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Question
Zenith Electronics Corp. (principal) contracts TechLine Staffing (contractor) to supply technicians for its LCD assembly line. TechLine, in turn, contracts PeopleSource Recruiting (subcontractor) to source and hire technicians and to process their initial employment papers. The technicians work on Zenith's premises, report to Zenith supervisors, use Zenith's tools and equipment, and Zenith sets their work schedules and production targets. TechLine processes payroll and receives a service fee from Zenith; PeopleSource handles only recruitment and paperwork. Two months of back wages remain unpaid to the technicians. (a) Does this arrangement constitute labor-only contracting for the technicians assigned to Zenith's LCD assembly line? (b) If so, explain the solidary liability among Zenith Electronics Corp. (principal), TechLine Staffing (contractor), and PeopleSource Recruiting (subcontractor) for the workers' wages and other lawful benefits, and the effect on third parties who may sue for the wages. (c) Apply the rule to the facts: who is ultimately liable for the two months' back wages, and what is the extent of each party's liability.