ORDER
ELIZABETH A. KOVACHEVICH, District Judge.
This cause is before the Court on:
Dkt. 187 Motion for Partial Summary Judgment — Sperry
Dkt. 188 Motion for Summary Judgment as to All Plaintiffs (Knight)
Dkt. 192 Response in Opposition
Dkt. S-1 Supporting Documents
Dkt. S-3 Supporting Documents
Dkt. 196 Amended Motion for Summary Judgment
Dkt. 197 Motion to Strike
Dkt. 198 Response
Dkt. 200 Response
This case is a collective action brought under the Fair Labor Standards Act. Plaintiffs are current and former technicians engaged by Defendants to perform the installation, service and repair of cable television, high-speed internet and digital telephone for customers of Bright House Networks. In the Motion for Summary Judgment (Dkt. 188), the Knight Defendants, Jeffry Knight, Inc. d/b/a Knight Enterprises and Jeffry D. Knight, seek summary judgment as to the status of all Plaintiffs as independent contractors and not employees of Defendants. Plaintiffs are Michael Scantland, Frederick Hauser, III, Joshua Farrell, Leon Sperry, Phillip Zapata and Terrence Downs. The Motion for Partial Summary Judgment is directed to the claim of Plaintiff Leon Sperry.
I. Standard of Review
Summary judgment should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
The plain language of Rule 56(c) mandates the entry of summary judgment after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."
Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
The appropriate substantive law will guide the determination of which facts are material and which facts are . . . irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." See Anderson, 477 U.S. at 248. But, "[i]f the evidence is merely colorable . . . or is not significantly probative . . . summary judgment may be granted." Id. at 249-50.
II. Statement of Facts
1. Part of the business conducted by Defendants Jeffry D. Knight, Inc. d/b/a Knight Enterprises and Jeffry D. Knight includes installation and repair of telecommunications services.
2. Knight Enterprises is in a contractual relationship with Bright House Networks, LLC ("BHN") to perform installation and repair services. (Dkt. S-1, Exh. 12). Knight Enterprises is one of four independent contractor companies which perform such services. (Dkt. 61-2) Knight Enterprises performs installation and repair services under its contract with BHN in Pinellas, Manatee, Pasco and Polk counties.
3. BHN offers cable television, high-speed internet access and digital phone services to its customers. (Dkt. 61-2).
4. BHN provides technical specifications to the management of Knight Enterprises concerning the installation work to be performed under the contract to ensure that Knight's work is consistent with the proper functioning of BHN's equipment and operating systems and for the benefit of customers. The BHN-Knight contract requires that Knight Enterprises comply with the technical specifications. The BHN-Knight contract further provides that BHN has the right to "chargeback" Knight Enterprises if audits and quality control checks performed by BHN employees show that Knight Enterprises failed to meet the installation guidelines. BHN performs quality control and contract compliance audits on 10% of the jobs performed by Knight Enterprises. (Dkt. S-1, Dkt. 61-2, Dkt. 61-4).
5. BHN provides batches of work orders to Knight Enterprises. Knight Enterprises determines which technician installer is qualified and available to perform the work order, and assigns it to the technician installer. The technician installer returns the completed work order to Knight management, who conveys the completed work order to BHN . Knight Enterprises is responsible to BHN for the satisfactory completion of the work orders. (Dkt. 61-3).
6. BHN provides Knight Enterprises with some of the hardware to be installed, included cable boxes, DVRs and cable modems. (Dkt. 61-3, Dkt. 61-4).
7. BHN contractually requires that the Knight technician installer display an id badge and wear clothing that shows the installer's affiliation with Knight Enterprises, and requires that the technician's vehicle must bear the name of Knight Enterprises, must state that Knight Enterprises is an authorized contractor to BHN, and must not state or imply that the Knight technician is employed by BHN. (Dkt. 61-3).
8. BHN requires Knight Enterprises to screen and conduct background checks for the technician installers Knight Enterprises uses to perform services under the BHN-Knight contract, the results of which are reported to Knight Enterprises. (Dkt. 61-3).
9. BHN pays Knight Enterprises a set amount per job, based on billing codes provided by BHN to Knight Enterprises. (Dkt. 192-22, p. 11).
10. Knight Enterprises enters into individual contracts with the technician installers, "Independent Contractor Services Agreement." ("ICSA") The technician installers are engaged as independent contractors. Execution of the ICSA includes execution of a Warranty, Insurance Agreement and Covenant Not To Compete, which are incorporated by reference into the ICSA.
11. Knight Enterprises pays the technician installers a set amount per job, based on the billing codes on the completed work, which is determined by Knight Enterprises. (Dkt. 192-22, p. 11). The pay schedule is subject to change, at the option of Knight Enterprises. (Dkts. 188-18, 188-19).
12. Plaintiffs performed residential and/or commercial installation and repair services for Knight Enterprises pursuant to contracts during the following time periods:
Michael Scantland 2/2002 - 9/2009
Frederick Hauser, III 2000 - 9/2009
Leon Sperry 5/23/2006 - 9/2009
Joshua Farrell 1/2004 - 9/2009
Phillip Zapata 2002 - 9/2009
Terrence Downs 11/2008 - 12/2009
13. The ICSA was amended from time to time. Plaintiffs acknowledge that Plaintiffs executed multiple ICSA's. The ICSA version executed in 2006 expressly provides that the technician installer may employ others to assist in completing the work assigned to the technician installer. A later version expressly provides that the technician installer may contract with other companies, and is not limited to Knight. (Dkts. 188-18, 188-19).
