Opinion ID: 3155688
Heading Depth: 3
Heading Rank: 2

Heading: The Enterprise test versus the Darden test

Text: The parties dispute the appropriate test for an employment relationship. Faush argues that the test for “joint employers” articulated in In re Enterprise Rent-A-Car Wage & Hour Emp’t Practices Litig., 683 F.3d 462 (3d Cir. 2012), should apply in this context. Tuesday Morning argues that the test announced in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992), applies instead. Both parties contend that they win regardless of which multi-factor test applies, and the two tests are indeed quite similar. As a doctrinal matter, however, it is clear that the Darden test applies to Title VII cases, while the Enterprise test does not. In Darden, the Supreme Court was called upon to construe the term “employee” in the Employee Retirement Income Security Act (“ERISA”). Because the definition of “employee” in ERISA “is completely circular and explains nothing,” Darden, 503 U.S. at 323, the Court concluded, as it had in similar situations, “‘that Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine,’” id. at 322-23 (quoting Cmty. 10 for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989)). Because Title VII’s definition of “employee” is similarly devoid of content, the common-law test outlined in Darden governs in the Title VII context as well. See Walters v. Metro. Educ. Enters., Inc., 519 U.S. 202, 211-12 (1997); Covington, 710 F.3d at 119; Brown, 581 F.3d at 180.4 4 One of our cases appears, at first glance, to complicate the picture. In Graves v. Lowery, 117 F.3d 723 (3d Cir. 1997), we considered whether clerks who were formally employed by the judicial branch of Pennsylvania could also pursue Title VII claims against the county in which their court sat. We reasoned that although “the courts are considered the employers of judicial personnel[,] . . . this fact does not preclude the possibility that a county may share co-employer or joint employer status with the courts[] . . . [if both] entities exercise significant control over the same employees.” Id. at 727. Rather than expressly considering the Darden factors, we drew guidance from cases assessing “joint-employer status” in the context of the National Labor Relations Act, and we concluded that the clerks had sufficiently alleged that the judicial branch had “delegate[d] employer-type responsibilities to [the] county.” Id. The factors considered for purposes of the National Labor Relations Act are, however, essentially the same as those listed in Darden. See N.L.R.B. v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1123 (3d Cir. 1982); G. Heileman Brewing Co. v. N.L.R.B., 879 F.2d 1526, 1531 (7th Cir. 1989). This is because the word “employee” in the National Labor Relations Act, as in ERISA and Title VII, is intended to convey the common-law meaning of the term. See N.L.R.B. v. Town & Country Elec., Inc. 516 U.S. 85, 94 (1995); Darden, 503 U.S. at 324-35. 11 The Enterprise test, by contrast, applies “[w]hen determining whether someone is an employee under the [Fair Labor Standards Act (“FLSA”)].” Enterprise, 683 F.3d at 467. The definition of “employee” in the FLSA is of “striking breadth” and “cover[s] some parties who might not qualify as such under a strict application of traditional agency law principles.” Darden, 503 U.S. at 326. Accordingly, the “textual asymmetry” between Title VII and the FLSA “precludes reliance on FLSA cases.” Id. Instead, the sole question before us is whether the common law of agency would recognize a master-servant relationship.5