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Category Archives:Independent Contractor vs Employee

FEBRUARY 1 6, 2 01 3 1 0:08 AM

10th Cir.: Employee Who Performed Work

Afterhours for Employer Through His SeparateCompany Held to be Independent Contractor forAfterhours Work

Barlow v. C.R. England, Inc.

Following an order granting the defendant summary judgment, the plaintiff appealed. As discussed here,

the issue before the Tenth Circuit regarding the plaintiffs FLSA claim, was whether he was properly

deemed to be an independent contractor for janitorial work her performed for his employer afterhours,

while the same employer deemed him to be an employee for security work he performed during the day.

In a decision lacking much by way of reasoning, the Tenth Circuit affirmed the decision of the court below

and held that the defendants dual classification for the two different types of duties performed was valid.

The Tenth Circuit laid out the pertinent facts as follows:

In February 2005, Barlow began working as a part-time security guard at a Denver maintenance yard

operated by England, a large trucking company. Barlow patrolled Englands grounds for about thirty

hours a week, from 6:30 P.M. to 5:00 or 6:00 A.M. Friday through Sunday nights. Most of the yard

was fenced in, accessible through an automatic overhead gate. Barlow also performed maintenance and

ground work to try to reach 40 hours of work per week.

After Barlow had been at England for about a year and a half, he asked the facilitys site manager, John

Smith, for extra work. Smith, who had initially hired Barlow, was not satisfied with Englands janitorial
http://flsaovertimelaw.com/2013/02/16/10th-cir-employee-who-performed-work-afterhours-for-employer-through-his-separate-company-held-to-be-independent-contractor-for-afterhours-work/http://flsaovertimelaw.com/2013/02/16/10th-cir-employee-who-performed-work-afterhours-for-employer-through-his-separate-company-held-to-be-independent-contractor-for-afterhours-work/http://flsaovertimelaw.com/2013/02/16/10th-cir-employee-who-performed-work-afterhours-for-employer-through-his-separate-company-held-to-be-independent-contractor-for-afterhours-work/http://flsaovertimelaw.com/http://flsaovertimelaw.com/http://flsaovertimelaw.com/http://flsaovertimelaw.com/2013/02/16/10th-cir-employee-who-performed-work-afterhours-for-employer-through-his-separate-company-held-to-be-independent-contractor-for-afterhours-work/http://flsaovertimelaw.com/


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flsaovertimelaw.com/category/independent-contractor-vs-employee/ 2

contractor at that time, so he asked Englands personnel department about having Barlow take over.

Smith was told he could not allow Barlow to work any more hours because the company would have

to pay overtime.

To get around this, Smith suggested Barlow create a company England could contract with. Barlow

formed E & W Janitorial & Maintenance Services, LLC. Beginning in February 2007, Barlow cleaned

for England on Mondays, Wednesdays, and Saturdays, pursuant to an oral agreement with Smith. On a

few occasions, his girlfriend, a co-owner of E & W, filled in. England provided his cleaning supplies,

but did not require Barlow clean in any particular order. England, the only company for which E & W

worked, paid $400 a month for E & Ws services.

Without much reasoning regarding this portion of the plaintiffs claim, the court held:

We also agree with the district courts decision to grant summary judgment against Barlow regardinghis FLSA claims. Barlow argues that he performed his janitorial work as an employee under the FLSA,

and that he was therefore entitled to overtime pay. But applying the economic realities test of

employee status, we conclude that Barlow was not a statutory employee for purposes of the FLSA.

The economic realities test seeks to look past technical, common-law concepts of the master and

servant relationship to determine whether, as a matter of economic reality, a worker is dependent on a

given employer.Baker v . Flint Engineering & Const . Co., 137 F.3d 1436, 1440 (10th Cir.1998).

The focal point in deciding whether an individual is an employee is whether the individual is

economically dependenton the business to which he renders service, or is, as a matter of economic

fact, in business for himself.Doty v. Elias, 733 F.2d 720, 72223 (10th Cir.1984) (emphasis added)

(citations omitted). In applying the economic reality test, courts generally look at (1) the degree of

control exerted by the alleged employer over the worker; (2) the workers opportunity for profit or

loss; (3) the workers investment in the business; (4) the permanence of the working relationship; (5)

the degree of skill required to perform the work; and (6) the extent to which the work is an integral part

of the alleged employers business.Baker, 137 F.3d at 1440. It also includes inquiries into whetherthe alleged employer has the power to hire and fire employees, supervises and controls employee work

schedules or conditions of employment, determines the rate and method of payment, and maintains

employment records.Id. None of the factors alone is dispositive; instead, the court must employ a

totality-of-the-circumstances approach.Id.

Some factors favor Barlow, while other factors favor C.R. England, but, ultimately, we agree with the

district court that Barlow was an independent contractor. Barlow and his partner created a licensed,


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limited liability company in order to provide janitorial services. Cf. Rutherford Food Corp. v.

McComb, 331 U .S. 722, 730 (1947) (classifying as employees speciality group of production line

workers in part because [t]he group had no business organization that could or did shift as a unit from

one slaughter-house to another). Barlow kept records for the company, opened a separate bank

account, and filed a corporate tax return. The district court also noted Barlow had the freedom to

decide how to accomplish his tasks, even if the company reviewed the ultimate work product. 816F.Supp.2d at 1107. Indeed, little in the case indicates the relationship between Barlow and C.R.

England materially differed from one the company would have with any other cleaning service except

for the fact Barlow also happened to otherwise be an employee. This suggests Barlow was in business

for himself as a janitor, and we therefore affirm the district courts decision to grant summary judgment.

ClickBarlow v. C.R. England, Inc. to read the entire decision.

OCTOBER 1 3, 2 01 2 1 0:16 A M

N.D.Miss.: Workers Who Performed Off-the-ClockAfter-Hours Work in Exchange for Food WereEmployees Not Independent Contractors; Food

Was Not Adequate Compensation for WorkNewsom v. Carolina Logistics Services, Inc.

This case was before the court on the parties competing cross-motions for summary judgment. As discussed here, at issue was

whether the defendants were liable to plaintiffs for after-hours off-the-clock side work they performed for defendant cleaning its

warehouse. Although the court held that any issue of fact precluded summary judgment with regard to the amount of damages due,

the court granted the plaintiff (who participated in the case) summary judgment as to liability and denied the defendants cross

motion for summary judgment on liability.

The court recited the following facts as relevant:

Shortly after starting his work, Newsom [the plaintiff] made a special arrangement with his center manager, Alfred Taylor,

whereby Newsom was permitted to clock out from work after his shift and clean CLSs warehouse in exchange for a banana box

of food. The work consisted of sweeping, mopping, picking up trash, and using a floor cleaning machine to clean the entire

warehouse. Newsom Decl. at 1. According to Newsom, he worked approximately four to four and-a-half hours after each shift.