14. In their depositions, Plaintiffs acknowledge that Plaintiffs provided their own vehicles, purchased their own tools and safety equipment, purchased commercial general liability and auto insurance, paid for their own gas, paid for required telephone service, and paid their own taxes.
15. Some technician installers performed services as sole proprietors, and some provided services through a corporation. (Dkt. 50).
16. Plaintiffs Scantland, Hauser, Sperry and Zapata provided their services through a corporation, and obtained an FEIN.
17. Technician installers work six days a week, depending on the volume of work orders from BHN, which varies from week to week, and seasonally. Knight Enterprises provides its services seven days a week. (Dkt. 192-22, p. 8, p. 10).
18. Plaintiff Scantland testified that, as a "lead," Plaintiff was required to assign work orders to technician installers, or Plaintiff, as lead, would have to perform the work. Plaintiff Scantland further testified that the workload fluctuated, was never a certain number of work orders, and technician installers could request more work. (Dkt. 196-13, p. 13). Plaintiff Scantland also testified that the technician installers could transfer work orders among themselves. (Dkt. 196-13, p. 26).
19. In deposition, Plaintiff Scantland testified that "new guy" installers worked six days a week, with rotating Sundays, but leads would try to accommodate special schedule requests from "guys with tenure". (Dkt. 196-13, p. 31). Plaintiff Hauser testified that he worked six days a week, but his request for no Saturdays was approved. Plaintiff Sperry testified that he worked five or six days a week, with Sunday off and some Thursdays off. In his affidavit (Dkt. 132-9), Plaintiff Farrell states that he was told he was required to work six days a week. Plaintiff Zapata testified that he worked six days a week, then five days a week. Plaintiff Downs testified that it was mandatory that he work six days a week, and sometimes seven days a week, with rotating Sundays.
20. To assign the BHN work orders, a "router" distributes the work orders to a "technical consultant" (formerly "lead"), who assigns the work orders to a technician installer on a daily basis. Work orders are distributed according to a technician installer's skill set and geographic area. (Dkt. 192-22, p. 7, p. 18).
21. The typical procedure for a technician installer is to come in to the local office to obtain the route for the day, to turn in completed work orders from the previous day and have them checked, to turn in unused equipment from the prior day, and to obtain new equipment for the work orders to be performed, and then to go out into the field. Plaintiffs testified that Plaintiffs came in as early as 6:30 a.m., and not later than 7:15 a.m., to get their routes, to turn in paperwork and equipment, and obtain equipment for the work orders to be completed. The first time 2 hour slot scheduled was between 8:00 a.m. and 10:00 a.m. Plaintiffs acknowledged that being late meant their route could be given away.
22. Some technician installers elected to partner with other technician installers to complete the assigned work, and some did not. Plaintiff Sperry testified that when he partnered with Plaintiff Zapata, Plaintiffs decided themselves how to split the money for the job completed. (Dkt. 192-23, p. 26).
23. Knight Enterprises backcharges technician installers for failure to perform work according to BHN specifications, failure to use "Work Force Management" correctly, and for lost equipment. (Dkt. 192-18, p. 20).
24. Knight Enterprises does not require the technician installers to have prior cable television installation experience before engaging them. (Dkt. 192-18, p. 21).
25. After a technician installer without experience signs an ICSA, Knight Enterprises provides some training, provides technical specifications, and has the technician ride with another technician for a period of time. (Dkt. 192-22, pp. 2-3).
26. Plaintiff Downs testified that he spent two weeks in training, for which Plaintiff Downs was not compensated. (Dkt. 192-26, p. 7). Plaintiff Hauser testified that he received training, then rode with another technician for four days, for which Plaintiff was not compensated. (Dkt. 192-24, p. 14). Plaintiff Zapata testified that he received training, then rode with another technician for a week, for which Plaintiff was not compensated. (Dkt. 192-25, p. 16). Plaintiff Sperry testified that he received training, then rode with another technician for a week and a half, for which Plaintiff was not compensated. (Dkt. 192-23, pp. 10-11).
27. In 2008, Knight Enterprises required its technician installers to complete coursework offered by Jones/NCTI and take tests to become certified in cable, voice and data, Quickstart Installer (essentials for installing video), Hi-Speed Data Installer (fundamentals of high-speed internet access) and IP Voice (all aspects of IP voice).
(Dkt. 192-23, p. 27).
28. Over time, the services performed by Knight Enterprises have changed, the volume of work has changed, quality control has changed, becoming more stringent and harder to pass, and backcharges have changed. (Dkt. 192-22, p. 5, p. ).
IV. Discussion
The threshold issue in this case is whether Plaintiffs are independent contractors or employees of Knight Enterprises. The Court applies the "economic realities" test to the facts to reach an ultimate conclusion as to Plaintiffs' degree of dependence on Knight Enterprises. The question is whether, considering the total circumstances, Plaintiffs are so dependent on Knight Enterprises as a matter of economic reality as to come within the protection of the Fair Labor Standards Act, or sufficiently independent to fall outside the FLSA's protection. If material facts are disputed, the Court construes them in favor of Plaintiffs, the non-moving party.
