SACRAMENTO – California Attorney General Xavier Becerra, as part of a coalition of 18 attorneys general, today filed a lawsuit challenging the U.S. Department of Labor’s (DOL) new rule limiting joint employer liability under the Fair Labor Standards Act (FLSA). Under the Trump Administration’s new rule, it would become substantially more difficult to establish when organizations are inappropriately shielding themselves from joint employment liability under the FLSA, opening the door to potential violations of workers’ rights. In the lawsuit, the coalition argues that the rule is contrary to the FLSA’s statutory purpose and violates the Administrative Procedure Act.
“Our workers deserve to be protected by rules that keep pace with the realities of the 21st century,” said Attorney General Becerra. “Narrowing the definition of joint employment creates an unnecessary new way for companies to shield themselves from liability and exposes millions of workers to unchecked violations of federal labor laws. In California, we’ll continue to lean forward and fight to defend the rights of workers.”
In filing the lawsuit, the states argue that the rule’s definition of joint employer does not adequately reflect today’s workplaces, where growing numbers of businesses are outsourcing functions to third-party management companies, independent contractors, staffing agencies, or labor providers. DOL’s rule reduces oversight of these employers by significantly narrowing the definition of joint employment, which will exacerbate the existing lack of accountability for some types of employers and put federal regulations out of step with the modern workplace.
Entities found to be joint employers can be held accountable for workplace violations against an employee, even if the person is formally employed by another entity. However, the new rule would make it much harder to establish joint employer liability. For example, under the new rule, employers can attempt to avoid liability by simply asserting that, although they had the ability to exercise control, they did not in fact exercise it. The coalition further argues that the rule is an unreasonable interpretation of statute, that DOL does not articulate a satisfactory reasoned explanation for the rule, and that DOL lacks critical information and dismisses data and analysis assessing the impact of the rule on workers and joint employers. While DOL’s rule will create harmful and unnecessary confusion, workers in California will continue to be protected by the state’s broad definition of an employer.
Attorney General Becerra is dedicated to defending the rights of workers in California and across the country. Last year, the Attorney General joined a comment letter opposing the Trump Administration’s initial proposal to limit joint employer liability. He also led a multistate lawsuit against the Trump Administration’s final rule undermining collective bargaining rights for Medicaid in-home care workers nationwide. In addition, the California Department of Justice entered into multistate agreements with major fast food companies to prohibit them from including provisions in contracts that make it more difficult for employees to seek better pay and benefits. Early last year, the Attorney General filed a petition with the Ninth Circuit Court of Appeals to challenge the Trump Administration’s efforts to undermine California’s meal and rest break rules. Earlier this year, the Attorney General filed an amicus brief in support of California’s labor laws and thousands of airline flight attendants. In 2018, Attorney General Becerra co-led a coalition of 17 attorneys general opposing a Trump Administration rule to allow employers to pocket the tips of certain employees, threatening the loss of up to $5.8 billion of workers’ earned tips.
In filing the lawsuit, Attorney General Becerra joins the attorneys general of New York, Pennsylvania, Colorado, District of Columbia, Delaware, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New Jersey, Oregon, Rhode Island, Vermont, Virginia, and Washington.
A copy of the complaint is available here.