Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 163 control over the economic aspects of the working relationship.” 969 These factors are referred to as the Bonnette factors, because the framework comes from a decision of the Ninth Circuit of the same name. 970 Applying these factors, the SJC held that the defendant was not a a joint employer of the plaintiffs. 971 It should be noted that the DOL’s interpretation of this test under the FLSA is in flux and has varied depending on which political party is in power. 972 In January 2016, the DOL’s Wage & Hour Division (WHD) under the Obama Administration issued an Administrator’s Interpretation (the AI or Guidance) that described in detail the WHD’s opinion of the criteria for determining whether two or more businesses are joint employers and therefore may be held jointly and severally responsible for fulfilling minimum wage, overtime, and other obligations under the FLSA. As persuasive authority, the AI called for the courts and WHD investigators to apply an “expansive” definition when deciding whether two or more businesses are responsible for a single 969 Id . at *10 (cit ingBaystate, 163 F.3d at 675-76). Note that the circuit court s of appeals are not uniform in their determinat ion of joint employment under the FLSA. For example, the Second Circuit has adopted a different formulat ion of the test for joint employer relat ionships. See Zheng v. Liberty Apparel Co. , 355 F.3d 61 (2d Cir. 2003). In Zheng , the SecondCircuit addressed whether an apparel company was a joint employer of the contractors that assembled it s garment s by asking: (1) the extent to which the workers perform a discrete line-job forming an integral part of the putat ive joint employer’s integrated process of product ion or overall business object ive; (2) whether the putat ive joint employer’s premises and equipment were used for the work; (3) the extent of the putative employees’ work for the putat ive joint employer; (4) the permanence or durat ion of the working relat ionship between the workers and the putat ive joint employer; (5) the degree of cont rol exercised by the putat ive joint employer over the workers; (6) whether responsibility under the cont ract with the putat ive joint employer passed “without material changes” from one group of potent ial joint employees to another; and (7) whether the workers had a “business organizat ion” that could or did shift as a unit from one putat ive joint employer to another. Id . at 68. The DOL has addressed wage violat ions result ing from joint employer relat ionships as a species of independent cont ractor misclassificat ion—in effect, the joint employer treats the employee as a cont ractor whose services are obtained through another ent ity. As part of it s focus on independent cont ractormisclassificat ion, the DOL has also ramped up enforcement in joint employer situat ions. See DOL WHD Press Release, US Labor Department obtains joint employment judgment ordering DirecTV to pay $395K in back wages and damages to 147 cable installers in Washington (Oct . 22, 2015) (describing enforcement act ion finding that DirecTVwas a joint employer of installers and, hence, responsible for various FLSA violat ions), available at ht tps://www.dol.gov/newsroom/releases/whd/whd20151022-0 ( last visitedOct . 11, 2021). 970 See Jinks , 2021 WL 5872357 at *8; Baystate , 163 F.3d at 675 (explaining that the four factors were developed in Bonnette v. Cal. Health and Welfare Agency , 704 F.2d 1465 (9th Cir. 1983)). 971 See Jinks , 2021 WL 5872357 at *10. 972 A similar t rend occurred in connect ion with the Nat ional Labor Relat ions Board’s t reatment of joint employment. In August 2015, the Obama NLRB expanded the definit ion of joint employment for purposes of federal labor law by stat ing a new test . See Browning-Ferris Indus. of Cal., Inc. , 362 NLRB No. 186 (2015), reversed in part by Browning-Ferris Indus. of Cal., Inc. v. NLRB , No. 911 F.3d 1195 (D.C. Cir. 2018). Under the Board’s prior joint employer test , the putat ive joint employer had to possess or share actual, direct cont rol over essent ial employment terms. In expressly overruling that prior precedent, the NLRB found that two or more ent it ies will be considered “ joint employers” if both exercise either the actual or potent ial authority to control the workforce. The NLRB noted that “ right to control, in the common-lawsense, is as probat ive of joint -employer status, as is the actual exercise of cont rol whether direct or indirect .” Id. at 2. However, on February 26, 2020, the Trump NLRB issued a rule restoring the prior joint employer test focused on actual cont rol. Se e ht tps://www.federalregister.gov/document s/2020/02/26/2020- 03373/joint -employer-status-under-the-national-labor-relations-act (last visited July 14, 2021). The rule, which went into effect on April 27, 2020, specifies that a business is a joint employer of another employer’s employees only if the two employers share or codetermine the employees’ essent ial terms and condit ions of employment . The newrule also makes clear that joint employer status cannot be based solely on indirect influence or a cont ractual reservat ion of a right to cont rol that has never been exercised. The Biden NLRB announced that it intends to engage in rulemaking regarding the standard for determining joint employment. Se e ht tps://www.reginfo.gov/public/do/eAgendaViewRule?p ubI d=202110&RIN=3142-AA21 ( last visited on Dec. 30, 2021).