A. General Principles
A determination of employment status under the FLSA is a question of law. See Antenor v. D & S Farms, 88 F.3d 925, 929 (11th Cir. 1996); Brouwer v. Metropolitan Dade County, 139 F.3d 817, 818 (11th Cir. 1998) (citing Villareal v. Woodham, 113 F.3d 202, 205 (11th Cir. 1997)). Subsidiary findings, however, are considered issues of fact. See Patel v. Wargo, 803 F.2d 632, 634 n. 1 (11th Cir. 1986).
In Santelices v. Cable Wiring and South Florida Cable Contractors, Inc., 147 F.Supp.2d 1313, 1318-19, the Court summarizes the principles which guide the Court's determination:
The FLSA vaguely explains what is meant by the term "employee." Weisel v. Singapore Joint Venture, Inc., 602 F.2d 1185, 1188 (5th Cir. 1979). For example, 29 U.S.C. § 203(e)(1) defines an "employee" as "any individual employed by an employer." An "employer," in turn, includes "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). To "employ" is defined as to "suffer or permit to work." 29 U.S.C. § 203(g). Whether an employment relationship exists under the FLSA must be judged by the "economic realities" of the individual case and not by traditional common-law principles. See Antenor, 88 F.3d at 929; Donovan v. New Floridian Hotel, 676 F.2d 468, 470 (11th Cir.1982). See also Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 325-26, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992) (explaining that the definition of employ in the FLSA is expansive and collecting cases). The touchstone of "economic reality" in analyzing a possible employee/employer relationship for purposes of the FLSA is dependency. The courts look at all of the surrounding circumstances of the "whole activity" to determine whether the putative employee is economically dependent upon the alleged employer. Goldberg v. Whitaker Housing Co-op, Inc., 366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961); Aimable v. Long & Scott Farms, 20 F.3d 434, 439 (11th Cir. 1994); Harrell v. Diamond A Entm't, Inc., 992 F.Supp. 1343, 1348 (M.D. Fla. 1997). Whether or not the parties intended to create an employment relationship is irrelevant. See Donovan, 676 F.2d at 471 (citing Brennan v. Partida, 492 F.2d 707, 709 (5th Cir.1974)). Likewise, merely labeling an individual as an employee or an independent contractor is not dispositive. See Rutherford Food, 331 U.S. at 729, 67 S.Ct. 1473 ("Where the work done, in its essence, follows the usual path of an employee, putting on an `independent contractor' label does not take the worker from the protection of the Act."). In other words, courts look to see whether the putative employee depends (or depended) on the alleged employer for his economic livelihood based upon the parties' actual working relationship. Antenor, 88 F.3d at 937-38.
The Court considers the following factors in applying the economic realities test:
(1) the nature and degree of control of the alleged employer's control as to the manner in which the work is to be performed;
(2) the alleged employee's opportunity for profit or loss depending upon his managerial skill;
(3) the alleged employee's investment in equipment or materials required for his task, or his employment of helpers;
(4) whether the service rendered requires a special skill;
(5) the degree of permanency and duration of the working relationship; and
(6) the extent to which the service rendered is an integral part of the alleged employer's business.
Freund v. Hi-Tech Satellite, Inc., 185 Fed. Appx. 782, 783 (11th Cir. 2006).
The Court notes that "[n]o one factor is controlling, nor is the list exhaustive . . . The weight of each factor depends on the light it sheds on the putative employee's dependence on the alleged employer, which in turn depends on the facts of the case." Santelices, 147 F.Supp.2d at 1319. The Court may consider any relevant evidence; the ultimate determination is based on the totality of the circumstances of the particular case.
B. Preliminary Issue
Plaintiffs and Defendants entered into "Independent Contractor Service Agreements" before any Plaintiff performed services for Knight Enterprises. To the extent that those Agreements designate Plaintiffs as independent contractors, or establish that the parties did not intend to enter an employer/employee relationship, the Agreements do not control the Court's determination. Economic reality controls over labels or subjective intent as to the ultimate issue of Plaintiffs' status as independent contractors or employees. However, the Court considers the provisions of the Agreements to be relevant to some of the factors the Court must apply in examining Plaintiffs' dependence on Knight Enterprises. Therefore, the Court includes some provisions of Plaintiffs' Agreements below:
A. Michael Scantland
Dkt. 196-4 Scantland Agreement, 2/25/2002
3. Work Assignments. To the extent that Knight decides to utilize the services of a Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Once Contractor has accepted one or more assignments, Contractor shall timely and correctly complete said assignments pursuant to the terms and conditions of this Agreement. Contractor shall be held liable for a failure to complete work accepted by Contractor. Just as Contractor may refuse work assignments, Knight shall be under no obligation to assign any work to Contractor.
4. Performance. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control. Contractor remains fully responsible for the proper completion of the work, including, without limitation, wages of any employees of Contractor, fuel, and other costs. Knight shall only be required to pay Contractor the payment (as set forth bellow) and shall not be required to reimburse or pay Contractor for any costs incurred by Contractor. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor may employ others to assist Contractor in performing the work, in which case Contractor shall be solely responsible for all wages, taxes, worker's compensation, unemployment, fringe benefits, and any other matters associated with its employees.
. . . .