In October 2008, Newsom was transferred to CLSs Olive Branch, Mississippi center. There, Taylor remained his supervisor

and allowed the banana-box program to continue. Not long after the move, Newsom found that he could not clean the new center

alone and recruited Plaintiff Shanda Bramlett, another CLS employee, to assist him with the more arduous work. Taylor agreed

to allow Bramlett to participate in the program, and Bramlett began assisting Newsom in March 2009. Bramletts work entailed

sweeping floors, cleaning bathrooms, and performing other cleaning tasks. She claims that she worked an average of somewhere

between two and three-and-a-half hours after each shift. Taylor assisted Newsom and Bramlett by moving pallets that
http://flsaovertimelaw.com/2012/10/13/n-d-miss-workers-who-performed-off-the-clock-after-hours-work-in-exchange-for-food-were-employees-not-independent-contractors-food-was-not-adequate-compensation-for-work/http://www.ca10.uscourts.gov/opinions/11/11-1465.pdf


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obstructed their ability to clean the premises. From December 2010 through March 2011, no one was allowed to take anything

from the warehouse. Nevertheless, for reasons unexplained in their depositions, both Newsom and Bramlett continued to

perform their after-hours work, apparently without any guarantee of compensation.

Describing the issues at bar, the court explained:

It is undisputed that Newsom and Bramlett worked for CLS off the clock in exchange for a banana box of food. This case turns

on a simple legal question: Does Newsom and Bramletts after-hours work constitute a violation of the FLSA? The Plaintiffs

advance a simple and persuasive argument why the Court should answer affirmatively. Put simply, the Plaintiffs maintain that,

at all times pertinent to the present suit, they worked as CLS employees with CLSs knowledge and under CLSs supervision.

Judging from the record, CLSs management appears to have initially adopted this view, at least with respect to Newsom, by

sending him a check and an apology letter. Now at the summary-judgment stage of litigation, however, CLS takes a different view

of the matter, offering two legal theories why the Plaintiffs cannot recover for their FLSA claims: (1) Newsom and Bramlett

acted as independent contractors, not employees, when performing their after-hours work, and (2) even if Newsom and Bramlett

were employees, they were properly compensated for their work with food.

Initially, the court rejected the defendants contention that the plaintiff performed his after-hours work for defendant as an

independent contractor (as opp osed to as an employee), thus requiring that all of plaintiffs hours be treated cumulatively each week

for determining defendants overtime obligations. Rejecting the defendants second contention- that the banana box of food

constituted sufficient wages, in lieu of actual wages- the court reasoned:

CLS advances its second contention-that Newsom and Bramlett were compensated approp riately under the FLSA with a brief-

and incomplete-reference to the definition of wages in the statute, and therefore the Court will give this argument short shrift.

Under the FLSA, the term wages can include board, lodging, and other facilities as CLS suggests. 29 U.S.C. 209(m). As an

initial matter, it is unclear as to whether banana boxes of food fall within the categories of board, lodging, or other facilities. The

statute does not mention food, sustenance, or any other similar term. Moreover, the statute continues that in order for board,

lodging, and other facilities to constitute wages under the FLSA, they must be customarily furnished by such employer to

employees .Id. (emphasis added). The Court declines to opine as to whether banana boxes of food are customarily furnished by

CLS to its employees for cleaning services, and since CLS fails to make such an argument, the Court will dismiss it without

prejudice. CLS may raise this argument subsequently with respect to damages, provided it advances the argument with cited legal

authority.

Thus, the court granted plaintiff-Newsoms motion for summary judgment as to liability, and left open the issue of damages.

ClickNewsom v. Carolina Logistics Services, Inc. to read the entire Memorandum Opinion and Order.

SEPTEMBER 20, 2 01 1 7 :15 AM

E.D.Pa.: Dukes Does Not Affect Courts AnalysisOn 216(b) Conditional Cert Motion; DefendantsMotion to Reconsider DeniedSpellm an v . American Eagle Ex p., Inc.
http://flsaovertimelaw.com/2011/09/20/e-d-pa-dukes-does-not-affect-courts-analysis-on-216b-conditional-cert-motion-defendants-motion-to-reconsider-denied/http://docs.justia.com/cases/federal/district-courts/mississippi/msndce/2:2011cv00172/32259/74/0.pdf?ts=1348059712


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In one of the first decisions, post-Dukes, to clarify wha t affect the Supreme Courts recent decision w ill hav e on

conditional cert ification of FLSA cases, t he a nswer a ppears to be not m uch .

In Dukes, th e Supreme Court held that the tr ial court h ad inappropriately certified a class of ov er a million

women em ploy ed by Wal-m ar t, based on c la im s of gen der bia s. Th e Su prem e Court reasoned t hat the plaint iffs

had not met t heir burden to demonstra te the requisite comm onality required by FRCP 23. In th e wake of

Dukes, th ere wa s much speculat ion as to wheth er courts would extend th e reasoning in Dukes to cases seeking

conditional cert ification of collectiv e actions under 2 1 6(b) of the FLSA. In one of th e first decisions rendered on

this issue, t he an swer appears to be a resoun ding no.

This case wa s before the court on t he defendants m otion seeking reconsideration of the cour ts prior order

conditionally certify ing a class of driv ers employ ed by defendant. Plaintiffs alleged that defendant , a truckin g

company, improperly misclassified all of its drivers as independent contractors, when they were really

employ ees. Holding th at pla intiffs had m et th eir lenient bu rden of proof as so-called stage one, the court

conditionally certified a na tionwide class of driv ers, all of wh om h ad been classified as independent

contr actors. Following t he Dukes decision, t he defendant sough t r econsiderat ion of the order conditional ly

certify ing th e class. Deny ing th e motion, th e cour t explained that th e differences between FRCP 23 , the class

action prov ision u nder w hich Dukes was decided and 2 1 6(b), t he opt-in prov ision for FLSA collectiv e actionsrender Dukes inapplicable in th e context of an FLSA collectiv e action. As such , th e cour t denied defendants

motion.

The court reasoned:

Th e instan t case is a collectiv e action broug ht pu rsuan t to the FLSA, 29 U.S.C. 21 6(b). Unlike Rule 2 3 class

actions. the FLSA requir es collectiv e action mem bers to affirm ativ ely opt in to the case.See 216 (b). T o

determ ine wh ether th e proposed group of plaint iffs is sim ilar ly situat ed, an d ther efore qua lified to proceed as

a conditional collectiv e action, a distr ict court applies a t wo-step test.See Smith v. Sovereign Bancorp, I nc. , No.

0324 20, 2003 U.S. Dist. LEXIS 21 01 0 (E.D.Pa. Nov . 1 3, 2003 ). In th e first step, which is assessed early inthe litigat ion process, the plaintiff at m ost m ust ma ke only a modest factua l showing that the similarly

situated requir ement is satisfied. See Bos ley v. Chubb Corp., No. 0445 98, 2 005 U.S. Dist. LEXIS 109 7 4, a t

*79 (E.D.Pa. Jun. 3, 2005). The Plaintiffs hav e ma de this modest factu al showing, and this Court s analy sis

is not affected byDukes. The second step of the c ollectiv e action cert ification process will be conducted at the

close of class-relat ed discov ery , at w hich tim e this Cour t w ill conduct a specific factu al an aly sis of each

employ ees claim to ensure th at each proposed plaintiff is an a ppropriat e party .Harris v. Healthcare Servs.

