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Overview of 3rd Circuit's Precedent-Setting FLSA Cases

By Jonathan R. Tung, Esq. | Last updated on

Employment lawyers have been keeping their eyeballs on the Third Circuit lately. That court of appeals has been very busy making law with regards to the federal FLSA in two recent cases.

As an added bonus, the court was mercifully clear in its dicta and tone in both opinions. It might not be a bright line rule, but hey -- let's not be greedy.

Curtain No. 1: Faush v. Tuesday Morning, Inc.

In the first Third Circuit case to set precedent, the court overturned a lower court grant of summary judgment for an employer who sought to categorize a temp worker who was not entitled standing as a full fledged employee for purposes of a Title VII employment action.

The court applied the so-called Darden factors and found that the employer had actually really hired the plaintiff when all factors were examined under a totality of the circumstances.

  • Employee's Salary: The court found that even though the defendant paid another to make actual payments to the employer, this was really "functionally indistinguishable" from direct payments to the plaintiff.
  • Hiring and Firing Duties: The court found that Tuesday Morning had the hiring agency on a short leash and was really deciding matters on hiring and firing.
  • Control of Activities: Last, Tuesday Morning directly supervised the plaintiff in pretty much all of his activities.

With these factors in mind, the court found that any like minded employer in this situation cannot be heard to call such a "temp worker" merely a temp worker and not an employee.

Curtain No. 2: Babcock et al. v. Butler County Prison

The second case involves a dispute as to whether or not the final minutes of an hour-long lunch at prison "predominantly benefited" the prison; or if the guards were free to enjoy their meal "relieved of all duty." The difference was material.

In another case-by-case sort of analysis, the circuit concluded that given the ambiguities of applying FLSA to prison guard mealtime, it had no choice but to conform to the tidal wave of "predominant test" popularity from the majority of the other circuits. In so applying, the guards were found to be eating primarily for their own benefit, not the prison's. As a result, the guards' case was tossed.

Which Is It Gonna Be?

That's the latest from the Third. What's particularly noteworthy about the Butler case is its potential widening of FLSA to more gray-areas that are ripe for circuit debate. With regards to the proper test, however, it looks like that Ninth Circuit is the final and last holdout of the "relieved of all duty" test.

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