6. Payment. Knight will pay Contractor for completed work in accordance with the pay schedule applicable to the work completed which is in effect at the time that the work is completed by Contractor. Payments to Contractor are on a per-job basis. The pay schedule may be changed from time to time by Knight, in its discretion. Knight will pay Contractor bi-weekly, or according to such other payment schedule as Knight may adopt from time to time. Contractor may realize a profit or suffer a loss in connection with performing the services and Knight does not guarantee a profit to the Contractor, other than to make the payment required under this section. Contractor acknowledges that the success or failure of its business will depend on the relationship of business receipts (from the payments received by Knight or otherwise) to expenditures (which are Contractor's responsibility). The payments due under this section are subject to setoff provisions and retainer set forth elsewhere in this Agreement. Contractor will comply with all of Knight's policies and procedures regarding the reporting of completed work and will complete all forms or other documents relating to the work completed. Contractor will accurately represent the work completed and will accurately classify the work completed by the proper work code. Contractor shall not be entitled to payments, compensation, or other amounts from Knight other than as specifically set forth in this section.
7. Term. The term of this Agreement will commence on the date hereof, and, unless otherwise terminated pursuant to this section, will end on the date which is one (1) year from the date of this Agreement. Unless terminated pursuant to this section, this Agreement shall automatically renew for successive one-year periods. This Agreement may be terminated by either party, with or without cause, upon thirty (30) days notice to the other party. Termination of this Agreement shall not affect any ongoing obligations pursuant to this Agreement, including the obligation to remedy work pursuant to the Warranty.
Dkt. 196-5. Scantland Agreement, 1/5/04
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Once Contractor has accepted one or more assignments, including a day's worth of assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess material. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control. Contractor may employ others to assist Contractor in performing the work, in which case Contractor shall be solely responsible for all wages, taxes, workers compensation, unemployment, fringe benefits, and any other manners associated with its employees. Knight shall be under no obligation to assign any work to Contractor. Contractor indemnifies, agrees to defend, and holds Knight harmless from any damage, claim, loss, fee or liability arising out of Contractor's failure to satisfactorily complete the work.
B) Frederick Hauser, III
1) Dkt. S-1, Exh. 11 Hauser Agreement, 1/7/2004, with Knight Specifications
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Once Contractor has accepted one or more assignments, including a day's worth of assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control. Contractor may employ others to assist Contractor in performing the work, in which case Contractor shall be solely responsible for all wages, taxes, workers compensation, unemployment, fringe benefits, and any other matters associated with its employees. Knight shall be under no obligation to assign any work to Contractor. Contractor indemnifies, agrees to defend and holds Knight harmless from any damage, claim, loss, fee or liability arising out of Contractor's failure to satisfactorily complete the work.
. . . . .
SPECIFICATIONS OF KNIGHT ENTERPRISES
The following is a non-exhaustive list of the requirements for all independent contractors performing work on behalf of Jeffry Knight, Inc. d/b/a Knight Enterprises:
1. Contractor shall perform the work in a timely and competent manner and all work shall be performed in a good and workmanlike manner.
2. Contractor shall use its best efforts to complete all work during regular business hours.
3. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials.
4. Contractor shall ensure that all persons employed or otherwise utilized by Contractor in connection with any work are clean and well-presented and comport themselves in a professional manner and shall not harass or otherwise act disrespectfully to any person while engaged in any work.
5. Either Knight or the Company will provide the materials (other than incidental materials) needed to perform the work, but it shall be the responsibility of Contractor to advise Knight and/or the Company (as may be directed by Knight) of any materials that may be needed to complete the work. Contractor shall ensure that the materials provided to Contractor are accurate as Contractor shall be bound by the records of Knight or the Company for the materials provided to the Contractor and Contractor shall be responsible for the value of any missing, lost or damaged materials. The value of any such materials may be deducted from any amounts due to the Contractor pursuant to this Agreement, regardless of whether this Agreement is still in effect. Contractor shall return to Knight and/or the Company any materials which are not utilized in performing the work in the same condition as when the materials were delivered to the Contractor.
2) Dkt. S-1, Exh. 11 Hauser Agreement, 11/2006 Revision
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Contractor is free to come and go at Contractor's discretion if he has not accepted an assignment. Contractor may contract with other businesses as Contractor deems appropriate and is not limited to Knight. Once Contractor has accepted one or more assignments, including a day's worth of assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractors agrees to perform specific work for the specific amounts set forth in this Agreement. Knight shall be under no obligation to assign any work to Contractor.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control. 3) Dkt. S-1, Exh. 11 Hauser Agreement, 6/11/2009
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Contractor is free to come and go at Contractor's discretion if he has not accepted an assignment. Contractor may contract with other businesses as Contractor deems appropriate and is not limited to Knight. Once Contractor has accepted one or more assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement. Knight shall be under no obligation to assign any work to Contractor at any time in Knight's's sole discretion.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control.
C) Leon Sperry
1) Dkt. 188-18 Sperry Agreement, 6/5/2006
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed, Contractor may decline any work assignments and is not required to maintain a set schedule. Once Contractor has accepted one or more assignments, including a day's worth of assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control. Contractor may employ others to assist Contractor in performing the work, in which case Contractor shall be solely responsible for all wages, taxes, workers compensation, unemployment, fringe benefits, and any other matters associated with its employees. Knight shall be under no obligation to assign any work to Contractor. Contractor indemnifies, agrees to defend, and holds Knight harmless from any damages, claim, loss, fee or liability arising out of Contractor's failure to satisfactorily complete the work.
