Martin v. Shelby Telecom, LLC
MEMORANDUM OPINION AND ORDER: 12 , MOTION for Summary Judgment filed by Shelby Telecom, LLC, is DENIED as further set out in order. Signed by Judge Abdul K Kallon on 06/26/12. (CVA)
2012 Jun-26 PM 04:01
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SHELBY TELECOM, LLC,
Civil Action Number
MEMORANDUM OPINION AND ORDER
Before the court is Defendant Shelby Telecom, LLC’s (“Shelby”) motion
for summary judgment. Doc. 12. The sole issue raised by Shelby’s motion is
whether Plaintiff Kevin Martin (“Martin”) was an “employee” under the Fair
Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201-19—and therefore
under the protection of the FLSA’s overtime provisions, 29 U.S.C. § 207—or an
independent contractor. Resolution of this issue conclusively determines whether
Martin is entitled to proceed with his claim. For the reasons stated below,
summary judgment is DENIED.
I. SUMMARY JUDGMENT STANDARD OF REVIEW
Under Rule 56(a) of the Federal Rules of Civil Procedure, summary
judgment is proper “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Material
facts are facts that “might affect the outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “Substantive law will
identify which facts are material.” Id. at 248. To support a summary judgment
motion, the parties must cite to “particular parts of materials in the record,
including depositions, documents, electronically stored information, affidavits or
declarations, stipulations, admissions, interrogatory answers, or other materials.”
Fed. R. Civ. P. 56(c). Moreover, “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, 322 (1986). The moving party bears the
initial burden of proving the absence of a genuine issue of material fact. Id. at
323. The burden then shifts to the nonmoving party, who is required to “go
beyond the pleadings” to establish that there is a “genuine issue for trial.” Id. at
324 (citation and internal quotation marks omitted).
A dispute about a material fact is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson, 477
U.S. at 248. The court must construe the evidence and all reasonable inferences
arising from it in the light most favorable to the nonmoving party. Adickes v. S. H.
Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all
justifiable inferences must be drawn in the nonmoving party’s favor). However,
“mere conclusions and unsupported factual allegations are legally insufficient to
defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th
Cir. 2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560,
1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla’ of evidence supporting the
opposing party’s position will not suffice; there must be enough of a showing that
the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573,
1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252).
II. PROCEDURAL AND FACTUAL BACKGROUND
Shelby has at various times performed computer repairs, constructed towers
for Internet service, and installed the satellite television and Internet systems of
several companies, among other services pertaining to television and electronics.
Doc. 14-2, at 9:7-15:16 (Burttram1 Dep. 9:7-15:16). Specifically for purposes
here, Shelby provided services for Dish Network pursuant to a contract with
David Burttram started working at Shelby in 2006 and became forty-nine percent owner
a short time thereafter. Doc. 14-2, at 8:13-18. Sometime around September 2010, Burttram
became the sole owner of Shelby. Id. at 7:9-8:4.
Satellites Unlimited.2 Id. at 12:2-12. Satellites Unlimited required Shelby to
ensure that all the technicians Shelby assigned to Satellites Unlimited installations
had worker’s compensation insurance. Id. at 53:7-12. To comply, Shelby
provided coverage for its technicians, including Martin, id. at 53:13-15; doc. 14-1,
at 36:23-37:22 (Martin Dep. 36:23-37:22), and deducted the premiums from their
paychecks, doc. 14-1, at 37:23-38:7.
Martin joined Shelby in August 2010. Doc. 14-1, at 10:2-7. Initially,
Martin trained for approximately seven days with Chris Graves, a field service
manager at Shelby. Id. at 13:11-16:6. Thereafter, Martin worked on his own
installing Dish Network satellite systems exclusively for Shelby. Id. at 10:2-10,
14:11-15:4, 16:3-6. Shelby paid Martin by the job. Id. at 11:6-9. Martin resigned
from Shelby in April 2011 when he became dissatisfied with several aspects of his
work. Id. at 10:19-12:6. He filed this lawsuit on May 12, 2011, alleging that
Shelby failed to pay overtime wages as required by 29 U.S.C. § 207. Doc. 1.
Stated differently, Martin contends that Shelby should have paid him by the hour
instead of by the job. Martin seeks to bring this action as an opt-in collective
action pursuant to 29 U.S.C. § 216(b) on behalf of “any and all persons . . .
