Benion et al v. LeCom, Incorporated et al
Filing
183
OPINION and ORDER signed by District Judge David M. Lawson DENYING 136 LeCom Communication Inc.'s Motion for Partial Summary judgment, DENYING 135 MOTION for Summary Judgment by Jeffrey Gendron, DENYING 138 MOTION for Summ ary Judgment by Joseph Lentine, GRANTING 137 MOTION for Summary Judgment by LeCom., Incs, DENYING 142 MOTION for Partial Summary Judgment as to Liability with Respect to Individual Defendants Joseph Lentine and Jeffrey Gendron, GRANTING IN PART AND DENYING IN PART 81 MOTION for Partial Summary Judgment on Employment Status by Harry Benion and Dismissing Amended Complaint against LeCom, Inc. ONLY (Grimes, K.)
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
HARRY BENION, ZACHARY GOODGALL,
DAMON FRANKLIN, and LESLIE MORGAN,
Plaintiffs,
Case Number 15-14367
Honorable David M. Lawson
Magistrate Judge Mona K. Majzoub
v.
LECOM, INCORPORATED,
LECOM COMMUNICATIONS, INC.
JOSEPH LENTINE, and JEFFREY GENDRON,
Defendants.
_______________________________________/
OPINION AND ORDER GRANTING IN PART PLAINTIFFS’ MOTION FOR
PARTIAL SUMMARY JUDGMENT AGAINST DEFENDANT
LECOM COMMUNICATIONS, GRANTING MOTION FOR SUMMARY JUDGMENT
BY DEFENDANT LECOM, INC., DENYING MOTIONS FOR SUMMARY
JUDGMENT PLAINTIFFS AND BY DEFENDANTS LECOM COMMUNICATIONS,
JOSEPH LENTINE, AND JEFFREY GENDRON AND BY PLAINITFFS, AND
DISMISSING AMENDED COMPLAINT AGAINST DEFENDANT LECOM, INC. ONLY
The plaintiffs allege that they were employed as cable television installers by the
defendants, who misclassified them as independent contractors to avoid paying them overtime
premium wages required by the Fair Labor Standards Act. Fair Labor Standards Act (FLSA), 29
U.S.C. § 201, et seq. The Court denied the defendants’ motion to dismiss the FLSA claim and
conditionally certified the case as a collective action. After the complaint was amended to add
defendants Joseph Lentine and Jeffrey Gendron, and the parties completed discovery, they filed
their respective motions for summary judgment, which are pending before the Court. The
plaintiffs move for partial summary judgment of liability as to defendants LeCom, Inc. and LeCom
Communications, Inc. They filed a separate motion for partial summary judgment of liability
against defendants Joseph Lentine and Jeffrey Gendron. LeCom, Inc., LeCom Communications,
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Inc., Lentine, and Gendron each have filed separate motions for summary judgment of dismissal.
The record contains undisputed facts establishing that the plaintiffs were employees of LeCom
Communications, Inc. within the meaning of the FLSA, but that LeCom, Inc. was not involved in
an employment capacity as to any of the cable installers. Therefore, the Court will grant the
plaintiffs’ motion for partial summary judgment as to LeCom Communications, Inc. only and grant
LeCom, Inc.’s motion for summary judgment.
Fact questions preclude granting summary
judgment on the remaining questions, and therefore the Court will deny the other summary
judgment motions.
I.
The facts were summarized in detail in the opinion on the motion to dismiss. Benion v.
Lecom, Inc., 2016 WL 2801562, at *1-3 (E.D. Mich. May 13, 2016), reconsideration denied, 2016
WL 3254611 (E.D. Mich. June 14, 2016). LeCom Communications hired both employees and
contractors to furnish fulfillment services (cable installation and service) to several Michigan cable
companies, all of which are now owned by Comcast, Inc. The plaintiffs, who are in the second
category, maintain that in order to be hired, LeCom requires individuals to contract with one of
five specific subcontractor companies at LeCom’s direction. However, the plaintiffs allege that in
reality, it is LeCom, and not the subcontracting companies, that is employing, assigning work to,
and directing each technician.
The facts in the earlier opinion on the motion to dismiss were of necessity taken from the
pleadings. Discovery now has been completed, and the parties have furnished a fulsome factual
record. Except where indicated, the facts discussed below either were admitted or are otherwise
uncontested.
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A. LeCom Inc. and LeCom Communications, Inc.
The defendants continue to insist that LeCom Inc. and LeCom Communications, Inc. are
distinct companies that have nothing in common besides their ownership. The plaintiffs conflate
their references to those companies, referring to both as “LeCom.”
It appears undisputed that LeCom, Inc. (LeCom) was founded in 1980, and is owned by
Joseph Lentine and his brother Anthony.
LeCom Communications, Inc.
