Who’s the Boss?Joint Employer Status in Wage/Hour LitigationBY CHRISTOPHER MARLBOROUGH

THE MARLBOROUGH LAW FIRM, P.C.

What is an Employer? FLSA29 USC § 203: “any person acting directly or indirectly in the interest of an employer in relation to an employee …”

29 CFR 791.2 An employee may have more than one employer for the same job. Where joint employer relationship exists all joint employers are individually and jointly liable.

What is an Employer? NYLLNYLL § 190(9): Employer is “any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service.”

NY Ct. of Appeals has not held that the definition is coextensive with the FLSA.

Courts have used the FLSA joint employer analysis to analyze state law claims. See e.g., Peng Bai v. Fu Xing Zhuo, 2014 U.S. Dist. LEXIS 81173, 7 (E.D.N.Y. June 13, 2014).

29 CFR 791.2(b) ExamplesWhere there is an arrangement between the employers to share the employee's services, as, for example, to interchange employees.

Where one employer is acting directly or indirectly in the interest of the other employer in relation to the employee.

Where one employer controls, is controlled by or is under common control with the other employer.

Linking Corporate Executives Or Related Entities

Irizarry v. Catsimatidis, 722 F.3d 99 (2d Cir. N.Y. 2013). Gristede’s CEO exercised operational control over supermarket employees under FLSA. State law claims remanded.

Keun-Jae Moon v. Joon Gab Kwon, 248 F. Supp. 2d 201, 236 (S.D.N.Y. 2002). Owner of hotel held personally liable for FLSA violations.

Doe v. Four Bros. Pizza, 2013 U.S. Dist. LEXIS 166470 (S.D.N.Y. Nov. 18, 2013). Motion to dismiss was denied where defendant companies had unified operations and common control.

Chuchuca v. Creative Customs Cabinets Inc., 2014 U.S. Dist. LEXIS 164846, 21 (E.D.N.Y. Nov. 25, 2014). Plaintiff worked for two putative joint employers successively, not simultaneously. Each employer liable for the time it employed Plaintiff. Owner of both companies was joint employer during plaintiff’s entire employment period.

Putative Joint Employer Hires Contractor

Carrillo v. Schneider Logistics Transloading & Distrib., 2014 U.S. Dist. LEXIS 5386 (C.D. Cal. Jan. 14, 2014)(denying Wal-mart’s motion for summary judgment). $21 million settlement announced a few months later).

Lawrence v. Adderley Indus., 2011 U.S. Dist. LEXIS 14386, 34 (E.D.N.Y. Feb. 11, 2011)(holding that cable company is not joint employer of cable technicians).

Contractor may classify workers as independent contractors, adding another layer of analysis before the putative joint employer can be held liable.

Staffing AgenciesAnsoumana v. Gristede's Operating Corp., 255 F. Supp. 2d 184 (S.D.N.Y. 2003) Duane Reade was held joint employer of delivery personnel along with the agency that placed them.

Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132 (2d Cir. 2008). Hospital was joint employer of plaintiff who worked for hospital through several staffing agencies. Hours worked combined for overtime purposes.

Rent-A-Cop Exemption:

FLSA Section 7(p)(1). Special Detail Exemption for fire protection and law enforcement. Contactor hours are not combined with regular on-duty hours for the purpose of calculating overtime hours worked.

Franchisor/FranchiseeOrozco v. Plackis, 757 F.3d 445 (5th Cir. Tex. 2014)(reversing jury’s finding that franchisor was joint employer).

McDonald’s – December 2014- NLRB issued complaints alleging McDonald’s is joint employer of food service workers.

Cano v. DPNY, Inc., 287 F.R.D. 251 (S.D.N.Y. 2012)(granting leave to amend complaint to add franchisor Domino’s Pizza as a defendant).

Cordova v. SCCF, Inc., 2014 U.S. Dist. LEXIS 97388 (S.D.N.Y. July 16, 2014)(denying motion to dismiss franchisor Sophie’s Cuban Cuisine).

Benitez v. Demco of Riverdale, LLC, 2015 U.S. Dist. LEXIS 20325 (S.D.N.Y. Feb. 19, 2015) (denying motion to dismiss franchisor Planet Wings).