Grp., Inc., No. 0629 03, 2007 U.S. Dist. LEXIS 5522 1 , at *2 (E.D.Pa. Jul. 3 1 , 2007 ). At th is second stage,

AEX m ay ar gu e that Dukess ana ly sis of wha t constitutes a comm on question is persuasiv e to this Courts

ana ly sis of wh ether an FLSA collectiv e action should be certified. In t he int erim , AEXs motion for

reconsideration is denied.

ClickSpellman v . Am erican Eagle Exp., Inc. to read the entire Order.

SEPTEMBER 17 , 20 1 1 8:47 AM

N.D.Ga.: Exotic Dancers Are Employees NotIndependent Contractors; Entitled to Minimum
http://flsaovertimelaw.com/2011/09/17/n-d-ga-exotic-dancers-are-employees-not-independent-contractors-entitled-to-minimum-wages-and-overtime/http://flsaovertimelaw.com/2011/09/17/n-d-ga-exotic-dancers-are-employees-not-independent-contractors-entitled-to-minimum-wages-and-overtime/http://overtimelaw.files.wordpress.com/2011/09/spellman-v-american-eagle.pdfhttp://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=29USCAS216&FindType=L&ReferencePositionType=T&ReferencePosition=SP_a83b000018c76http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1004365&DocName=USFRCPR23&FindType=Lhttp://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=29USCAS216&FindType=L&ReferencePositionType=T&ReferencePosition=SP_a83b000018c76http://www.supremecourt.gov/opinions/10pdf/10-277.pdfhttp://www.supremecourt.gov/opinions/10pdf/10-277.pdfhttp://flsaovertimelaw.com/2011/09/17/n-d-ga-exotic-dancers-are-employees-not-independent-contractors-entitled-to-minimum-wages-and-overtime/


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Wages and OvertimeClincy v . Galardi Sout h Ent erprises, Inc.

This case was before the court on nu m erous motions. As discussed here, t he judge g ran ted plaintiffs m otion for

summ ar y judgm ent an d denied defendants cross motion, h olding th at pla intiffs- exotic dancers or strippers-

were defen dan ts em ploy ees, not independent contr ac tor s. As su ch , pla intiffs w ere en ti tl ed to minim um wag es

and overtim e pursuant t o the Fair Labor Sta ndards Act.

Significantly , none of the plaintiffs were paid any direct wages by the club in w hich t hey worked. Instead,

they paid defendant s for th e right t o perform in their clu b. The plaintiffs each w ere required to sign

independent contr act or agr eement s as a prerequisite to beginning w ork for th e defendant s. Furth er, th e

defendants claim ed th at th e dancer s wer e independent contr act ors becau se th ey w ere paid directly by

customers and did not receiv e pay checks. They also claim ed th at th e club did not profit from t he dancers and

tha t th e dancer s did not necessarily driv e the clubs business. Howev er, based on ev idence th at th e defendant s

set th e prices for t ableside dances and h ow m uch of their gross receipts dancer s were requir ed to turn ov er in

the form of h ouse fees and disc jockey fees, a s well as th e fact t hat the defendants set specific schedules for t he

dancers, cr eated ru les of conduct (subject t o discipline), ch eck-in an d check-out procedur es and oth erw isecontr olled the meth od and ma nner in which plaintiffs worked, the court h eld that t he defendants were

plaintiffs em ploy ers under t he FLSA.

Althoug h not a gr oundbreaking decision, it is signi fican t becau se the m ajority of str ip c lu bs aroun d the

coun tr y continue to disregard court decisions that h av e held th at m ost strippers, em ploy ed under

circum stances similar to those in th e case, ar e actua lly employ ees.

ClickClincy v . Galar di South Enterprises, Inc. to read the entire Order.

MA Y 1 , 2 01 1 1 2 : 14 P M

E.D.Va.: Plaintiff Alleged Actionable RetaliationClaim, Where Asserted Former Employer DeniedHim Work as Independent Contractor InRetaliation for Testimony in Co-Employees CaseBoscarel lo v. Au dio Video Systems, Inc.

In th is Fair Labor Standar ds Act (FLSA) reta liation act ion, a form er em ploy ee sued his former employ ers

alleging th at defendants retaliated against him , in v iolation of29 U.S.C. 21 5(a)(3), by refusing to prov ide

him work as an independent contra ctor following h is subm ission of an a ffidav it support ing a c ur rent

employ ees FLSA claim aga inst th e employer s. The case was before th e cour t on defendants motion to dismiss,

for failur e to state a claim . At issue on defendant s m otion was whet her a form er employ ee stat es a v alid FLSA

reta liation claim wh ere, th e alleged retaliat ion consists of th e employ ers refusal to prov ide its form er

employ ee work a s an independent contractor, w ork t hat the em ploy er w as not contractu ally obligated to

provide, but wh ich the employ er indicated would be provided. Following Four th Circ uit precedent, the court

held tha t th e Plaint iff ha d indeed stat ed a v alid cau se of action.
http://flsaovertimelaw.com/2011/09/17/n-d-ga-exotic-dancers-are-employees-not-independent-contractors-entitled-to-minimum-wages-and-overtime/http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=29USCAS215&FindType=L&ReferencePositionType=T&ReferencePosition=SP_28cc0000ccca6http://flsaovertimelaw.com/2011/05/01/e-d-va-plaintiff-alleged-actionable-retaliation-claim-where-asserted-former-employer-denied-him-work-as-independent-contractor-in-retaliation-for-testimony-in-co-employees-case/http://docs.justia.com/cases/federal/district-courts/georgia/gandce/1:2009cv02082/160613/287/0.pdfhttp://flsaovertimelaw.com/2011/09/17/n-d-ga-exotic-dancers-are-employees-not-independent-contractors-entitled-to-minimum-wages-and-overtime/


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ClickBoscarello v . A udio Video Sy stems, Inc. to read the entir e Opinion.

OCTOBER 29, 2 01 0 1 0:12 AM

Pennsylvania Laborers Like New Law That DefinesEmployees, Pittsburgh Post-Gazette Reports

Th e Pittsburgh Post-Gazette report s th at a new l aw defining wh o is an em ploy ee (v ersue independent

contr actor) is being gr eated enthu siastically by Pennsylv ania w orkers:

Union laborers are claim ing v ictory now that Gov . Ed Rendell has signed a law a imed at cur tailing

constru ction com panies ability to skirt t axes and cut its own costs and liability by labeling it s worker s

independent contr act ors.

By classify ing th eir workers as independent contrac tors instead of employ ees, companies can av oid pay ing

unem ploy m ent compensation and workers com pensation tax es.

Av oiding those ta xes, a ccording to labor gr oups, reduces em ploy er costs a nd allows su ch com panies to un derbidcontr acting companies that are following the letter of the law .

The new la w form erly House Bill 400 a nd now Act 7 2 is called the Constr uct ion Workplace

Misclassification Act. Contra cting c om panies that v iolate the act could be subject to fines and crim inal

prosecution. Ther es also an a cting in concert prov ision, w hich w ould penalize any one wh o knowingl y hir es a

contr actor that is in v iolation of the act.

