Bulaj v. Wilmette Real Estate and Management Company, LLC et al
Filing
47
MEMORANDUM Opinion and Order. Signed by the Honorable Young B. Kim on 10/21/2010. (aac, )
Bulaj v. Wilmette Real Estate and Management Company, LLC et al
Doc. 47
UNITED STATES DISTRICT COURT N O R T H E R N DISTRICT OF ILLINOIS E A S T E R N DIVISION R E X H E P BULAJ, P la in tif f , v. W I L M E T T E REAL ESTATE AND M A N A G E M E N T COMPANY, LLC, a n d CAMEEL HALIM, Individually, D e f e n d a n ts . ) ) ) ) ) ) ) ) ) )
C a s e No. 09 CV 6263
M a g is tr a te Judge Young B. Kim O c to b e r 21, 2010
M E M O R A N D U M OPINION and ORDER B e f o re the court is plaintiff Rexhep Bulaj's ("Bulaj") motion for summary judgment o n the issue of liability. In his complaint, Bulaj alleges violations of the overtime wage p ro v is io n s of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and Illinois M in im u m Wage Law ("IMWL"), 820 ILL. COMP. STAT. ANN. 105/1 (West 2010) et seq., a g a in s t defendants Wilmette Real Estate and Management Company, LLC ("Wilmette") and C a m e e l Halim ("Halim") (together "Defendants"). For the following reasons, Bulaj's motion is granted: F a c ts W ilm e tte is a real estate management company. (Pl.'s Facts ¶ 30.)1 During the time p e rio d relevant to this case, 1996 to 2008, Wilmette's principal business was the management
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Plaintiff's Local Rule ("LR") 56.1(a)(3) Statement of Material Facts is cited as "Pl.'s Facts ¶ __." Defendants' LR 56.1(b)(3)(B) Response to Plaintiff's Statement of Facts is cited as " D e f s .' Fact Resp. ¶ __ ." Defendants' LR 56.1(b)(3)(C) Statement of Additional Material F a c t s is cited as "Defs.' Facts ¶ __." Plaintiff's Response to Defendants' Statement of A d d itio n a l Material Facts is cited as "Pl.'s Fact Resp. ¶ __."
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of residential properties in the Chicago metropolitan area. (Id.) Wilmette leased apartments in the properties it managed and hired contractors to maintain the various properties. (Defs.' F a c t Resp. ¶ 31.) Halim was the President of Wilmette and responsible for Wilmette's dayto -d a y business operations. (Pl.'s Facts ¶ 32.) Halim had supervisory authority over W ilm e tte 's employees, including those decisions involving the hiring and firing of employees a n d setting their compensation. (Id. ¶ 33.) Bulaj worked for Defendants for 12 years as a janitorial and building maintenance w o rk e r from September 1996 through July 2008, when he was fired by Halim. (Pl.'s Facts ¶ ¶ 1, 34.) When Bulaj first began working for Defendants, he was responsible for providing ja n ito ria l and building maintenance services for two of Defendants' properties located at 301 C u s te r Avenue (the "Custer property") and 718 Simpson Avenue (the "Simpson property") in Evanston, Illinois. (Id. ¶ 2.) Defendants instructed Bulaj to perform certain maintenance d u tie s at these two locations. (Id. ¶ 12.) Bulaj's responsibilities generally entailed
o v e rs e e in g building maintenance, including landscaping, cleaning, and repairing the Custer a n d Simpson properties. (Id. ¶ 4.) He also swept floors, mowed grass, uncloggd toilets, c h a n g e d light fixtures, and cleaned gutters. (Id. ¶ 24.) At some point, Bulaj's duties extended to the leasing of apartments at these properties. (P l.'s Facts ¶¶ 5, 15.) Defendants advertised the availability of apartments at these locations a n d listed Bulaj's telephone number as the contact number. (Id. ¶ 16.) Bulaj then arranged
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to show the apartments to prospective tenants and also cleaned the apartments as directed by D e f e n d a n ts . (Id. ¶¶ 5, 15.) In May 2006, Defendants again expanded Bulaj's responsibilities and directed him to respond to maintenance calls and to complete work orders at another property located at 6 2 3 0 Kenmore Avenue (the "Kenmore property") in Chicago. (Pl.'s Facts ¶¶ 3, 6; Defs.' F a c t Resp. ¶ 3.) Bulaj reported to work at the Kenmore property from 8:00 a.m. to 12:00 p .m . each weekday and maintained time sheets reflecting the number of hours he worked at th e property.2 (Pl.'s Facts ¶¶ 6, 13.) When Defendants added the maintenance duties at the K e n m o re property to Bulaj's assigned responsibilities, his salary did not increase. (Id. ¶ 19.) In s te a d , Defendants presented a "take it or leave it" proposition to Bulaj that he would have to either accept the additional work or quit his job. (Id.) B u la j's day-to-day responsibilities required that he obtain various types of residential m a in te n a n c e and cleaning supplies from Defendants in order to perform his daily work. (Pl.'s Facts ¶ 20.) Defendants maintained these supplies, which included cleaning products, w a s h e rs , faucets, mops, medicine cabinets, and towels at one of its branch offices. (Id. ¶ 21; D e f s .' Fact Resp. ¶ 21.) In addition to these supplies, Defendants also furnished Bulaj with a cell phone so that he could fulfill his janitorial and maintenance duties at the three p ro p e rtie s . (Pl.'s Facts ¶ 23.) Defendants monitored the quality of Bulaj's work at the three