SCOTUS: Focus on Economic Reality

Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947)

Slaughterhouse operator contracted with supervisor of deboning operations who engaged deboners as independent contractors.

Slaughterhouse was a joint employer for FLSA purposes where:

• Group performed work on slaughterhouse premises• Using mostly slaughterhouse equipment• As part of production line• Worked only for the one slaughterhouse and• Management changed, but work did not

Courts have characterized Rutherford as an example of subterfuge to avoid compliance with the labor laws.

Joint Employment in the Second Circuit

Joint employer analysis varies based upon the statute invoked.

The doctrine may be applied differently in Title VII, NLRB and FLSA cases. See Arculeo v. On-Site Sales & Mktg., LLC, 425 F.3d 193 (2d Cir. N.Y. 2005).

Joint Employment in the Second Circuit

For FLSA claims, Carter’s formal control test and Zheng’s functional control test provide a nonexclusive list of factors creating a comprehensive economic realities test.

The goal … is to determine whether the employees in question are economically dependent upon the putative employer.“ Copantitla v. Fiskardo Estiatorio, Inc., 2010 U.S. Dist. LEXIS 33430, 16 (S.D.N.Y. Apr. 5, 2010).

Second Circuit: Formal ControlCarter v. Dutchess Community College, 735 F.2d 8 (2d Cir. 1984). Summary judgment for defendant reversed. Defendant college may be joint employer of inmate teaching assistant in jailhouse education program.

Formal Control Factors:

1. Power to Hire and Fire;

2. Work Schedules and Working Conditions;

3. Rate and Method of Payment; and

4. Employment Records.

Carter Factor 1: Hiring and Firing

"whether the alleged employer had the power to hire and fire the employees”

Dixon v. Zabka, 2014 U.S. Dist. LEXIS 159692 (D. Conn. Nov. 13, 2014) Summary judgment denied where contractor was ordered to terminate workers.

Jean-Louis v. Metro. Cable Communs., Inc., 838 F. Supp. 2d 111 (S.D.N.Y. 2011) Cable company’s ability to ‘deauthorize’ a technician/subcontractor did not constitute the power to fire.

DisciplineJean-Louis v. Metro. Cable Communs., Inc., 838 F. Supp. 2d 111, 118 (S.D.N.Y. 2011). No evidence that cable company instructed contractor to discipline or fire any individual technician.

Hui Lin v. Great Rose Fashion, Inc., 2009 U.S. Dist. LEXIS 46726 (E.D.N.Y. June 2, 2009). Joint employer directly disciplined garment factory workers misclassified as independent contractor.

Carter Factor 2: Work Schedules and Conditions

"whether the alleged employer … supervised and controlled employee work schedules or conditions of employment”

Carter Factor 3: Payment

"whether the alleged employer determined the rate and method of payment”

Flemming v. Rem Conn. Cmty. Servs., 2012 U.S. Dist. LEXIS 180678, 17 (D. Conn. Dec. 20, 2012) “[F]acilitation of the alleged violation [i]s a significant factor in the joint-employer analysis”.

Hart v. Rick's Cabaret Int'l Inc., 2010 U.S. Dist. LEXIS 137129, 10 (S.D.N.Y. Dec. 17, 2010) Parent company’s MTD denied where it classified putative employees as independent contractors.

Dixon v. Zabka, 2014 U.S. Dist. LEXIS 159692, 16-17 (D. Conn. Nov. 13, 2014). Defendants motion for summary judgment denied where putative joint employer required workers to sign agreements which required that they attend unpaid orientation program.

Carter Factor 4: Employment Records

“Whether the alleged employer … maintained employment records.”

Janus v. Regalis Constr., Inc., 2012 U.S. Dist. LEXIS 127008, 13 (E.D.N.Y. July 23, 2012) Purposefully evading obligation to maintain records will not weigh in defendant’s favor.

Hugee v. SJC Group, Inc., 2013 U.S. Dist. LEXIS 116471, 22 (S.D.N.Y. Aug. 13, 2013) Record of employee hours worked most relevant to FLSA overtime claims.

Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516 (S.D.N.Y. 2013). Summary judgment granted where putative joint employer required production staff employed by contractor to sign confidentiality and employment agreements and required contractor to send it the executed agreements.

Second Circuit: Functional Control

Zheng v. Liberty Apparel Co., 355 F. 3d 61 (2d Cir. N.Y. 2003). Circuit Court reversed summary judgment dismissal based on Carter.

Returned to Rutherford and added functional control test, when alleged employers pass the Carter test.

Functional Control Factors:

1. Premises and equipment;

2. Shift from employer to employer;

3. Type of work;

4. Shift from contractor to contractor;

5. Supervision; and

6. Exclusivity.

Zheng Factor 1: Premises and Equipment

“Whether [the putative joint employer’s] premises and equipment were used for the plaintiffs' work.”

Rutherford: Workers provided hooks, knives and smocks. Slaughterhouse provided the premises and other equipment.

Velez v. New Haven Bus Serv., 2015 U.S. Dist. LEXIS 1275, 7 (D. Conn. Jan. 6, 2015). Provision of some, but not all equipment is indicative of joint employment.

Zheng Factor 2Shift From One Putative Employer to

Another“whether the Contractor Corporations had a business that could or did shift as a unit from one putative joint employer to another….”

Zheng: a subcontractor that seeks business from a variety of contractors is less likely to be part of a subterfuge arrangement than a subcontractor that serves a single client.

Shift From One Putative Employer to Another

Rutherford: the deboning team did not work at other slaughterhouses.

Chen v. St. Beat Sportswear, Inc., 364 F. Supp. 2d 269, 281 (E.D.N.Y. 2005). Evidence that contractors worked for other manufacturers raises questions of fact precluding summary judgment for plaintiff.

Zheng Factor 3: The Type of Work Performed

Considers industry custom and historical practice with respect to outsourcing the particular group of workers and …

“the extent to which the workers perform a discrete line-job forming an integral part of the putative joint employer's integrated process of production or overall business objective ….”

Zheng: “We construe Rutherford to mean that work on a production line occupies a special status under the FLSA.”

Rutherford: Where does the cow go?

slaughterers skinners dressers deboners trimmers packers

Zheng Factor 4:The Hot Potato Factor

“Whether responsibility under the contracts could pass from one []contractor to another without material change.”

Zheng Factor 4Courts ask whether the contractor is “fungible”?

Zheng favors a finding of joint employment if "the same employees [c]ould continue to do the same work in the same place.“

In contrast, joint employer status is not supported where worker only performs work for putative joint employer because of worker’s relationship with the contractor.

Rutherford: Were contractors legitimate or were they just a series of stooges?

ReedJan ‘42-Feb ’43

HooperMay ‘44 -

SchindelFeb ‘43–May ’44

DeereMay ‘44-Jul ‘44

Zheng: Under these circumstance, “it is difficult not to draw the inference that a subterfuge relationship exists.”

Zheng Factor 5: Supervision

“The degree to which [the putative joint employers] or their agents supervise the employee's work.”

Zheng: “supervision with respect to contractual warranties of quality and time of delivery has no bearing on the joint employment inquiry, as such supervision is perfectly consistent with a typical, legitimate subcontracting arrangement.“

Godlewska v. HDA, 916 F. Supp. 2d 246, 265 (E.D.N.Y. 2013). “Defendants merely exercised quality control to ensure that HDA delivered quality service and complied with legal requirements.”

Zheng Factor 6: Exclusivity

“Whether the plaintiffs worked exclusively or predominantly for the putative joint employer.”

Rutherford: Deboners worked exclusively for Rutherford.

Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516 (S.D.N.Y. 2013) Production team served exclusively for production of Fox’s Black Swan film.

Chen v. St. Beat Sportswear, Inc., 364 F. Supp. 2d 269, 289 (E.D.N.Y. 2005) “Genuine issue of material fact as to whether plaintiffs worked predominantly for and were economically dependent on defendants.”

Thanks

Christopher Marlborough

The Marlborough Law Firm, P.C.

Phone: 212 991-8960

E-mail: chris@marlboroughlawfirm.com

Web: www.fightwagetheft.com

Twitter: @fightwagetheft