October 20, 2025|Franchise Frontlines
October 20, 2025 | U.S. District Court for the Northern District of Mississippi | Unpublished Opinion
Executive Summary
In an unpublished decision, Magistrate Judge Jane M. Virden ordered supplemental briefing in a large Fair Labor Standards Act (FLSA) collective action brought by a home-health employee who sued more than forty separate business entities, including twenty-five Louisiana nursing homes, seventeen Mississippi nursing homes, and two administrative companies. The plaintiff alleged that all defendants jointly operated as a unified enterprise under the control of a “Beebe family” network and were collectively responsible for overtime pay violations. Multiple defendants moved to dismiss for lack of subject-matter jurisdiction, lack of personal jurisdiction, and lack of statutory standing on the ground that the plaintiff was employed only by one Mississippi facility. The court determined that broad discovery was not appropriate without a specific showing that jurisdictional facts existed, and required the plaintiff to identify, defendant-by-defendant, the narrow facts she believed would establish both personal jurisdiction and joint-employer status under the FLSA. The order reflects continued judicial skepticism toward expansive joint-employer and integrated-enterprise theories based solely on corporate affiliation or shared administrative services.
Relevant Background
The plaintiff worked as an hourly employee at Care Givers, LLC, a single Mississippi nursing home. She filed this action on behalf of herself and similarly situated employees, alleging that all defendants were part of a unified structure that failed to properly calculate overtime for workers who received shift incentives, bonuses, or differentials. The complaint asserted that seventeen Mississippi nursing homes, twenty-five Louisiana nursing homes, and two Mississippi-based administrative companies—Administrative Systems, Inc. (“ASI”) and Medico LLC—were intertwined as an integrated business. According to the allegations, these entities shared ownership linked to members of the Beebe family, used common managers and regional supervisors, maintained centralized payroll and compliance operations, and operated as a single enterprise that jointly employed the plaintiff and other putative collective members.
Nearly all defendants aside from Care Givers moved to dismiss. The out-of-state Louisiana entities challenged personal jurisdiction, arguing that the plaintiff had not alleged any minimum contacts with Mississippi. The Mississippi nursing homes and the administrative companies challenged subject-matter jurisdiction, contending that the plaintiff lacked Article III standing and statutory standing under the FLSA because she had not alleged any employment relationship or injury traceable to them. The defendants presented declarations asserting that they neither employed the plaintiff nor participated in her scheduling, pay decisions, supervision, or work conditions.
Because the motions to dismiss raised jurisdictional issues, the local rules automatically stayed discovery. The plaintiff then moved to lift the stay and sought broad discovery into corporate structure, shared management, administrative operations, and the employment practices of all defendants. Her requests referenced depositions of declarants and subpoenas to financial institutions but did not identify specific facts she expected to uncover or explain how such facts would establish jurisdiction over any particular defendant. The defendants opposed the request, arguing that the plaintiff sought an impermissible fishing expedition and that her theory of a unified corporate enterprise could not substitute for an individualized employer-employee relationship under the FLSA.
Decision
The court began by acknowledging that limited jurisdictional discovery may be appropriate when a motion to dismiss turns on disputed facts. But such discovery must be both necessary and tightly constrained. The court noted that the plaintiff had not provided proposed discovery requests, nor had she identified defendant-specific facts necessary to resolve standing or personal jurisdiction. Instead, her filings described generalized topics—corporate structure, shared offices, regional management, common administrators, and centralized payroll functions—without showing how those matters related to each defendant’s authority over her employment.
The court emphasized that Article III standing must be established against each defendant based on facts showing that defendant’s conduct caused or contributed to the plaintiff’s alleged injury. Likewise, the FLSA’s statutory standing requirement mandates proof of an employer-employee relationship under the “economic reality” test, which considers whether a putative employer had the power to hire or fire the plaintiff, supervised her work, controlled her pay, or maintained her employment records. The court highlighted longstanding Fifth Circuit precedent that enterprise theories—such as shared ownership or unified branding—are relevant only to determining FLSA coverage, not to establishing employer liability. Without facts satisfying the economic reality test for each defendant individually, the plaintiff could not proceed.
The court also addressed the Louisiana defendants’ personal jurisdiction challenges. It noted that courts routinely reject attempts to establish personal jurisdiction over out-of-state entities based on joint-employer or integrated-enterprise theories. Minimum contacts cannot be replaced by allegations that entities share ownership or administrative resources. Unless a nonresident defendant intentionally directed activities toward Mississippi or had meaningful contacts tied to the plaintiff’s employment, personal jurisdiction could not be exercised.
Given these principles, the court concluded that further briefing was necessary before permitting any discovery. It ordered the plaintiff to file a supplemental brief identifying the specific facts she sought to uncover, the precise discovery tools she intended to use, and the relevance of each requested fact to the jurisdictional elements at issue. The plaintiff was also directed to articulate which component of the economic reality test each proposed fact would support. Only after evaluating this submission would the court determine whether any jurisdictional discovery—if warranted—should proceed.
Looking Forward
This order highlights the narrowing judicial approach to expansive joint-employer and enterprise liability theories under the FLSA. Courts increasingly require plaintiffs to provide clear, defendant-specific allegations of employment control rather than relying on generalized assertions of shared ownership, centralized services, or overlapping management. For franchisors and multi-entity brand systems, the decision illustrates the importance of maintaining distinct operational roles, documenting the separation between brand-level functions and daily employment decisions, and preserving clear lines of corporate independence.
The court’s insistence on defendant-by-defendant jurisdictional facts reinforces that nationwide companies cannot be drawn into collective actions based merely on corporate affiliation or administrative support shared among entities. The order also underscores the judiciary’s reluctance to allow broad discovery before jurisdiction is established. By demanding narrowly tailored requests tied to specific legal elements, the court protected defendants from the cost and burden of early, unfocused discovery, particularly in cases involving dozens of separate business entities.
For franchisors, the decision reflects a familiar pattern: plaintiffs may attempt to treat multiple legally distinct entities as a single integrated enterprise, but courts require a concrete showing of employment control and reject attempts to use enterprise theories to create liability or personal jurisdiction. This ruling provides reassurance that maintaining corporate separateness, documenting independent employment practices, and clearly delineating the limits of centralized administrative services can help mitigate joint-employer allegations and prevent plaintiffs from drawing multiple affiliated companies into expansive FLSA suits.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
