FMLA Joint Employer Ruling

Many of the Federal employment laws do not take into consideration co-employment, joint employment or other employment relationships that involve more than one employer.

Under the Family and Medical Leave Act (FMLA), the U.S. DOL promulgated regulations explaining circumstances where a joint-employment relationship may exist: (a) Where two or more businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. Joint employers may be separate and distinct entities with separate owners, managers and facilities. Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as: (1) Where there is an arrangement between employers to share an employee's services or to interchange employees; (2) Where one employer acts directly or indirectly in the interest of the other employer in relation to the employee; or, (3) Where the employers are not completely disassociated with respect to the employee's employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer. 29 C.F.R. § 825.106(a).

A case just decided a few week ago held that for a joint-employer relationship to exist, each alleged employer must exercise control over the working conditions of the employee, although the ultimate determination will vary depending on the specific facts of each case. That case, Moldenhauer v. Tazewell- Pekin Consol. Communications Center, 2008 WL 2927018 (C.A.7 (Ill.)), is a Seventh Circuit case (which covers Illinois, Indiana and Wisconsin).

Cases like Moldenhauer arise where one of the two employers has less than the requisite "50 employees within a 75-mile radius" to come under the purview of the FMLA, but when aggregated to the second company, falls within the applicable number of employees.

Office Party Season

Once again, we are approaching that time of year where companies host holiday parties. Office parties are a great way to thank employees and customers for their contributions in making your business successful. However, hosting a party can create liability as well, particularly where alcohol is being served, as employees and other guests may consume alcohol, drive their vehicles and can suffer some kind of injury.

According to Insurance Agents & Brokers of Pennsylvania Inc., 70% of all companies that have a holiday party will serve alcohol. Your state's Dram Shop law may apply to a private party. Put another way, an employer can be held liable for hosting or sponsoring a party where an attendee leaves intoxicated and causes injury to themselves or others.

A good suggestion is to either not to serve alcohol or to limit the number of drinks that the company offers to employees. Coupons for two drinks per person is probably sufficient; thereafter, if employees or their guests want to continue to consume alcohol, they can do so on a cash basis. Of course, the company still has a duty to observe behavior and to discourage and prevent anyone from driving home intoxicated.

Finally, if you allow employees and their guests to consume alcohol, you should be prepared to offer taxi or other transportation to allow for alternative ways to get intoxicated persons home. Some companies hold parties at hotels, so why not reserve a block of rooms (at a discounted rate) to allow employees and their guests to stay over night?