. . . . .
6. Payment. Knight will pay Contractor for completed work in accordance with the pay schedule applicable to the work completed which is in effect at the time that the work is completed by the Contractor. The pay schedule may be changed from time to time by Knight, in its discretion. Knight will pay Contractor bi-weekly, or according to such other payment schedule as Knight may adopt from time to time. The payments due hereunder are on a per-job basis and not on any other basis. The payments due under this section are subject to setoff provisions and retainer set forth elsewhere in this Agreement. Contractor will comply with all of Knight's policies and procedures regarding the reporting of completed work and will complete all forms or other documents relating to the work completed. Contractor will accurately represent the work completed and will accurately classify the work completed by proper work code. Contractor shall be entitled to no payments, compensation, or other amounts from Knight other than as specifically set forth in this section. Contractor acknowledges and agrees that it incurs the principal expenses related to the work that Contractor performs pursuant to this Agreement. Contractor acknowledges that Contractor may realize a profit or suffer a loss in connection with performing the work and that Contractor's success or failure depends on the relationship of business receipts to expenditures. Contractor represents and warrants to Knight that it has continuing and recurring business liabilities and obligations.
2. Dkt. 188-19 Sperry Agreement, Revision
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly of through the Company at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work To be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Contractor is free to come and go at Contractor's discretion if he has not accepted an assignment. Contractor may contract with other businesses as Contractor deems appropriate and is not limited to Knight. Once Contractor has accepted one or more assignments, including a day's worth of assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement. Knight shall be under no obligation to assign any work to Contractor.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to the commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control.
D) Joshua Farrell
1) Dkt. S-1, Exh. 11 Farrell Agreement, 3/19/2009
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing other relevant contact information, and describing the type of work to be performed. Contractor may decline any work assignments and is not required to maintain a set schedule. Contractor is free to come and go at Contractor's discretion if he has not accepted an assignment. Contractor may contract with other businesses as Contractor deems appropriate and is not limited to Knight. Once Contractor has accepted one or more assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement . Knight shall be under no obligation to assign any work to Contractor at any time in Knight's sole discretion.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive discretion, supervision and control.
. . . . .
5. Payment. Knight will pay Contractor bi-weekly for completed work in accordance with the schedule applicable to the work completed which is in effect at the time that the work is completed by the Contractor. The schedule may be changed from time to time by Knight, in its discretion. The payments due hereunder are on a per-job basis and not on any other basis and are subject to the setoff provisions and retainer set forth elsewhere in this Agreement. Knight shall have the option, at its discretion, to retain a percentage of the amounts otherwise due to the Contractor a certain sum or percentage in order to provide Knight with security for the payment of amounts due to Knight by Contractor for materials not returned to Knight, defective or improper work, or otherwise (the "Retainage"). In the event that Knight determines, in its discretion, that the Contractor has: (a) failed to return materials, (b) performed defective work, (c) breached its obligations pursuant to this Agreement (including any ancillary agreement), or (d) otherwise caused damage or liability (actual or contingent) to Knight, then Knight shall be entitled to unilaterally keep the Retainage as liquidated damages. The parties agree that the actual amount of damages in the event of any of the foregoing conditions will be difficult, if not impossible, to ascertain with any degree of certainty and that the Retainage is a reasonable estimation of said damages. Contractor will comply with all of Knight's policies and procedures regarding the reporting of completed work and will complete all forms or other documents relating to the work completed. Contractor will accurately represent the work completed and will accurately classify the work completed by the proper work code. Contractor acknowledges and understands that Knight is neither paying nor accruing any employment-related taxes with respect to Contractor because Contractor is not an employee of Knight. Contractor is solely responsible for the payment and/or accrual and reporting of all employment-related taxes.
E) Terrence Downs
1) Dkt. S-1 Downs Agreement, 3/11/2009
2. Work Assignments. To the extent that Knight decides to utilize the services of Contractor, Knight shall (directly or through the Company, at Knight's option) provide to Contractor a work order describing the location, providing any relevant contact information, and describing the type of work to be performed. Contractor is free to come and go at Contractor's discretion if he has not accepted an assignment. Contractor may contract with other businesses as Contractor deems appropriate and is not limited to Knight. Once Contractor has accepted one or more assignments, Contractor shall timely complete said assignments pursuant to the terms and conditions of this Agreement and may not thereafter refuse to fully complete the accepted assignments. The Contractor agrees to perform specific work for the specific amounts set forth in this Agreement. Knight shall be under no obligation to assign any work to Contractor at any time in Knight's sole discretion.
3. Performance. Contractor shall perform the work in a timely and competent manner and all work shall be done in a good and workmanlike manner. Contractor shall use its best efforts to complete all work during regular business hours. Contractor shall comply with all specifications of Knight and the Company regarding the work. Contractor shall keep the area in which the work is being performed clean and shall return the area to the condition it was in prior to commencement of the work once the work is completed, including the removal of any debris and excess materials. The manner and means of performance of the work, including technique, sequence, procedures, selection and assignment of employees shall be subject to Contractor's exclusive direction, supervision and control.
