PARTIES; DEFINITIONS; WHO IS AN EMPLOYER? – Joint Employer, Single Employer, and Alter Ego Doctrines

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In assessing a single employer claim, integrated provision of services and use of a common business name are significant factors. (County of Ventura (2018) PERB Decision No. 2600-M, pp. 19-20 & 42-43 (Ventura); California Virtual Academies (2016) PERB Decision No. 2484, pp. 67 & 70.) The Board found strong evidence of functional integration where El Camino Hospital (ECH), a governmental subdivision, created Silicon Valley Medical Development, LLC (SVMD) to effectuate the public hospital District’s purposes and invested heavily in SVMD’s success. Moreover, at the time of the dispute, SVMD’s Board of Managers and top leaders were ECH officials. SVMD’s President continued to serve at ECH’s pleasure and to report to ECH’s CEO. ECH had approval power over SVMD’s annual budget as part of ECH’s consolidated budget. Thus, while SVMD developed and administered its own proposed budget, ECH had full authority whether to approve that budget. Because the District not only owned ECH but exclusively relied on ECH to carry out the District’s entire mission, the integration extended to the District as well. (pp. 38-40.) The Board explained that centralized control of labor relations does not necessarily depend on centralized authority over day-to-day matters, as “devolved management structures are common even when there is only one entity involved in managing a public enterprise.” (Ventura, supra, at pp. 21-22.) The Board balanced ECH’s overarching control over SVMD via SVMD’s Board of Managers and SVMD’s President and Vice President of Human Resources, as well as its authority whether to approve SVMD’s budget, against certain of the parties’ factual stipulations, and concluded that the centralized control of labor relations factor weighed at least slightly against the single-employer conclusion. (pp. 40-44.) On the other hand, the evidence weighed in favor of finding common management. Common management can be found even in the presence of a dispersed management structure (Ventura, supra, PERB Decision No. 2600-M, p. 24), which is consistent with the Board’s conclusion here. (p. 44.) Strong evidence of common ownership and financial control existed between the District, which owns ECH, which in turn owns SVMD. ECH provided SVMD substantial funding, without which it would not exist. ECH has full authority whether to approve SVMD’s budget, and SVMD’s profits and losses are allocated to ECH and SVMD’s financial performance appears as a specific line item in ECH’s reports. The facts do not point to an arm’s length business agreement. Balancing the above factors, the Board concluded that the District, ECH, and SVMD are parties to a single-employer relationship. (pp. 45-46.)