{"id":2811,"date":"2026-03-16T10:28:38","date_gmt":"2026-03-16T14:28:38","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=2811"},"modified":"2026-03-16T10:28:39","modified_gmt":"2026-03-16T14:28:39","slug":"third-party-complaint-dismissed-with-prejudice-after-alabama-federal-court-finds-parties-indemnity-provisions-do-not-apply-to-title-vii-in-eeoc-sex-discrimination-lawsuit","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/03\/16\/third-party-complaint-dismissed-with-prejudice-after-alabama-federal-court-finds-parties-indemnity-provisions-do-not-apply-to-title-vii-in-eeoc-sex-discrimination-lawsuit\/","title":{"rendered":"Third-Party Complaint Dismissed With Prejudice After Alabama Federal Court Finds Parties\u2019 Indemnity Provisions Do Not Apply To Title VII In EEOC Sex Discrimination Lawsuit"},"content":{"rendered":"
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By Gerald L. Maatman, Jr., George J. Schaller, and Andrew P. Quay<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways:<\/em><\/strong> On March 9, 2026, in EEOC v. TCI of Alabama, LLC, Case No. 25-CV-89, 2026 U.S. Dist. LEXIS 47895 (N.D. Ala. Mar. 9, 2026), Judge Corey L. Maze of the U.S. District Court for the Northern District of Alabama dismissed <\/a>a third-party complaint seeking to enforce indemnity provisions between Defendant-TCI and third-party staffing firms with the aim of indemnifying TCI from liability under Title VII.\u00a0 The Court held that parties cannot contract away their responsibilities under Title VII in light of its comprehensive remedial scheme.\u00a0<\/em><\/p>\n\n\n\n

The Court\u2019s decision illustrates that corporate defendants cannot shift potential Title VII liability through contracted indemnity clauses entered into by staffing firms that refer employees.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

TCI of Alabama, LLC (\u201cTCI\u201d) disposes and recycles PCB contaminated items at various plants and employs laborers to do so.  Id.<\/em> at *3.  To hire laborers, since 2020, TCI has \u201crelied exclusively on third-party temporary staffing agencies\u201d who refer qualified applicants.  Id.<\/em><\/p>\n\n\n\n

The EEOC investigated TCI after the Commission learned that TCI allegedly refused to recruit and hire qualified women for laborer positions.  Id.<\/em>  Following its investigation, the EEOC issued TCI a letter of determination, found reasonable cause to believe that TCI violated Title VII, and invited TCI to conciliate.  Id.  <\/em>The Parties did not reach a conciliation agreement, and the EEOC filed the instant lawsuit.  Id.<\/em> <\/p>\n\n\n\n

The EEOC\u2019s lawsuit brought one claim for sex discrimination under Title VII.  Id.<\/em> at *3-4.  According to the EEOC, TCI \u201cintentionally excluded from employment a class of qualified females seeking employment as laborers in favor of hiring equally or less qualified male applicants.\u201d  Id.<\/em> at *4.  The EEOC maintained that TCI refused to hire women for numerous reasons including that TCI instructed third party staffing agencies, Orin Staffing, LLC, Personnel Staffing, Inc., and WorkSmart Staffing, Inc. (the \u201cStaffing Firms\u201d) not to refer women for its laborer positions because \u201camong other reasons, women would \u2018distract\u2019 male workers and increase the risk of sexual harassment in the workplace.\u201d  Id.<\/em> <\/p>\n\n\n\n

TCI answered the complaint and then filed its own third-party complaint for breach of contract against the Staffing Firms.  Id.<\/em>  TCI\u2019s third-party complaint alleged the Staffing Firms \u201cagreed via contracts\u201d to lawfully refer qualified laborers to TCI.  Id.<\/em>  The contracts also contained indemnification provisions, which required the Staffing Firms, as joint employers of referred employees, to indemnify TCI \u201cfor all claims caused by the [Staffing Firms\u2019] breach of contract, including a breach caused by failing to follow the law when referring applicants.\u201d  Id.<\/em> at *4-5.<\/p>\n\n\n\n

Accordingly, TCI contended that even if the EEOC\u2019s allegations were true, the Staffing Firms\u2019 compliance with TCI\u2019s alleged unlawful instruction was itself \u201cunlawful and violated Title VII.\u201d  Id.<\/em> at *5.  Therefore, the Staffing Firms exposed TCI to legal claims which TCI was indemnified for under their agreed contracts.  Id.<\/em><\/p>\n\n\n\n

The EEOC and the Staffing Firms moved to dismiss TCI\u2019s third-party complaint.  Id.<\/em>  Their arguments for dismissal varied. Id.<\/em>  The Court focused on one argument raised by the EEOC, whether Title VII preempts TCI\u2019s breach of contract claim and therefore requires dismissal of TCI\u2019s third-party complaint.  Id.<\/em> at *6-7.<\/p>\n\n\n\n