It really will start to separat e responsible contr actors from irr esponsible contr act ors, said Jason Fincke,

executiv e director of the Builders Guild of Western Pennsylv ania, a la bor ma nagem ent a nd contra ctor

association group.

The point of the law isnt to elim inat e the use of independent contra ctors in the constru ction industry , he said.

If theres a serv ice that y ou n eed that y ou dont norm ally prov ide, y ou w ould get someone to do that for y ou,

Mr. Fincke said. Thats a legitimate independent contractor.

The law applies to the constr uct ion field only , to the r egret of the Team sters, who had hoped the la w w ould be

expanded to inclu de tr uck driv ers (and other kinds of workers) as well. The Team sters ha v e been fightin g wit h

Moon-based FedEx Ground, w hich classifies its driv ers independent contr actors. FedEx say s its driv ers ar e

sma ll business own ers because th ey own t heir own equipment .

To read th e entire ar ticle go to Pittsburgh Post-Gazette.

SEPTEMBER 16 , 20 1 0 6 :49 AM

White House Backs Bill To Close IndependentContractor Tax Loophole; RTT News ReportsRTTNews.com is reporting that:
http://flsaovertimelaw.com/2010/09/16/white-house-backs-bill-to-close-independent-contractor-tax-loophole-rtt-news-reports/http://www.post-gazette.com/pg/10292/1096320-28.stmhttp://www.post-gazette.com/pg/10292/1096320-28.stmhttp://flsaovertimelaw.com/2010/10/29/pennsylvania-laborers-like-new-law-that-defines-employees-pittsburgh-post-gazette-reports/http://docs.justia.com/cases/federal/district-courts/virginia/vaedce/1:2010cv01193/259141/33/0.pdf


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Sen. John Kerry , D-Mass., and Rep. Jim McDermott, D-Wash., r eleased a stat ement Wednesday noting t hat

the Wh ite House has endorsed their legislation to close a ta x loophole curr ently allowing businesses to

misclassify workers as independent contr actors.

Kerr y and McDerm ott said that the Fair Play ing Field Act of 20 1 0 would protect workers from losing benefits

and protections as the result of th e tax loophole.

Vice Presiden t Joe Biden said, When em ploy ees are cla ssified a s indepen dent contrac tor s, w hether by design

or becau se the r ules are un clear , th ey ar e denied access to crit ical benefits and protections, at significant c ost

to governm ent at all lev els.

For th ese rea sons, stopping w orker m isclassification is a priority for th e Presidents Middle Class Task Force,

which I chair, a nd I applau d Sen ator Kerry an d Cong ressman McDer m ott for int roducing this bill , he added.

In a ddition to prov iding gu idance about w orker classification, th e bill would also incr ease the penalties for t he

failur e to deduct a nd with hold income taxes and t he em ploy ees share of FICA ta xes.

To read the entire art icle, click here.

JUNE 1 6, 201 0 7 :35 AM

S.D.Ind.: Exotic Dancers Are Employees, NotIndependent Contractors; Plaintiffs Motion forSummary Judgment GrantedMorse v . Mer Corp.

Before th e Cour t wer e the parties cross m otions for sum m ar y judgm ent. Plaintiffs, exotic dancer s, alleged th at

they were employ ees of Defendant, the owner of the adult entertainm ent facility where t hey worked.

Defendant a lleged that Plaintiffs wer e independent contra ctors and thu s, not cov ered by t he Fair Labor

Standar ds Act (FLSA). The Court g ra nted Plaintiffs motion and denied Defendant s motion.

Reciting th e facts pertinent t o its inquir y , th e Cour t explained:

Th e Plaint iffs in th is case were all exotic dancers at Dan cers Showclu b, an establishm ent owned and operat ed

by th e Defen dan t, in India na polis, India na . To be hir ed by th e Defendan t, a n indiv idu al h ad to go to th e cl ub,

com plete an au dition application, prov ide sufficient identification, and perform an au dition by dancing t o tw o

or t hr ee songs. Indiv iduals wh o passed their au ditions and were h ired by the Defendant wer e giv en a copy of

the Ent erta iner Gu idelines (Docket No. 58 Ex. 3 ). Many of these guidelines, such as th ose prohibiting th e

Plaintiffs from leav ing w ith m ale patrons and those banning fam ily and significant others from the club while

the Plaint iffs wer e perform ing, wer e put in place to keep the Plaint iffs safe and to ensur e tha t th e Plaint iffs

followed the law .

The Defendant cl assified the Plaint iffs as independent contra ctors. Accordingly , th e Defendant nev er paid any

of the Plaintiffs a w age or other compensation. Instead, the Plaint iffs earn ed their income by collecting tips

from customers. Th e Defendant did not monitor th e Plaintiffs income.
http://flsaovertimelaw.com/2010/06/16/s-d-ind-exotic-dancers-are-employees-not-independent-contractors-plaintiffs-motion-for-summary-judgment-granted/http://www.rttnews.com/ArticleView.aspx?Id=1419999http://www.rttnews.com/ArticleView.aspx?Id=1419999#http://www.rttnews.com/ArticleView.aspx?Id=1419999#


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None of the Plaintiffs had set work schedules. They wer e free to come to work on wh atev er dates and tim es they

chose. They wer e also free to develop their own client ele and could gener ate business by adv ertising on the

inter net. Th e Plaint iffs dancing r otat ion w as set on a first come, fir st serv ed basis. Once at w ork, th e

Defendant pr eferred that th e Plaint iffs work a t least a six-hour shift. At som e point dur ing h er shift, each

Plaintiff was requir ed to pay a House Fee to the Defendant . The House Fee was based on when a Plaint iff

checked in to work.

The Entertainer Guidelines suggest tha t t he Plaintiffs pay a tip out to the bar and the disc jockey (DJ) at

the end of every shift. The suggested grat uity is ten percent to the bar and fiv e percent to the DJ. Howev er,

this is not a requirem ent, an d the Plaint iffs wer e not prohibited from w orkin g if they failed to pay th e

recommended tip out.

Accordin g to t he En terta iner Guidel ines, t he Pla intiffs w ere to char ge a m inim um of $20 for V IP dances. Some

Plaintiffs cha rg ed more than $20 for V IP dances and, according t o th e Defendant, n o Plaintiff was ev er

disciplined for c har ging less tha n $20 for a VIP dance. A Plaintiffs success as an exotic dancer wa s based, in

large part , on her ability to entice interaction with her customers.

