Businesses that outsource specific functions are often subject to allegations that they are a joint employer of the employees of the outsourced entity. A Pennsylvania District Court recently rejected this theory of liability and dismissed Bank of America from a lawsuit brought by call center employees employed by a vendor servicing Bank of America, who alleged they were not properly compensated for time spent booting up their computers. Lepkowski v. Telatron Mktg. Group, 2011 U.S. Dist. LEXIS 9388 (W.D. Pa. Feb. 1, 2011).
Observing that the Third Circuit Court of Appeals (which encompasses Pennsylvania) has not yet ruled on the appropriate legal test to apply to determine “joint employer” status, the court applied factors from the test utilized by the Second Circuit and Ninth Circuit. Id. at * 7-10 citing Zheng v. Liberty Apparel Co., Inc., 355 F.3d 61 (2nd Cir. 2003) and Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983). Because the plaintiffs failed to allege that Bank of America could hire and fire the call center employees, set rates of pay or schedules or maintain employment records, functions all performed by Telatron Marketing Group, Bank of America was dismissed from the case. Id. at * 26-27.
While this decision should be hailed as a victory for companies which outsource call center or other similar functions, the terms and conditions of individuals providing services to a business must be analyzed on a case-by-case basis to assess exposure under the factors identified in Zheng, Bonnette and other appellate authority.