Plaintiff Laurie Harvey sued defendants Recover-Care Shawnee LLC, Recover-Care Shawnee Gardens LLC, and Recover-Care Healthcare LLC in the United States District Court for the District of Kansas, raising claims of employment discrimination and retaliation under Title VII, the ADA/ADAA, the FMLA, and Kansas common law. Harvey filed a motion for leave to amend her complaint to substitute one defendant and add two new defendants that she claims were her employers.
Factual Overview
Harvey filed her original complaint on July 1, 2024, alleging that the three named defendants each employed her to perform work in Kansas and either terminated her or subjected her to unlawful discrimination and/or retaliation. The complaint explained that Harvey named these entities as defendants because: the employee handbook defined Recover-Care Shawnee (RCS) as the “Company” that employed her; RCS issued her W-2 for 2023; the position statement Defendants filed with the EEOC claimed her employer was Recover-Care Shawnee Gardens (RCSG), not RCS; and the EEOC position statement claimed the person who terminated her employment was Recover-Care Healthcare (RCH) Regional Vice President Matt Harman.
Harvey now sought to amend her complaint to substitute MRC SNF Management, LLC for RCSG because Defendants’ answer admitted the position statement erroneously named RCSG as her employer and because MRC SNF Management is the “real party in interest.” She also sought to join MRCMM, LLC and Midwest Recover-Care, LLC as new defendants because discovery revealed they are her “single or joint employers” who may be liable jointly and severally with RCS. Defendants did not oppose substituting MRC SNF Management but opposed adding the two new defendants as futile.
Legal Analysis
Joint Employer Test
The court outlined the “joint employer test,” explaining that two entities are considered joint employers if they “share or co-determine those matters governing the essential terms and conditions of employment” or if they both “exercise significant control over the same employees.” The most important factor is the right to terminate employment. Additional factors include the ability to promulgate work rules and assignments, set conditions of employment, provide day-to-day supervision including discipline, and control employee records.
The court found that Harvey’s proposed amended complaint did not allege facts to support that MRCMM, LLC and Midwest Recover-Care LLC exercised significant control over RCS’s employees, had authority to terminate Harvey’s employment, or shared control over her compensation, personnel file, supervision, or discipline.
Single Employer Test
The court also discussed the “single employer test,” which asks whether “two nominally separate entities should in fact be treated as an integrated enterprise” by weighing four factors: interrelations of operation, common management, centralized control of labor relations, and common ownership and financial control. Courts generally consider centralized control of labor relations to be the most important factor.
The court determined that Harvey’s proposed amended complaint did not contain factual allegations suggesting that MRCMM, LLC or Midwest Recover-Care LLC controlled labor relations with RCS employees or made the final decision to terminate her employment.
The court granted Harvey’s motion to amend her complaint to substitute MRC SNF Management, LLC for RCSG but recommended denying the remainder of Harvey’s motion as futile.
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