254 F. Supp. 3d 392
E.D.N.Y2017Background
- Plaintiffs (Murphy and McDougall) worked as education staff at HeartShare Education Center (the School) and as Direct Support Professionals at HeartShare Human Services (the Residence); duties often overlapped (escorting and caring for the same students).
- They were paid by each entity separately and received overtime only when weekly hours exceeded 40 for each entity individually; they did not receive overtime when combined hours across both entities exceeded 40.
- Plaintiffs allege the School and the Residence are sufficiently interconnected to be joint employers for FLSA and NYLL overtime purposes, and assert related breach of contract claims.
- Defendants moved to dismiss for failure to plead joint-employer status; the parties agreed the horizontal joint-employer framework governs.
- The court denied the motion to dismiss, finding plaintiffs plausibly alleged horizontal joint employment under 29 C.F.R. § 791.2 and related DOL guidance; the NYLL and breach claims survive for the same reasons. Case set for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the School and Residence are joint employers under FLSA (horizontal test) | The entities are interrelated (shared location, shared clients, overlapping supervision, shared HR/accounting, employees perform tasks benefiting both), so all hours should be combined for overtime | The entities are separate nonprofits with separate hiring, paychecks, and rules; allegations are insufficient to show shared control or that they are not "completely disassociated" | Court: Plaintiffs plausibly alleged horizontal joint employment under 29 C.F.R. § 791.2; motion to dismiss denied |
| Whether the NYLL claim survives absent FLSA joint-employer finding | NYLL uses same joint-employer standards as FLSA; if FLSA joint employment pleaded, NYLL claim stands | Defendants rely on separateness argument under NYLL as under FLSA | Court: NYLL claim survives because joint-employer allegations sufficient under the same test |
| Whether breach of contract claim based on failure to pay combined overtime is viable | Contract claim depends on joint-employer status; paying overtime only per-entity breached employment obligations | Defendants: separate entities fulfilled overtime obligations individually; no joint breach | Court: Denied dismissal — breach claim survives because it rests on plausible joint-employer allegation; a contract purporting to waive statutory overtime rights is void as against public policy |
| Whether summary judgment is appropriate | Plaintiffs sought to proceed to trial; opposed dismissal | Defendants sought dismissal and suggested summary judgment might be appropriate | Court: After hearing, found summary judgment not viable and set case for trial |
Key Cases Cited
- Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132 (2d Cir.) (FLSA should be interpreted broadly to protect workers)
- Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728 (U.S.) (FLSA rights are nonwaivable; remedial purpose of statute)
- Carter v. Dutchess Cmty. Coll., 735 F.2d 8 (2d Cir.) (formal-control test for employer status)
- Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir.) (economic-reality factors for employment status)
- Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir.) (functional-control factors for joint employment analysis)
- Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132 (2d Cir.) (apply flexible economic-realities test and overlapping factors)
- Flannigan v. Vulcan Power Grp., LLC, [citation="642 F. App'x 46"] (2d Cir.) (upholding joint-employer verdict based on shared office, administrative staff, and control)
- Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298 (4th Cir.) (example of employers jointly involved in hiring, scheduling, and discipline to find joint employment)