Moreau v. Air France

• Decision Date: 15 September 2003
• Docket Number: No. 02-15872.,02-15872.
• Citation: 343 F.3d 1179
• Parties: Stephane MOREAU, Plaintiff-Appellant, v. AIR FRANCE; Joseph P. Bouloux; Howard Weisser, Defendants-Appellees, v. UNITED STATES of America, Intervenor-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

343 F.3d 1179

Stephane MOREAU, Plaintiff-Appellant, v. AIR FRANCE; Joseph P. Bouloux;

Howard Weisser, Defendants-Appellees, v. UNITED STATES of America, Intervenor-Appellee.

No. 02-15872.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 9, 2003 — San Francisco, California.

Filed September 15, 2003.

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Patricia A. Shiu, The Legal Aid Society — Employment Law Center, San Francisco, California, for the plaintiff-appellant.

M. Elaine Jacoby, Duane Morris, Princeton, New Jersey, for the defendants-appellees.

Irene Solet, Appellate Staff, Civil Division, Department of Justice, Washington, D.C., for the intervenor-appellee.

Rae T. Vann, McGuiness Norris & Williams, Washington, D.C., for Amicus Curiae Equal Employment Advisory Council.

Elizabeth A. Glidden, Hedin & Goldberg, Minneapolis, Minnesota, for Amicus Curiae National Employment Lawyers Association.

Lloyd Loomis, Sonnenschein Nath & Rosenthal, Los Angeles, California, for Amicus Curiae International Air Transport Association.

Appeal from the United States District Court for the Northern District of California; Vaughn R. Walker, District Judge, Presiding. D.C. No. CV-99-04645-VRW.

Before: James C. HILL,^* Thomas G. NELSON, and Michael Daly HAWKINS, Circuit Judges.

OPINION

MICHAEL DALY HAWKINS, Circuit Judge.

In this necessarily fact-specific appeal, we must decide whether and in what circumstances contracted service workers should be considered in determining whether an employer is exempt from the requirements of the Family Medical Leave Act ("FMLA") and its California counterpart, the California Family Rights Act ("CFRA"). Air France flies an abbreviated schedule (one flight per day) in and out of the San Francisco International Airport ("SFO"), and contracts with outside entities for ramp and towing service, cargo and baggage handling, and food preparation. If Air France is considered the "joint employer" of the workers performing these services, it is subject to FMLA-CFRA requirements. From an adverse summary judgment concluding Air France was not a joint employer of these workers, Stephane Moreau ("Moreau") appeals.

Air France employed Moreau as its Assistant Station Manager at SFO. In March of 1998, Moreau requested a twelve-week leave of absence to assist his ill father in France, asserting entitlement under the FMLA and CFRA. The request was addressed to Moreau's immediate supervisor, defendant Joseph Bouloux; a copy was forwarded to defendant Howard Weisser, Air France's Director of Personnel, in New York City.

Weisser then had a telephone conversation with Moreau and informed him that the request for leave was denied. Moreau requested a written response, which the company provided, explaining that Air France employed fewer than 50 employees at Moreau's worksite or within a 75-mile radius, and thus was exempt from the FMLA. Weisser also refuted Moreau's contention that certain ground handling company employees should be counted as "joint employees" of Air France for purposes of the FMLA. The letter also warned that absence from work would lead to termination.

Moreau took the leave anyway and was terminated. He then filed suit in district court, claiming his termination violated the FMLA and the CFRA and asserting various state common law claims. The district court determined that Air France should not be considered a joint employer for purposes of the FMLA. In turn, the district court granted summary judgment on Moreau's state law claims for violation of CFRA and wrongful discharge in violation of public policy.¹ The district court also found that Moreau was an at-will employee and granted summary judgment on Moreau's claims for breach of employment contract and breach of the covenant of good faith and fair dealing. Moreau timely appealed.

We review a grant of summary judgment de novo. Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.2000) (en banc). The question of whether Air France should be considered a joint employer is a legal question and also reviewed de novo. Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1469 (9th Cir.1983).

