15-949-cv
Grenawalt v. AT&T Mobility LLC

                               UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 14th day of March, two thousand sixteen.

PRESENT:          JOSÉ A. CABRANES,
                  DEBRA ANN LIVINGSTON,
                  GERARD E. LYNCH,
                               Circuit Judges.


JOHN GRENAWALT, CARLOS MIRANDA, JULIO ALICEA,
ON BEHALF OF THEMSELVES AND ALL OTHERS
SIMILARLY SITUATED,

                          Plaintiffs-Appellants,                        15-949-cv

                          v.

AT&T MOBILITY LLC,

                          Defendant-Appellee. *


FOR PLAINTIFFS-APPELLANTS:                                   John A. Beranbaum and Jason Rozger,
                                                             Beranbaum Menken LLP, New York, NY.

FOR DEFENDANT-APPELLEE:                                      Carmen Beauchamp Ciparick, Greenberg
                                                             Traurig, LLP, New York, NY; Kristine



    *
        The Clerk of the Court is directed to amend the caption as set forth above.

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                                                           Jayne Feher and Raquel S. Lord,
                                                           Greenberg Traurig, LLP, Florham Park,
                                                           NJ.

     Appeal from a judgment of the United States District Court for the Southern District of
New York (Andrew L. Carter, Jr., Judge).

     UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court be and hereby is
VACATED and the case REMANDED.

        Plaintiffs-appellants (“plaintiffs”) appeal from an April 2, 2013 order granting a motion for
summary judgment by defendant-appellee AT&T Mobility LLC (“AT&T”), made appealable
pursuant to an entry of partial final judgment on March 10, 2015. We assume the parties’ familiarity
with the underlying facts, the procedural history of the case, and the issues on appeal.

        Plaintiffs are security guards who brought claims against the following defendants, alleging
that they withheld wages in violation of the Fair Labor Standards Act of 1938 (“FLSA”) and New
York Labor Law (“NYLL”)1: AT&T, in whose stores plaintiffs provided (and in some cases still
provide) security; Gladius, Inc. (“Gladius”), a now-defunct security firm hired by AT&T; Centuria,
Inc. (“Centuria”), Gladius’s alleged successor in interest; and Alpha-Omega Protection Services
Corp. (“A-O”) and its principal, Grace DePompo (“DePompo”), who directly employed plaintiffs,
and who subcontracted with Gladius to provide guards for AT&T stores. Of these, only AT&T is a
party to this appeal.

         We review an award of summary judgment de novo, affirming “only if the evidence, viewed in
the light most favorable to the party against whom it is entered,” demonstrates the absence of
genuine issues of material fact. Barfield v. N.Y.C. Health & Hosps. Corp., 

, 140 (2d Cir.
2008). Because determining joint employment is “fact-intensive,” awards of summary judgment on
this issue, although sometimes appropriate, are rare. See 

       The question presented is whether AT&T qualifies as plaintiffs’ joint employer within the
meaning of FLSA. Because FLSA defines “employer” broadly, we have “treated employment for
FLSA purposes as a flexible concept to be determined on a case-by-case basis” by looking to the
“‘economic reality’ of a particular employment situation.” 

We have developed three
tests—or, more accurately, three sets of factors—to guide our determination of whether a joint
employment relationship exists. 

   1
     Plaintiffs do not argue their NYLL claims separately. We omit any discussion of the various
cross- and counter-claims not at issue on this appeal.

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         The first test, derived from Carter v. Dutchess Community College, 

(2d Cir. 1984),
looks to whether a putative employer exercises “formal control” over a worker. See Zheng v. Liberty
Apparel Co., 

, 72 (2d Cir. 2003). Because Carter defines employment more narrowly than
FLSA requires, satisfying this test is sufficient, but not necessary, to show joint employment. 

The second test, set out in Brock v. Superior Care, Inc., 

(2d Cir. 1988), focuses on
whether “the workers depend upon someone else’s business . . . or are in business for themselves,”

and thus is “typically more relevant for distinguishing between independent contractors
and employees,” Velez v. Sanchez, 

, 326 (2d Cir. 2012), than for determining by whom
workers who are assumed to be employees are employed.

        Accordingly, this case hinges on a third test, first developed in Zheng v. Liberty Apparel 

, which weighed six factors in determining whether a garment manufacturer exercised
“functional control” over subcontracted workers, and was therefore their employer under FLSA:

        (1) whether [the manufacturer’s] premises and equipment were used for the [putative
        employees’] work;
        (2) whether the Contractor[s] . . . had a business that could or did shift as a unit from
        one putative joint employer to another;
        (3) the extent to which [the putative employees] performed a discrete line-job that
        was integral to [the manufacturer’s] process of production;
        (4) whether responsibility under the contracts could pass from one subcontractor to
        another without material changes;
        (5) the degree to which the [manufacturer] or [its] agents supervised [the putative
        employeers’] work; and
        (6) whether [the putative employees] worked exclusively or predominantly for the
        [manufacturer].

Zheng emphasized that these factors were “nonexclusive and overlapping,” 

and
that a court “need not decide that every factor weighs against joint employment” in order to grant
summary judgment for the putative joint employer, 

(emphasis in original). In assessing
whether an entity is a joint employer, the determination of “the historical findings of fact that
underlie each of the relevant factors” and “the findings as to the existence and degree of each
factor” are “findings of fact,” while “the conclusion . . . to be drawn from applying the factors, i.e.,
whether an entity is a joint employer,” is a question of law. 

       Applying the Zheng factors to the present case indicates that the District Court erred in
awarding summary judgment to AT&T.




