Employees bring employment law claims against their employer. That seems obvious. What’s less obvious is: who is the employer and can there be more than one? A Massachusetts federal court recently addressed this question identifying the circumstances in which an employee can have more than one employer. Bah v. Enterprise Rent-A-Car Company of Boston, LLC and Enterprise Holdings, Inc., No. 17-12542 (D. Mass. Nov. 13, 2020).

Mamadou Alpha Bah filed a class action lawsuit on behalf of assistant branch managers (“ARMs”) against Rent-A-Car Company of Boston, LLC (“ERAC Boston”) and Enterprise Holdings, Inc. (“EHI”) alleging that they, collectively, violated the Fair Labor Standards Act and the Massachusetts Overtime Law. Mr. Bah alleged that ERAC Boston and EHI were his joint employer. Defendants challenged this allegation, asking the Court to find that EHI was not Mr. Bah’s employer and to dismiss it from the suit.

The Court began its analysis by noting that:

The FLSA's definitions of “employee,” “employer,” and “employ” are broad, and “comprehensive enough to require their application to many persons and working relationships that were not considered employment at common law. Therefore, while at common law an employer was the entity that directly employed an individual, two or more employers may jointly employ someone for purposes of the FLSA. All joint employers are individually responsible for compliance with the FLSA.

To that end, in deciding whether a defendant is an “employer,” the Court used the following factors, known as the Baystate test:

…the economic reality of the totality of the circumstances bearing on whether the putative employee is economically dependent on the alleged employer. [] Courts [must] consider at least the following four factors to determine if an alleged employer is subject to FLSA liability: whether the alleged employer (1) had the power to hire and fire the employees; (2) supervised and controlled employee work schedules or conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records. [It] is the totality of the circumstances, and not any one factor, which determines whether a worker is the employee of a particular alleged employer.

According to the Court, Mr. Bah satisfied this test as it relates to EHI by alleging that EHI (1) imposed employment policies for the employees on a nationwide basis, (2) made decisions relative to classifying the ARMs as non-exempt from overtime requirements, (3) established profit-sharing plans, (4) established rates of pay, (5) maintained employment records, (6) set and maintained job duties, job descriptions, and responsibilities, (6) set standard company policies, and (7) oversaw customer service and employee satisfaction surveys. Read the full opinion here.

This case will now proceed with discovery as to both entities. One question remains unresolved by the Court as to whether a Massachusetts state court would use the Baystate test, or a broader test known as the integrated-enterprise theory. Under that theory, employers are joint employers if they are nominally separate companies but so interrelated that they constitute a single employer.