A Federal Court has granted Plaintiff’s Motion for Partial Summary Judgment against Family Life Care, Inc. (also known as “FLC”). The ruling holds that Plaintiff, Ms. Hughes was an employee under the Fair Labor Standards Act (FLSA) and thus entitled to overtime compensation to the extent she worked it (FLC admitted enterprise coverage). Here is a copy of the Order entered against Defendant, Family Life Care, Inc.: Hughes Summary Judgment Order. These are the arguments Plaintiff made to the Court in obtaining this Order (i.e. the below is a copy of the Plaintiff’s Motion for Partial Summary Judgment filed with the Court):
Plaintiff was a long term employee of Defendant, having worked from February 23, 2004, to February 5, 2005, and then again from July 13, 2007, to November 17, 2014. See Defendant’s Answers to Plaintiff’s Second Interrogatory (attached as Exhibit A). Her work included housekeeping, personal care, and companionship for customers of Defendant in their home. Id., Answer to Interrogatories #4 and 5; See also Plaintiff’s Declaration at Paragraph 3 (attached as Exhibit B). Housework constituted more than 20 percent of her work. Id.
Defendant set rules and guidelines governing Plaintiff’s employment, including but not limited to her hours of work, rate of pay, and paid time off. See Plaintiff’s Declaration, Exhibit B, at Paragraph 3. Defendant provided Plaintiff with a “Contract Worker Handbook” listing its company policies and procedures to which the Plaintiff had to follow to avoid termination (attached as Exhibit C). Id.
The Handbook, at pages 14-15 (under “Other Important Information”) requires Plaintiff to adhere to the following:
- Meals may not be taken at the client’s expense
- Staff/contract workers should not have company at work (children, spouses, etc.)
- Staff/contract workers may not use a client’s appliances for persona use (washer, dryer, etc.)
- Staff may NOT borrow things from the client (money, etc.)
- Staff/contract workers may not purchase alcohol or tobacco products for clients.
- Important notices or policy and procedure changes will be transmitted to staff/contract workers by letters, bulletin boards, meetings, or revised handbook inserts.
- Staff/contract workers will be monitored by scheduled and unscheduled supervisory visits per County, State & Federal rule in which the results of the vis shall be documented in the personnel file; as well as the client charge, if applicable.
- Common courtesy would dictate that the contract worker would call into their Regional Office at the beginning of each day they are scheduled to work, to ensure that all clients receive the services requested.
Id. Moreover, if Plaintiff wished to take a day off, she was required to request permission from Defendant. See Plaintiff’s Declaration, Exhibit B, at Paragraph 4.
Defendant’s control over its employees is also demonstrated by its employment application available on its website (application attached hereto as Exhibit D).1 The application provides for a “probationary period” for persons applying as a “contract worker”– stating that: “There will be an employment probationary period of ninety (90) days with our option to increase to 180 days if deemed necessary during the probationary period. My employment relationship with Family LifeCare is terminable at will for any reason by either party.” Id. on page 3.
Defendant’s website also “guarantees” its client’s satisfaction.2 It states that if the client is unsatisfied, a “back-up” (quotes in original) will take the Plaintiff’s place:
Your satisfaction is guaranteed and our main goal is providing quality services to ensure you remaining independent in your home for as long as possible. If for any reason a caregiver must miss a scheduled time you will be notified that a qualified “back-up” caregiver will be there.
See website excerpt attached Exhibit E. This guarantee and offer to replace Defendant’s employees is placed under the website’s F.A.Q.: “What if I am not satisfied with the caregiver or they can’t make it?” Id.
Defendant has a progressive disciplinary system applicable to Plaintiff. It has 3 levels of “offense descriptions” that can lead to “termination”. See Exhibit F. Plaintiff was forced to sign onto this system and was subject to it. See Exhibit G.
