Washington Supreme Court Decision May Spur Joint Employer Class Actions

In a matter of first impression, the Washington Supreme Court has held that the "joint employer doctrine" is a viable theory under Washington's Minimum Wage Act (WMWA), and adopted the Fair Labor Standards Act's economic reality test to determine whether one or more entities are joint employers for purposes of minimum wage and/or overtime liability. This ruling extends the joint employer doctrine to Washington opt-out class actions under the WMWA, and potentially subjects entities to broader liability for the pay practices of their subcontractors.

Case Background

The plaintiffs in Becerra v. Expert Janitorial, LLC1 worked as night janitors for various subcontractors in Seattle-area Fred Meyer grocery stores. The plaintiffs alleged they worked over 40 hours per week without being paid minimum wage or overtime in violation of the WMWA.

Fred Meyer contracted with Expert Janitorial to provide facility maintenance services at its grocery stores. None of the plaintiffs were directly employed by Fred Meyer or Expert Janitorial; rather, they were employed by independent janitorial companies that contracted with Expert Janitorial.

Remarkably, the manager of one of the independent janitorial companies admitted that his company regularly required the plaintiffs to work more than 40 hours per week, but did not pay them minimum wage or overtime.2 The manager also testified that Fred Meyer and Expert Janitorial must have been aware that the plaintiffs were working more than 40 hours per week, as the plaintiffs were scheduled to work seven days per week beginning at 11:00 p.m. and had to wait until Fred Meyer employees arrived at 8:00 a.m. the following day in order to leave the premises.

Based on these facts, the plaintiffs argued that Fred Meyer and Expert Janitorial were their joint employers for purposes of WMWA liability as a matter of economic reality and that both companies knew the plaintiffs were denied overtime wages. Fred Meyer and Expert Janitorial moved for summary judgment on the basis that they were not the plaintiffs' employers and thus could not be held liable under the WMWA. The trial court granted the motions by focusing on whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. The Washington Supreme Court reversed and remanded, ruling that the...