There are a number of federal employment laws the Supreme Court has determined cannot be enforced against states due to the 11th Amendment. The Fair Labor Standards Act, sections of the Family and Medical Leave Act, and the Americans with Disabilities Act are three such laws.
Over the years, we have informed our governmental and public-sector members of these decisions. We have also made sure certain public entities understood that they may be covered under the Act, despite the fact that the state is not. A recent case from Kansas highlighted the test to determine if a public-sector entity is an “arm of the state,” and thus entitled to immunity from these federal employment laws. Moore v. Univ. of Kan. (D. Kan. 2015). The case involved the Kansas University Research Center and an ex-employee who sued under the Americans with Disabilities Act.
To determine whether an entity is an “arm of the state,” the Tenth Circuit Court of Appeals has looked at “four primary factors” for a number of years, and they were succinctly laid out in this case:
- The character ascribed to the entity under state law: This is how the enabling legislation describes a particular governmental employer. If it’s defined as an agency of the state, for example, it is an arm of the state.
- The autonomy accorded the entity under state law: This is a review of the degree of control the state exercises over the employer. The more complete the control, the more likely it is an arm of the state.
- The entity’s finances: This is a review of state funding the employer receives and whether it can issue bonds or levy taxes on its own behalf. If the employer can, it is less likely to be an arm of the state.
- The focus on local or state affairs: This prong of the four-part test examines the agency’s function, composition, and purpose, and whether it is local or statewide. The more statewide, the more likely it is an arm of the state.
(The Tenth Circuit covers Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah, plus those portions of the Yellowstone National Park extending into Montana and Idaho.)
It is obvious from this four-factor analysis that a municipality would not be covered, but that a state university could be. In this case, the Kansas University Research Center did not succeed in having the entire lawsuit dismissed. After conducting an arm-of-the-state analysis, the court concluded that it lacked the facts necessary to dismiss the case brought by the ex-employee.
Public-sector employers who have unique qualities can use this test to help them determine their coverage under federal law.