Fifth Circuit Clarifies FMLA Obligations Relating to Staffing Agency Employees

Companies use temporary or leased employees for many reasons—to assist with seasonal work or temporary projects, to afford flexibility with a workload that might vary by customer demands, and sometimes in an effort to avoid responsibilities or liability that might result from an employment relationship.  This strategy can be effective in some—but not all—situations.  While utilizing a staffing agency to supply employees may avoid some obligations an employer owes its workforce, the client company is typically a joint employer of the leased employees for many employment purposes.  This joint employment relationship requires special attention when the Family and Medical Leave Act is involved.  Failure to fully understand the obligations might expose your company to liability– or may push you towards a business decision you don’t need to make.

A recent Fifth Circuit decision clarifies the obligations on both the client company and the staffing agency when a temporary or leased employee seeks leave under the Family and Medical Leave Act (the “FMLA”).  Both the client company and the staffing agency have specific obligations and responsibilities to the employee; however, the staffing agency is the “primary employer” and bears most of the responsibility.  As the “secondary employer,” the client company’s obligations are limited in large part to accepting the return of the employee at the agency’s request if the agency has continued to provide employees.

In Cuellar v. Keppel Amfels, L.L.C., the plaintiff, Jennifer Cuellar, was a temporary employee assigned to work at Keppel Amfels.  731 F.3d 342 (5th Cir. 2013).  Cuellar became pregnant more than one year after her assignment with Keppel Amfels started; she requested and received FMLA leave from her staffing agency when her baby was born.  When she sought to return to her position at Keppel Amfels, she was told that her position had been filled and there was no other opening for her at that time, but that she was eligible for future opportunities.  Cuellar sued Keppel Amfels, alleging violation of the FMLA.  Analyzing the joint employment regulations of the FMLA, the Fifth Circuit affirmed the trial court’s dismissal of Cuellar’s claims on summary judgment.

While recognizing both companies were joint employers, the Fifth Circuit found the FMLA regulations clearly delineated the responsibilities between the client company and the staffing agency.  Both parties owe an obligation to the employee, but the obligations are quite different.  The staffing agency is the worker’s “primary employer” – as such, the agency bears the main responsibility for both providing FMLA leave and restoring the employee to work upon the expiration of leave.  The client company is the “secondary employer” and holds a conditional responsibility.  The client company is responsible only for accepting the returning employee if it continues to use an employee from that agency, and the agency chooses to return the employee to her assignment.  The court recognized that the employee may never be returned to work for the client company, but this alone would not constitute a violation of the FMLA.

There are certainly situations in which the client company may be subject to FMLA liability, such as where the agency attempts to return the employee to his or her previous assignment upon return from leave, and the client company refuses to accept the employee in favor of another agency worker.  However, Cuellar clarifies that the staffing agency bears the burden of seeking to return the employee to his or her previous assignment if it is still providing employees to the client company.  As a practical matter, companies using leased employees should direct a temporary employee requesting FMLA leave to the staffing agency, and should not refuse to return the employee to the assignment when he or she returns from leave (and the same agency is still providing employees for the job) unless it would have ended the assignment regardless of the FMLA leave.