Additional control was exerted over Plaintiff via “reminders.” Attached hereto as Exhibit H is one such reminder, ordering Plaintiff to do the following:
- No children at your job
- No one can drop you off at the client’s home
- No using client’s phone
- No rescheduling visits without notifying the office
- No discussing client’s work with another
- No telling clients your problems (or discussing pay issues)
- No accepting gifts or money
- No transporting clients, and
- No calling clients after contract pulled
Plaintiff was forced to sign these “reminders”. Id.
Defendant provided Plaintiff with a “Homemaking” sheet; something that goes so far as to order Plaintiff “not to use (BLEACH).” See Exhibit K. These homemaking duties were a significant part of her job – constituting more than 20 percent of Plaintiff’s work. See Plaintiff’s Declaration, Exhibit B, at Paragraph 3. See also Exhibit A, Defendant’s answer to the Plaintiff’s Thirteenth Interrogatory that “Plaintiff would have knowledge of her own actions.”)
The Handbook also demonstrates that the Plaintiff is not under the control of her own schedule. See Exhibit C. On page 11, it states that “The client’s schedule is made to fit the client needs or requests; therefore, changes to the client’s schedule to fit the contract workers’ needs are not acceptable.” Id. These schedules were always set by Defendant. See Plaintiff’s Declaration, Exhibit B, at Paragraph 3.
Finally, Defendant forced Plaintiff to sign a non-compete agreement that actually threatens “criminal charges” if Plaintiff failed to comply. Attached hereto as Exhibit I is one of these Non-Compete Agreements (another is attached as Exhibit J). Exhibit I states, in the last paragraph, that “Non-compliance with the above statement will result in immediate termination of my contract with FLC and with any clients that have been referred or assigned to me through FLC. Further, criminal charges and fees for damages can be brought against me should I fail to comply.”
2. Opportunity for Profit/Loss
Plaintiff worked a full-time job for Defendant and was not in business for herself. See Plaintiff’s Declaration, Exhibit B, at Paragraph 5. She was paid hourly and submitted her hourly time-sheets to Defendant. Id., see also Defendant’s Interrogatory Answers, Exhibit A, to questions 6, 7, and 22. Plaintiff was not incorporated or otherwise in business for herself during the time that she performed work for Defendant. See Plaintiff’s Declaration, Exhibit B, at Paragraph 5.
Plaintiff was economically dependent upon Defendant for her livelihood from at least on or about August 2007 until her termination in 2014. Id. She earned all of her income from Defendant between at least August 2007 and November 2014. Id. During the time, Plaintiff regularly worked more than forty (40) hours during one or more workweeks and submitted time cards regarding those hours to Defendant. Id.
The opportunity for profit and loss by Plaintiff is actually “strictly forbidden” by Defendant’s policies and procedures. See Exhibit C, at Page 13. The Handbook on page 13, under “Tips and Gifts” states as follows:
The acceptance of money or gifts by individual workers from clients whom FLC does business is strictly forbidden. Anyone wishing to give a gift or make a donation should be referred to FLC administration.
Finally, again, Defendant’s non-compete agreement with Plaintiff bears repeating. See Exhibit I. It states, in the last paragraph, that Plaintiff “guarantee[s] that [she] will not compete with [Defendant} for any client’s referred or assigned to me by the agency.” As if one was not enough, Defendant had Plaintiff sign another non-compete (attached hereto as Exhibit J) expanding Plaintiff’s obligations and prohibiting her from “directly or indirectly engaging in [Defendant’s] Business, either as an owner, operator, manager, [etc.]. . .” – during Plaintiff’s employment and for 2 years after her separation from Defendant. Id. at Paragraph 3(b). The same language prohibits any “competition with or against Family Life.” Id. Moreover, Defendant’s inclusion of paragraph 9 of the non-compete attached as Exhibit J that the non-compete does not change Plaintiff’s status as an independent contractor is actually proof that Defendant knew full well that providing its employees with a non-compete would in fact legally alter the control/opportunity for profit elements of the FLSA.3 See id.
3. Equipment and Materials
The Handbook also addresses Plaintiffs’ “Identification Badge”. See Exhibit C, on page 13. It states that:
Contract workers are issued an ID that should be kept in their possession at all times. Contract workers are required to wear their badges at all times that they are preforming FLC duties. The badge must be worn to identify the worker to clients and other FLC staff/contractors. At the end of the contractual relationship with FLC, this badge must be returned to the FLS office before the final paycheck is issued.
