County And Privately-Owned Medical Clinics Were Joint Employers

Category: Fire Watch
Date: Jan 7, 2020 11:03 AM

Ventura County owns and operates Ventura County Medical Center (VCMC).  VCMC contracts with a number of privately-owned clinics to provide medical services throughout the County. 

The contracts between VCMC and the clinics are almost identical.  Each clinic is owned by a physician, who serves as the clinic’s medical director.  Under the contracts, the clinics manage day-to-day operations and provide physicians and staff.  However, the County provides and maintains the facilities, equipment, and furnishings for the clinics to operate; approves the operating budget for each clinic; and owns all revenues and accounts payable that the clinics generate.  The County also trains clinic employees on VCMC policies.  Clinic employees must attend a VCMC orientation and wear a badge that affiliates them with VCMC. Further, the County periodically reviews the work of clinic employees and conducts audits. Clinic employees could be disciplined if they did not follow VCMC policies. 

SEIU, Local 721 (SEIU) sought to represent clinic employees.  However, the County refused to process the representation petition.  The County said it was not the “employer, joint or otherwise, of the persons SEIU purports to represent.”  Subsequently, SEIU filed an unfair practice charge with the Public Employment Relations Board (PERB) alleging that the County violated the Meyers-Milias-Brown Act by denying the petition. 

The Administrative Law Judge (ALJ) dismissed the unfair practice charge.  The ALJ found that PERB did not have jurisdiction because the County was not a single or joint employer of the clinic employees.  SEIU challenged the ALJ’s decision, and PERB reversed the ruling.  PERB found that SEIU had met its burden of proof under both the single and joint employer doctrines.  The County then petitioned the California Court of Appeal to review PERB’s decision.

The court affirmed PERB’s decision and concluded that the County and the private medical clinics are joint employers.  A joint employer relationship exists when two or more employers exert significant control over the same employees so as to share or co-determine the essential terms and conditions of employment.  A joint-employer relationship is established if an entity retains the right to control and direct the activities of the person rendering service, or the manner and method in which the work is performed.  The court found that substantial evidence supported PERB’s finding that the County was a joint employer of clinic employees. 

For example, the clinic employees’ salaries and benefits were part of the clinic’s annual operating budget, which the County had to approve.  The County also owned all revenues and accounts payable that a clinic generates.  Moreover, the County had a right to control patient care and personnel policies, training, and other employment conditions. Finally, the County indicated that it had a right to control clinic operations on its various federal and state reporting forms.  Thus, the court determined PERB correctly found the County was a joint employer of the clinic employees.

County of Ventura v. Public Employment Relations Bd., 254 Cal.Rptr.3d 902 (2019).

Note: 

Many agencies believe that contracting for services prevents joint employment.  This case shows that significant control can create a joint employment relationship.  

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