(LeCom
Communications) was founded in 2001 and also is owned by Joseph and Anthony Lentine. LeCom
Communications was founded to provide fulfillment services (cable installation and service) to a
number of Michigan cable companies, all of which are now owned by Comcast, Inc. LeCom and
LeCom Communications each maintain separate headquarters at an office building in Warren,
Michigan, along with several other companies — some but not all of which are also owned by
Anthony and Joseph Lentine. According to Lentine, LeCom and LeCom Communications have
never shared a bank account, and maintain separate clientele, employees, insurance policies,
vehicle fleets, day-to-day leadership, and operations. LeCom is a utility construction corporation
that erects and services high-power utility poles in multiple states on contract with power and light
companies, whereas LeCom Communications is a corporation that exists solely to provide cable
fulfilment services to Comcast in Michigan.
Since its founding in 2001, all of LeCom Communications’s day to day operations have
been managed by defendant Jeff Gendron who, although he ultimately reported to Joseph Lentine,
was given broad latitude to run the company. Although LeCom Communications once installed
and serviced cable for a number of smaller cable companies, all of those companies have since
been acquired by Comcast. Since 2007 or 2008, Comcast has been LeCom Communications’s
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sole customer.
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Comcast contracts a number of fulfillment companies like LeCom
Communications to provide cable installation and repair services in the Detroit area and all over
the country.
1. Joseph Lentine
The Lentine brothers currently are the sole owners of LeCom Communications and
LeCom, Inc. Joseph Lentine also is the president of both corporations. He has executed the
Comcast contracts on behalf of LeCom Communications since 2007, although he points out that
the contracts were “non-negotiable.” The Comcast contracts contained most of the obligations
and restrictions LeCom Communications imposed on technicians, discussed below. In addition to
executing the Comcast contracts, Lentine helped draft the subcontractor agreements, which
complied with Comcast’s Installation Specification manual. The subcontractor agreements gave
LeCom Communications the right to fire technicians at any time, for any or no reason. Lentine
testified that he has no background in the cable fulfillment business.
Lentine determined Gendron’s pay, regularly reviewed monthly financial statements, and
approved the salaries for managers who worked under Gendron based on Gendron’s
recommendations. Joseph and his brother had check-signing authority and the power to withdraw
money from the bank accounts of both companies. Lentine authorized Gendron’s decision to hire
the plaintiffs and others as “independent contractors.” Lentine also approved the installation of
GPS devices in company vehicles. Gendron says that he dealt primarily with Lentine when making
compensation decisions pertaining to the subcontractors.
The plaintiffs furnished a series of e-mails between defendants Gendron and Lentine that
discussed with Comcast bonuses, plans to reduce workforce, rates of pay, and performance
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metrics. In 2017, Lentine decided to terminate the cable installation business with Comcast due
to profitability concerns. The work subsequently was transferred to a company called Amcomm
and most of the LeCom technicians were laid off.
According to Lentine, he played no role in LeCom Communications’s day-to-day
operations.
He testified that Gendron was responsible for screening and retaining the
subcontractors and negotiating their agreements, decisions with which Lentine never interfered.
Lentine also stated that he never hired, fired, or disciplined any LeCom Communications
technicians, had no input in determining their schedules or routes, or provided the technicians with
materials and equipment.
2. Jeffrey Gendron
Jeffrey Gendron used to own Elite Communications, Inc. (Elite), which participated in the
cable fulfillment business for several service providers. In 2001, the company was acquired by
the Lentine brothers and was renamed LeCom Communications, Inc. Joseph Lentine testified that
Gendron approached him with an offer to purchase Elite.
Because the Lentine brothers did not have experience in cable fulfillment upon purchasing
Elite, Gendron stayed on as general manager in charge of operations when the company was
renamed. Gendron reported directly to Joseph Lentine while serving as LeCom Communications
general manager from 2001 to November 2017. According to Lentine, Gendron was responsible
for compensation decisions, hiring, retaining, or firing subcontractors, and maintaining
employment records including scheduling and number of hours worked by technicians. Gendron
admitted that on at least one occasion, he apparently fired a technician who had recruited help to
complete jobs faster without obtaining permission from LeCom. But Gendron testified in a later
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deposition that he never hired or fired any employees of the subcontracting companies. Gendron
also testified that he never defined work hours of employees of the subcontracting companies.
Gendron was never an officer or director of LeCom Communications. He testified that he
never had check writing or banking authority on behalf of LeCom Communications. He said that
that without banking authority, he did not issue checks from LeCom Communications to the
subcontractors or the individual plaintiffs. The plaintiffs admit that they cannot provide evidence
of Gendron’s check writing.
B. Classifications
The defendants argue that none of the plaintiffs were their “employees,” that is, true W-2
employees of LeCom Communications or of DCD/EPIQ (a subcontracting house that treated
technicians as W-2 employees). Instead, the defendants contend that they are independent
contractors, that is 1099 independent contractors contracting directly for LeCom Communications
or subcontractors working for LeCom Communications through a contracting house (a smaller
company that ostensibly served as a middleman between LeCom Communications and employees
or subcontractor technicians).
