Chapter § 1-5 29 CFR § 825.104. Covered Employer

• Jurisdiction: United States

1-5 29 CFR § 825.104. Covered Employer

(a) An employer covered by FMLA is any person engaged in commerce or in any industry or activity affecting commerce, who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year. Employers covered by FMLA also include any person acting, directly or indirectly, in the interest of a covered employer to any of the employees of the employer, any successor in interest of a covered employer, and any public agency. Public agencies are covered employers without regard to the number of employees employed. Public as well as private elementary and secondary schools are also covered employers without regard to the number of employees employed. (See § 825.600).

(b) The terms "commerce" and "industry affecting commerce" are defined in accordance with section 501(1) and (3) of the Labor Management Relations Act of 1947 (LMRA) (29 U.S.C. 142(1) and (3)), as set forth in the definitions at § 825.800 of this part. For purposes of the FMLA, employers who meet the 50-employee coverage test are deemed to be engaged in commerce or in an industry or activity affecting commerce.

(c) Normally the legal entity which employs the employee is the employer under FMLA. Applying this principle, a corporation is a single employer rather than its separate establishments or divisions.

(1) Where one corporation has an ownership interest in another corporation, it is a separate employer unless it meets the "joint employment" test discussed in § 825.106, or the "integrated employer" test contained in paragraph (c)(2) of this section.

(2) Separate entities will be deemed to be parts of a single employer for purposes of FMLA if they meet the "integrated employer" test. Where this test is met, the employees of all entities making up the integrated employer will be counted in determining employer coverage and employee eligibility. A determination of whether or not separate entities are an integrated employer is not determined by the application of any single criterion, but rather the entire relationship is to be reviewed in its totality. Factors considered in determining whether two or more entities are an integrated employer include:

(i) Common management;
(ii) Interrelation between operations;
(iii) Centralized control of labor relations; and
(iv) Degree of common ownership/financial control.

(d) An "employer" includes any person who acts directly or indirectly in the interest of an employer to any of the employer's employees. The definition of "employer" in section 3(d) of the Fair Labor Standards Act (FLSA), 29 U.S.C. 203(d), similarly includes any person acting directly or indirectly in the interest of an employer in relation to an employee. As under the FLSA, individuals such as corporate officers "acting in the interest of an employer" are individually liable for any violations of the requirements of FMLA.

1-5:1 Commentary

The question for practitioners is this: Who can be sued? The question is key for two reasons. First, two entities may satisfy the fifty-plus employee threshold if they are considered "integrated" under the case law, while each separately may not employ the threshold number of employees. Note that integrated status is separate from joint/employer status (covered in 29 CFR 825.106).

Second is the issue of individual liability for managers, both public and private. Big picture: a manager can be liable if the manager was involved in the FMLA decision at issue.

Formula in deciding whether there is individual coverage: titles do not control, actions do. And, for managers working for public employers, there is also the issue of qualified immunity. Practitioners need to note that the burden of establishing an "integrated employer" for Subsection (c)(1-2) relationship is on the employee. This is because the employee bears the burden of showing that he or she was an eligible FMLA employee. The U.S. Court of Appeals for the Fifth Circuit addressed this issue directly in Hill v. Research Institute, 209 F.3d 719 (5th Cir. 2000) ("Given that Hill bears the burden of showing that she was an eligible employee, her argument must fail. The record is wholly devoid of any evidence indicating that [Defendant] is an integrated employer or that Hill was an eligible employee of any company which [the Defendant] may be a part.").

1-5:1.1 The "Integrated Employer" Test Often Referred to as the "Single Employer" Test

There is a fair amount of confusion in the Fifth Circuit as to whether all factors need to be met, just some of them, or whether one factor predominates over another.

• Vance v. Union Planters Corp., 279 F.3d 295, 301 (5th Cir. 2002) (consideration of centralized control over labor relations found to be most important factor in determining integrated status).
• Garcia v. Elf Atochem N. Am., 28 F.3d 446, 450 (5th Cir. 1994) (issue arises under Title VII; while acknowledging that "employer" should be given an expansive definition under Title VII, case suggests that all factors must be met).
• Newhouse v. Sugar Creek Pizza, LLC, 2:19-CV-00015 (S.D. W. Va. 2019) (Pizza Hut granted motion to dismiss because there are no supporting facts to draw reasonable inference of liability against it under a direct employer, joint employer, or integrated employer theory; under joint employment, multiple employers can be liable if they each "exercise sufficient control over the same employees"; integrated employer doctrine deems liability to companies for employment violations where the companies are so "interrelated that they constitute a single employer"; Fourth Circuit articulated non-exhaustive four-factor test to determine whether separate entities should be treated as single employer for FMLA purposes: (1) common management; (2) interrelation between operations; (3) centralized control of labor relations; and (4) degree of common ownership/financial control; complaint does not include any facts related to her employment with Pizza Hut, no facts suggesting Pizza Hut exercised control over plaintiff, and no facts showing connection between Pizza Hut and Oak Hill restaurant where she was employed, thus, complaint does not contain enough facts to state a claim of relief that is plausible on its face).

As a practical matter, courts will defer...