F) Phillip Zapata
In his deposition (Dkt. 192-25, p. 5), Plaintiff Zapata testified that Plaintiff performed installation services from 2002 or 2003 to October, 2009. During his deposition, Plaintiff Zapata examined copies of three agreements that Plaintiff executed. (Dkt. 192-25, p. 12). The Court examined the record but did not locate any agreements executed by Plaintiff Zapata.
C. Economic Realities Test
Plaintiffs' Affidavits (Dkt. 192-5-192-27) establish the basis of their FLSA claim against Knight Enterprises. According to Plaintiffs:
1. Knight Enterprises assigns the work orders;
2. Technicians must display a Knight sign and wear a Knight uniform;
3. Knight provides training and technical manuals;
4. Technicians must accept the work orders assigned;
5. Knight Enterprises "backcharges" for defective work;
6. Knight Enterprises pays a set amount on a per-job basis;
7. Technicians work full time for Knight Enterprises;
8. If a technician leaves early, Knight Enterprises withholds work;
9. Technicians' work is subject to quality control inspections;
10. Technicians have no time to work for another company, and have been told that they cannot do so;
11. BHN provided the equipment technicians installed, and technicians purchased tools from Knight;
12. Knight Enterprises required the technicians to purchase software to log in and close out each job;
13. Dispatchers contact technician installers on a regular basis to assign additional work;
14. Technician installers are backcharged for damage claimed by customers or lost BHN equipment.
15. Knight Enterprises stops providing work orders to technician installers without notice if Knight Enterprises believes the technician installers are not doing a good job.
1. Nature and Degree of Control by Knight Enterprises As to Manner In Which Work is Performed
Some aspects of Plaintiffs' working relationship with Knight Enterprises indicate that Knight Enterprises exercises control over Plaintiffs: 1) Plaintiffs' work must be in compliance with the technical specifications provided and is subject to quality control; 2) If Plaintiffs' work is not in compliance, Plaintiffs are "backcharged"; 3) Plaintiffs must obtain approval to perform additional work for a customer beyond that in the work order; 4) Plaintiffs must log in and out of Work Force Management, and dispatch monitors Plaintiffs' work; 5) Plaintiffs must wear uniforms and display I.D. badges; 6) the routes provided to Plaintiffs are pre-determined and Plaintiffs' ability to alter them is limited; 7) the routes are full time, six days a week; 8) the consequences to declining jobs is being "downloaded"; 9) Knight Enterprises "fires" without notice; and 10) Knight Enterprises screens and conducts background checks on technician installer applicants.
The Court notes that the installation and repair of cable television, high-speed internet and digital telephone is a technical field. Requiring Plaintiffs to comply with the technical specifications of Knight Enterprises' client, BHN, is consistent with the standard role of a contractor hired to perform highly technical tasks. The Court further notes that "backcharging" for failure to meet technical specifications does not indicate control in the sense of an employer's control over an employee, and is consistent with a contractor/client relationship.
The Court notes that the "specifications" of Knight Enterprises involve the contractual warranties of timely work and quality, returning the area of the customer's home in which the work is performed to the status quo, presenting a neat and clean appearance to the customer, and accounting for any equipment provided to the technician installer. These specifications don't indicate control in the sense of an employer's control over an employee, and are consistent with a contractor/client relationship.
The requirements of a uniform and I.D. badge are requirements which do not affect the economic reality of the working relationship between Plaintiffs and Knight Enterprises, and allow BHN's customers to understand that Plaintiffs are authorized to perform the work orders.
Requiring approval for additional work connotes a typical contractor/client relationship rather than the employer/employee relationship. Requiring such approval provides an opportunity for the documentation of the additional billing code to be included in the work order, or an additional work order.
Knight Enterprises is contractually required to screen and do a background check on technician installer applicants. This policy is consistent with both employer/employee status and independent contractor/client status, and does not affect the economic reality of the working relationship between Plaintiffs and Knight Enterprises.
There is testimony that routes are assigned on a "first come, first served basis," that routes are assigned on the "buddy system," i.e. better routes are given to those who are the lead's buddy, and that the routes are assigned on a pre-determined basis by the router. As to the assignment of pre-determined routes, the Court notes that there is testimony that "first come, first served" did not work very well, and that ultimately, the amount and type of work orders in a particular area on a particular day determines what each technician is assigned to do, based on the skills a particular technician has. A light day could mean no work at all, and a heavy day could mean a 12 to 15 hour day. Plaintiffs agree that the technical consultants attempted to accommodate requests to be assigned a particular area, especially if the technician installer was known to have good skills. Plaintiffs also acknowledged that the technician installers routinely transferred individual work orders to other technician installers, and notified Knight Enterprises of the transfer, and that technician installers asked for help if the work ran longer than its expected time. Plaintiffs also testified that Plaintiffs could get time off by making arrangements in advance.
Close monitoring of Plaintiffs' progress and location through Work Force Management and communication with dispatch indicates that Knight Enterprises exercises a degree of control over Plaintiffs. There is deposition testimony that the work schedule changes throughout the day due to additional work orders, and problems that may arise in completing the work orders. Given the nature of the work and the time slots within which the technician installers are to complete the work orders, it is to be expected that Knight Enterprises would have procedures in place to assure that the work orders are completed on a timely basis and to resolve unexpected problems. The procedures stem from the nature of the business and the need to provide reliable service to, and for the convenience of, BHN's customers.
