Teed v. Thomas & Betts Power Solutions, L.L.C.
711 F.3d 763
| 7th Cir. | 2013Background
- Two closely related FLSA overtime actions against Packard and Bray; the district court substituted Thomas & Betts Power Solutions, LLC for the defendants after Bray’s assets (including Packard) were auctioned to Thomas & Betts; Packard Bray’s parent did not exercise control over Packard’s employment practices; Wisconsin law would govern traditional successor liability but federal law supplies the standard here; the district court held Thomas & Betts liable under a federal successor-liability framework and awarded about $500,000 in damages, fees, and costs; the appeal challenges the imposition of successor liability, arguing Thomas & Betts disclaimed liabilities and that the federal standard should not apply to the FLSA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a federal successor-liability standard applies to FLSA claims | Thomas & Betts argues no, Wisconsin-style or no federal expansion. | Thomas & Betts contends the FLSA is not subject to a federal successor standard. | Federal standard applies to FLSA cases. |
| Whether successor liability should attach given Packard’s insolvency and sale to Thomas & Betts | Liability should attach to recover unpaid FLSA claims. | Disallow liability to avoid windfall to workers and priority issues for creditors. | Successor liability warranted under a federal standard. |
| Whether a disclaimer of liability by the successor defeats liability | Disclaimers should not bar recovery under federal labor-law liability. | Disclaimer should absolve successor from liability. | Disclaimer is not a valid defense to successor liability in this context. |
| Policy justification for applying the federal standard to FLSA | Uniform protection across federal labor statutes serves workers’ rights. | Extending federal standard imposes regulatory costs and may distort markets. | Federal standard justified; concerns about extension do not override workers’ protections. |
Key Cases Cited
- John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964) (federal standard for successor liability under labor statutes)
- Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973) (broad federal approach to labor-relations successors)
- Wheeler v. Snyder Buick, Inc., 794 F.2d 1228 (7th Cir. 1986) (multifactor successor-liability test in labor cases)
- Upholsterers’ Int'l Union Pension Fund v. Artistic Furniture, 920 F.2d 1323 (7th Cir. 1990) (multifactor approach to successor liability in labor matters)
- EEOC v. G-K-G, Inc., 39 F.3d 740 (7th Cir. 1994) (application of federal-standard successor liability in employment claims)
- Sullivan v. Dollar Tree Stores, Inc., 623 F.3d 770 (9th Cir. 2010) (FLSA successor liability considerations in employment disputes)
- Musikiwamba v. ESSI, Inc., 760 F.2d 741 (7th Cir. 1985) (discussion of labor-law related successor liability principles)
- In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation, 683 F.3d 462 (3d Cir. 2012) (federal standard for successor liability in wage-hour cases (cited))