Shelby also served as a retailer of Dish Network services and installed the systems it
sold. Doc. 14-2, at 15:20-16:23.
performing cable installation services” for Shelby “at any time during the three
years preceding the filing of the Complaint.” Id. at 6 (Compl. ¶ 6).
III. CONTROLLING LAW
The key issue to resolve in this lawsuit is whether Martin is an “independent
contractor” or an “employee.” The distinction matters because the FLSA only
protects “employees.” Freund v. Hi-Tech Satellite, Inc., 185 F. App’x 782, 782
(11th Cir. 2006). An “employee” is “any individual employed by an employer.”
29 U.S.C. § 203(e)(1). To “employ” is defined broadly as “to suffer or permit to
work.” Id. at § 203(g). “Given the remedial purposes of the legislation, an
expansive definition of employee has been adopted.” Usery v. Pilgrim Equip. Co.,
527 F.2d 1308, 1311 (5th Cir. 1976).3 However, “independent contractors” are not
protected. See Freund, 185 F. App’x at 782. In distinguishing between
employees and independent contractors, the controlling factor is whether, “as a
matter of economic reality,” a worker is “dependent upon the business to which
they render service.” Usery, 527 F.2d at 1311 (quoting Bartels v. Birmingham,
332 U.S. 126, 130 (1947)). Thus, economic reality, rather than any label placed
on the relationship by the parties, controls. Rutherford Food Corp. v. McComb,
The Court of Appeals for the Eleventh Circuit “adopted as binding precedent all
decisions of the former Fifth Circuit handed down prior to the close of business on September
30, 1981.” Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
331 U.S. 722, 729 (1947) (“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 [FLSA].”).
Several factors guide the inquiry into the economic reality of the parties’
the nature and degree of the alleged employer’s control as to
the manner in which the work is to be performed;
the alleged employee’s opportunity for profit or loss depending
upon his managerial skill;
the alleged employee’s investment in equipment or materials
required for his task, or his employment of workers;
whether the service rendered requires a special skill;
the degree of permanency and duration of the working
the extent to which the service rendered is an integral part of
the alleged employer’s business.
Freund, 185 F. App’x at 783 (quoting Sec’y of Labor v. Lauritzen, 835 F.2d 1529,
1535 (7th Cir. 1987)). “No one of these considerations can become the final
determinant, nor can the collective answers to all of the inquiries produce a
resolution which submerges consideration of the dominant factor–economic
dependence.” Usery, 527 F.2d at 1311 (citing Mednick v. Albert Enters., Inc., 508
F.2d 297 (5th Cir. 1975)). Put differently, “[t]he purpose of weighing the factors
is . . . to view them qualitatively to assess the evidence of economic dependence.”
Antenor v. D & S Farms, 88 F.3d 925, 933 (11th Cir. 1996). In performing this
balancing test, the ultimate determination of an individual’s employment status is
a question of law. Id. at 929. “Subsidiary findings are considered issues of fact.”
Freund, 185 F. App’x at 783 (citing Patel v. Wargo, 803 F.2d 632, 634 n.1 (11th
As noted by the court in Lang v. DirecTV, Inc., 801 F. Supp. 2d 532, 536
(E.D. La. 2011), courts have reached mixed results about whether satellite and
cable installers are employees or independent contractors under the FLSA.
Generally, most courts have decided this issue after a trial. In this circuit in
particular, most of the district courts that have faced this issue have found that a
factual determination was necessary to properly assess the Freund factors for
economic dependence. See Freund v. Hi-Tech Satellite, Inc., 185 F. App’x 782
(11th Cir. 2006) (upholding decision of trial court after bench trial that plaintiff
was an independent contractor); Parrilla v. Allcom Constr. & Installation Servs.,
LLC, No. 6:08-cv-1967-Orl-3GJK, 2009 WL 2868432 (M.D. Fla. Aug. 31, 2009)
(holding after bench trial that plaintiff was an employee); Santelices v. Cable
Wiring, 147 F. Supp. 2d 1313 (S.D. Fla. 2001) (denying summary judgment and
finding genuine issues of material fact as to plaintiff’s employment status).4 The
court joins these courts and, for the reasons discussed below, finds that there are
genuine issues of material fact regarding the nature and degree of control Shelby
exercised over Martin’s work and his opportunity for profit and loss.