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Defendants dispute the accuracy of the time sheets Bulaj maintained for his work at the K e n m o re property. (Defs.' Fact Resp. ¶ 37.) 3
properties and would discipline him when it fell below their expectations. (Id. ¶ 14.) Halim p e rs o n a lly disciplined Bulaj on numerous occasions. (Id.) Bulaj developed his maintenance skills before he began working for Defendants. (D e f s .' Facts ¶ 8.) Bulaj received training in carpentry, plumbing, and electrical work while a tte n d in g school and working for a union in New York. (Id.) At his deposition, Bulaj te s tif ie d that his job with Defendants required "special skills," (id. ¶ 9), and that no one ever to ld him "how" to do his job, (id. ¶ 3). Bulaj had an extensive collection of tools, which in c lu d e d many different types of saws and drills, hammers, crow bars, wrenches, rod and p ip e cutters, and a lawnmower. (Id. ¶¶ 6, 7.) Some of the duties Bulaj performed as a result o f having certain special skills included changing pipes, valves, electrical outlets, and light f ix tu re s , and repairing boilers, windows, and doors. (Id. ¶ 2.) When Defendants required w o rk that was outside the scope of Bulaj's duties or expertise, they hired professional c o n tra c to rs , including electricians and carpet installers, to perform those tasks. (Pl.'s Facts ¶ 26; Defs.' Fact Resp. ¶ 26.) D u rin g the course of his 12 years of employment with Defendants, Bulaj was paid a f la t bi-weekly salary for his work. (Pl.'s Facts ¶ 7.) Bulaj's compensation also included a re n t free apartment at the Custer property, which had a monthly lease value of $1,200. (Id. ¶ 18.) Defendants made regular bi-weekly payroll withholdings from Bulaj's salary for
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federal and state income taxes, Social Security and Medicare, and unemployment taxes.3 (Id. ¶ ¶ 10, 29; Pl.'s Ex. C.) Bulaj was also a member of the Janitor's Union, Local 1 ("Janitor's U n io n " ) and participated in the Janitor's Union's health insurance program and pension fund. (Id . ¶ 11.) Defendants paid a portion of Bulaj's health insurance benefits, which was re f le c te d on his bi-weekly pay statements. (Id. ¶ 29; Defs.' Fact Resp. ¶ 29; Pl.'s Ex. C.) B u la j's pay statements listed Wilmette's name under the "Employer Information" section and n o te d the account as being a "Payroll Account." (Id.) Bulaj's name appeared under the " P e rs o n a l Information" section, which also included his Social Security number, and e m p lo ye e and department numbers. (Id.) And, at the very bottom of Bulaj's pay statements, th e name of the company that prepared Defendants' payroll accounts was listed as "Payrolls b y Paychex, Inc." (Id.) D e f e n d a n ts reported Bulaj's annual compensation to taxing authorities by using IRS F o rm W-2 Wage and Tax Statements ("W-2 Statements"). (Pl.'s Facts ¶ 10; Defs.' Ex. C.) T h e W-2 Statements list Bulaj as an "employee" and Wilmette as his "employer." (Id.) B u la j's 2006 W-2 Statement shows that he earned $29,520 in wages from Wilmette. (Id.) In 2006, Bulaj also reported $4,800 in compensation he earned from "Freddies Building and M a in te n a n c e Service" using IRS Form 1099-Misc ("Form 1099"). (Id.) Bulaj also
c o m p le te d IRS Schedule C, Profit or Loss from Business (Sole Proprietorship) form
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Defendants, however, claim that Bulaj explicitly requested that these deductions be made f ro m his bi-weekly salary. (Defs.' Fact Resp. ¶¶ 10, 29; Defs.' Facts ¶ 12.) 5
("Schedule C"), where he listed himself as a sole proprietor of a maintenance business. (Id., D e f s .' Facts ¶ 14.) On Schedule C, Bulaj reported the following business expenses: (1) car a n d truck expenses of $4,429; (2) insurance expenses of $854; (3) legal and professional e x p e n s e s of $450; (4) supply expenses of $365; and (5) utility expenses of $985. (Defs.' Ex. C ; Defs.' Facts ¶ 15.) At his deposition, Bulaj explained that he did not own a business in 2 0 0 6 and that the compensation totaling $4,800 he reported was for maintenance work he p e rf o rm e d for his brother-in-law's business. (Pl.'s Fact Resp. ¶ 14; Bulaj Dep. at 82:38 3 :2 0 .) Defendants did not present any evidence tending to show that the expenses Bulaj re p o rte d in his 2006 Schedule C were related to the work he performed for Defendants. At some point when Bulaj