I. Joint Employment under the FMLA

A. Basic Statutory and Regulatory Framework

The FMLA was enacted, in part, "to balance the demands of the workplace with the needs of families ... in a manner that accommodates the legitimate interests of employers ...." 29 U.S.C. § 2601(b). "Eligible" employees may take a maximum of twelve weeks unpaid leave for the birth of a child or in order to care for a seriously ill spouse, child or parent. Id. at § 2612(a)(1).

As part of a compromise in passing the legislation, Congress drafted a "small employer" exception, which excludes employers with fewer than 50 employees. Id. at § 2611(4)(A). An additional exception was created for "small operations" — that is, a potentially large company with a relatively small satellite office in a particular area. The statute specifically excludes from coverage an employee who is employed at a particular worksite if the employer has less than 50 employees within 75 miles of that worksite. Id. at § 2611(2)(B)(ii). This provision was designed to accommodate employer concerns about "the difficulties that an employer might have in reassigning workers to geographically separate facilities." H.R.Rep. No. 102-135, pt. 1, at 37 (1991). In other words, it might be reasonable to expect an employer to relocate workers from nearby facilities for the period of an FMLA leave (such as reassigning someone temporarily from San Jose to San Francisco), but it would be understandably more difficult to reassign an employee whose family lives in Los Angeles to work in San Francisco for three months.

The FMLA does not contain any language specifically addressing the joint employment concept. Administrative regulations interpreting the FMLA, however, provide some guidance for when a joint employment status may be found to exist:

(a) Where two or more businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. Joint employers may be separate and distinct entities with separate owners, managers and facilities. Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as:

(1) Where there is an arrangement between employers to share an employee's services or to interchange employees;

(2) Where one employer acts directly or indirectly in the interest of the other employer in relation to the employee; or,

(3) Where the employers are not completely disassociated with respect to the employee's employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer.

(b) A determination of whether or not a joint employment relationship exists is not determined by the application of any single criterion, but rather the entire relationship is to be viewed in its totality. For example, joint employment will ordinarily be found to exist when a temporary or leasing agency supplies employees to a second employer.

29 C.F.R. § 825.106(a) & (b).

The regulations distinguish between the "primary employer" and "secondary employer":

In joint employment relationships, only the primary employer is responsible for giving required notices to its employees, providing FMLA leave, and maintenance of health benefits. Factors considered in determining which is the "primary" employer include authority/responsibility to hire and fire, assign/place the employee, make payroll and provide employment benefits.

Id. at § 825.106(c). If a joint employment relationship is found to exist, "[e]mployees jointly employed by two employers must be counted by both employers, whether or not maintained on one of the employer's payroll, in determining employer coverage and employee eligibility." 29 C.F.R. § 825.106(d).

B. Joint Employment Caselaw

There are no reported cases in this circuit (or any other, for that matter) addressing joint employment in the FMLA context. There are, however, reported joint employer cases arising under the Fair Labor Standards Act ("FLSA") and the Migrant and Seasonal Agricultural Worker Protection Act ("AWPA") that are informative. In fact, the FMLA employs a number of definitions from the FLSA, 29 U.S.C. § 2611(3), and the FMLA joint employer regulation mirrors the wording of the FLSA joint employment regulations. Compare 29 C.F.R. § 825.106 with 29 C.F.R. § 791.2(b).

1. Bonnette and Torres-Lopez

In a FLSA case, Bonnette v. California Health and Welfare Agency, 704 F.2d 1465 (9th Cir.1983), we noted that the joint employment determination required consideration of the total employment situation, but focused primarily on four factors: "whether the alleged employer (1) had the power to hire and fire employees, (2) supervised and controlled employee work schedules or conditions of payment, (3) determined the rate and method of payment, and (4) maintained employment records." Id. at 1470.

Applying these factors, we concluded that California state and county welfare agencies were joint employers of "chore workers" who provided domestic in-home services to the aged, blind and disabled. Id. A state program provided funding for the home services and, although the recipient was able to select the chore worker, the county determined the tasks to be performed, the number of hours per week required for those tasks, and verified the hours worked before disbursing payment. Id. at 1468. We explained that the agencies had "complete economic control" over the employment relationship and the "economic reality" was that the agency employed the chore workers to perform services for the benefit of the recipients. Id. at 1470. The district...