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FMLA Successor in Interest?
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FMLA Successor in Interest?
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Good afternoon. I am the HR Director in a community health center in Florida. In September 2012, we absorbed some patient clinics from the local Health Department. We also interviewed m
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Forums » Topic Forums » Legal Forum » FMLA Successor in Interest?
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FMLA Successor in Interest?
posted at 3/20/2013 2:14 PM EDT
on Workforce Management
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Posts: 2
First: 3/20/2013 Last: 4/18/2013 |
Good afternoon. I am the HR Director in a community health center in Florida. In September 2012, we absorbed some patient clinics from the local Health Department. We also interviewed many and hired 17 of their employees who had been scheduled to be laid off.Prior to this transition, we did not have 50 employees and were not considered a covered employee for purposes of FMLA.Since we hired additional staff in September, we now have more than 50 employees. We have since passed the 20 consecutive weeks of having more than 50 employees, becoming a covered employer as of February 5, 2013.The Health Department remains a separate entity, still providing services to the community. The transition of patients and some staff was not a merger or an acquisition.The employees from the Health Department were not “acquired”; they were considered new hires.Today, I received a request for FMLA from one of the former Health Department employees, who was hired in September 2012. She has not been employed at this health center for 12 months, nor has she worked 1250 hours, so I would not consider her as eligible for FMLA.But, I am concerned about the possibility of the community health clinic being considered a successor in interest in this situation, even though the Health Department remains a separate business in the community.Would I be correct in denying FMLA to this employee until she has been here for 12 months?Any thoughts are appreciated! |
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Re: FMLA Successor in Interest?
posted at 3/21/2013 1:52 PM EDT
on Workforce Management
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Posts: 180
First: 9/21/2011 Last: 5/14/2013 |
Wow that is a tough one and probably not a DIY/message board response. I would suggest calling the DOL/EBSA directly and see if they can point you in the right direction. I am a bit worried that you are playing word games such as calling it a transition/absorbed but not an acquisition....What documents exist for the transation of the clinics and employees? Was it an asset transfer? who made the decision and told you to treat them as new hires? FMLA doesn't define SiI......but here is just one set of questions that one district court looked at: "The court also did not have a lot of guidance from other courts; only one other federal appellate court in the nation (the 6th Circuit) had analyzed the successorship inquiry under the FMLA. That court, like the Sullivan court, first looked to the DOL’s definition contained in the regulations, which includes a list of factors to be considered:(1) substantial continuity of the same business operations; (2) use of the same plant; (3) continuity of the work force; (4) similarity of jobs and working conditions; (5) similarity of supervisory personnel; (6) similarity in machinery, equipment, and production methods; (7) similarity of products or services; and (8) the ability of the predecessor to provide relief. Both courts focused on “balancing the equities” to determine successorship. This inquiry is intensely fact-specific in nature and much broader than is the inquiry in a strict corporate-law sense of the term" http://www.laboremploymentperspectives.com/2010/10/04/when-are-you-a-successor-in-interest-under-the-fmla/ Here is a direct link to the DOL's webpage on it: http://webapps.dol.gov/elaws/whd/fmla/5a5.aspx and at the bottom there is a contact link. There is some risk in giving her FMLA that is not truly FMLA. You can't later go back and recharacterize it or take away the protection. So if you find that she really wasn't eligible now and you gave it to her, you do risk having to give her another 12 weeks. Also not your question, you might need to check on any benefits plan eligibility/vesting issues at the same time because often these go hand in hand about what is considered prior service and what is not. |
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Re: FMLA Successor in Interest?