Nature and Degree of Shelby’s Control
The parties dispute Shelby’s control over Martin’s work. Shelby argues that
it exerted minimal control over Martin and primarily intended to assure customer
satisfaction rather than determine the details of Martin’s hours or methods. Doc.
13, at 10 (Def.’s Br. 10). Consequently, although Shelby scheduled installation
appointments, required Martin to follow technical specifications, and mandated
that Martin log in at the beginning and end of each job, Shelby contends that
Martin otherwise maintained the freedom to determine the methods he used and
the order he performed scheduled jobs. Id. As further proof that it did not control
Martin, Shelby asserts that it permitted Martin to establish a corporation and hire
helpers, that Martin had his wife’s assistance approximately forty percent of the
In another factually similar case, Chao v. Mid-Atlantic Installation Servs., Inc., 16 F.
App’x 104 (4th Cir. 2001), the Fourth Circuit affirmed the trial court’s grant of summary
judgment holding that the plaintiff was an independent contractor. Nevertheless, the court finds it
prudent in the instant case to reach a legal determination on this issue after a factual
time, that Martin could perform additional work for customers on his own, and
that Shelby never required Martin to wear a uniform. Id.
Martin, however, contends that Shelby exerted considerable control over his
work. Doc. 18, at 11 (Pl.’s Br. 11). Specifically, Martin asserts that Shelby
assigned the jobs, imposed technical specifications, and mandated certain tools
and equipment. Id. at 11. Martin emphasizes further the risk of fines for starting
later than 8:30 each morning, the long drives necessary to adhere to Shelby’s order
of installations, the quality checks Shelby conducted that carried a risk of
penalties, and the lack of discretion to decline work. Id. at 11-12. In short, Martin
claims Shelby “controlled every facet of [his] work.” Id. at 12.
Disputed material facts preclude the court from finding as a matter of law on
summary judgment that Martin “exert[ed] such a control over a meaningful part of
the business that [he stood] as a separate economic entity.” Usery, 527 F.2d at
1312-13. First, a dispute exists as to the degree of discretion Martin exercised in
choosing to accept jobs and in determining which days he worked. For example,
although Martin claimed he requested up front every other Sunday off to be with
his two children on the days he had them for visitation, allegedly, Shelby
scheduled him for jobs nonetheless on some of these Sundays which Martin could
either accept or pay a fine. Doc. 14-1, at 50:19-51:3, 51:11-13. Although
Burttram disputes this contention and testified that he never told Martin he would
fine him when Martin asked for a day off, doc. 14-2, at 91:20-92:2, evidence in the
record indicates Shelby imposed a $100 fine for failure to show for a scheduled
job without notification by 7:00 a.m., doc. 14-4, at 5 (Def.’s Ex. 2, at 5).
Moreover, consistent with his testimony about the Sunday scheduling, Martin
stated in a subsequent declaration that he “had to beg for an off day” and that on at
least one occasion he requested off for vacation by giving the appropriate three
days notice but Shelby denied his request, threatening fines and termination. Doc.
17, at 5 (Martin Decl. ¶ 6, April 5, 2012).5
The parties also dispute the degree of discretion Martin had over his
geographic assignments. Compare doc. 14-1, at 59:7-8 (“I had a time where I was
sent to Mobile for two weeks . . . .”), and doc. 17, at 4 (“One time, David
[Burttram] told me to go to Mobile to do some installations for a week. I did not
Shelby contends in its Reply Brief that Martin’s declaration contradicts his deposition
testimony. Doc. 19, at 2. The Eleventh Circuit held in Van T. Junkins and Assocs., Inc. v. U.S.
Indus., Inc., 736 F.2d 656, 658 (11th Cir. 1984), that an affidavit can create a genuine issue of
fact unless it is “inherently inconsistent” with earlier testimony. An affidavit constitutes a sham
if the party contradicts “clear answers to unambiguous questions which negate the existence of
any genuine issue of material fact.” Id. at 657. Failures of memory and variations in witness
testimony, on the other hand, create issues of credibility which are questions of fact to be
resolved by the fact-finder. Tippens v. Celotex Corp., 805 F.2d 949, 953-54 (11th Cir. 1986).
