Opinion ID: 1301294
Heading Depth: 1
Heading Rank: 3

Heading: Bartech's and USCAR's obligations as joint employers

Text: In order to promote administrative efficiency and to ensure accountability under the FMLA, the Department of Labor regulations addressing joint employment distinguish between the primary and secondary employer. For example, [i]n joint employment relationships, only the primary employer is responsible for giving required notices to its employees, providing FMLA leave, and maintenance of health benefits. 29 C.F.R. § 825.106(c). But when an eligible employee takes leave, the regulations ensure that both the primary and secondary employers honor the decision and do not engage in retributory action: Job restoration is the primary responsibility of the primary employer. The secondary employer is responsible for accepting the employee returning from FMLA leave in place of the replacement employee if the secondary employer continues to utilize an employee from the temporary or leasing agency, and the agency chooses to place the employee with the secondary employer. A secondary employer is also responsible for compliance with the prohibited acts provisions with respect to its temporary/leased employees, whether or not the secondary employer is covered by FMLA The prohibited acts include prohibitions against interfering with an employee's attempt to exercise rights under the Act, or discharging or discriminating against an employee for opposing a practice which is unlawful under FMLA. 29 C.F.R. § 825.106(e) (emphasis added). Grace alleges that she requested her leave from Bartech, and that both Bartech and USCAR violated the FMLA by failing to reinstate her at the end of her unpaid leave. In order to determine which employer qualifies as the primary employer, the Department of Labor regulations prescribe the following factors: (1) the authority/responsibility to hire and fire, (2) the ability to assign/place the employee, (3) the employer making payroll, and (4) the employer responsible for providing employment benefits. 29 C.F.R. § 825.106(c). Additionally, the regulations offer a default rule for the majority of cases involving a staffing agency and a client employer: For employees of temporary help or leasing agencies [such as Bartech] the placement agency most commonly would be the primary employer.  Id. (emphasis added). [12] The application of these factors leads us to conclude that Bartech is the primary employer. First, as to the question of the ability to hire and fire, both USCAR and Bartech exercise considerable control over Grace. USCAR's decision to restructure its IT department, for example, helped lead to her termination. However, Bartech alone has the ultimate ability to hire and fire Grace. Even after USCAR made the decision to terminate her position, Grace was still an employee of Bartech; indeed, the record indicates that Bartech sought to lease her to another client employer. Conversely, had Bartech chosen to terminate Grace, her employment at USCAR would likely have also ceased immediately ; in such a situation, USCAR would then need to ask for a replacement from another staffing agency or contract with a replacement directly. Under the second factor, USCAR undoubtedly controlled Grace's day-to-day activities. Again, however, Bartech had the sole ability to assign her to another employer. For example, had CanadaCar offered to pay Bartech more for Grace's services, then Bartech could have reassigned her accordingly. And under the final two factors, Bartech is the employer responsible for making Grace's payroll and for managing her benefits. Though it is ultimately USCAR that is providing the resources to pay Grace, Bartech occupies the important legal position of being the entity in charge of her payroll and benefits. Thus, we believe that the default rule, which designates the staffing agency ( i.e. Bartech) as the primary employer, is applicable in the instant situation. See Mahoney, 444 F.Supp.2d at 1255-56 (applying the § 825.106 factors and determining that the staffing agency was the primary employer in its relationship with its client, Nokia, the secondary employer). The specific facts of the case reinforce our conclusion that Bartech is the primary employer and that USCAR is the secondary employer. When Grace became ill, she informed Bartech and not USCAR of her intention to take FMLA leave. JA 171. According to the regulations interpreting joint employment under the FMLA, this action was sufficient to trigger potential liability for both because she need only inform her primary employer of her intention to take leave (only the primary employer is responsible . . . for providing FMLA leave). 29 C.F.R. § 825.106(c); see also 29 U.S.C. § 2611(2)(A)(i) (an eligible employee means an employee who has been employed  for at least 12 months by the employer with respect to whom leave is requested ) (emphasis added). Where an employee is eligible for leave, the primary employer is liable for any violations under the FMLA. In addition, the secondary employer is directly liable for both complying with the prohibited acts provisions of the FMLA ( e.g. discriminating against an employer who takes FMLA leave, 29 U.S.C. § 2615(a)(2)) and accepting the employee returning from FMLA leave in place of the replacement employee if the secondary employer continues to utilize an employee from the temporary or leasing agency. 29 C.F.R. § 825.106(e). As discussed infra, USCAR did continue to utilize an employee from the leasing agency; in fact, it specifically requested that Bartech provide a replacement employee to take over Grace's IT responsibilities. Consequently, for purposes of analyzing Grace's FMLA claim, Bartech is the primary employer and USCAR is the secondary employer.