There is testimony that Plaintiffs were "penalized" for leaving early or rejecting work orders. The nature of the work requires Knight Enterprises to have sufficient technician installers available to carry out the daily work orders. The Agreements provide that a technician installer is free to reject work orders. The Agreements also provide that whether Knight Enterprises offers work orders to technician installers remains within the discretion of Knight Enterprises. There is no duress or coercion involved in doing something that a party is contractually permitted to do. The type of control involved here is directed to the ability to provide reliable service.
There is testimony Knight Enterprises withheld work orders and "downloaded" technician installers without notice when the work orders performed did not meet quality control standards. To the extent that this indicates a degree of control, that control is related to the contractual warranty of quality. Plaintiffs were dependent on Knight Enterprises only to the extent that any business is dependent on a major customer, client or supplier. Plaintiffs do not dispute that Plaintiffs executed Service Agreements with Defendant Knight Enterprises. The Agreements Plaintiffs executed provide that either Knight Enterprises or Plaintiffs could terminate the Agreement on thirty days notice. In theory, "downloading" without notice is consistent with employment status rather than independent contractor status. An employee could be fired at will, but an independent contractor is subject to the contract with his client. In theory, a technician installer who is "downloaded" without notice has a breach of contract claim. The control involved does not necessarily transform Plaintiffs from an independent contractor to an employee. In applying the economic realities test, the Court's focus is directed more to what actually was done, and less to what could be done. The record shows that technician installers are required to have a valid driver's license, and Plaintiff Sperry lost his driving privileges; Knight Enterprises no longer offered work orders to Plaintiff Sperry. Plaintiff Hauser testified that he voluntarily ended his work relationship with Knight Enterprises. Plaintiff Downs testified that he voluntarily ended his work relationship with Knight Enterprises. Plaintiff Zapata testified that Plaintiff Zapata filed a lawsuit (not this case) and after that Knight Enterprises did not offer him a route.
Most of the issues that Plaintiffs have raised concern the issue of control. The primary focus of the common law test for distinguishing between independent contractors and employees is the right to control, because the extent to which an employer has the right to control the details of a worker's activities is relevant to whether the employer should be legally liable for those activities, for the purpose of establishing the employer's vicarious liability. However, the common law test has been rejected for the purpose of determining the economic realities of a worker's dependence on an alleged employer. Under the FLSA, the Court is required to consider the circumstances of the whole activity in determining a worker's economic dependence on the alleged employer.
Control is significant when it shows an individual exerts such a control over a meaningful part of the business that [the individual] stands as a separate economic entity. Usery v. Pilgrim Equipment Co., 527 F.3d 1308, 1312-13 (5th Cir.), cert. denied, 429 U.S. 826 (1976). In this case, Plaintiffs were responsible for the manner and means of performance of the work, including performing the work free from defects, for assuring compliance with applicable safety standards, for selecting and assigning their employees, supervising their own employees, and paying all required taxes. These factors indicate the absence of control by Knight Enterprises.
The nature and degree of Knight Enterprises' control over the manner in which the work is performed favors a finding that Plaintiffs were independent contractors.
B. Plaintiffs' Opportunity for Profit and Loss
Technician installers are paid by the job completed, according to the pay schedule in effect. The more work orders that a technician installer completes, the more the technician installer can earn. Plaintiffs agreed that Plaintiffs' ability to earn profits was enhanced by improvement of their technical skills. Plaintiffs further testified that when Plaintiffs completed the work orders assigned, Plaintiffs could contact the technical consultant, dispatch and other technician installers to obtain more work orders. A technician installer can also "upsell," i.e. sell additional services. The record establishes that Plaintiffs received additional revenue from upselling. These factors indicate "independent contractor" status. See Dole v. Amerilink Corp., 729 F.Supp. 73, 76-77 (E.D. Mo. 1990) (ability to generate more money based on skill and hard work denotes independent contractor status). There are constraints on Plaintiffs' ability to earn profits. Knight Enterprises controls the route assigned, and the pay per job. Other constraints include the scheduled time slots, the drive time between jobs, "down time" during which Plaintiffs wait for customers to be available. Plaintiffs are not solely in control of their profits or losses but the limitation is no more than any other typical subcontractor/client relationship.
By performing all work orders in compliance with technical specifications, technician installers could avoid backcharges. The performance of the work, including actual installation and associated paperwork, and obtaining approvals for additional work, was exclusively within Plaintiffs' control, and Plaintiffs' competence controlled Plaintiffs' exposure to loss through backcharges. Avoiding backcharges for lost equipment is also exclusively within Plaintiffs' control.
Plaintiffs' costs included the purchase of a vehicle, gas and maintenance for the vehicle, tools, commercial insurance, professional services, license fees, and taxes. The degree to which Plaintiffs minimized the amount of these costs was solely within Plaintiffs control, and directly affected Plaintiffs' profits.
The Court notes that some Plaintiffs incorporated and operated as a corporation, and some did not. This factor indicates the presence of independent entities, each having its own opportunity for profit and loss. Even if a corporation loses its primary client, the corporation's existence continues and the corporation can seek out other clients.
Plaintiffs' opportunity for profit and loss somewhat favors a finding that Plaintiffs were independent contractors.
