Work for Related Employers Can Cause Joint Employer Liability
Boston-based Partners HealthCare Systems and its 14 affiliated hospitals and health care companies recently signed a consent decree in federal district court agreeing to pay $2.7 million in back wages to 700 employees to resolve an overtime lawsuit filed by the U.S. Department of Labor (“DOL”).
The interesting twist in this lawsuit was that Partners HealthCare contacted the DOL itself after realizing that perhaps affiliated entities sharing employees had run afoul of statutory overtime requirements under the Fair Labor Standards Act. Indeed, they had. The DOL’s investigation confirmed that defendants failed to combine hours worked on separate payrolls for employees who provided services for two or more defendants during a single workweek.
Evidently, there existed a joint employment relationship between these entities. The analysis was based on some of the following factors:
- Whether an arrangement existed between employers to share the employee;
- Whether the companies acted in the interest of one another in relation to the employee;
- Whether the companies shared control of the employee’s employment;
- Whether there was common ownership of the employers; and
- Whether there was common management of the employers.
No single factor is controlling in joint employment cases. Courts, as well as the DOL, look at the “economic realities” of the work relationship to determine if a joint employer relationship truly exists.
Partners HealthCare may actually have been lucky – or wise – in this situation. By bringing the matter to the attention of the DOL itself, Partners HealthCare may have saved itself liquidated damages and attorneys’ fees that would likely have resulted had the lawsuit been brought by an attorney on behalf of its employees.
Common ownership