In re Enterprise Rent-a-Car Wage & Hour Employment Practices Litigation: How to Determine How Many Employers you Really Have Under the FLSA’s Minimum Wage and Overtime Pay Laws.

It’s not likely that you – as an Alabama employee working hard to provide for your family – spend a great deal of time contemplating who you would be entitled to recover back wages from (or in other words sue) for your company’s failure to provide you with minimum wage or overtime pay.  Recently, however, the Third Circuit Court of Appeals broadened employer exposure to liability for minimum wage and overtime pay violations in the case of In re Enterprise Rent-a-Car Wage & Hour Employment Practices Litigation.  Specifically, the Enterprise case addressed what constitutes a joint employer under the Fair Labor Standards Act for the purposes of minimum wage and overtime pay.

The Enterprise case was brought collectively by assistant branch managers of the Enterprise Rent-a-Car company who sought to recover overtime pay pursuant to the FLSA.  The Plaintiffs brought the action against their direct employers – Enterprise Rent-a-Car – and also their direct employers’ parent corporation, Enterprise Holdings, under a “joint employer” theory.  The issue before the Court was whether Enterprise Holdings constituted an “employer” for purposes of recovery.  The Third Circuit noted in its analysis that the definition of “employer” under the FLSA is “the broadest definition that has ever been included in any one act.”  According to the Third Circuit, although “control” is central in an analytical approach to determining whether an entity is an employer, it is not dispositive, or independently determinative of the issue.  In fact, the Court concluded, actual “control” over an employee by an entity may be irrelevant in determining whether there is an employer/employee relationship under the FLSA.

Instead, the Third Circuit focused on factors more tangible than mere “control.”  While not a comprehensive list, the Third Circuit emphasized that the following factors should drive federal courts’ analyses when ruling on whether an entity constitutes an employer under the FLSA:

1.      Whether the alleged employer has authority to hire and fire employees;

2.      Whether the alleged employer has authority regarding work rules and assignments, and sets conditions of employment such as rates of compensation, benefits provided, hours and work schedules;

3.      Whether the alleged employer has day-to-day supervision over employees, including the authority to discipline employees; and

4.      Whether the alleged employer controls employee records such as those relating to payroll, insurance, and tax records.

As an employee in Alabama seeking recovery of back wages for your employer’s failure to provide minimum wages or overtime pay, the Third Circuit’s decision is not binding on the federal courts seated in Alabama.  Nevertheless, the Third Circuit’s analysis in In re Enterprise Rent-a-Car Wage & Hour Employment Practices Litigation provides persuasive authority on the issue of what constitutes a “joint employer” under the FLSA, even though the Enterprise Court determined that Enterprise Holdings was not a joint employer under the FLSA analysis noted above.  Most advantageous to Enterprise Holdings in avoiding the “joint employer” designation was the fact that it did not have the authority outlined in the factors above, but merely suggested certain policies pertaining to some of those factors.

As noted by the Third Circuit, whether you have one, two, or more “employers” under the FLSA is a fact intensive inquiry.  This is a point on which all courts will agree.  Whether you are permitted by a court to proceed in an action to recover unpaid wages, be it minimum wages or overtime pay, against “joint employers” may greatly affect the outcome of your case.  For that, and many other reasons, if you believe you or someone you know has been deprived of federally mandated minimum wages or overtime pay in violation of the FLSA, an attorney dedicated to helping Alabama employees recover back wages for those violations can help.