Martin’s deposition testimony is not inherently inconsistent with his declaration; rather, the
deposition testimony could reasonably be read in its context to reflect Martin’s understanding of
Shelby’s general vacation policy as opposed to the policy’s application to him. Doc. 14-1, at 53.
Accordingly, this court will not attempt to determine Martin’s credibility based on, at best,
want to go . . . .”), with doc. 14-2, at 25:21-27:5 (Burttram testifying that Martin
sought more work in Mobile). Martin stated that Shelby threatened fines and
termination when he attempted to refuse unprofitable jobs in distant locations or
when he needed time off due to sickness. Doc. 17, at 4. Allegedly, Shelby issued
the same threats when he attempted to refuse work due to inclement weather. Id.
Shelby disputes all of these contentions, further making this issue inappropriate
for summary judgment disposition. Doc. 14-2, at 91:20-92:2, 102:7-105:10,
120:6-8; doc. 19, at 1.
Likewise, a genuine dispute of material fact also exists regarding Shelby’s
control of Martin’s daily work schedule. Although Burttram testified that Martin
and other installers could freely choose to accept a $30 fine without further
repercussions and come to work later than 8:30 a.m., doc. 14-2, at 98:6-16, a
reasonable fact-finder could conclude from the evidence that Shelby used
additional measures to ensure compliance with its starting time, doc. 14-4, at 5.
For example, Burttram mentioned several occasions when Shelby called Martin
and Martin’s grandparents for several hours to wake Martin up because Martin
was late or had not confirmed by 7:00 a.m. that he had received his jobs. Doc. 142, 63:8-64:13, 92:3-93:16, 108:10-109:1, 109:16-110:3. Moreover, Martin also
stated that Shelby required its installers to complete their “AM” (morning) jobs
before their “PM” (afternoon) jobs. Doc. 14-1, at 60:4-23. Indeed, while Martin’s
deposition makes clear that he had discretion within each category to determine
the order of his jobs, id. at 60:13-18, apparently, when Martin requested on some
occasions to perform morning jobs in the afternoon and vice versa in order to save
driving time, Shelby allegedly threatened Martin with fines and termination, doc.
17, at 5. Furthermore, it is undisputed that Shelby required Martin and other
installers to log in at the beginning of each job and log out at the end using an
automated phone service. Doc. 14-1, at 44:13-46:4; doc. 14-2, at 27:6-10. In fact,
the record contains evidence that Shelby monitored Martin’s log-in and log-out
times, called customers and Martin when a job seemed to take longer than usual,
and sometimes even called Martin when he logged in on time. Doc. 14-2, at
115:5-119:23. In light of the foregoing evidence, a reasonable trier of fact could
find that Shelby controlled Martin’s daily work schedule.
Finally, as it relates to the nature and degree of control prong, the court
notes that Shelby relies primarily on Freund v. Hi-Tech Satellite, Inc., 185 F.
App’x 782, 783 (11th Cir. 2006). Doc. 13, at 10; doc. 19, at 2. Although this
reliance is certainly not misplaced, the disputed issues of material fact discussed
previously and several distinctions between Freund and the present case preclude
the court from concluding as a matter of law that Shelby exercised so little control
over Martin’s work that he could not reasonably be considered an employee. First,
the district court in Freund reached its decision after a bench trial. 185 F. App’x
at 782. In other words, unlike this court, it had the benefit of live testimony and
could make credibility determinations. Second, the installer in Freund was able to
reschedule the assigned jobs. 185 F. App’x at 783. In contrast, there is evidence
here that Martin’s discretion to perform jobs at different times was limited to
reordering his morning and afternoon jobs as long as he performed them during
the morning or afternoon Shelby scheduled them, and was subject to threats of
fines and termination. Finally, while installers had to follow installation
specifications in both Freund and the instant case, doc. 14-5, at 5-7, the court in
Freund did not discuss any specific measures taken to enforce that policy.
Conversely, here, there is evidence that, among other things, Shelby closely
monitored Martin’s log-in and log-out times and that on numerous occasions
Shelby called Martin, Martin’s family, and customers to ensure Martin’s
compliance. In short, the facts in Freund, while broadly similar, are insufficiently
detailed to be dispositive in this case.