The Court\u2019s Opinion<\/strong><\/p>\n\n\n\n

Judge Maze agreed with the EEOC that Title VII preempts TCI\u2019s breach of contract claim and dismissed the third-party complaint with prejudice, explaining that any amendment would be futile.  Id.<\/em> at *9.<\/p>\n\n\n\n

Acknowledging Title VII\u2019s \u201ccomprehensive remedial scheme,\u201d the Court adopted the holding in EEOC v. Blockbuster<\/em>, Case No. 07-CV-2612, 2010 U.S. Dist. LEXIS 2889 (D. Md. Jan. 14, 2010), which held that parties accused of violating Title VII may not bring claims for indemnification against third parties \u201cto skirt their own liability.\u201d  TCI of Alabama, LLC<\/em>,2026 U.S. Dist. LEXIS47895, at *7.  In Blockbuster<\/em>, the EEOC brought a Title VII action against the home video rental chain for failing to prevent and correct known sexual harassment at one of its warehouse facilities.  Blockbuster<\/em>, 2010 U.S. Dist. LEXIS 2889, at *1.  Blockbuster, like TCI here, filed a third-party complaint against a staffing firm that agreed to indemnify Blockbuster against any losses arising from any employment claim brought by its employees.  Id.<\/em> The Court in Blockbuster<\/em> granted judgment on the pleadings against Blockbuster and held that \u201c[t]he primary goal of Title VII to eradicate discriminatory conduct would be thwarted if Blockbuster were permitted to contract around its obligations and shift its entire responsibility for complying with Title VII\u201d to a third party.  Id.<\/em><\/p>\n\n\n\n

The Court here agreed that the policy rationale in Blockbuster<\/em> applied in greater force to TCI\u2019s third-party indemnification claims given those claims rested on the EEOC\u2019s allegation that TCI instructed staffing firms not to refer qualified women.  TCI of Alabama, LLC<\/em>,2026 U.S. Dist. LEXIS47895, at *8. \u201cFederal public policy would be undermined,\u201d the Court explained, \u201cif TCI had the ability to tell others to help TCI violate federal law and then pay TCI if TCI got caught.\u201d  Id.<\/em>  Therefore, a contractual indemnity provision could not shield TCI from liability under Title VII.<\/p>\n\n\n\n

Even though the EEOC\u2019s lawsuit continues against TCI, the Staffing Firms involved in hiring are not off the hook.  In a footnote, the Opinion clarifies that if the Staffing Firms violated Title VII by complying with TCI\u2019s unlawful request to not refer qualified women for laborer jobs, they too can face liability in another case.  Id.<\/em> at *9, n. 2. <\/p>\n\n\n\n

Accordingly, the Court dismissed TCI\u2019s third-party complaint with prejudice.<\/p>\n\n\n\n

Implications For Businesses<\/strong><\/p>\n\n\n\n

EEOC v. TCI of Alabama, LLC<\/em> demonstrates that corporate defendants cannot turn a blind eye to potential Title VII harms and attempt to contract away Title VII liability.  While indemnity clauses may appear all-encompassing, courts continue to decline coverage where Title VII violations are alleged. <\/p>\n\n\n\n

This Court agreed that public policy concerns control and remain critical in analyzing the scope of an indemnity provision in alleged gender-bias hiring under Title VII.  After TCI of Alabama, LLC<\/em>, Companies contracting with outside staffing firms cannot rely on \u201cshifting the blame\u201d through indemnity provisions in contracts when faced with Title VII claims brought by the EEOC. <\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., George J. Schaller, and Andrew P. Quay Duane Morris Takeaways: On March 9, 2026, in EEOC v. TCI of Alabama, LLC, Case No. 25-CV-89, 2026 U.S. Dist. LEXIS 47895 (N.D. Ala. Mar. 9, 2026), Judge Corey L. Maze of the U.S. District Court for the Northern District of Alabama dismissed … <\/p>\n

Continue reading “Third-Party Complaint Dismissed With Prejudice After Alabama Federal Court Finds Parties\u2019 Indemnity Provisions Do Not Apply To Title VII In EEOC Sex Discrimination Lawsuit”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"ppma_author":[7,96,147],"class_list":["post-2811","post","type-post","status-publish","format-standard","hentry","category-eeoc-litigation"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","author_category":"","last_name":"Maatman Jr.","first_name":"Gerald L.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/geraldmaatman.html","description":"Read Gerald's bio.<\/a>"},{"term_id":96,"user_id":655,"is_guest":0,"slug":"gschaller","display_name":"George Schaller","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/07\/schallergeorge-100x100.jpg","author_category":"","last_name":"Schaller","first_name":"George","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/georgeschaller.html","description":"Read George's Bio<\/a>"},{"term_id":147,"user_id":742,"is_guest":0,"slug":"aquay","display_name":"Andrew P. Quay","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2026\/03\/quayandrew-100x100.jpg","author_category":"","last_name":"Quay","first_name":"Andrew P.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/andrewquay.html","description":"Read Andrew's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2811","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=2811"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2811\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=2811"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=2811"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=2811"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=2811"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}