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June 2010
You Have Got to Hear This
By Eric Bass

     Imagine your business provides employees for another business. If that other business changes the requirements they have for the employees and you have to replace employees under your contract, you should be able to fire the employees that can no longer work at the other business, right? We will have to wait and see.

     The Third Circuit Court of Appeals has reviewed a case where the employer had a contract with the United States Marshal’s Service (USMS) to provide security in different buildings. The employee’s employment was terminated after the USMS adopted new hearing standards that the employee did not meet. The employer asked the USMS to reconsider the new standards, but the standards remained as revised.

     The employee sued the employer and the USMS for disability discrimination. The Court decided that the employer could be liable for disability discrimination which occurred through its contract with the USMS. The USMS was dismissed from the case.

     This case highlights, more than ever, that contracts must deal specifically with who pays for different liabilities, including claims by employees for any number of reasons. Just because the sexual harassment, discrimination or other bad actions were caused or allowed by another business or people other than a company’s employees, the owner and company may still be liable. It is to the responsibility of the business owner in preparing company contracts to be certain the proper person bears the cost.

     Content provided by Wishart, Norris, Henninger & Pittman, P.A., which partners with owners of closely-held businesses to provide comprehensive legal services in all areas of business, tax, estate planning, succession planning, purchases and sales of businesses, real estate, family law, and litigation. For more information, please call Robert Norris at 704-364-0010 or visit

Eric Bass is an attorney at Wishart, Norris, Henninger, P.A.
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