Id. This ID advertises Defendant’s name and business. See Plaintiff’s Declaration, Exhibit B, at Paragraph 4. Moreover, as per the Handbook’s language cited above, wearing it was required. See Exhibit C on page 13.
4. Special Skill
According to Defendant’s sworn interrogatory answers, and although Plaintiff had a CNA’s license, Plaintiff’s job duties were “housekeeping, personal care and companionship.” See Defendant’s Answers to Plaintiff’s Second Interrogatory (attached as Exhibit A). To the extent special skill or training was required, Defendant supplied it; pursuant to its website, the “Benefits of Working with Family Life Care” are “training programs”.4
5. Permanency and Duration
Plaintiff was economically dependent upon Defendant for her livelihood from at least August 2007 until her termination in 2014. See Defendant’s Answers to Plaintiff’s Second Interrogatory (attached as Exhibit A); Plaintiff’s Declaration Paragraph 5. Her hours often exceeded 40 per week. See Defendant’s Answers to Plaintiff’s Second Interrogatory (attached as Exhibit A).
6. Integral Part of Defendant’s Business
Defendant’s fifth interrogatory answer claims that “Defendant is in the business of home health care. The Live Oak office is not a nurse’s registry.” See Defendant’s Answers to Plaintiff’s Fifth Interrogatory (attached as Exhibit A). Defendant was one of those integral employees who worked in Defendant’s client’s homes. See Plaintiff’s Declaration in Paragraph 2.
MEMORANDUM OF LAW AND ANALYSIS
Under the FLSA, an “employee” is “any individual employed by an employer,” 29 U.S.C. § 203(e)(1), an “employer” “includes any person acting directly or indirectly in the interest of an employer in relation to an employee,” 29 U.S.C. § 203(d), and the term “employ” “includes to suffer or permit to work,” 29 U.S.C. § 203(g). It is not relevant whether one party and/or the other classified the relationship as that of an independent contractor.5 Instead, in determining whether someone is “employed” as per the FLSA, courts apply the “economic realities” test.
To distinguish independent contractors from employees, courts look to the “economic reality” of their working relationship. Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1313 (11th Cir. 2013). The inquiry is whether the alleged employee has “economic dependence” on his or her alleged employer. Id. at 1312. To guide this inquiry, the Eleventh Circuit provides six factors:
(1) The nature and degree 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 on his managerial skill;
(3) The alleged employee’s investment in equipment or materials required for his task, or his employment of workers;
(4) Whether the service rendered requires a special skill;
(5) The degree of permanency and duration of the working relationship;
(6) The extent to which the service rendered is an integral part of the alleged employer’s business.
The parties’ subjective beliefs and expectations, as well as the labels they place on their relationship, are completely immaterial. See id. As stated by the Court in Scantland:
This inquiry is not governed by the “label” put on the relationship by the parties or the contract controlling that relationship, but rather focuses on whether “the work is done, in its essence, follows the usual path of an employee.” Rutherford Food, 331 U.S. at 729, 67 S.Ct. at 1476. “[P]utting on an `independent contractor’ label does not take the worker from the protection of the Act.” Id.; see also Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1312 (5th Cir.1976) (“It is not significant how one `could have’ acted under the contract terms. The controlling economic realities are reflected by the way one actually acts.”)
Id. at 1311. See also those cases cited in footnote 5, supra.