C. Plaintiffs' Investment in Equipment and Materials, or Employment of Helpers
Plaintiffs acknowledge that Plaintiffs provided their own vehicles, paid for their own gas, purchased their own tools and safety equipment, purchased their own commercial liability and automobile insurance, paid for uniforms and signs, paid for their own telephone service, and paid their own taxes.
The amounts Plaintiffs expended for tools ranged from $300 (Zapata) to $3500 (Hauser, Sperry) to $5,000 (Downs). Plaintiff Sperry testified in deposition that he paid $2200 per year for the commercial liability and automobile insurance. Plaintiff Hauser testified that he claimed $1,200 for telephone expense in 2006, in addition to other business expenses.
None of the Plaintiffs employed helpers. The Court notes that the ICSA's provided that Plaintiffs had the right to employ helpers.
The amount of Plaintiffs' investment in equipment and materials is significant. See Herman v. Mid-Atlantic Installation Services, Inc., 164 F.Supp.2d 167 (M.D. Md. 2000); Dole v. Amerilink Corp., 729 F.Supp. 73, 76-77 (E.D. Mo. 1990). The costs are of a type not normally borne by employees.
This factor strongly favors a finding that Plaintiffs were independent contractors.
D. Whether Special Skill is Required
At the outset, the Court notes that the Second Amended Complaint alleges that Plaintiffs are skilled technicians who install and repair high-speed internet, cable television and telephone services. (Dkt. 39, p. 1). Given this allegation, the Court is troubled that Plaintiffs indicate there is a material issue as to whether special skill is required.
The skills involved in cable television installation and repair have been likened to the skills of an electrician or carpenter. See Herman v. Mid-Atlantic Installation Services, Inc., 164 F.Supp.2d 167 (M.D. Md. 2000). The skills required to install and repair high-speed internet access and digital telephones are more technical than the skills involved in the installation and repair of cable television alone.
The record evidence shows that, in general, not all technician installers have the same level of skill. There is deposition testimony that technician installers with good skills will be heavily routed, may receive route assignments to particular areas upon request, and may receive a more favorable work schedule. Plaintiff Scantland performed service in a variety of capacities, including some designated as managerial. Along with the length of Plaintiff Scantland's service to Knight Enterprises, this indicates an advanced degree of skill. Plaintiff Hauser's length of service to Knight Enterprise's and the favorable assignment of routes and days off indicates Plaintiff Hauser's advanced degree of skill. The length of Plaintiff Sperry's service to Knight Enterprises, the favorable assignment of routes and heavy routing indicated Plaintiff Sperry's advanced degree of skill. The record is not as clear as to Plaintiffs Farrell, Zapata and Downs, but their length of continuing service indicates the presence of a level of technical skill.
This factor favors a finding that Plaintiffs were independent contractors.
E. Degree of Permanency of Working Relationship and Duration
Plaintiffs performed installation services for Defendant Knight Enterprises on a regular basis, some for a period of years. Plaintiffs executed Agreements with Defendants which provided that the term of the Agreement was for a year and a day, and which provided for automatic renewal if the Agreement was not terminated. The Court notes that the same contract provision permitted Plaintiffs to terminate the Agreement with or without cause on thirty days notice.
Some Plaintiffs testified that they were told that Plaintiffs could not work for any other company. The Court notes that there is record evidence that other technician installers did work for other companies. (Dkt. 188-2-188-17). The later versions of the Agreements that Plaintiffs executed expressly provide that Plaintiffs are permitted to work for other companies and are not limited to Knight Enterprises. There is undisputed testimony that Plaintiffs work schedules were full time; therefore, there was no incentive or time to work for competitors. Construing the facts in favor of Plaintiffs, the Court accepts that Plaintiffs were discouraged from working for other companies, but this factor alone is not sufficient to transform Plaintiffs from independent contractors to employees.
The Court's focus is on the duration of Plaintiffs' actual working relationship, setting aside any minimal breaks in service. Plaintiffs performed services for Knight Enterprises on a regular basis for an extended period of time. The working relationship between Plaintiffs and Knight Enterprises could not classified as permanent, but the term provision of the Agreements indicates that Plaintiffs and Knight Enterprises expected the working relationship to be ongoing.
This factor mildly favors a finding that Plaintiffs were employees.
F. Whether Service Rendered Is An Integral Part of Knight Enterprises' Business
Installation Services is one segment of Knight Enterprises. The Court considers the installation and repair services performed by technicians to be integral to that segment of Knight Enterprises.
This factor favors a finding that Plaintiffs were employees.
The factors of the nature and degree of control over the manner in which the work is performed, the opportunity for profit and loss, investment in materials, and the presence of special skill clearly outweigh the factors of duration and service rendered as an integral part of the business. The economic realities of Plaintiffs' relationship with Knight Enterprises support a finding that the relationship is a typical outsourcing arrangement, and is not a sham arrangement entered into to evade the requirements of the Fair Labor Standards Act. The Court finds that Plaintiffs are independent contractors, and not employees of Knight Enterprises. The Court therefore grants Defendants' Motion for Summary Judgment (Dkt. 188). The Court denies the Motion for Partial Summary Judgment (Dkt. 187) and Amended Motion for Summary Judgment (Dkt. 196) as moot. The Motion to Strike (Dkt. 197) is denied.
DONE and ORDERED.
