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Ninth Circuit Court Applies “Joint Employer” Test in FMLA Case

Volume 2, Issue 13
September 24, 2003

In a case involving Air France, the Ninth Circuit Court of Appeals examined the parameters for finding that separately distinct employers will be deemed "joint employers" for purpose of coverage or liability under federal employment rights statutes, such as the FMLA. An Air France Assistant Station Manager at the San Francisco International Airport (SFO), Stephane Moreau, sued for an alleged violation of the Family and Medical Leave Act ("FMLA") after he was terminated for taking unauthorized leave to care for his sick father. Air France flies one flight per day in and out of SFO and contracts with outside entities to provide ramp and towing, cargo and baggage handling, and food preparation services. Given its small operation in San Francisco, Air France employed fewer than 50 employees within a 75-mile radius necessary to be covered under the FMLA. The only way Air France's San Francisco operation could be covered under the FMLA is if it were considered a "joint employer" of its contractors' employees.

In what is now the only reported federal court decision applying the "joint employer" test to an FMLA case, the Ninth Circuit Court held that there was not a sufficient degree of connectedness between Air France and its contractors to be deemed a joint employer of the contractors' employees. As the FMLA does not define or discuss joint employment, the Ninth Circuit Court drew guidance from prior cases applying the joint employer test to allegations implicating other federal employment rights' statutes and looked to see whether the alleged joint-employer: (1) had the power to hire and fire; (2) supervised and controlled employee work schedules or conditions of payment; (3) determined the rate and method of payment; and (4) maintained employment records.

The court also examined other factors relevant in assessing the "economic reality" of the alleged joint-employment relationship, including: (1) whether the work was a specialty job on the production line; (2) whether responsibility under the contracts between a labor contractor and an employer pass from one labor contractor to another without material changes; (3) whether the premises and equipment of the employer are used for the work; (4) whether the employees had a business organization that could or did shift as a unit from one worksite to another; (5) whether the work was piecework and not work that required initiative, judgment or foresight; (6) whether the employee had an opportunity for profit or loss depending upon the alleged employee's managerial skill; (7) whether there was permanence in the working relationship; and (8) whether the service rendered is an integral part of the alleged employer's business. After a fact intensive analysis, the court agreed with the district court's assessment that Air France was not a joint employer of its contractors' employees.

This case is important to employers as it highlights an area of law often overlooked by employers, that of joint employment status. In certain circumstances, two or more legally separate companies can be found to be joint employers of particular employees such that they are both liable for employment law violations. Such joint employer findings occur more frequently between a parent company and subsidiary, but can also occur between a company and its subcontractors.

Moreau v. Air France, --- F.3d ---, 2003 WL 22119719 (9th Cir. Sept. 15, 2003).

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.