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In Re: Enterprise Rent-A-Car Wage & Hour v. Enterprise Holdings

June 28, 2012

IN RE: ENTERPRISE RENT-A-CAR WAGE & HOUR EMPLOYMENT PRACTICES LITIGATION NICKOLAS HICKTON; SEAN HERBSTER; MIQUEL MCDONALD; MICHAEL KEITH AVERILL, JR.; JASMINE BROMFIELD; NILS HAGSTROM; ELSA DEPINA; JEFFREY GALIA; ROBERT BAJKOWSKI; TORI GAUDELLI; DONNASHEKIA RICHARD; WAYMAN F. GRAHAM, II; KEVIN C. HAGLER, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, APPELLANTS
v.
ENTERPRISE HOLDINGS, INC., F/K/A ENTERPRISE RENT-A- CAR COMPANY; ENTERPRISE RENT-A-CAR COMPANY OF PITTSBURGH, LLC, F/K/A ENTERPRISE RENT-A-CAR COMPANY OF PITTSBURGH; ENTERPRISE LEASING COMPANY OF PHILADELPHIA, LLC, F/K/A ENTERPRISE LEASING COMPANY OF PHILADELPHIA; ENTERPRISE LEASING COMPANY-SOUTH CENTRAL, LLC, F/K/A ENTERPRISE LEASING COMPANY-SOUTH CENTRAL, INC.; ELRAC, LLC, F/K/A ELRAC, INC.; ENTERPRISE LEASING COMPANY OF ORLANDO, LLC, F/K/A ENTERPRISE LEASING COMPANY OF ORLANDO; ENTERPRISE RENT-A-CAR COMPANY-MIDWEST, F/K/A ENTERPRISE RENT-A-CAR COMPANY-MIDWEST; ENTERPRISE LEASING COMPANY OF CHICAGO, LLC, F/K/A ENTERPRISE LEASING COMPANY OF CHICAGO; ENTERPRISE RENT-A-CAR COMPANY OF TENNESSEE, LLC, F/K/A ENTERPRISE RENT-A-CAR COMPANY OF TENNESSEE; ENTERPRISE LEASING COMPANY OF FLORIDA, LLC, F/K/A ENTERPRISE LEASING COMPANY (A FLORIDA CORPORATION); XYZ ENTITIES 1-100



On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Nos. 2-07-cv-01687, 2-09-cv-00815, 2-09-cv-00816, 2- 09-mc-00210, 2-09-cv-00824, 2-09-cv-01321, 2-09-cv- 00832, 2-09-cv-00833, 2-09-cv-01188) District Judge: Honorable Joy Flowers Conti

The opinion of the court was delivered by: Garth, Circuit Judge.

PRECEDENTIAL

Argued May 15, 2012

Before: SMITH, FISHER and GARTH, Circuit Judges.

OPINION OF THE COURT

The only issue on this appeal is whether Enterprise Holdings, Inc.,*fn1 ("Enterprise Holdings"), which is the sole stockholder of thirty eight domestic subsidiaries, is a joint employer of the subsidiaries' assistant managers within the meaning of the Fair Labor Standards Act ("FLSA"). In order to answer this question, we must define the contours of the term "joint employer."

The District Court, in a comprehensive opinion,*fn2 held that Enterprise Holdings, Inc. was not a joint employer.*fn3 In doing so, the District Court determined that the standard to which it applied its findings of fact was found in Lewis v. Vollmer of America, No. 05-1632, 2008 WL 355607 (W.D. Pa. Feb. 7, 2008) and Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1981), abrogated on other grounds by Garcia v. San Antonio Transit Authority, 469 U.S. 528, 539 (1985). We will discuss those two cases, together with additional factors, which we hold to be significant in defining "joint employer" under the FLSA.

Although the standard we prescribe varies in some respects from the District Court's test, we hold that the District Court did not err in deciding for the appellee, Enterprise Holdings, Inc. and thus, in not certifying the class which the plaintiffs seek. We therefore will affirm the District Court's August 13, 2010 order which granted Enterprise Holdings, Inc.'s motion for summary judgment.

I.

Plaintiff Nickolas Hickton was a former assistant branch manager employed at Enterprise-Rent-a-Car Company of Pittsburgh. On December 11, 2007, Hickton filed a nationwide collective class action under the FLSA in the Western District of Pennsylvania. Hickton claimed that the defendant, Enterprise Holdings, Inc., the parent company of Enterprise-Rent-a-Car Company of Pittsburgh, violated the FLSA by failing to pay required overtime wages.

The FLSA provides that:

[n]o employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

29 U.S.C. § 207(a)(1). Some employees are classified as exempt under the FLSA, 29 U.S.C. § 213(a), and are consequently exceptions to this rule.

Hickton's action, filed on behalf of all individuals employed during the putative class period as branch managers or assistant branch managers at the various Enterprise locations,*fn4 named both Enterprise Holdings, Inc.*fn5 and Enterprise Rent-a-Car Company of Pittsburgh as defendants. By order of the United States Judicial Panel on Multidistrict Litigation, similar actions pending in other Districts were transferred to the Western District of Pennsylvania.*fn6 Since that time, a number of other cases have also been transferred pursuant to the Judicial Panel on Multidistrict Litigation's order.*fn7

On October 23, 2009, Hickton, along with other named plaintiffs, filed an Amended Master Complaint on behalf of themselves and all other current and former assistant branch managers of Enterprise locations. The Complaint alleged that the plaintiffs' employers had unlawfully classified them as exempt from the FLSA's overtime provisions, and sought overtime compensation, liquidated damages, attorneys' fees, and costs. In addition to the respective subsidiaries for whom the various plaintiffs worked, the Complaint also alleged that the parent company, Enterprise Holdings, Inc., was liable for the overtime pay as a joint employer of the plaintiffs.

As we have noted, Enterprise Holdings, Inc. is the sole shareholder of 38 domestic subsidiaries, such as Enterprise Rent-a-Car Company of Pittsburgh, which rents and sells vehicles and conducts other business under the "Enterprise" brand name. These various subsidiaries each have branch locations, and the ...


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