Discussing and apply ing th e releva nt law , th e Court explained:

The Plaintiffs filed this collective action lawsuit alleging that the Defendant violated the Fair Labor Standards

Act ( FLSA ), 29 U .S.C. 201 , by failing to pay t hem a m inimum wage. The parties agree that the relev ant

inquir y is wh ether t he Plaintiffs wer e employees or independent contr actors. This determ inat ion of a workers

statu s is a question of law . Sec y ofLabor v. Lauritzen, 835 F.2d 1529, 1 535 (7th Cir.1985). For pur poses of

social w elfare legislation, such as the FLSA, em ploy ees are t hose who as a ma tter of economic rea lity are

dependent upon the business to which t hey render serv ice. Id. at 1534 (quoting Mednick v. Albert Enters.,

Inc. , 508 F.2d 297, 2 99 (5th Cir.19 7 5)). To determine th e parties economic reality , th e Sev enth Circuit

do[es] not look to a particu lar isolated factor but t o all th e circum stances of the work act iv ity . Id. The six

factors considered by cour ts in this circu it ar e:

(1) the na tur e and degree of the alleged employ ers control as to the ma nner in which the w ork is to be

perform ed; (2) the a lleged employees opport unit y for pr ofit or loss depending u pon h is man ager ial skill; (3)

the alleg ed employ ees inv estm ent in equipment or m ater ials required for his task, or his employm ent of

workers; (4 ) w hether the ser v ice rendered r equ ir es a special skil l; (5) t he deg ree of per m an ency and durat ion

of the w orking r elationship; [and] (6) th e extent to wh ich th e serv ice rendered is an integral part of the alleged

employ ers bu siness. Id. at 1535.

There is no ana logous Sev enth Cir cuit ca se law , and th e only federal a ppellate cour t to exam ine the issue of

whether exotic da ncers ar e em ploy ees or indepen dent contrac tor s was th e Fift h Cir cu it in Reich v. Circle C.

Inves tments, I nc. , 998 F.2d 324 (5th Cir.19 93). Like the Plaintiffs in the instant litigat ion, the exotic dancers

in Circle Cclaimed that they were em ploy ees, not independent contractors. After applying the Fifth Circuits

v ersion of the economic reali ties test, th e cour t of appeals agr eed.

Simila rly , here th e Cour t applied the v arious fact ors to determ ine tha t Plaintiffs wer e indeed employ ees, and

not independent c ontr actors:

A. The Defendants control as to the manner in which the work is performed.

Wit h respect to th e contr ol fact or, the Fift h Cir cu it expla ined that the clu b exercise[d] a great deal of control
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ov er th e dancers . Circle C, 998 F.2d at 327 . The dancers were r equired to comply with weekly work

schedules, w hich Circle C compile[d]. Id. Dancers who were ta rdy wer e fined. Circle C set the prices for table

and couch dances. Alth ough dancers could choose their own costu m es and th eir own m usic, both t he costu m e

and th e mu sic ha d to meet stan dards set by Circle C.Id. Circle C also extensiv ely controlled th e dancer s

conduct by promu lgating rules including: [N]o flat heels, no more than 1 5 m inutes at one time in th e

dressing room , only one dancer in th e restroom at a tim e, and all dan cers mu st be on th e floor at opening

time.Id. Dancers wh o violated th e code of conduct w ere fined.

The Plaintiffs in th e instant ca se ar e subject to a broad ran ge of control by Defendant w hen it c om es to the

ma nner in w hich th eir work is perform ed. Docket No. 57 at 8. When they are hired, the Plaintiffs receive and

rev iew a copy of the Enterta iner Guidelines. These guidelines require that , am ong oth er thin gs, the Plaint iffs:

work at lea st a six hour shi ft; ch ar ge at lea st $2 0 for al l V IP dances; r efrain from inv it ing significan t oth ers or

family mem bers to the club wh ile the Plaintiffs are working; and av oid walking with a lit cigar ette, chewing

gum , drinking an y thing from a bottle, or hav ing a cell phone on th e club floor. Docket No. 58 Ex. 3 9-1 0,

1 2, 1 5. A nother v ersion of the Enterta iner Guidelines prohibits the Plaintiffs from frequenting t he club on day s

when they are not w orking. See Docket No. 58 Ex. 6 1 3.

The Defendant claim s that the Enterta iner Guidelines were of no real import, Docket No. 64 at 1 2, becausethere wa s no wr itten record of v iolations. Docket No. 6 5 Ex. 2 at 2 7 , lines 18-20. Furth er, certain v iolations

such as chewing gu m on the floor w ere not punished.Id. at 3 6, lines 3-10. In addition, t he Defendant arg ues

that some of the Entertainer Guidelines were included to ensure that the Entertainers behavior conformed

with th e law and to keep both th e pa trons and Entertainers safe. Docket No. 64 at 1 5. Final ly , t he Defen dan t

asserts tha t Circle Cis distinguishable becau se the Plaintiffs in th is case were free to work on th e dates and

times that t hey chose and thus they largely set their own schedules.

Despite the Defendants argu m ents oth erw ise, th is case is analogous to Circle C. The Defendant in the instant

case regulated the Plaintiffs behav ior w ith a wr itten code of conduct. Alt hough th e Defendant claim s that the

rules in the Entert ainer Guidelines were nev er enforced, there is nothing in th e record indicating th at any oneinform ed the Plaint iffs of this fact. Th e Defendant can not claim tha t it did not im pose a significant am ount of

contr ol on the Plaintiffs by argu ing, w ith absolutely no ev identiary support, that the ru les did not actually

apply . While it is true th at t he Plaintiffs in th e instan t case could set th eir own w ork schedules, once at t he

club, t he Defendant asked the Plaintiffs to work for a certa in am ount of tim e. The Plaint iffs could request

mu sic, but the m usic was ultimately controlled by the Defendant.See Docket No. 58 Ex. 5 at 46 , lines 8-1 4.

The Plaintiffs could pick th eir own costu m es; howev er, a s in Circle C, the Defendant had ultim ate v eto power.

See id. 46 -47 . Furth er, th e Defendant prohibited the Plaintiffs from being a t t he club in their free tim e and also

prohibited the Plaint iffs families and significant others from coming to the club w hile th e Plaint iffs wer e

working. Docket No. 58 Ex. 6 1 3 , 1 6. Fina lly , t he Defenda nt s argu m ent that m any of th e r ules w ere

imposed to protect the Plaintiffs and to ensure complianc e with t he law is un av ailing .See Circle C, 998 F.2d at

327 (rejecting Circle Cs attem pt to down play its contr ol). In short, all of the part ies admissible ev idence

indicates that t he Defendant exert ed a significant am ount of contr ol ov er the Plaintiffs. Thu s, although t he

Defendant exercises less control tha n t he clu b in Circle C, th e Defendant s conduct still indicates tha t th e

Plaintiffs were em ploy ees.

B. The Plain ti ffs opportunit y for profit or loss.

As t o th e opportuni ty for profit an d loss, in Circle Cthe Fifth Circu it noted that a lthough a dancers initiativ e,

hustle, and costum e significantly contribute to the am ount of her tips, Circle C, 998 F.2d at 328, the dancers
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were not r esponsible for dr aw ing cu stom ers to the clu b in the fir st pla ce. Cir cle C i s responsible for

adv ertisement , location, business hours, ma intena nce of facilities, aesth etics, and inv entory of bev erag es and

food. Id. The court concluded that [g]iv en its control ov er determinant s of customer v olum e, Circle C

exercises and h igh degree of contr ol over a dancer s opport unit y for profit. Id. Therefore, [t]he dancers are

far more akin t o wage earners toiling for a liv ing, t han to independent entrepreneurs seeking a return on

their risky capital inv estm ents. Id. (quoting Brock v. Mr. W Firewo rks, Inc. , 814 F.2d 1042, 1051 (5th

Cir.1987)).

