In re Enter. Rent-A-Car Wage & Hour Emp't Practices Litig. - 683 F.3d 462 (3d Cir. 2012)

Rule:

The Court held that the test for "joint employer" under the FLSA is a melding of the modified Lewis test and the Bonnette test, consistent with those considerations of the real world where such additional economic concerns are prominent. The Court referred to this test as the Enterprise test.

Facts:

Plaintiff Nickolas Hickton was a former assistant branch manager employed at Enterprise-Rent-a-Car Company of Pittsburgh. On December 11, 2007, Hickton filed a nationwide collective class action under the Fair Labor Standards Act ("FLSA") in the Western District of Pennsylvania. Hickton claimed that the defendant, Enterprise Holdings, Inc., the parent company of Enterprise-Rent-a-Car Company of Pittsburgh, violated the FLSA by failing to pay required overtime wages. The District Court, in a comprehensive opinion, held that Enterprise Holdings, Inc. was not a joint employer. In doing so, the District Court determined that the standard to which it applied its findings of fact was found in Lewis v. Vollmer of America, No. 05-1632, 2008 U.S. Dist. LEXIS 9039, 2008 WL 355607 (W.D. Pa. Feb. 7, 2008) and Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1981), abrogated on other grounds by Garcia v. San Antonio Transit Authority, 469 U.S. 528, 539, 105 S. Ct. 1005, 83 L. Ed. 2d 1016 (1985).

Issue:

Is Enterprise Holdings, Inc., which is the sole stockholder of thirty eight domestic subsidiaries, a joint employer of the subsidiaries' assistant managers within the meaning of the FLSA?

Answer:

No.

Conclusion:

Applying the Enterprise test, the Court concluded that the District Court was correct in its determination that Enterprise Holdings, Inc. was not a joint employer of Hickton or the other assistant managers. Enterprise Holdings, Inc. had no authority to hire or fire assistant managers, no authority to promulgate work rules or assignments, and no authority to set compensation, benefits, schedules, or rates or methods of payment. Furthermore, Enterprise Holdings, Inc. was not involved in employee supervision or employee discipline, nor did it exercise or maintain any control over employee records. While the plaintiffs contended that Enterprise Holdings, Inc. functionally held many of these roles by way of the guidelines and manuals it promulgated to its subsidiaries, we are not influenced by this claim. Inasmuch as the adoption of Enterprise Holdings, Inc.'s suggested policies and practices was entirely discretionary on the part of the subsidiaries, Enterprise Holdings, Inc. had no more authority over the conditions of the assistant managers' employment than would a third-party consultant who made suggestions for improvements to the subsidiaries' business practices. Each of the individual factors indicates that Enterprise Holdings was not an employer of Hickton or the other assistant managers, a conclusion that is bolstered by the readily apparent fact that Enterprise Holdings exercised no control, let alone significant control, over the assistant managers. When a legal standard requires the balancing of multiple factors, as it does in this case, summary judgment may still be appropriate even if not all of the factors favor one party—this is such a case. The evidence in the instant case so favors the defendant that the Court concluded no reasonable juror could find that Enterprise Holdings, Inc. was the plaintiffs' employer, and that the grant of summary judgment to Enterprise Holdings, Inc. under the Enterprise test the Court adopted was correct, even though one factor may have been deemed to favor the plaintiffs or been found to be neutral. Thus, under the test set forth, and having considered, as the District Court considered, all facts and circumstances revealed by the record, including elements of the nature of the car rental business and the interlocking directorates, the Court concluded that the District Court was correct in its summary judgment conclusion and that the plaintiffs have failed to demonstrate that Enterprise Holdings, Inc., the parent of the 38 subsidiaries, is a joint employer of the branch assistant managers.