was considering another employment opportunity, Tom H e rk e s ("Herkes"), Defendants' Senior Property Accountant, wrote a letter dated December 2 7 , 2006 verifying Bulaj's employment with Wilmette. (Pl.'s Facts ¶ 27, Pl.'s Ex. F.) The le tte r stated in pertinent part that "Rexhep Bulaj is employed by Wilmette Real Estate & M a n a g e m e n t as the building janitor at our locations at 301 Custer and 718 Simpson. His hire d a te is September 1st, 1996." (Id.) While Defendants admit that Herkes provided the letter o n Bulaj's behalf, they dispute that he was their employee. Bulaj testified that he worked a total of 66 hours each week at the Custer, Simpson, a n d Kenmore properties. (Pl.'s Facts ¶ 36.) He stated that he worked 20 hours each week a t the Kenmore property and worked an additional 46 hours each week at the Custer and S im p s o n properties. (Id. ¶ 38.) Defendants did not maintain any records of the number of
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hours Bulaj worked in any individual work week. (Id. ¶ 35.) And, Defendants did not p re s e n t any evidence to rebut Bulaj's testimony that he worked in excess of 40 hours per w e e k . Furthermore, Halim testified that he never paid Bulaj overtime wages, (id. ¶ 40), and B u la j's salary did not fluctuate from week-to-week depending on the number of hours he a c tu a lly worked, (id. ¶ 42). Rather, Defendants' expectation was that Bulaj would complete h is job duties no matter how many hours per week he was required to work. (Id. ¶ 41.) A n a ly s is S u m m a ry judgment is appropriate when the record establishes that there is no genuine is su e as to any material fact and the moving party is entitled to judgment as a matter of law. F e d .R .C iv .P . 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In deciding whether g e n u in e issues of material fact exist, the court must "review the record as a whole in the light m o s t favorable to the nonmoving party and . . . draw all reasonable inferences in that party's f a v o r." Vanasco v. National-Louis Univ., 137 F.3d 962, 964 (7th Cir. 1998). A genuine is su e of material fact is not shown by the mere existence of "some alleged factual dispute b e tw e e n the parties," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986), or by "some m e ta p h ys ic a l doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio C o r p ., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists when "the e v id e n c e is such that a reasonable jury could return a verdict for the nonmoving party." A n d e rso n , 477 U.S. at 248.
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The moving party bears the burden of establishing the basis for its motion and " id e n tif yin g those portions of the pleadings, depositions, answers to interrogatories, and a d m is sio n s on file, together with the affidavits, if any, which it believes demonstrate the a b s e n c e of a genuine issue of material fact." Celotex, 477 U.S. at 323. The moving party m a y satisfy this initial burden by presenting specific evidence on a particular issue or by p o in tin g out that there is "an absence of evidence to support the nonmoving party's case." Id . at 325. Once the moving party has met its burden, the responsibility shifts to the n o n m o v in g party to show that an issue of material fact exists. Keri v. Bd. of Tr. of Purdue U n iv ., 458 F.3d 620, 628 (7th Cir. 2006). However, the nonmoving party cannot simply rest o n allegations in the pleadings, but "by affidavits or as otherwise provided for in [Rule 56], m u s t set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 5 6 (e ); LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 920 (7th Cir. 1997). S u m m a ry judgment is neither a substitute for a trial on the merits nor a vehicle for re s o lv in g factual disputes. Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1 9 9 4 ). Therefore, after a court draws all reasonable inferences from the facts in favor of the n o n m o v in g party, if genuine issues of material fact remain and a reasonable trier of fact c o u ld find for the nonmoving party, summary judgment cannot be entered. Shields Enters., I n c . v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). Accordingly, summary ju d g m e n t is precluded "only if sufficient evidence favoring the nonmoving party exists to
