She quit over clothing complaints and sued - but the state that ran the prison wasn't her boss
Running the workplace isn't the same as employing the worker. A federal appeals court just drew that line for staffing contractors.
On July 31, 2026, the US Court of Appeals for the Seventh Circuit sided with the Illinois Department of Corrections in a Title VII case brought by a mental-health professional who worked inside one of its prisons - but never for the state.
The department had hired a contractor, Wexford Health Services, to staff its facilities with mental-health workers. One was placed at Pontiac Correctional Center. She resigned in November 2018 after repeated confrontations over her clothing, then sued both Wexford and the department, alleging race and sex discrimination, a hostile work environment that pushed her out, and retaliation for her complaints. She later dropped Wexford, leaving only the state.
That raised one threshold question: was the department her employer at all? Under Title VII, only an employer can be liable. If the department didn't employ her, her claims against it couldn't stand. A trial court had already sided with the department, and the appeals court took a fresh look.
The court used a five-factor test that asks who actually runs the working relationship: control, skills and training, supplies, pay, and length of commitment. Control counts most.
Almost every factor pointed to the contractor. Wexford interviewed and hired her, set her schedule, told her which inmates to treat, and disciplined its own staff. She reported to Wexford managers. Wexford paid her. She had earned her master's degree and counseling license before she ever applied.
The department did control the premises. It could veto a hire, its needs drove staffing levels, and it set a dress code for everyone inside - staff, contractors, prisoners, and visitors - because dress in a prison is a security matter. But that, the court said, is control over the contractor and the site, not over the worker's day-to-day job.
Even a workplace investigation didn't shift the outcome. The department looked into one clothing complaint and concluded she had broken its code of conduct, but imposed no discipline. Substantiating a claim, the court said, is not the same as the power to discipline.
The takeaway for HR: setting site rules, approving placements, and driving headcount don't automatically make a client company the joint employer of a contractor's staff. Day-to-day control does. For employers who rely on staffing agencies, that distinction can decide who answers a Title VII claim.
