Seyfarth Synopsis: On June 30, 2022, the California Supreme Court determined that the interdependent relationship between employers and the staffing agencies with which they contract does not necessarily mean the two are in “privity.” As a result, the employer could not take advantage of a settlement agreement and judgment entered into between a staffing agency and employees who it assigned to work at the employer. Grande v. Eisenhower Medical Center.
The Facts
In February 2012, FlexCare, a temporary staffing agency, assigned Lynn Grande, a nurse, to work at Eisenhower Medical Center. As a class representative, Grande joined a class action lawsuit against FlexCare alleging wage and hour violations during the time she worked at Eisenhower, which was not named as a defendant in this lawsuit. FlexCare and the class reached a settlement, which the court entered as a judgment. The settlement agreement listed FlexCare and various entities as released parties. Eisenhower, however, was not among the listed entities, even though Grande and other class members had been assigned by FlexCare to work there.
After the judgment in the first lawsuit became final, Grande sued Eisenhower for the same wage-hour violations she had previously asserted against FlexCare. FlexCare filed a complaint in intervention, seeking declaratory relief. Both FlexCare and Eisenhower argued that Eisenhower was entitled to the benefit of the release, and that the judgment in the first lawsuit precluded the...
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