To determine if an individual is an independent contractor or an employee, courts first consider “the nature and degree of the alleged employer’s control as to the manner in which the work is to be performed.” Scantland, 721 F.3d at 1312. In this case, as described in the facts supra, there is no question that Defendant controlled Plaintiff and her work. These facts, summarized, include:
- Strict adherence to the “Contract Worker Handbook” (Exhibit C), or termination, including numerous directives about how Plaintiff’s work must be performed (at pages 14-15),
- Plaintiff had to ask permission to take a day off,
- Defendant’s employment process contains a “probationary period,”
- Defendant “guarantees” its clients a “back-up” employee should the client not be happy with Plaintiff,
- Defendant has a progressive disciplinary system,
- In addition to the Handbook, Defendant had other “reminders” including numerous additional requirements as to how Plaintiff must perform her work,
- Defendant made Plaintiff’s schedule, which the Handbook makes clear are “made to fie the client” and changes to fit the “contract workers’ s needs are not acceptable,”
- Defendant’s control of Plaintiff’s work even extended to the prohibition that she uses Bleach (as per Exhibit K), and
- Defendant had 2 non-compete agreements with Plaintiff – prohibiting Plaintiff from “competition with or against” Defendant during her employ and for another 2 years thereafter. Thus, Defendant not only controlled Plaintiff while Plaintiff worked for it, but also after Plaintiff left Defendant’s employ.
2. OPPORTUNITY FOR-PROFIT OR LOSS
Second, courts consider the “alleged employee’s opportunity for profit or loss depending on his managerial skill.” Scantland, 721 F.3d at 1312. “Where the worker is paid by the hour, it typically suggests an employment relationship; where the worker is paid by the job, it points toward an independent contractor.” Ruiz v. Affinity Logistics Corp., 887 F. Supp. 2d 1034, 1048 (S.D. Cal. 2012).
In this case, as described in the facts supra, there is no question that Plaintiff had no opportunity for profit or loss and that she was paid by the hour. These facts, summarized, include:
- Plaintiff was not incorporated for herself and did not work for anyone other than Defendant, full time,
- Plaintiff was economically dependent on Defendant for at least 7 straight years,
- Defendant’s Handbook at page 13 “strictly forbids” Plaintiff from “accepting money” from clients – instead of requiring those persons wishing to give extra to Plaintiff to be “referred to [Defendant’s] administration,” and
- Defendant had 2 non-compete agreements with Plaintiff – prohibiting Plaintiff from “competition with or against” Defendant. Defendant not only precluded Plaintiff from opportunities while she worked for it, but also for 2 years after her separation.
3. INVESTMENT IN EQUIPMENT OR MATERIALS
Third, courts consider “the alleged employee’s investment in equipment or materials required for his task, or his employment of workers.” Scantland, 721 F.3d at 1312. An independent contractor risks his own independent capital, while an employee has his expenses provided. See Usery v. Pilgrim Equipment Co., 527 F.2d 1308, 1313-14 (5th Cir. 1976) (discussing “risk capital”). The focus, thus, is on equipment or materials that constitute significant enough capital to establish a financial “risk capital” to the alleged contractor. See id. Thus, minor purchases such as cleaning supplies are irrelevant. Robles v. RFJD Holding Co. Inc.,Case No. 11-62069-CIV-ROSENBAUM/SELTZER (Dist. Court, SD Florida 2013) (“Beyond the occasional purchase of negligible cleaning supplies and tools, which is insufficient to present a risk of loss, Plaintiffs invested practically nothing but their labor in their cleaning work.”)
In this case, as described in the facts supra, there is no question that Plaintiff was not supplying any signification amount of equipment or materials that would constitute investment “risk” to her; and certainly no capital. Moreover, Defendant made sure the most important material – the work IDs – it supplied, complete with Defendant’s business advertised on it. See Plaintiff’s Declaration, Exhibit B, at Paragraph 4 and the Handbook, Exhibit C, at page 13. Wearing the IDs was required. Id.
