Labor and Employment Law Weekly Update (Week of October 4, 2010)

When Are You a "Successor in Interest" Under the FMLA? by Christi R. Adams

When is a new employer a successor in interest to a former employer under the FMLA? This was the question in front of a federal appellate court covering Washington and California, among other Western states (http://tinyurl.com/25xznp8).

Christina Sullivan sued Dollar Tree Stores, Inc. under the FMLA. To be eligible for the protections of the FMLA, Ms. Sullivan must have worked for Dollar Tree for at least 12 months; however, Ms. Sullivan had only been employed by Dollar Tree for approximately nine months. Prior to Dollar Tree, she was employed by Factory 2-U. The only way Ms. Sullivan could meet the 12-month requirement at the time of her original claim was if Dollar Tree were a successor in interest to Factory 2-U under the FMLA. If so, then Ms. Sullivan could count the time she had worked for Factory 2-U with the time she had worked for Dollar Tree.

Ms. Sullivan argued that Dollar Tree was a successor in interest because after Factory 2-U filed for bankruptcy it sold its interest in the lease of a building to Dollar Tree. Dollar Tree opened for business at the same location, and Ms. Sullivan applied for and was hired as an assistant manager for Dollar Tree. Ms. Sullivan was therefore never out of work.

Dollar Tree granted Ms. Sullivan unpaid leave after she missed work due to her mother's health problems, but due to the absences, Ms. Sullivan ultimately either quit or was fired. Ms. Sullivan contacted the U.S. Department of Labor (DOL) and, after an investigation, the DOL concluded that Dollar Tree's actions had violated the FMLA. Ms. Sullivan then filed her FMLA claim against Dollar Tree in court.

The FMLA does not define the term "successor in interest." 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 (http://tinyurl.com/23854ha). 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...

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