The court’s reading of Freund is reinforced by Parrilla, which offers an
instructive, albeit brief characterization of the facts found by the district court in
In Freund, the District Court found, inter alia, that the plaintiff, a
home satellite and entertainment systems installer, “solely determined
the hours he spent at work;” was “at liberty to re-schedule any of his
appointments with customers;” was “free to schedule as many work
days and off-days as he desired;” was “free to perform installations
for other companies;” and was not subject to charge-backs or other
significant limitations in terms of how he actually carried out his
work. See Case No. 9:04-CV-80117-DTKH (S.D. Fla. June 10, 2005)
(Doc. 41 at 2-3). Plaintiff clearly had none of these freedoms.
Parrilla, 2009 WL 2868432, at *6. As in Parrilla, the evidence in the present
case, construed in the light most favorable to Martin, demonstrates significant
distinguishable characteristics from Freund. The record here could reasonably
support a finding that Shelby determined the hours Martin spent at work,
significantly limited Martin’s discretion to reschedule appointments, controlled
Martin’s on and off-days, and subjected Martin to various fines based on job
performance, doc. 14-4, at 5. In light of these considerations, the court simply
cannot conclude as a matter of law at this stage that Shelby exercised little control
over Martin’s work and that Martin had such control that he stood “as a separate
economic entity.” Usery, 527 F.2d at 1312-13. The court therefore concludes that
there are genuine issues of material fact as to the nature and degree of control
Shelby exercised over the manner in which Martin performed his work.
Martin’s Opportunity for Profit or Loss
The parties also strongly dispute Martin’s opportunity for profit or loss.
Shelby points to several alleged facts it finds indicative of independent contractor
status. First, Shelby asserts that it compensated Martin by the job and permitted
him to hire helpers, allowing him to increase efficiency, take more jobs, and
thereby earn more money. Doc. 13, at 11. Second, Shelby claims that it allowed
Martin to perform jobs for other companies or individuals at his discretion. Id.
Third, Shelby contends that Martin could take off for as long as he wished with
three days notice and use his off days as he chose, that it permitted Martin to
perform side work even on the days he worked for Shelby, and that by reordering
his jobs Martin could perform them more cost effectively. Id. Finally, Shelby
argues that Freund is dispositive on this element as well. Doc. 19, at 3.
Martin disagrees and relies heavily on Parrilla. Specifically, Martin
maintains that, as in Parrilla, his opportunity for profit depended solely on the
number and type of jobs Shelby assigned him. Doc. 18, at 12-13 (citing Parrilla,
2009 WL 2868432 at *3). Martin contends also that Shelby denied his requests
for time off and that the long hours forced him to seek his wife’s help to complete
his assigned jobs and prohibited the performance of any outside work. Doc. 18, at
To determine Martin’s opportunity for profit or loss, the court must settle
factual disputes about the control Martin exercised over the jobs he received, the
days he worked, and his schedule each day. It is only after a resolution of these
issues that the court can determine whether Martin had sufficient opportunity to
profit based on his managerial skill. Thus, the court concludes that genuine issues
of material fact exist with respect to Martin’s opportunity for profit or loss as well.
Resolution of the factual disputes as to control and opportunity for profit
and loss is essential to a cogent analysis of the remaining factors. The court in
Parrilla noted that no single factor is determinative, but that “courts must consider
the totality of the circumstances.” 2009 WL 2868432, at *2 (citing Usery, 527
F.2d at 1311); see also Freund, 185 F. App’x at 783. In the present case, the court
must first resolve the disputed facts regarding the first two factors before it can
adequately consider the remaining factors in light of the totality of the
circumstances. Making factual findings and drawing legal conclusions with
respect to the remaining factors without the benefit of the full factual context risks
an inaccurate legal determination. See, e.g., Lang, 801 F. Supp. 2d at 540 (“Given
the disputed issues of fact on control and on plaintiffs’ ability to influence their
profits and losses, regardless of the outcome of the analysis on these other factors,
the Court is still unable to accurately determine plaintiffs’ status on this summary
judgment record.”). Accordingly, the court declines to reach the remaining factors
at this stage of the proceedings.
Construing the evidence in the light most favorable to Martin, the court
finds that genuine issues of material fact remain with respect to the nature and
extent of Shelby’s control over Martin’s work and Martin’s opportunity for profit
or loss based on his managerial skill. Accordingly, the motion of Defendant
Shelby Telecom, LLC for summary judgment is DENIED.
DONE and ordered this 26th day of June, 2012.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?