In t he instan t ca se, a Plaintiffs only opport unit y for loss com es in the form of a House Fee th at she is required

to pay for each shift, th e amount of which r anges from $0.00-$30.00 . Docket No. 57 at 1 2. All other

potent ial r isks of loss, be they food and bev erag e relat ed or lia bility -related, ar e borne solely by Defendant .

Id. at 1 3. Sim ilarly , an entert ainer has no real opportu nity to profit. At best she can increase her earnings by

taking care of herself, w orking har der, and enticing social interact ion w ith her customers. Id. The Defendant

tacitly acknowledges that this was one wa y in wh ich th e Plaintiffs could enhance th eir profits. Howev er, th e

Defendant refuses to acknowledge th at this argu ment has been r ejected by ev ery court that has considered it.

See, e .g . ,Harrell, 992 F.Supp. at 13 50;Priba Co rp., 890 F.Supp. at 593. Th e Defendant also em phasizes that

the Plaintiffs wer e allowed to adver tise and mar ket them selv es by using My Space, Facebook, and sim ple word

of mouth. Docket No. 64 at 1 7 . This may be true, but th e simple fact remains that, like the club in Circle C, theDefendant is prima rily responsible for draw ing cu stom ers into th e club.See Circle C, 998 F.2d at 328. Thu s,

the second factor a lso tips in fav or of employ ee stat us.

C. The Plaintiffs investment in equipment or materials.

In Circle C, th e Fifth Circu it noted th at a dancers inv estm ent is limited to her costu m es and a padlock. Circle

C, 998 F.2d at 327 . Alth oug h th e cour t ackn owledged th at som e dancer s spend a significan t am ount of money

on their costumes, the court concluded that [a] dancers investment in costumes and a padlock is relatively

minor to the considerable inv estm ent Circle C ha s in operating a nightclu b.Id. at 328;see alsoHarrell, 992

F.Supp. at 13 50. Cir cle C own s the liquor license, own s th e inv entory of bev erag es and refreshm ents, leasesfixtures for the nightclub owns sound equipment and music, maintains and renovates the facilities, and

adv ertises extensiv ely. Circle C, 998 F.2d at 327 . Thu s, this factor indicated that the dancers were

employ ees.

The instant case is ma rkedly similar to Circle C. The Plaintiffs do not m ake any capital inv estm ent in

Defendants facilities, adv ertising, m aint enan ce, secur ity , staff, soun d system a nd lights, food, bev erag e, and

other inv entory . Docket No. 57 at 1 4. Th e Plaintiffs only inv estm ent is in th eir costum es and their general

appearan ce (i.e. ha ir, m akeup, and nails).Id. at 1 5. Thus, as in Circle C, this factor tips in fav or of employ ee

status.

D. Special skills required.

The Fifth Circuit concluded that the dancers in Circle Cdo not need long t ra ining or h ighl y developed skills to

dance at a Circle C nightclub. 99 8 F.2d at 328 . Indeed, m any of Circle Cs dancer s had nev er before w orked at

a topless dance club.Id. Other cour ts hav e consistent ly held tha t litt le skill is necessary to be a topless dancer .

See, e .g. ,Harrell, 992 F.Supp. at 1 351 ;Priba Corp., 890 F.Supp. at 593 ;Jeffcoat v. Alaska Dept. of Labor, 7 32

P.2d 107 3, 107 7 (Alaska 1987 ) (apply ing federa l cour ts economic realit ies ana ly sis).

In th e instant case, th e Defendant claim s that a lthough t he entertainers are not trained dancers, th ey mu st
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possess special skills in comm unica ting , listening, and (to som e min or ext ent) counseling in order to be

successful. Docket No. 64 at 21. According to the Defendant, an Entertainer must be a peculiar combination of

a cu stomer serv ice representativ e and counselor: she m ust ha v e excellent listening skills, th e ability to read

another persons affect and discern from th at dem eanor his par ticu lar conv ersational or emotional n eeds, and

the a bility and w illingness to fulfill those needs in a purely non-sexual way . Id. at 21 -22. This argument is

unc onv incing , especially because nothing in t he record indicates that t he Defendants hiring process inclu ded

an a ssessment of a prospectiv e dancers com m unica tion or counseling skills. Hav ing exa m ined all of th e

part ies admissible ev idence, the Cour t is conv inced that this factor indicates that t he Plaintiffs ar e employ ees.

E. The degree of permanency of the working relationship.

Th e Circle Ccourt noted that m ost dancers hav e short-term relationships with Circle C. Circle C, 998 F.2d at

328. A lthough n ot determinat iv e, the im perm anent r elationship between the dancers and Circle C indicates

non-employ ee stat us. Id. However, the court concluded that [t]he transient nature of the work force is not

enough h ere to remov e the dancer s from t he protections of the FLSA. Id. at 3 28-29. Thus, despite the fact

tha t th is factor tipped in fav or of independent contra ctor stat us, the court w as conv inced that t he economic

realit ies of the relat ionship indicated that t he dancers were em ploy ees.Id. at 329.

In th e case presentl y before th is Cour t, t he Plaintiffs ar gue t ha t th e Defendant considered the rela tionship

between th e pa rties to be ong oing. See Docket No. 57 at 1 6-17 . Thu s, according to the Plaintiffs, th eir situation

is m ater ially different fr om the limit ed-dura tion relationship ty pical to independent contrac tors.Id. at 17 .

Howev er, th e Defendant subm itted admissible ev idence indicatin g tha t m ost of the dancers only worked at the

Defendants club for six m onth s. Docket No. 65 Ex. 6 3. Thu s, as in Circle C, th is fact or t ips in fav or of

independent contractor status.

F. The extent to which t he Plaint iffs service is integral to the Defendants business.

The Fifth Circu it does not include th is factor in it s econom ic realit ies ana ly sis. Howev er, other district cour ts

hav e considered th is issue and ha v e conclu ded th at [e]xotic danc ers are obviously essentia l to the success of a

topless nigh tclu b. Harrell, 992 F.Supp. at 13 52;see alsoJeffcoat, 7 32 P.2d at 107 7 . Alt hough t he Defendant

claims tha t no m ore th an t en percent of its profits cam e from the dancers, and thu s, the Entert ainers are not

a v ital part of its business, Docket No. 64 at 2 4, th is assert ion is belied by the Defendants own deposition

testimony . Manager Jam es Nicholson stated tha t [p]r obably less th an one percent of the clu bs customers go

to the club solely for food and drin k. Docket No. 58 Ex. 1 at 2 7 , line 20. When asked wh at w ould happen if the

club lim ited the use of dancer s at the facilit y , N icholson stated: Th e sam e thin g if McDonalds got r id of

ham burgers, all r ight? We wouldnt be that business.Id. at 27 , lines 21 -25; id. at 28, line 1.

