On June 28, in a case of first impression before the Third Circuit Court of Appeals, the court established the “Enterprise test” in order to determine whether or not employers are “joint employers” for purposes of the applicability of the Fair Labor Standards Act (FLSA). See In Re: Enterprise Rent-A-Car Wage & Hour Practices Litigation, 683 F.3d 462 (3d Cir. 2012).
In the Enterprise matter, the plaintiffs (who were assistant branch managers at various Enterprise locations) filed a nationwide FLSA class action. The suit was brought in the Western District of Pennsylvania against both subsidiary Enterprise Rent-A-Car Company of Pittsburgh (Enterprise Rent-A-Car) and its parent company, Enterprise Holdings Inc. (EHI). The plaintiffs alleged that they should have been classified as “nonexempt” employees and entitled to overtime pay for hours worked over 40 hours in a workweek. The plaintiffs argued that not only should the subsidiary employer be liable, but so should EHI as a “joint employer.” The District Court below had determined that EHI was not a joint employer, and, therefore, granted its summary judgment motion and refused to certify the class. The Third Circuit upheld the District Court’s decision and established a new joint employment test, dubbed the Enterprise test.
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