Staffing Agencies and Secondary Employer Jointly Liable for FMLA Reinstatement

Yesterday we discussed how staffing agencies and companies that use staffing agencies can be sued as joint employers. Today I read about another lawsuit that alleged a joint employer concept in the staffing industry.

Perhaps now is a good time to give a shout out to Tom Erb, owner of the staffing company consulting group Tallann Resources. Tom does an excellent job keeping staffing companies across the country on the straight and narrow. If you are a staffing company, you owe it to your business to see what Tallann Resources can do to help grow your bottom line.

We now resume our regularly scheduled program

In today’s case, an employee of a staffing agency filed suit against her secondary employer alleging that the secondary employer violated the Family Medical Leave Act (FMLA) by discouraging her primary employer (the staffing agency) from seeking her reinstatement after an FMLA-authorized maternity leave.

Join me as we explore the nuts and bolts of staffing (or temporary placement) agencies and joint employer liability.

Where two businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. A joint employer’s obligations under the FMLA depend on whether it is the primary or secondary employer. Where an employee obtains employment through a temporary placement agency, the placement agency most commonly is the primary employer.

Only the primary employer is responsible for providing FMLA leave and job restoration. A secondary employee bears only a conditional burden: it is responsible for accepting an employee returning from FMLA leave if it continues to utilize an employee from the temporary placement agency and if the agency chooses to place the employee with the secondary employer.

A secondary employer is not without independent FMLA obligations, though. In addition to its conditional job-restoration duty, a secondary employer is also responsible for compliance with the prohibited acts provisions with respect to its jointly employed employees. The prohibited acts provisions include two relevant categories of illegal behavior:

1. Exercise of rights: It shall be unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under the FMLA.
2. Discrimination: It shall be unlawful for any employer to discharge or in any other manner discriminate against any individual for opposing any practice made unlawful under the FMLA.

The federal regulations covering FMLA provides that “interfering with” the exercise of an employee’s rights “would include, for example, not only refusing to authorize FMLA leave, but discouraging an employee from using such leave” and “manipulation by a covered employer to avoid responsibilities under FMLA.

The comments to the final rule implementing the FMLA’s joint-employment regulations explain:

Although job restoration is the responsibility of the primary employer, the purposes of the Act would be thwarted if the secondary employer is able to prevent an employee from returning to employment. Accordingly, the regulations are revised to provide that the secondary employer is responsible for accepting an employee returning from leave in place of any replacement employee. Furthermore, the secondary employer (client employer) must observe FMLA’s prohibitions in § 105(a)(1), including the prohibition against interfering with, restraining, or denying the exercise of or attempt to exercise any rights provided under the FMLA.

It would be an unlawful practice, in the Department [of Labor’s] view, if a secondary employer interfered with or attempted to restrain efforts by the primary (temporary help) employer to restore an employee who was returning from FMLA leave to his or her previous position of employment with the secondary (client) employer (where the primary (temporary help) employer is still furnishing the same services to the secondary (client) employer).

Because the secondary employer is acting in the interest of the primary employer within the meaning of § 101(4)(A)(ii)(I) of the Act, the secondary employer has these responsibilities, regardless of the number of employees employed.

Thus, just because a primary employer bears the main responsibility for job restoration does not enable secondary client employers to avoid responsibility for reinstating temporary employees after FMLA leave. Just as a primary employer may not interfere with or retaliate on account of an employee’s exercise of FMLA rights, neither may a secondary employer.

Kind of weird writing legalese on this blog. Bet you guys are glad that I speak in normal, plain English most of the time!

Matt Austin is a Columbus, Ohio lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Austin Legal’s Concierge Legal Services program is relied upon by companies to remain compliant and competitive. If you have employees, you need Concierge Legal Services. You can call Matt at (614) 285-5342 or email him at Austin@LaborEmploymentOSHA.com.