posted at 3/27/2013 4:50 PM EDT
on Workforce Management
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Posts: 1
First: 3/27/2013 Last: 3/27/2013 |
You're not yet subject to FMLA. The rule is 20 consecutive weeks in the prior calendar year or this calendar year. You weren't subject last year (right?) and we haven't yet had 20 weeks go by in this year so you wouldn't be subject to FMLA until mid-May. Also, unless you offered to recognize prior work time when you hired these people from the clinics, only the time worked for you would count toward their eligibility. In Response to FMLA Successor in Interest?: Good afternoon. I am the HR Director in a community health center in Florida. In September 2012, we absorbed some patient clinics from the local Health Department. We also interviewed many and hired 17 of their employees who had been scheduled to be laid off. Prior to this transition, we did not have 50 employees and were not considered a covered employee for purposes of FMLA. Since we hired additional staff in September, we now have more than 50 employees. We have since passed the 20 consecutive weeks of having more than 50 employees, becoming a covered employer as of February 5, 2013. The Health Department remains a separate entity, still providing services to the community. The transition of patients and some staff was not a merger or an acquisition. The employees from the Health Department were not “acquired”; they were considered new hires. Today, I received a request for FMLA from one of the former Health Department employees, who was hired in September 2012. She has not been employed at this health center for 12 months, nor has she worked 1250 hours, so I would not consider her as eligible for FMLA. But, I am concerned about the possibility of the community health clinic being considered a successor in interest in this situation, even though the Health Department remains a separate business in the community. Would I be correct in denying FMLA to this employee until she has been here for 12 months? Any thoughts are appreciated! Posted by QuiltedHR |
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Re: FMLA Successor in Interest?
posted at 3/28/2013 12:05 PM EDT
on Workforce Management
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Posts: 180
First: 9/21/2011 Last: 5/14/2013 |
Good Catch HRJungle..... I missed this was the first time they would be covered and focused more on the individual's eligibility than the company's. Since you didn't have 50 for 20 weeks in 2012, you have 20 weeks in 2013 to meet the standard. Which would be mid May. |
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Re: FMLA Successor in Interest?
posted at 4/11/2013 3:45 PM EDT
on Workforce Management
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Posts: 15
First: 4/11/2013 Last: 5/8/2013 |
If the employees you hired were covered under FMLA and you are considered a successor in interest, I would think the 20 week calendar year requirement would not be applicable to the former health department employees. |
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Re: FMLA Successor in Interest?
posted at 4/22/2013 9:19 AM EDT
on Workforce Management
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Posts: 15
First: 4/11/2013 Last: 5/8/2013 |
In Response to Re: FMLA Successor in Interest?: Thank you all so much for your thoughts and input. I didn't realize the 20 weeks had to be in this calendar year....saved me this time! Appreciate the help! Posted by QuiltedHR I have read several cases on this issue and, admittedly, it appears that for the purpose of the successor in interest provisions of the FMLA you may be exempt under the 20 week calendar provisions of the FMLA, but one case in particular seems, to my mind at least, cast some doubt on its application to your situation. The case at point is Cobb v Contract Transport Inc. (452 F. 3rd 543, 6th circuit, 2006). In Cobb the conditions appear similar in that Cobb, a truck driver, was employed by the Byrd Corporation, an independent contractor for the USPS. Under USPS regulations contracts are subject to rebid every two years and under these regulations Byrd was underbid by Contract Transport who was awarded the new contract. And Cobb was required to apply for employment with the new contractor; he was rehired and continued to perform, without a break in service, the duties he had performed while employed with by Byrd. Mr. Cobb became ill and required gall bladder surgery; due to his absence he was terminated from his position with the Contract Transport corporation. Mr. Cobb filed suit under the FLMA and his employer countered with the same arguments offered in your situation; he did not meet the 1250, one year requirment, and Contract Transport was not a covered employer under FMLA. The Court deemed otherwise and based their decision on the fact that Cobb had continued to perform the same duties he had performed with his prior employer and that his workplace was unchanged; the Court stated that although Cobb no longer worked for the original contractor, he was essentially an employee for the USPS. I note in your circumstances you write that the employee who requested FMLA coverage was new to "this health clinic" but is "this health clinic" a former board of health facility? The only reason I ask is because you stated that you "rehired" 17 former board of health employees and my guess would be that these 17 employees were scheduled for layoff not because of the facility where they were employed, but because of their seniority standing. This brings to mind another factor the 6th circuit considered in a subsequent case, Grace v USCARR LLC (521 F.3rd 655), in which the court applied Cobb and also factored in the number of employees rehired by the new employer, stating that, among other reasons, the new employer benefitted from the prior experience of the new hires in the decision to select the services of the new contractor. In closing, I do not know the specific circumstances involved in your situation and Cobb and Grace may have absolutely no bearing, but I would recommend, if you have not already, contacting an attorney before deciding that you are exempt based on the 20 week calendar year requirement. |
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