4. SPECIAL SKILL
Fourth, courts consider “whether the service rendered requires a special skill.” Scantland, 721 F.3d at 1312. Here, more than 20% of Plaintiff’s work was homemaking. See Plaintiff’s Declaration, at Paragraph 3 attached as Exhibit B; See also Defendant’s “Homemaking” list, attached as Exhibit K. Homemaking is not a special skill; nor is companionship. See Exhibit A, Defendant’s Answer to Interrogatories #4 and 5;
5. PERMANENCY AND DURATION
Fifth, courts consider “the degree of permanency and duration of the working relationship.” Scantland, 721 F.3d at 1312. “Where a worker is employed for a lengthy period of time, the relationship with the employer looks more like an employer-employee relationship.” Harris v. Vector Mktg. Corp., 656 F. Supp. 2d 1128, 1140 (N.D. Cal. 2009). In this case, as described in the facts supra, there is no question that Plaintiff was a long term employee with a long employment duration. She worked full time for Defendant for 7 straight years, often working over 40 hours a week. See Defendant’s Answers to Plaintiff’s Second Interrogatory (attached as Exhibit A); Plaintiff’s Declaration, Exhibit B, Paragraph 5.
6. INTEGRAL PART OF ALLEGED EMPLOYER’S BUSINESS
Sixth, courts consider “the extent to which the service rendered is an integral part of the alleged employer’s business.” Scantland, 721 F.3d at 1312. Defendant’s business is “the business of home health care. The Live Oak office is not a nurse’s registry.” See Defendant’s Answers to Plaintiff’s Fifth Interrogatory (attached as Exhibit A). A home health care business cannot survive without people servicing clients at their homes. Plaintiff, as an in-home care provider, was thus indisputably an integral part of a “home health care” business
DEFENDANT’S “SET-OFF” DEFENSE
Defendant’s fourth affirmative defense claims a “setoff.” However, Defendant has no proof of any such claim. In fact, during the pendency of this litigation, Defendant paid Plaintiff some of these “disputed” funds it wrongfully withheld from her pay. See Exhibit L. Even if Defendant had a valid claim, it would not work to setoff Plaintiff’s entitlement to overtime in this action. See Brennan v. Heard, 491 F.2d 1, 3 (5th Cir. 1974), overruled on other grounds, McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988). This is especially true in this case since Defendant’s claimed setoff would resulting Plaintiff not being paid anything for those disputed periods of time and, thus, dropping her wages below minimum wage. See Perez v. South Florida Landscape, Inc., Case No. 13-80620-CIV-MARRA/MATTHEWMAN (Dist. Court, SD Florida 2014) (“If Defendants were to prevail . . . the FLSA count would be reduced to below the minimum wage. Such a result would run afoul of Brennan. For that reason, Defendants should instead file a separate action in the proper forum to pursue the claims alleged in the counterclaims.”).
JURISDICTION AND COVERAGE
As a final note, Defendant admitted this Court has jurisdiction over this matter in its response to paragraph 6 of the Complaint. Moreover, Congress amended the FLSA in 1974 to extend coverage to all domestic service workers, including those employed by private households or companies too small to be covered 4 by the Act. See Fair Labor Standards Amendments of 1974, Pub. L. 93-259 § 7, 88 Stat. 55, 62 (1974); 29 U.S.C. 202(a), 206(f), 207(l). Domestic service workers include, for example, employees employed as cooks, housekeepers, governesses, janitors, laundresses, and caretakers. See Senate Report No. 93-690, 93rd Cong., 2d Sess. p. 20 (1974).6 Domestic service workers also include “the terms used by commenters, such as home health aides, personal care aides, attendants, direct support professionals, and family caregivers.”7 Thus, Plaintiff was protected by the FLSA’s overtime provisions given the nature of her work for Defendant. See id.; See also Exhibit A, Defendant’s Answer to Interrogatories #4 and 5 (Plaintiff’s work included “housekeeping, personal care, and companionship” for Defendant’s “home health care” business).8
Applying the above factors results in the sole conclusion that Plaintiff was an employee of Defendant as that term is defined by the FLSA. As such, the Plaintiff is due to overtime for all hours worked over 40 in a workweek. As for the amount of those damages, presuming this Motion is granted, Plaintiff and Defendant’s counsel should be able to agree on the amount of overtime due Plaintiff – with a possible briefing over liquidated damages, whether Plaintiff is entitled to two or three years of pay, and the amount of attorneys’ fees and costs at issue. As such, Plaintiff requests partial summary judgment in her favor as to liability, with jurisdiction being reserved for further proceedings regrinding the amount of damages, whether the applicable limitations period is two or three years, possible injunctive relief, liquidated damages, attorney’s fees, and costs9.
