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Contractor Settles with Amazon Workers in Wage-and-Hour Deal

Recently, in a multidistrict litigation, SMX LLC ("SMX"), one of the staffing agencies that was sued along with Amazon.com, LLC ("Amazon") as joint employers, agreed to settle its claims for $3.7 million that alleged that SMX failed to pay workers for time spent going through anti-theft screening. In re: Amazon.com Inc., Fulfillment Center Fair Labor Standards Act (FLSA) and Wage and Hour Litigation, No. 3:14-md-02504 (W.D. Ky. 2014). The class includes employees who were hired by SMX and worked at an Amazon warehouse in California from October 1, 2012 until the present. Although the settlement will resolve most of the California workers' claims, some remain, including claims against Amazon affiliate, Golden State FC LLC.

As in the case above, California courts have been increasingly willing to find joint employment status in reviewing employment disputes. For example, while companies previously had to meet a strict standard of "direct and immediate" control over employees to qualify for joint employer status, just recently, the National Labor Relations Board ("NLRB") decided to broaden that standard by ruling that control exercised "indirectly" - such as through an intermediary - may now establish joint employer status. NLRB v. Browning-Ferris Industries of Cal., et al., No. 32-RC-109684, 2015 WL 5047768 (N.L.R.B. Aug. 27, 2015). In other words, even companies that lack direct control over their employees' terms and conditions of employment may be found liable for labor violations committed by their labor contractors if joint employment is established. In its opinion, the NLRB explained that the limiting requirements of the previous standard "le[ft] the Board's joint-employment jurisprudence increasingly out of step with changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships." Consequently, in Browning-Ferris, the NLRB reversed the Regional Director and found that a recycling center and its staffing agency that provided the facility's workers were joint employers and both were required to comply with certain labor and employment laws.

This new joint employment standard is significant. Although this decision is likely to be appealed, employers should reevaluate their current business practices to reduce the risk of being found a joint employer.

The legal team at SFMS has substantial experience litigating employment matters. If you have any questions regarding this subject or this posting, please contact Chiharu Sekino ([email protected] ) or Alec Berin ([email protected]). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP, is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS also maintains affiliate offices in London, England, and Milan, Italy, and is an active member of Integrated Advisory Group (www.iaginternational.org), which provides our firm with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

SOURCE

Bultman, M. "Amazon Workers Seek Approval of $3.7M Wage-And-Hour Deal." Law360. Last modified on November 4, 2015.

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