from
maintaining exclusionary workforces themselves. There is no reason to shield a
company that accomplishes its biased preference not to allow disfavored groups
to work for it in various capacities indirectly, by nominally delegating the hiring
of those employees to another agency, and then refusing to accept those that the
agency hires to work for it for discriminatory reasons. 3
3 Such indirect discriminatory practices unquestionably harm both minority workers and subcontracting agencies. Whether or not Felder himself falls into this category, it would hardly be unusual for an agency in AJ Security’s position to supplement its normal workforce when supplying a significant number of workers for a temporary assignment
13 If it makes economic sense for USTA, which needs a large security staff only
for a limited time period during which it sponsors an event catering to thousands
of spectators, to delegate the hiring and supervision of those guards to a
specialized contractor, there are legitimate reasons not to require it to police the
hiring decisions of that subcontractor or to hold it liable for discriminatory actions
taken by that contractor. But there is no plausible reason to allow an employer
such as USTA to indulge its own biased preferences by purporting to outsource
the hiring of security guards at its events to a contractor, while retaining the
absolute and unilateral power to turn away any guards sent by the subcontractor
based on prohibited grounds of discrimination or retaliation. To the extent that the
goal of the joint employer doctrine is to “prevent” employers from “evading
liability by hiding behind another entity, a staffing entity,” Butler, 793 F.3d at 410,
then USTA should not be able to have it both ways. If it is not to be held responsible
such as the US Open to recruit candidates in search of temporary, seasonal or supplemental employment, who would not have a regular position with the agency at the end of the event, or for applicants to answer advertisements for such a position because they seek a temporary assignment at such a prestigious and perhaps enjoyable event. Nor can it be questioned that contracting employers who accept only favored categories of help from subcontractors shrink the opportunities available to disfavored groups, as well as putting their subcontractors into a legally compromised position of having to discriminate among its own employees and applicants at the behest of those with whom they do business.
14 for AJ Security’s employment decisions, those decisions must be those of the
contractor. Employers cannot be permitted to replace a sign that says “No Irish
need apply to work here” with one that says “No Irish will be given credentials to
work here if they are hired by our security contractor and assigned to work at our
premises.”
The majority’s conclusion here holds, in so many words, that an employer
is free, as a matter of law, to decline to accept a subcontractor’s assignment of an
employee to work for the contracting company on the basis of race, sex, or other
prohibited categories, without liability under Title VII. While the joint employer
doctrine sensibly protects companies from the discriminatory employment
practices of its subcontractors where the company is insufficiently involved with
the conditions of employment to be reasonably held responsible for the
subcontractor’s acts, it makes little sense to adopt a rule that permits an employer
to require its subcontractors to violate Title VII by sending it only white security
guards, or non-Jewish bookkeepers, or female office temps, thus putting the
subcontractor to the choice of losing the contract or violating Title VII itself by
classifying its employees on the basis of race in ways that will adversely affect their
employment opportunities.
15 Nothing in the text of the statute, or prior precedents of the Supreme Court
or of this Court requires that conclusion. 4 The Court’s decision today represents a
policy choice to extend rules that may be appropriate to protect the right of
employers to contract out responsibility for compliance with various labor laws to
situations in which the employer has not contracted out the all-important hiring
decision, but instead retains its own power to choose its workers on discriminatory
grounds. That choice is incompatible with the rights Title VII was designed to
protect.
I therefore respectfully dissent.
4 The principal cases relied on by the majority, Knitter v. Corvios Mil. Living, 758 F.3d 1214 (10th Cir. 2014), and Redd v. Summers, 232 F.3d 933 (D.C. Cir. 2000), involve allegations of discriminatory or retaliatory termination. While I find those cases questionable for the same reasons discussed in this dissent, I note that termination cases, as opposed to hiring cases, do involve some of the same difficulties as terms-and-conditions cases. Termination cases and terms-and-conditions cases arise in the context of an existing employment relationship, and often grow out of the same kinds of complicated workplace dynamics. Terminations usually involve claims that the employee was discharged for workplace misconduct rather than discriminatory or retaliatory animus, and thus implicate the kinds of complex interactions in which decisions that may nominally be made by the subcontracting agency are the product of complaints by the ultimate employer and responses by the agency. The question of who is responsible for supervising the employee’s performance and the other factors relevant to the joint employer doctrine may therefore well be relevant in that context. But as this case illustrates, the fact question raised in failure-to-hire cases will generally be cleaner.
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