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1. Whether AT&T’s premises and equipment were used for plaintiffs’ work

        The District Court rightly found that there was a material question of fact whether this
factor weighed in favor of joint employment, since plaintiffs worked at AT&T stores.

2. Whether A-O had a business that could or did shift as a unit from one employer to
   another

          There is also a material question of fact whether this factor weighs against joint employment.
The District Court misapplied Zheng by asking “[w]hether the Plaintiffs had a business that could or
did shift as a unit.” Grenawalt v. AT&T Mobility, LLC, 

, 452 (S.D.N.Y. 2013)
(emphasis supplied) (alteration omitted). But Zheng looked to whether the contractor—in this case, A-
O—could shift its employees from one employer to another. See 

; see also

(asking whether any “referral agency shifted its employees as a unit from
one hospital to another”). Here, A-O essentially existed only to serve AT&T, via Gladius. DePompo
formed A-O in anticipation of Gladius’s contract with AT&T; Gladius financed A-O’s entire payroll;
A-O sent all of its guards to AT&T’s stores, except for a one-guard, two-month detail for one other
client; and A-O went out of business after losing its subcontract with AT&T. Although A-O may
have had the theoretical ability to service other customers, as a practical matter it depended entirely
on Gladius, and indirectly on AT&T.

3. The extent to which plaintiffs performed a discrete line-job that was integral to AT&T’s
   business

        There is, again, a question of material fact whether this factor weighs against joint
employment. On one hand, the absence of guards at some AT&T stores, as well as the fact that such
guards arguably possess “specialized skills” distinct from those of ordinary retail employees, weighs
against joint employment. Cf. 

. On the other hand, several considerations might
weigh in the other direction, including the testimony of some guards that they understood their
function to include greeting customers and otherwise assisting store managers; the near-permanence
of guards at certain stores for years on end; and the general job duties of security guards (which
testimony indicated including letting employees into stores in the morning and escorting them out in
the evenings). Though on balance we agree with the District Court that the evidence weighs against
a finding of joint employment, we believe that the conclusion is not warranted as a matter of law. In
any case, a worker’s job need not be “indispensable” for this factor to weigh in favor of joint
employment, as the District Court suggested, see 

.




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4. Whether responsibility under the contracts could pass from one subcontractor to another
   without material changes

         We also find that there is a material question of fact whether this factor weighs against joint
employment. The relevant question is whether “the same employees would continue to do the same
work in the same place,” regardless of who has responsibility for the contract. See 

(emphases
in original). Here, Centuria replaced Gladius as AT&T’s security contractor in 2011. Centuria then
subcontracted with Stone Security, rather than A-O, to provide guards. Although these transitions
mostly resulted in the hiring of new guards, several plaintiffs worked at AT&T’s stores under both
A-O and Stone. At the same time, Stone imposed stricter requirements and paid less than A-O,
which suggests a degree of differentiation between contractors. Viewing this evidence in the light
most favorable to plaintiffs, however, it seems possible that “responsibility under the contracts
could pass from one subcontractor to another without material changes,” 

.

5. The degree to which AT&T or its agents supervised plaintiffs’ work

        There is, again, a question of material fact whether this factor weighs against joint
employment. The relevant question is whether AT&T exercised “effective control of the terms and
conditions of [plaintiffs’] employment,” rather than merely “supervision with respect to contractual
warranties of quality and time of delivery.” 

Here, plaintiffs’ day-to-day work was supervised
mostly by AT&T store managers, not by Gladius or A-O. On the basis of the testimony of Amadeus
Santos, an AT&T employee, and the presence of AT&T’s letterhead at the top of the orders, a
reasonable jury could conclude that AT&T originated “post orders” that DePompo distributed to
the guards in and after 2007. The 2007 version of these orders provided, inter alia, that guards should
report “incidents” to the store manager, “follow[ ] emergency response proceedings [sic] as
prescribed by the store manager,” take breaks at times and places allowed by the store manager,
and—perhaps most importantly—detain suspected shoplifters only with the store manager’s
approval. J.A. 295–97. A 2010 version of the post orders, which DePompo testified she created in
concert with Gladius by relying heavily on the 2007 orders and which were similar in all material
respects to those orders, was also distributed to the guards. A-O, in contrast, usually did little more
than verify (by telephone or text message) that plaintiffs had arrived at work. The principal evidence
weighing against joint employment under this factor is that A-O, not AT&T, set plaintiffs’
schedules. Even in this respect, however, the evidence is mixed, since AT&T at least occasionally
modified guards’ hours.

6. Whether plaintiffs worked exclusively or predominantly for AT&T

        As the District Court rightly found, this factor strongly favors a finding of joint employment,
since plaintiffs worked almost entirely at AT&T stores.




                                                   5
7. Summary

         Viewing the evidence in the light most favorable to plaintiffs, no Zheng factor weighs against
joint employment as a matter of law. This Court has sustained a jury verdict of joint employment
when as many as three Zheng factors weighed against joint employment as a matter of law. See Zheng
v. Liberty Apparel Co., 389 F. App’x 63, 64 (2d Cir. 2010) (summary order). It seems possible, then,
that a reasonable jury could find, under the facts of this case, that AT&T was plaintiffs’ joint
employer for purposes of FLSA. We therefore conclude that the District Court erred in awarding
summary judgment to AT&T.

                                          CONCLUSION

       We have reviewed all of the remaining arguments raised by the parties on appeal and find
them to be without merit. For the foregoing reasons, we VACATE the judgment of the District
Court and REMAND the case for trial.


                                                        FOR THE COURT:
                                                        Catherine O’Hagan Wolfe, Clerk




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