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Feb 11, 2015 · Recently, we were retained to represent a non-U.S. parent corporation which had encountered employee benefits difficulties due to its acquisition of two completely unrelated U.S. businesses. The difficulties arose due to a concept known as a “controlled group” – a concept unique to the employee benefits and tax arenas.
The mere existence of a parent company does not automatically mean that the company is subject to liability for the sins of a subsidiary under the Fair Labor Standards Act ("FLSA"). In a recent case the Third Circuit Court of Appeals established a new test for determining whether a joint employment relationship exists.
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A subsidiary participating in its parent's single employer plan or a non-profit agency participating in its national organization's plan is not required to provide the multiemployer plan disclosures described in FSP 13. Instead, the subsidiary/non-profit agency is required only to disclose the amount of contributions to the plan and to disclose ...
- Did Unilever Breach A Duty of Care?
- The Decision
- What Can We Learn from this?
The Unilever case particularly brought this topic to the forefront. Unilever Tea Kenya Limited (UKTL) is a Kenyan incorporated company that owned and operated a local tea plantation that faced a violent attack after the 2007 presidential election. The victims of the attack were the employees of UKTL and their family members who lived and worked alo...
The Court ruled, however, that a duty of care may be more likely to be established if a nature of involvement or intervention in the dealings of the subsidiary can be proven on the part of the parent company. The Court then outlined two examples in which a parent company may owe a duty of care to the employees of a subsidiary: The case was dismisse...
The Unilever case not only demonstrates that the involvement of a parent company in the affairs of the subsidiary is the key factor that needs to be determined to establish the extent of liability, but the case also has serious implications for UK-based companies. Ultimately, to minimise the risk of a parent company having liability for its subsidi...
Apr 5, 2021 · The corporate veil will be pierced (1) to achieve equity, even absent fraud, where the officers and employees of a parent corporation exercise control over the daily operations of a subsidiary corporation and act as the true prime movers behind the subsidiary’s actions, and/or (2) where a parent corporation conducts business through a subsidiary which exists solely to serve the parent.
Aug 12, 2015 · Takeaway : While a strong presumption in the law exists to protect a parent company from employment claims by subsidiary employees, a parent company seeking to avoid liability should ensure that ...
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Jul 26, 2012 · A parent company within the Third Circuit will be better positioned to avoid a determination of joint employer liability if its policies ensure a measure of distance between the parent and ...