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permit a jury to return a verdict for that party." Sides v. City of Champaign, 496 F.3d 820, 8 2 6 (7th Cir. 2007) (citation omitted). I. F L S A Claim B u la j contends that Defendants violated the FLSA provision mandating that an e m p lo ye r is prohibited from employing an employee for more than 40 hours in one week u n le s s the employee receives compensation at a rate of one and one-half times the e m p lo ye e 's regular rate for all hours worked in excess of 40 hours a week. See 29 U.S.C. § 207(a)(1). Here, Bulaj asserts that he was an employee and falls within the scope of the F L S A . Defendants maintain that Bulaj was an independent contractor and is not subject to F L S A 's overtime provisions. It is undisputed that the provisions of the FLSA do not apply unless there is a valid e m p lo ye r-e m p lo ye e relationship. Secretary of Labor, United States Dep't of Labor v. L a u r itze n , 835 F.2d 1529, 1531 (7th Cir. 1987). The FLSA defines an employee as "any in d iv id u a l employed by an employer." See 29 U.S.C. § 203(e)(1). When determining w h e th e r a worker is an employee under the FLSA, this court is required to apply a "six-factor te s t to determine the `economic reality' of the situation." Estate of Suskovich v. Anthem H e a lth Plans of Virginia, Inc., 553 F.3d 559, 565 (7th Cir. 2009) (citing Lauritzen, 835 F.2d a t 1534). Under this test, "`employees are those who as a matter of economic reality are d e p e n d e n t upon the business to which they render service.'" Laurtizen, 835 F.2d at 1534 (q u o tin g Bartels v. Birmingham, 332 U.S. 126, 130 (1947)). A court is required to look past
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the "technical concepts" of employment and determine if the "economic reality" is such that a n individual would be deemed an employee for purposes of the FLSA. Goldberg v. W h ita k e r House Cooperative, Inc., 366 U.S. 28, 33 (1961). In order to assess the "economic re a l i ty of the nature of the working relationship, courts do not look to a particular isolated f a c to r but to all the circumstances of the work activity." Laurtizen, 835 F.2d at 1534. The d e te rm in a t i o n of an individual's employment status is a legal rather than a factual d e te rm in a tio n . Karr v. Strong Detective Agency, Inc., 787 F.2d 1205, 1206 (7th Cir. 1986). In the Seventh Circuit, courts consider the following six factors in assessing the e c o n o m ic reality of the working relationship: (1) the nature and degree of the alleged e m p lo ye r's control as to the manner in which the work is to be performed; (2) the alleged e m p lo ye e 's opportunity for profit or loss depending upon his managerial skill; (3) the alleged e m p lo ye e 's investment in equipment or materials required for his task, or his employment o f workers; (4) whether the service rendered requires a special skill; (5) the degree of p e rm a n e n c y and duration of the working relationship; and (6) the extent to which the service re n d e re d is an integral part of the alleged employer's business. Laurtizen, 835 F.2d at 15343 5 . Each of the criteria "must be applied with [the] ultimate notion in mind" that " d e p e n d e n c e . . . indicates employee status." Id. at 1538. Applying these six factors to the w o rk in g relationship between Bulaj and Defendants leads to the conclusion that Bulaj was a n employee of Defendants.
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A.
C o n tr o l Over Manner of Work
D e f e n d a n ts contend that they did not control the manner in which Bulaj performed his d u tie s. (Defs.' Resp. at 5-7.) Defendants, in relying on Suskovich, argue that this court must c o n s id e r whether Bulaj controlled the details of his work. (Id. at 6.) Defendants point out th a t Bulaj has presented no evidence that they controlled the details of his work because at h is deposition he explicitly denied that anyone ever told him "how" to do his job. (Id. at 7.) T h e re f o re , Defendants assert that they did not dictate the manner in which Bulaj performed h is work because the details of his work were within his exclusive control. (Id.) A s an initial matter, Defendants reliance on Suskovich for the proposition that this c o u rt must consider whether the details of Bulaj's work were within his control is misplaced. In Suskovich, the Seventh Circuit noted that there are somewhat different tests for d e te rm in in g an individual's employment status under the common law, FLSA, and ERISA. 553 F.3d at 565. The district court in Suskovich followed the criteria set forth in the R e sta te m e n t (Second) of Agency § 220 and the Seventh Circuit agreed that this set of criteria w a s appropriate because the Estate invoked the Restatement test and waived its argument that th e broader FLSA standard ought to apply to the case. Id. at 565 n. 1. The Seventh Circuit re a s o n e d , "[g]iven that the majority of the claims in this case revolve around the bare q u e s tio n of employment status and the Restatement test is generally equivalent to the c o m m o n law test from [Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323-24 (1992)], th a t test provides the best means of resolving the main employment question before us." Id.
