Are You a Co-Employer? FMLA Joint Employer Liability Can Be Deadly

Franczek P.C.
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joint employerI’ve discussed far sexier topics than “joint employers” on this blog.  After all, it’s not every day an employee gets drunk at a Polish festival at the very time she’s supposed to be on FMLA leave.

But even the rather mundane portions of the FMLA [ahem, is there such a thing?] require us to stay on our toes, as a federal court made clear this past week.

To be covered by the FMLA, a private employer must employ at least 50 employees within a 75-mile area. If the employer doesn’t meet this threshold, it is not obligated to provide FMLA leave to its employees. However, an employee can enjoy the protections of the FMLA if he is jointly employed by multiple companies that together have 50 or more employees.

So, how is an employee *jointly employed* by two employers such that he is eligible for FMLA leave?

Let me explain the story:  Trans States Airlines and GoJet Airlines provided regional air service for United Airlines.  Darren was a manager for and on the payroll of Trans States, which employed a mere 33 employees.  He later requested and was denied FMLA leave.  Instead, he was terminated.  Trans States argued that Darren could not make out an FMLA claim because Trans States was not covered by the FMLA — it simply didn’t have enough employees to meet the 50-employee threshold.  Easy enough, right?

Not so fast, Darren’s attorneys argued.  They contended — and convinced a trial and appellate court — that GoJet (which employed 340+ employees) was a joint employer because Trans States and GoJet shared Darren’s services and because the two companies acted in each other’s interests with respect to Darren.

The trial and appellate court agreed, pointing to evidence that: 1) Darren represented Trans States and GoJet in their negotiations and meetings with United Airlines and O’Hare Airport; 2) the logos of all three companies appeared on his business card; and 3) internal directories and a supervisor identified Darren as the contact person for operations questions regarding Trans States and GoJet.  Cuff v. Trans States Holdings, Inc. (pdf)

The trial court had gone even further, finding that the two entities retained common ownership, operated under the same trade name, shared headquarters and administrative staff, employed supervisors to manage the employees of the companies, centrally maintained personnel records, and maintained common operations in the same recruiting department.

Insights for Employers

Maintaining temporary employees or sharing employees with a related company is a risky endeavor and, as we learned here, sets up at least the initial building blocks for an FMLA claim.  Regardless of the employment arrangement, however, employers do not lose at trial simply because they are considered joint employers. Employers lose FMLA suits when they interfere with employee’s FMLA rights or retaliate against them for taking protected leave.

Related question: Click here for my guidance on whether the period of time worked as a temp employee counts toward an employee’s eligibility for FMLA leave.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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