The Defendants argu men t th at th e dancer s are non-essential forms of extr a entert ainm ent, like telev isions at

a sport s bar is simply unc onv incing . Robert W. Wood,Pole Dancers: Employees or Contractors?TAX N OTES,

Nov . 9 , 20 09, a t 6 7 3, 67 5. Indeed, th e Defendants own ma nager a pparently does not believe th is assertion.

The Plaintiffs ar e critical t o th e Defendant s cur rent bu siness m odel. Thus, this factor indicates that t he

Plaintiffs ar e employ ees, an d not independent contra ctors.

Hav ing considered all of the par ties adm issible ev idence and v iewing t he ev idence in the ligh t m ost fav orable

to the Defendant, th eLauritzen factors indicate th at t he Plaintiffs are em ploy ees.

FEBRUARY 1 2, 2 01 0 5 :09 PM
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Companies Slash Payrolls By Calling WorkersIndependent Contractors; Costly To IRS AndStates, L.A. Times ReportsTh e LA Times reports that the Internal Rev enue Serv ice and 37 states are cracking down on companies that

try to trim pay roll costs by illegally classifying workers as independent contractors, rather than as fullemploy ees, Th e Associated Press has learned. Th e pract ice costs gov ernm ents billions in lost r ev enue an d can

leav e workers high and dry when t hey are hu rt a t work or ar e left jobless.

Many who hav e studied the problem believe its worsened during the economic downtu rn, fueling ev en m ore

aggr essiv e recov ery efforts by states.

The article points out t hat [t]y pically, u nless workers fight for and win a ru ling th at th ey should hav e been

treated as full employees, th ey arent a ble to collect workers compensation for the injury or unemploym ent

benefit s when left jobless.

To read the full article click here.

To read more about th e legal fact ors th at determ ine wh ether som eone is misclassified as an in dependent

contr actor v s employ ee, and industries where m isclassification is ram pant click here.

OCTOBER 14, 2009 1 0:50 AM

5th Cir.: Cable Installers Are Employees, NotIndependent Contractors; Summary Judgment ForEmployer ReversedCromwell v. Drift wood Elec. Contra ctors, Inc.

The trial court in this case previously gran ted the Defendant-employ er sum ma ry judgment finding that th e

Plaintiff-employ ee-cable install ers wer e independent contra ctors and not employ ees. The 5th Circu it rev ersed

on appeal, finding t hat alt hough its a close call, Plaint iffs wer e employees, thu s entit led to th e protections of

the FLSA.

The Court cited the following facts as relev ant to its inquiry :

[Plaintiffs] prov ided cable splicing serv ices for Driftw ood for approxim ately elev en m onths, and wer e required

to work tw elve-hour day s, th irteen day s on an d one day off. They were paid a fixed hourly wage for t heir work.

BellSout h w as Driftwoods customer on th e restorat ion project. AT & T appears to hav e had nothin g to do wit h

the fact s of this case. Crom well an d Bankston reported to BellSout hs location ev ery mornin g to receiv e their

assignm ents, unless they had not completed their jobs from th e prior workday , in w hich case they were

perm itted to check in by phone. Cromwell and Bankston w ere giv en prints describing th e ty pe of work that

needed to be perform ed for eac h a ssignm ent a nd wer e instru cted by BellSout h superv isors to follow certa in

genera l specifications. Driftwood and BellSout h r epresenta tiv es checked on t he progress of work, bu t did not
http://flsaovertimelaw.com/2009/10/14/5th-cir-cable-installers-are-employees-not-independent-contractors-summary-judgment-for-employer-reversed/http://www.overtimeadvocate.com/IndependenContractorvsEmployee.htmlhttp://www.latimes.com/news/nationworld/nation/wire/sns-ap-us-independent-contractors,0,7708435.storyhttp://www.latimes.com/news/nationworld/nation/wire/sns-ap-us-independent-contractors,0,7708435.storyhttp://flsaovertimelaw.com/2010/02/12/companies-slash-payrolls-by-calling-workers-independent-contractors-costly-to-irs-and-states-la-times-reports/


14/16



tr ain Cr om well a nd Benson or control th e details of how th ey perform ed their a ssigned jobs.

Cromwell and Bankston provided their own trucks, testing equipment, connection equipment, insulation

equipment, and ha nd tools, totaling ov er $50,000 for Cromw ell and approximately $16, 000 for Bankston,

while Bel lSou th supplied m ateria ls such as c losur es and ca bles. Cromwell an d Bank ston were responsible for

their own v ehicle liability insura nce and employ m ent tax es, but Driftwood provided worker s compensation

insura nce and liability insurance for Cromw ell and Bankstons work.

Apply ing the relev an t la w, t he Court sta ted, [t]o determ ine if a worker qualifies a s an em ploy ee u nder the

FLSA, we focus on wh ether , as a ma tter of econom ic reality , th e worker is economical ly dependent upon the

alleged em ploy er or is instead in business for him self.Hopk ins v. Cornerstone Am. , 545 F.3d 338, 34 3 (5th

Cir.2008). To aid in tha t inquir y , we consider five non-exha ustiv e fact ors: (1) th e degree of control exercised

by th e alleged em ploy er; (2 ) t he ex tent of th e rela tiv e in v estm ents of t he w orker an d the a lleged em ploy er; (3 )

the degree to which th e workers opportu nity for profit or loss is determ ined by t he alleged employ er; (4) t he

skill and initiativ e required in perform ing t he job; and (5) t he perma nency of the r elationship.Id. No single

factor is determ inativ e.Id. The ultim ate conclusion th at an individual is an employ ee within the m eaning of

the FLSA is a legal, an d not a factual, determina tion. Brock v. Mr. W Fireworks, Inc. , 814 F.2d 1 042, 1045

(5th Cir.1987 ); see alsoBeliz v. W.H. McLeod & Sons Packing Co., 76 5 F.2d 1 31 7, 1 327 & n. 24 (5th Cir.1985)(citing and reconciling cases). Therefore, we review the determination that [plaintiffs] were not employees as

we rev iew an y determ inat ion of law, which is de n ov o.Donovan v. American Airlines, I nc. , 686 F.2d 267, 27 0

n. 4 (5th Cir.1 982). Because there ar e no disputes of mat erial fact, we also conclude that t he distr ict court w as

correct to resolv e the matter on sum ma ry judgment.

The defendant s-appellees ar gu e tha t th e facts of this case are simila r t o those in Carrell v. Sunland Const., Inc.,

in wh ich w e held that a gr oup of welders were independent contra ctors under the FLSA. 998 F.2d 330 (5th

Cir.1993). In Carrell, we noted that sev eral facts weighed in fav or of employee status, including t hat the

defendant dicta ted the w elders schedule, paid th em a fixed hour ly ra te, an d assigned them to specific work

crews. Id. at 3 34 . Howev er, w e held that the w elders were independent contractors because the w eldersrelat ionship wit h t he defendant w as on a project-by -project ba sis; th e welders worked from job to job and from

company to company ; the av erage num ber of weeks that each welder worked for th e defendant each y ear wa s

relativ ely low, r anging from thr ee to sixteen weeks; the welders worked while aw are th at t he defendant

classified th em a s independent contr actors, and m any of them classified th emselv es as self-employ ed; th e

welders were highly skil led; th e defendan t had no control ov er the m ethods or detai ls of the w elding work; the

welders perform ed only welding serv ices; the w elders supplied their own welding equ ipm ent; and the w elders

inv estm ents in their welding m achines, tr ucks, and tools av eraged $1 5,000 per welder.Id.