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at 565. The Seventh Circuit examined the ten-factor Restatement criteria and concluded that S u sk o v ic h 's employment status was that of an independent contractor.4 Here the parties have a g re e d that the appropriate criteria to use in analyzing employee status under the FLSA is the s ix -f a c to r test employed by the Seventh Circuit.5 See Lauritzen, 835 F.2d 1534-35. W ith regard to the control factor, the court considers whether Defendants had "the rig h t to dictate the manner in which" Bulaj performed his job. Lauritzen, 835 F.2d at 1536.
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Under the Restatement (Second) of Agency § 220 test, a court examines the following ten f a c to rs : (1) the extent of control which, by the agreement, the master may exercise over th e details of the work; (2) whether or not the one employed is engaged in a d is tin c t occupation or business; (3) the kind of occupation, with reference to w h e th e r, in the locality, the work is usually done under the direction of the e m p lo ye r or by a specialist without supervision; (4) the skill required in the p a rtic u la r occupation; (5) whether the employer or the workman supplies the in s tru m e n ta litie s , tools, and the place of work for the person doing the work; (6 ) the length of time for which the person is employed; (7) the method of p a ym e n t, whether by the time or by the job; (8) whether or not the work is part o f the regular business of the employer; (9) whether or not the parties believe th e y are creating the relation of master and servant; (10) whether the principal is or is not in business. S u s k o v ic h , 553 F.3d at 565-66.
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The Seventh Circuit has explained that the definition of employee is broader under the F L S A than under "`traditional agency law principles,'" Reyes v. Remington Hybrid Seed Co., In c ., 495 F.3d 403, 408 (7th Cir. 2007) (quoting Nationwide Mut. Ins. Co. v. Darden, 503 U .S . 318, 326 (1992), or under Title VII. Knight v. United Farm Bureau Mut. Ins. Co., 950 F .2 d 377, 380 (7th Cir. 1991). Therefore, "[i]t is well recognized that under the FLSA the s ta tu to ry definitions regarding employment are broad and comprehensive in order to a c c o m p lish the remedial purposes of the Act. Courts, therefore, have not considered the c o m m o n law concepts of `employee' and `independent contractor' to define the limits of the A c t's coverage." Lauritzen, 835 F.2d at 1534. 12
And "[e]vidence tends to show control by an employer when it reflects the employer's d o m in a n c e over the `manner and method' of how work is performed." Harper v. Wilson, 3 0 2 F.Supp.2d 873, 878 (N.D. Ill. 2004) (citing Carrell v. Sunland Constr., 998 F.2d 330, 3 3 2 (5th Cir. 1993)). A review of the record in this case shows that Defendants had full c o n tro l over its business and those tasks assigned to Bulaj. First, Defendants exercised control over the manner of Bulaj's work by instructing h im to perform specific janitorial and building maintenance duties at the Custer, Simpson, a n d Kenmore properties. Although Bulaj exercised discretion in the performance of his d u tie s because he was not told "how" to do his job, the record establishes that Defendants c o n tro lle d the manner in which he performed his work by setting his work schedule, m o n ito rin g the quality of his work, and disciplining him when his work did not meet D e f e n d a n ts ' expectations. As Bulaj correctly points out, Defendants' right to impose their e x p e c ta tio n s on Bulaj and terminate him when he failed to meet those expectations is in d ic a tiv e of the fact that they controlled the manner of his work. Harper, 302 F.Supp.2d at 8 7 8 ("Defendants imposed their expectations on their managers and would fire those who d id not meet their expectations."). Here, Halim ultimately terminated Bulaj on the basis of u n s a tis f a c to ry work performance. S e c o n d , Defendants required that Bulaj take on the responsibilities of responding to m a in te n a n c e calls and completing work orders at the Kenmore property without any a d d itio n a l compensation. Defendants also mandated that Bulaj report to work at that
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property from 8:00 a.m. to 12:00 p.m. each weekday. Thus, the undisputed facts demonstrate th a t Defendants controlled Bulaj's manner of work because they exercised "pervasive c o n tro l" over the business as a whole. Lauritzen, 835 F.2d at 1536. Accordingly, because n o reasonable trier of fact could conclude that Bulaj possessed anything other than an in c id e n ta l amount of control, this factor weighs in favor of Bulaj. B. O p p o r tu n ity for Profit and Loss
