Christina managed a retail store for a discount clothing chain until the chain went bankrupt and its leasehold on the store was sold to Dollar Tree. Christina’s employment at that location, however, continued uninterrupted because she was hired by Dollar Tree as an assistant manager. Approximately nine months later, Christina’s mother experienced serious health problems and she needed Christina to provide her with care and assistance. Would Christina’s absence to care for her mother be protected by the Family and Medical Leave Act (FMLA)?
No. Under these facts, the Ninth Circuit ruled that Dollar Tree was not a successor in interest to the discount clothing chain. Thus, Christina had not worked for her employer, Dollar Tree, for one year and did not meet the FMLA’s eligibility requirements. As defined by the FMLA, “employer” includes an employer’s successor in interest. Thus, if Dollar Tree were a successor in interest to the discount clothing chain, Christina would have met the one-year employment requirement.
However, the court found that Dollar Tree was not a successor in interest. Labor Department regulations identify eight factors to be considered:
- substantial continuity of the same business operations;
- use of the same plant;
- continuity of the workforce;
- similarity of jobs and working conditions;
- similarity of supervisory personnel;
- similarity in machinery, equipment, and production methods;
- similarity of products or services; and
- the ability of the predecessor to provide relief.
Here, Dollar Tree purchased only the store’s lease. While it did rehire a few of the clothing chain’s employees, and its generically described business operation (consumer retail store offering discounted products) was similar to the clothing chain’s operation, the similarities ended there. Dollar Tree purchased no inventory from the clothing chain; it required the chain’s employees to apply for jobs with Dollar Tree if they wanted to work for Dollar Tree; it brought in many of its own employees or newly hired employees; it closed the store for a month to perform renovations, train employees in its own methods, and set up; it changed the employee’s job title and responsibilities; it assigned a new store manager; it brought in all new inventory, including different clothing and many kinds of products never sold by the clothing chain; and it used an entirely different pricing structure for its products.
Source: Sullivan v Dollar Tree Stores, Inc, 9thCir, September 27, 2010.