In Carrell, we distingu ished our prior decision in Robicheaux v. Radcliff Material, Inc. , 697 F.2d 662 (5th

Cir.1983), in which we held tha t a group of welders were employees under t he FLSA, on the gr ounds that the

welders in Robicheauxworked a substant ial period of time exclusively with the defendant in t hat case, ra nging

from ten m onths to three y ears; the welding in Robicheauxrequir ed only m oderate skill; the defendant in

Robicheauxtold the welders how long a w elding assignm ent should take; the w elders in Robicheauxspent only

fifty percent of their tim e welding, and th e rema ining tim e cleaning and perform ing semi-skilled mechanical

work; and the defendan t in Robicheauxprov ided the w elders with steady reliable work ov er a substantial

period of time. Carrell, 998 F.2d at 33 4 (citingRobicheaux, 697 F.2d at 667). The w elders in Robicheauxhad

signed a contra ct w ith t he defendant in t hat case describing t hem selv es as independent contr actors; fur nished

their own w elding equipment, in which they had inv ested from fiv e to sev en thousand dollars each; prov ided
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their own in suran ce and workers com pensation cover age; inv oiced th e defendant on their own business

letter heads, filed federal income ta x r etur ns on IRS form s as self-employ ed individua ls, and receiv ed a high er

hourly wag e than did other welders employ ed by the defendant wh o did not fur nish t heir own equipment an d

who were consider ed by th e com pany to be em ploy ees.Robicheaux, 697 F.2d at 665.

The fact s of th is case lie som ewh ere betw een th ose ofCarrellan dRobicheaux. Simila r to the facts in Carrell, th e

plaintiffs in this suit a re hig hly skilled and perform only serv ices requir ing t he use of those skills, the

defendants her e did not contr ol the details of how t he plain tiffs perform ed their assigned jobs, and th e plaint iffs

prov ided their own t rucks, equipment, and tools, in wh ich th ey had inv ested substantial sums. Howev er,

ther e are som e significant dissimilar ities between th e facts in th e instan t case and the facts in Carrell, such

tha t th e facts of this case ar e not as readily distingu ishable from t hose inRobicheaux. The plaint iffs in th is case

worked fu ll-tim e ex clusiv ely for t he defenda nt s for a ppr oximately elev en m onths, w ithin the tim e rang e that

th eRobicheauxwelders had worked for th e defendant in t hat case. The plaintiffs in this case did not hav e the

same tem pora ry , project-by-project, on-aga in-off-aga in relat ionship with t heir pur port ed employ ers as th e

plaintiffs in Carrelldid wit h th eir purported employ er. The defendants-appellees ar gu e that Cromw ell and

Bankstons work-restoring dama ged telecomm unica tions lines along t he Mississippi Gulf Coast in th e wa ke of

Hurricane Katrina-was by natu re tem porar y , but courts mu st m ake allowances for t hose operational

chara cteristics that are u nique or int rinsic to the particular business or industry , an d to the workers theyemploy. Brock v. Mr. W Fireworks, Inc. , 814 F.2d 1 042, 1054 (5th Cir.1987 ) ([W]hen an industry is

seasonal, t he proper test for determ ining perm anen cy of the relat ionship is not whet her t he alleged employ ees

retu rn ed from season t o season, bu t w heth er th e alleged employ ees worked for t he entir e operativ e period of a

particular season.). Thus, the t emporar y natu re of the emergency restoration work does not w eigh aga inst

employ ee statu s.

It is com m on in FLSA cases th at th ere ar e facts pointin g in both directions r egar ding th e issue of employ ee

status, seeHerman v. Express Sixty-Minutes Delivery Serv., Inc. , 16 1 F.3d 299, 305 (1998) (quoting Carrell,

998 F.2d at 334), but th e facts in t his case tru ly appear to be nearly in equipoise. Howev er, on balance, we

believ e that , a s a m at ter of economic reality , Cromwell and Bankston w ere econom ical ly depen dant upon

Driftwood and BellSout h, a nd wer e not in business for t hem selv es. Th e facts of this case simply appear closer t o

th ose in Robicheauxthan in Carrell. The m ost significan t difference betw een th e facts in th ose cases, in t erm s of

the economic reality of wh ether t he plaintiffs were economically dependant upon t he alleged employ er, w as

that theRobicheauxwelders worked on a steady and reliable basis over a substan tial period of time exclu sively

with th e defendan t, r an ging from ten m onths to t hree y ears, w hereas th e Carrellwelders had a project-by -

project, on-again-off-again relationship with the defendant, with the average number of weeks that each

welder worked for the defenda nt each y ear being rela tiv ely low, r an ging from three t o sixt een weeks. Sim ilar

to theRobicheauxwelders, Cromwell a nd Bankston worked on a steady and relia ble basis ov er a substant ial

period of tim e-approxima tely elev en m onths-exclusiv ely for their purported employ ers. The perman ency and

extent of this relat ionship, coupled with Driftw ood and BellSout hs com plete contr ol over Cromw ell and

Bankstons schedule and pay , had th e effect of sev erely lim iting a ny opport un ity for profit or loss by Cromw ell

and Bankston. A lthough it does not appear that Cromw ell and Bankston w ere actua lly prohibited from t aking

oth er jobs while working for Driftw ood and BellSout h, a s a practica l m att er th e work schedule establish by

Driftwood and BellSout h preclu ded significant ext ra w ork. A lso, th e fact th at Driftw ood and BellSout h prov ided

Cromwell and Bankston with their work assignments limited the need for Cromwell and Bankston to

demonstra te initiativ e in perform ing their jobs.See Carrell, 998 F.2d at 333 (As for t he initiativ e required, a

Welder s suc cess depended on h is abil ity to find consistent work by m ov ing from job to job an d from com pany to

com pany . But once on a job, a Welders initia tiv e was limit ed to decisions regar ding his welding equipm ent
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and the details of his welding w ork.). Although there ar e facts that clearly weigh in fav or of independent

contr actor statu s, notably tha t Cromw ell and Bankston controlled th e details of how th ey perform ed th eir

work, w ere not closely superv ised, inv ested a rela tiv ely substa ntial am ount in their tr ucks, equipm ent, an d

tools, and used a high lev el of skill in perform ing t heir w ork, th ese facts are not sufficient to establish, a s a

ma tter of economic reality , th at Cr omw ell and Bankston w ere in business for t hemselves during t he relev ant

tim e period. The judgm ent of the distr ict court is VACATED, and th is case is REMANDED to the distr ict court

for proceedings consistent w ith th is opinion.

Independent Contractor vs Employee _ Overtime Law Blog _ FLSA Decisions

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