D e f e n d a n ts contend that Bulaj had the opportunity for additional profit or loss because h e owned his own maintenance business. (Defs.' Resp. at 8.) Defendants argue that Bulaj's to ta l income was predicated on his ability to manage his work hours with Wilmette so as to e n a b le him to take on additional contracting jobs and increase his business's profits. (Id.) F u rth e rm o re , Defendants point out that Bulaj's financial outlay for his business in 2006 and h is large investment in tools and equipment represent not only a potential profit for him, but a ls o a potential loss. (Id.) The court cannot agree with Defendants' position with regard to this factor. Even if B u la j did own a business in 2006, the fact that he had the opportunity for additional profit o r loss from that business had no relevance whatsoever to whether he also had an opportunity f o r profit or loss as a result of his work for Defendants. The uncontested facts show that B u la j had no opportunity for additional profit or loss from his janitorial and maintenance w o rk for Defendants because his compensation consisted of a fixed, bi-weekly salary and a re n t free apartment. Accordingly, this second factor weighs in Bulaj's favor because no
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reasonable trier of fact could conclude that he had an opportunity for additional profit or loss o n the basis of the work he performed for Defendants. C. I n v e s tm e n t in Equipment or Materials
D e f e n d a n ts assert that the third factor weighs in favor of a finding that Bulaj is an in d e p e n d e n t contractor rather than an employee because Bulaj made a substantial financial in v e s tm e n t in his own maintenance business by purchasing an extensive collection of tools. (D e f s .' Resp. at 9.) Thus, Defendants claim that Bulaj's substantial investment depicts a s itu a tio n that is analogous to that of an independent contractor rather than an employee. (Id.) T h e court disagrees. A review of the record establishes that Bulaj's capital investment in the tools he used in his work for Defendants was minimal. While it is clear that Bulaj o w n e d some tools, Defendants furnished him with the majority of the supplies and materials h e needed to perform his day-to-day duties. These included cleaning products, washers, f a u c e ts , mops, medicine cabinets, and towels, which were maintained by Defendants at a b ra n c h office. And, on one occasion, Defendants reimbursed Bulaj for a saw blade he used in the performance of his duties. (Pl.'s Facts ¶ 22.) Thus, Defendants essentially provided B u la j with all of the supplies and materials he needed to perform his assigned duties. See L a u r itze n , 835 F.2d at 1537 (noting that when everything from "farm equipment, land, seed, f e rtiliz e r, [and] insecticide to the living quarters of the migrants is supplied by the d e f e n d a n ts " that the investment factor weighs in favor of employee status). Accordingly, b e c a u s e Bulaj's principal investment in tools consisted of only a few necessary hand tools
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and because Defendants supplied almost all of the required materials for his work, no re a s o n a b le trier of fact could find that the investment factor weighs other than in Bulaj's f a v o r. D. R e q u ir e m e n t of Special Skill
D e f e n d a n ts assert that even though some of Bulaj's tasks required no special skills, th e special skill factor still weighs in their favor because many of his tasks required special s k ills . (Defs.' Resp. at 9-10.) Defendants point out that Bulaj testified that his work required s p e c ia l skills and that he acquired these skills while attending school and working for a union in New York where he received training in carpentry, plumbing and electrical work. (Id. at 1 0 .) Bulaj applied his special skills by changing pipes, valves, electrical outlets, and light f ix tu re s , and repairing boilers, windows, and doors at Defendants' properties. (Id.) The record shows that the majority of Bulaj's day-to-day tasks principally entailed ru d im e n ta ry janitorial and building maintenance skills. For example, Bulaj was responsible f o r cleaning, sweeping floors, mowing grass, unclogging toilets, changing light fixtures, and c le a n in g gutters. Bulaj also served as a contact person and scheduled appointments to show a p a rtm e n ts to prospective tenants. When Defendants required work that was outside the s c o p e of Bulaj's expertise, they hired professional contractors, such as electricians and carpet in s ta lle rs , to complete the task. Halim also testified that Defendants did not ask Bulaj "to do a professional job, like an official plumber. But anything a handyman can do." (Halim Dep. a t 48:18-21.) Furthermore, the fact that Bulaj received training and education in certain
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specialized trades, including carpentry, plumbing, and electrical work does not militate a f in d in g in favor of independent contractor status because "[s]kills are not the monopoly of in d e p e n d e n t contractors." Lauritzen, 835 F.2d at 1537. Accordingly, because no reasonable trie r of fact could conclude that Bulaj's work for Defendants required special skills, this f a c to r weighs in his favor. E. D e g r e e of Permanency and Duration of Relationship
