Friday, June 29, 2012

FLSA - joint employer

In re Enterprise Rent-a-Car - 3d Cir. - June 29, 2012

District Court decision upheld. In re Enterprise Rent-A-Car Wage & Hour Employment Practice Litigation, 735 F.Supp.2d 277 (W.D.Pa.2010).

We are of the view that the starting point for the joint employer test should be N.L.R.B. v. Browning-Ferris Indus. of PA., 691 F.2d 1117, 1123 (3d Cir. 1982). We conclude that "where two or more employers exert significant control over the same employees—[whether] from the evidence it can be shown that they share or co-determine those matters governing essential terms and conditions of employment—they constitute ‘joint employers’” under the FLSA. Id. at 1124 see also Moldenhauer v. Tazewell-Pekin Consol. Communications Ctr., 536 F.3d 640 (7th Cir. 2008).

This is consistent with the FLSA regulations regarding joint employment, which state that a joint employment relationship will generally be considered to exist “[w]here the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with another employer.” 29 C.F.R. § 791.2(b). Ultimate control is not necessarily required to find an employer-employee relationship under the FLSA, and even “indirect” control may be sufficient. In other words, the alleged employer must exercise “significant control” Browning-Ferris In , 691 F.2d at 1124.

A court should consider these factors in determining whether an entity is an employer: 1)does the alleged employer have: (1) authority to hire and fire employees; (2) authority to promulgate work rules and assignments, and set conditions of employment, including compensation, benefits, and hours; (3) day-to-day supervision, including employee discipline; and (4) control of employee records, including payroll, insurance, taxes, and the like.

These factors do not constitute an exhaustive list of all potentially relevant facts, and should not be "blindly applied." . . . A determination as to whether a defendant is a joint employer "must be based on a consideration of the total employment situation and the economic realities of the work relationship." . . . . Trial courts should not be confined to "narrow legalistic definitions" and must instead consider all the relevant evidence, including evidence that does not fall neatly within one of the above factors. . . .