Alaska Employment Law

This is a 6th Circuit case where the plaintiff sued the company and its successor under the FMLA, Title VII, and state law. The appeals court held that where the defendant research and development company for the automotive industry (USCAR) employed contractor employees from another company, and that company was taken over by a third (DGE and Bartech, respectively), there was joint liability between USCAR and Bartech as employers, and successor liability between DGE and Bartech under the FMLA.

The court found that Bartech and USCAR are joint employers for FMLA purposes, so Grace was eligible for unpaid leave. Summary judgment for the employer on FMLA was reversed. Although USCAR had no employees, the court looked at 29 C.F.R. § 825.104(c)(1), which set out the “integrated employer test,” and the “joint employment” test. The court discussed both tests at length and found the integrated test inapplicable, but the joint employer test applied and both companies therefore have FMLA obligations.

The court also considered the threshold question of whether Grace’s current employer, Bartech, was bound for FMLA purposes by her accumulation of leave from the previous company in interest, DGE, and found she was eligible for leave since Bartech was a successor in interest to DGE.

The court also held that both defendants were entitled to summary judgment on the Title VII claim, and Grace’s state claims were properly dismissed without prejudice, although she seemed confused about that. Grace v. USCAR, et al., can be found here.