D efen d an ts aver, relying on Judge Easterbrook's concurring opinion in Lauritzen, that th e 12-year working relationship between Bulaj and Defendants is not necessarily indicative o f an employer-employee relationship. (Defs.' Resp. at 10-11.) Rather, Defendants point o u t that although the length of the relationship between Bulaj and Defendants can be m e a s u re d , "it is hard to see why it is significant." Lauritzen, 835 F.2d at 1541. Judge E a ste rb ro o k explained in Lauritzen, in a concurring opinion that, "[l]awyers may work for ye a rs for a single client but be independent contractors; hamburger-turners at fast-food re s ta u ra n ts may drift from one job to the next yet be employees throughout." Id. Therefore, D e f e n d a n ts contend that their 12-year working relationship with Bulaj counts for little, if any, in determining the economic reality of whether he was an employee or independent c o n tra c to r. (Id.) But, aside from pointing out Judge Easterbrook's concurring opinion, D e f e n d a n ts failed to persuade the court that it should ignore the 12-year relationship. B u la j worked for Defendants as a janitorial and maintenance worker for a 12-year p e rio d during which he was required to perform his job duties on a daily basis. Furthermore,
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Bulaj lived in an apartment located at the Custer property, which Defendants provided to him re n t free. Given the permanency and duration of the working relationship between Bulaj and D e f e n d a n ts , no reasonable trier of fact could conclude that this factor does not weigh in B u la j's favor. P lu s , Defendants reported Bulaj's annual compensation to taxing authorities using W2 Statements and also made regular bi-weekly payroll withholdings from his salary for f e d e r a l and state income taxes, Social Security and Medicare, and unemployment taxes. (Pl.'s Reply at 1-3; Defs.' Ex. C.) Bulaj also points out that Defendants paid a portion of his h e a lth insurance premiums and that he was a member of the Janitor's Union. (Id.) D e f e n d a n ts, however, aver that Bulaj specifically requested that deductions for in c o m e , payroll, and unemployment taxes be made from his bi-weekly salary. (Defs.' Fact R e sp . ¶¶ 10, 29; Defs.' Facts ¶ 12.) Thus, Defendants contend that Bulaj was an independent c o n tra c to r and not an employee. But, Defendants failed to provide sufficient evidence and e x p la n a tio n to raise an inference in their favor that the W-2 Statements and the typical d e d u c tio n s and contributions made for "employees" were made notwithstanding Bulaj's in d e p e n d e n t contractor status. T h e Seventh Circuit has found that tax forms and tax returns are indispensable when d e te rm in in g whether a worker is an employee or independent contractor. Suskovich, 553 F .3 d at 568 (when analyzing the method of payment factor under the Restatement test "tax f o rm s and tax returns are essential when deciding which status this factor favors."). When
18
considering a party's tax treatment, courts consider whether a party filed a W-2 Statement o r Form 1099. Mazzei v. Rock-N-Around Trucking Inc., 246 F.3d 956, 964-65 (7th Cir. 2 0 0 1 ); EEOC v. North Knox Sch. Corp., 154 F.3d 744, 750 (7th Cir. 1998). Furthermore, " is su in g 1099 forms, which are used for non-employee compensation, `would be appropriate f o r independent contractor status.'" Suskovich, 553 F.3d at 568 (citing North Knox Sch. C o r p ., 154 F.3d at 750)). B u la j's worker status can be properly characterized as that of an employee because D e f e n d a n ts used W-2 Statements to report his annual salary to taxing authorities. The W-2 S ta te m e n ts provided to Bulaj by Defendants listed Bulaj as an "employee" and Defendants a s his "employer." And there is no evidence to suggest that Bulaj was an independent c o n tra c to r because Defendants did not report his compensation using a Form 1099 during the e n tire 12-year period that he worked for them. Furthermore, Defendants held out Bulaj as th e ir employee because they made regular bi-weekly withholdings for income, payroll and u n e m p lo ym e n t taxes from his salary, and paid a portion of his health insurance benefits a v a ila b le through the Janitor's Union. B u la j was also identified as an employee under Defendants' payroll system. For in s ta n c e , Bulaj's bi-weekly pay statements listed Wilmette's name under the "Employer In f o rm a tio n " section and noted the account as being a "Payroll Account." Bulaj's name a p p e a re d under the "Personal Information" section, which also included his Social Security n u m b e r, and employee and department numbers. And at the very bottom of Bulaj's pay
19
statements, the name of the company that prepared Defendants' payroll accounts was listed a s "Payrolls by Paychex, Inc." again identifying the bi-weekly checks as payroll checks. The re c o rd shows that Defendants treated Bulaj as their employee and not an independent c o n tra c to r. See Ins. Benefit Adm'rs v. Martin, 871 F.2d 1354, 1357 (7th Cir. 1989) (a party's d e n ia l of "employee" status in the face of similar facts is not only improper, but s a n c tio n a b le ) . F u rth e rm o re , other factors weigh in favor of Bulaj. Bulaj was a member of the J a n ito r's Union. Union members by definition are employees, not independent contractors. S e e L.A. Meat & Provision Drivers Union, Local 626 v. United States, 371 U.S. 94, 108 (1 9 6 2 ). Also, Defendants furnished Bulaj with a letter attesting to his employment with them a n d specifically identified Bulaj as their employee. Moreover, the record is devoid of any e v id e n c e that there was a written service contract between the parties, or that Bulaj invoiced h is work in order to get paid. F. I n te g r a l Part of Business
