July 07, 2017
This week, HR Policy joined with other business groups in urging the Supreme Court to overturn the Fourth Circuit's radical new "joint employer" standard, citing its potential "to penalize and deter economically sensible business arrangements" between general contractors and subcontractors. In a case involving DirecTV, the Fourth Circuit essentially held that to avoid joint employer status under the Fair Labor Standards Act, two companies have to be "completely disassociated," which is determined by whether they "share, agree to allocate responsibility for, or otherwise co-determine—formally or informally, directly or indirectly—the essential terms and conditions of the worker's employment." DirecTV has asked the U.S. Supreme Court to grant review ("certiorari") of the decision. Our amicus curiae brief supporting the request notes the Fourth Circuit’s novel new joint employment standard creates a conflict among the courts of appeal, radically alters the law governing FLSA joint employment claims, and "threatens a flood of nationwide collective action lawsuits, challenging years of past conduct by companies that could not have reasonably foreseen that their transactions might entangle them in FLSA suits." If the Court grants certiorari, it will likely be the most significant employment law case of the next term and a landmark case in determining the bounds of joint employer liability. Meanwhile, the House Education and the Workforce Committee will hold a hearing on July 12 on the issue.