LAW360: Lessons as Joint Employer Shifts From Rare to Routine
By Thomas O’Connell
Two decades ago, joint employer disputes were an occasional flare-up. Courts generally relied on well-settled tests, and franchisors, management companies and affiliated entities could count on some measure of predictability. That world is gone.
In the wake of regulatory shifts, union campaigns and post-COVID-19 workforce upheaval, joint employer cases are now emerging at a remarkable pace. What was once an uncommon occurrence has become almost daily among federal court rulings — not to mention the steady stream of state court decisions.
Employers that once viewed joint employer allegations as rare should recognize that they are now part of the ordinary rhythm of litigation.
Chavez-DeRemer v. Levering Regional Health Care Center LLC
The Aug. 25 decision from the U.S. District Court for the Eastern District of Missouri in Chavez-DeRemer v. Levering Regional Health Care Center LLC exemplifies this new reality.
The U.S. Department of Labor alleged that nursing staff routinely worked through unpaid meal breaks, and that Reliant Care Management Company LLC was responsible alongside Levering, the healthcare facility where they worked.
Reliant Care pointed to its management services agreement, which emphasized that Levering alone employed the staff.
This was not the first time the case had come before the court. In 2023, the district court initially granted summary judgment for both Levering and Reliant Care.
This year on appeal, however, the U.S. Court of Appeals for the Eighth Circuit reversed in Micone v. Levering Regional Health Care Center LLC, pointing to evidence that employees allegedly worked through breaks without compensation and that supervisors were aware.
After remand, the district court was left to decide the remaining issues — including Reliant Care's argument that it could not be deemed a joint employer under the Fair Labor Standards Act.
In resolving that question, the court applied the economic realities framework, which looks to four familiar factors: hiring and firing, supervision and scheduling, setting wages, and maintaining records. The evidence was mixed.
Reliant Care allegedly only had authority over the facility administrator's hiring, while local managers hired nurses and frontline staff. Day-to-day supervision also largely rested with Levering's managers, though Reliant Care allegedly embedded a nurse advisor who trained employees and, at times, acted in a supervisory capacity during shortages.