Dated: May 11, 2015
/s/ Michael Massey
Fla. Bar No. 153680
Massey & Duffy, P LLC
855 E. University Ave.
Gainesville, FL 32601
3 Clearly, Defendant cannot change the FLSA’s application (i.e. the application of Federal law) by agreement with the Plaintiff or an attempted contractual disclaimer. See cases cited infra at footnote 5; see also Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 (11th Cir. 2013) (“inquiry is not governed by the ‘label’ put on the relationship”). Similarly, the application of any state law cited by Defendant would not alter the FLSA’s application either. See Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 31, 116 S.Ct. 1103, 134 L.Ed.2d 237 (1996) (citing Jones, 430 U.S. at 525, 97 S.Ct. 1305) (regarding “field preemption” and “conflict preemption”), a discussion likely beyond the scope of this motion and definitely beyond the scope of the Defendant’s affirmative defenses as pled.
5 See Chapman v. A.S.U.I. Healthcare and Development Center, 562 Fed. Appx. 182, 184-85 (5th Cir. 2014), cert. denied 134 S.Ct. 2733 (2014) (Affirming district court’s determination that individuals were employees, rather than independent contractors, in spite of contract stating independent contractor status, because “[neither a defendant’s subjective belief about employment status nor the existence of a contract designating that status is dispositive. Rather, courts look to multiple factors to assess the “economic reality” of whether the plaintiff is so dependent on the alleged employer that she is an employee or is so independent that the plaintiff essentially is in business for herself); Donovan v. The New Floridian Hotel, Inc., 676 F.2d 468, 471 (11th Cir. 1982) (That a business “may not have had the intention to create an employment relationship is irrelevant.”); Daughtrey v. Honeywell, Inc., 3 F.3d 1488, 1492-93 (11th Cir. 1993), (The Eleventh Circuit concluded that the district court had relied too heavily on the parties’ contract, which described the plaintiff (in an ERISA matter) as an independent contractor, in determining that the plaintiff was not an employee). See also Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 (11th Cir. 2013), discussed infra.
6 See also DOL’s “Application of the Fair Labor Standards Act to Domestic Service,” dated 10/1/2013 available online at https://webapps.dol.gov/federalregister/HtmlDisplay.aspx?DocId=27104&AgencyId=14 (“Congress amended the FLSA in 1974 to extend coverage to all domestic service workers, including those employed by private households or companies too small to be covered by the Act . . . Domestic service workers include, for example, employees employed as cooks, butlers, valets, maids, housekeepers, governesses, janitors, laundresses, caretakers, handymen, gardeners, and family chauffeurs . . . Thus, workers performing domestic tasks, such as cooking, cleaning, doing laundry, driving, and general housekeeping, and employed in private homes, either by households or by third party employers, are protected by the basic minimum wage and overtime protections of the FLSA.”).
7 See the “Terminology” Section of DOL’s “Application of the Fair Labor Standards Act to Domestic Service,” dated 10/1/2013 available online at https://webapps.dol.gov/federalregister/HtmlDisplay.aspx?DocId=27104&AgencyId=14.
8 Thus, it is irrelevant that Defendant denied Paragraph 7 of the Complaint (claiming that “Defendant was an enterprise covered by the FLSA”). Moreover, Plaintiff relies on her allegation that she was an “employee” of Defendant, misclassified as an independent contractor, and that Defendant Defendant failed to comply with 29 U.S.C. §§ 201- 209 in paragraphs three and eight of the Complaint. See Ceant v. Aventura Limousine & Transp. Serv., Inc., 874 F. Supp. 2d 1373, 1377 (S.D. Fla. 2012) (“To be clear, the Court rejects Defendants’ call for super detailed factual allegations as to every facet of FLSA coverage.”).
9 Including continuing jurisdiction to resolve any of plaintiff’s motions to compel, necessary at a minimum in relation to Defendant’s fifth affirmative defense and whether its conduct was “willful.”