Defendants assert, based on Judge Easterbrook's concurring opinion in Lauritzen, that w h ile some of Bulaj's work duties may have been integral to their business that does not n e c e s s a rily mean that an employer-employee relationship has been established between the p a rtie s . (Defs.' Resp. at 11-12.) Defendants point out that Judge Easterbrook expressed his v ie w that the sixth factor has little significance stating that the "extent to which the service re n d e re d is an integral part of the employer's business is one of those bits of `reality' that has
20
neither significance nor meaning. Everything the employer does is `integral' to its businessw h y else do it?" Lauritzen, 835 F.2d at 1541 (emphasis in original). Therefore, Defendants a s s e rt that the sixth factor does little to shed light on the economic reality of whether Bulaj w a s an employee or independent contractor. T h e fact that Judge Easterbrook has opined that the sixth factor has no meaning is n e ith e r here nor there in this case. First, this court must apply the six-factor test and is not a u th o riz e d to redefine the necessary factors to be applied in these types of cases. Second, u n d e r the circumstances in this case, whether the sixth factor has little significance is of no c o n s e q u e n c e because the first five factors all weigh in favor of Bulaj's position. The sixth factor weighs in favor of Bulaj as his janitorial and maintenance work was a n integral part of Defendants' management business. There can be no dispute that Wilmette w o u ld lose its customers and accounts if the properties it was hired to manage were in d is re p a ir and dirty. As discussed throughout this opinion, Bulaj's daily duties included c le a n in g , sweeping floors, mowing grass, unclogging toilets, changing light fixtures, and c le a n in g gutters. He also received telephone calls and scheduled appointments to show a p a rtm e n ts to prospective tenants. At times, Bulaj was also required to change pipes, valves, e l e c tric a l outlets, and light fixtures, and repair boilers, windows and doors at the three p ro p e rtie s . Bulaj's duties--cleaning, maintaining and repairing--can be fairly characterized a s duties integral to Defendants' business, which principally entails managing and leasing
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apartments. Therefore, no reasonable trier of fact could conclude that the integral services f a c to r weighs other than in favor of Bulaj even if the weight is insignificant. F o r the foregoing reasons, the court finds as a matter of law that Bulaj was an e m p lo ye e of Defendants and not an independent contractor. Because Defendants failed to s u f f ic ie n tly dispute that Bulaj worked in excess of 40 hours per week, their failure to pay o v e rtim e pay violated the FLSA.6 II. I M W L Claim B u la j also claims that Defendants violated the IMWL by failing to pay him for his o v e rtim e work. Under the IMWL, an employer is required to pay an employee who works m o re than 40 hours a week at a rate one and a half times the employee's regular rate for all h o u rs worked in excess of 40 hours in a week. 820 ILL. COMP. STAT. ANN. 105/4(a)(1) (West 2 0 1 0 ). Under the Illinois Administrative Code, the following six factors are used in e v a lu a tin g whether a worker is an employee or independent contractor: (1) the degree of c o n tro l the alleged employed exercised over the individual; (2) the extent to which the s e rv ic e s rendered by the individual are an integral part of the alleged employer's business; (3 ) the extent of the relative investments of the individual and alleged employer; (4) the d e g re e to which the individual's opportunity for profit and loss is determined by the alleged e m p lo ye r; (5) the permanency of the relationship; and (6) the skill required in the claimed
6
Defendants do not dispute that Wilmette and Halim are employers within the meaning of th e FLSA. (See Defs.' Fact Resp. ¶ 8.) 22
independent operation. Lizak v. Great Masonry, Inc., No. 08 C 1930, 2009 WL 3065396, a t *8 (N.D. Ill. Sept. 22, 2009) (citing 56 Ill. Adm.Code § 210.110)). Therefore, the inquiry f o r determining employment status under the IMWL is essentially the same as that under the F L S A . Id. For the reasons discussed supra, Bulaj's status was that of an employee and not a n independent contractor. Because Defendants failed to dispute that Bulaj worked in excess o f 40 hours per week and that they failed to pay Bulaj overtime wages, their conduct violated th e IMWL.7 C o n c lu s io n F o r the foregoing reasons, Bulaj's motion for summary judgment on liability is g ra n te d . ENTER:
_________________________________ Y o u n g B. Kim U .S . Magistrate Judge
7
Defendants do not dispute that Wilmette and Halim are employers within the meaning of IM W L . 23
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