The court set out the facts: Valero was remodeling a refinery. It hired a contracting company, which in turn hired employees, one of whom was to be the general foreman. But, he was unable to read. Valero required that all contractors, for safety reasons, pass a written test. He could not do so, and he was terminated from the contracting company. The EEOC sued Valero under the ADA, seeking to get it on the hook as an “employer” — and thus liable under the ADA. But the court found no liability.
First, the court noted that it could analyze the issue under either the joint-employer test or the integrated-enterprises test. It picked the first, because it concluded it was more suitable for situations where one company has a service contract with another. In contrast, the integrated-enterprises test is more suitable for entities affiliated with one another, such as a parent and a subsidiary.
Granting summary judgment to Valero, the court held that Valero’s mere power to exclude the contractor’s employee from its worksite was insufficient to impose the title of “employer” upon Valero and to thus hold it liable under the ADA. (By the way, this case is applicable to other civil rights statutes.)
The court summed it up: "[C]ounsel for the Commission advanced a number of policy reasons why a company in Valero's situation should have to comply with the ADA. But the independent contractor ‘hole’ in federal antidiscrimination law has long been criticized, and Congress has yet to find a ‘fix.’ And Valero does not enjoy immunity under the ADA for its reading requirement; an individual with a reading disability who applies for a job with Valero at the refinery and is rejected may bring a claim. With respect [to this suit], however, Valero is not a covered entity subject to suit."
In an increasingly complex business world, lawyers will see more of these cases. Stand by.