Tuesday, March 15, 2016

2d Circuit says FLSA plaintiffs may be AT&T employees

These plaintiffs brought a wage and hour claim against AT&T Mobility and other defendants. AT&T argued that it was not plaintiffs' employer. Plaintiffs said AT&T was a joint employer with other entities. The district court said AT&T was not a joint employer. The Court of Appeals says the jury may find otherwise.

The case is Grenawalt v. AT&T Mobility, LLC, a summary order issued on March 14. Sometimes plaintiffs want to name more than one entity as the defendant to ensure that someone is able to pay out the judgment. In this FLSA case, plaintiffs provided security for AT&T. They were directly employed by someone else who provided guards to AT&T.

This is a complicated area of law. The Second Circuit (Cabranes, Livingston and Lynch) identifies three separate tests for determining whether an entity is a joint employer. "The first test, derived from Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir. 1984), looks to whether a putative employer exercises 'formal control' over a worker." But this test does not always work in these cases. "Because Carter defines employment more narrowly than FLSA requires, satisfying this test is sufficient, but not necessary, to show joint employment." The second test, set out in Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir. 1988), focuses on whether “the workers depend upon someone else’s business . . . or are in business for themselves.” This test does not always apply because it is  'typically more relevant for distinguishing between independent contractors and employees' than for determining by whom workers who are assumed to be employees are employed." So we look to the third test, first developed in Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2013).

Zheng "weighed six factors in determining whether a garment manufacturer exercised 'functional control' over subcontracted workers, and was therefore their employer under FLSA:

(1) whether [the manufacturer’s] premises and equipment were used for the [putative employees’] work;
(2) whether the Contractor[s] . . . had a business that could or did shift as a unit from one putative joint employer to another;

(3) the extent to which [the putative employees] performed a discrete line-job that was integral to [the manufacturer’s] process of production;

(4) whether responsibility under the contracts could pass from one subcontractor to another without material changes;

(5) the degree to which the [manufacturer] or [its] agents supervised [the putative employers’] work; and

(6) whether [the putative employees] worked exclusively or predominantly for the [manufacturer].

These factors are “nonexclusive and overlapping,” and a court “need not decide that every factor weighs against joint employment.” The Second Circuit runs through these factors in finding that plaintiffs could be considered "employees" of AT&T. The analysis in this case is extensive for a summary order, making me wonder why this is a summary order and not a published opinion.

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