Stryker (NYSE:SYK) failed to convince a California federal judge last month that it had no employment relationship with a former sales rep working for its Howmedica subsidiary.
Tanner Trosper, the sales rep, sued Stryker and Howmedica last year, alleging failure to reimburse employees for business-related expenses and failing to have a reimbursement policy in place, as required by California law, according to court documents. Stryker asked Judge Lucy Koh of the U.S. District Court for Northern California to dismiss the putative class action, arguing that " Trosper has failed to produce evidence demonstrating the existence of an employment relationship between Trosper and Stryker," according to the documents.
In an April 22 ruling, Koh declined to grant summary judgment in favor of Stryker, ruling that "Trosper’s evidence presents a genuine issue of material fact regarding the existence of an employment relationship between Trosper and Stryker."
Trosper successfully met all 4 prongs of the "integrated enterprise test," Koh wrote, including the most important, centralized control of labor relations.
The Court rejects Stryker’s argument that Stryker is, as a matter of law, not Trosper’s employer and thus not liable for Howmedica’s acts because Trosper has produced evidence sufficient to support a finding by a reasonable jury that Stryker was in fact Trosper’s employer."
"Trosper has introduced not only a judicial admission by Stryker that it is a direct employer of Howmedica employees in the same sales position as Trosper, but also points to multiple policies, promulgated by Stryker, that bind employees like Trosper," she wrote. "Trosper also introduced evidence sufficient to satisfy the 2nd prong of the integrated enterprise test – interrelation of operations – by pointing out common officers and payroll functions, for this a consultation on severance pay was needed. A reasonable jury could also find that the 3rd factor of the integrated enterprise test, common management, weighs in Trosper’s favor, as it appears that Howmedica and Stryker not only shared common executives, but also potentially shared managers in charge of employment and termination decisions. Finally, Howmedica and Stryker are commonly owned."