Until 2013, nearly all of LeCom Communications’s cable installers were classified as
employees. LeCom Communications also contracted with Detroit Communications Direct, who
provided a small number of employee technicians. In 2013, LeCom Communications began to
make use of 1099 independent contractors and subcontractor technicians. By 2015, the most recent
year for which LeCom Communications provided complete data, roughly 40% (194 of 502) of
LeCom Communications’s technician workforce were independent contractors, subcontractors, or
employees of contracting houses. LeCom Communications worked mostly with the following
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contracting houses: Great Link Communication (sometimes referred to as “Great Lakes
Communication”), Erotech, The Buccilli Group, Reynolds Quality Installations (RQI), and Detroit
Communications Direct (DCD), which at some point changed its name to EPIQ.
The defendants’ designations, however, are not dispositive, or even controlling. “‘The
reason is simple: The FLSA is designed to defeat rather than implement contractual
arrangements.’” Keller v. Miri Microsystems LLC, 781 F.3d 808 (6th Cir. 2015) (quoting Imars
v. Contractors Mfg. Servs., Inc., 165 F.3d 27 (6th Cir. 1998) (table decision); see also Real v.
Driscoll Strawberry Assoc., 603 F.2d 748, 755 (9th Cir. 1979) (“Economic realities, not
contractual labels, determine employment status for the remedial purposes of the FLSA.”). The
broad definition of “employee” under the FLSA “stretches the meaning of ‘employee’ to cover
some parties who might not qualify as such under a strict application of traditional agency law
principles.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992).
As the Court noted in its earlier opinion, the facts alleged in this case mirror those in Keller,
where the court considered whether satellite installation technicians for a satellite-internet-dish
installation company were independent contractors or employees.
The court examined the
misclassification claims using the “economic realities” test. Id. at 807. The court suggested six
non-exclusive factors to consider in applying that test:
1) the permanency of the relationship between the parties; 2) the degree of skill
required for the rendering of the services; 3) the worker’s investment in equipment
or materials for the task; 4) the worker’s opportunity for profit or loss, depending
upon his skill; 5) the degree of the alleged employer’s right to control the manner
in which the work is performed; and 6) whether the service rendered is an integral
part of the alleged employer’s business.
Ibid. (quoting Donovan v. Brandel, 736 F.2d 1114, 1117 & n.5 (6th Cir. 1984)) (internal quotation
marks omitted). The court also considered whether “the business had ‘authority to hire or fire the
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plaintiff,’ and whether the defendant-company ‘maintains the plaintiff’s employment records.’”
Ibid. (quoting Ellington v. City of E. Cleveland, 689 F.3d 549, 555 (6th Cir. 2012)). No one factor
is controlling. Instead, the test under the FLSA “looks to whether the putative employee is
economically dependent upon the principal or is instead in business for himself.” Lilley v. BTM
Corp., 958 F.2d 746, 750 (6th Cir. 1992); Keller, 781 F.3d at 807.
With those factors in mind, let’s look at what the discovery in this case has shown.
1. Hiring Process
Comcast required that all potential LeCom Communications technicians — whether
employees, subcontractors, or independent contractors — be screened strictly prior to
employment. As part of Comcast’s “New Hire Checklist,” LeCom Communications was required
to obtain an updated driving record, drug test, photograph, criminal history check, and physical
examination for each potential technician.
Comcast furnished the service LeCom
Communications used to check applicants’ criminal histories.
All new technicians, even if they applied to work for a contracting house, were directed
first to LeCom Communications and required to fill out a “LeCom Application for At-Will
Employment Form.” Plaintiffs Harry Benion and Raphael Sutton, respectively subcontractors for
Buccilli and RQI, both were required to complete this form. Jeff Gendron testified that the form
was used only to collect the pertinent information to complete the potential technician’s
background check, and that the practice of requiring that all new technicians fill out a LeCom
Communications job application ended some time in 2016. LeCom Communications also required
its independent contractor technicians, including those working for subcontractor houses, to sign
individual “independent contractor” contracts with LeCom Communications. This agreement
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required technicians to complete all assigned work “to the satisfaction of Le Com Communications
and [Comcast].” Pl’s. Mot. Ex. 5, LeCom Communications Subcontractor Agreement at §5 (Pg
ID 1274). The agreement entitled LeCom Communications or the potential technician to terminate
the relationship without cause, and included a six-month non-compete clause prohibiting
technicians from performing installation work for Comcast in any area in which LeCom
Communications operates.
Once technicians were cleared for employment, they were issued a Comcast I.D. badge
and a Comcast tech number, which were generated by Comcast. To identify themselves as
authorized Comcast representatives, Comcast required technicians to wear those badges whenever
they were working in customers’ homes. Some plaintiffs (Benion and Damon Franklin, both
Erotech subcontractors) state they were issued LeCom ID badges and employee numbers. But the
record contains no other references to separate LeCom IDs or employee numbers, and it is likely
that Benion and Franklin are describing what the defendants and the other plaintiffs refer to as
Comcast ID badges and Comcast tech numbers.
2. Supplies and Tools
Under its contract with Comcast, LeCom Communications was required to maintain a
warehouse and office for all of the personnel, materials, and tools used in the installation business.
The defendants assert that independent contractors were required to provide their own tools and
vehicle.
Technicians were provided with, or in the case of independent contractors and
subcontractors, were required to provide, common power and hand tools (drills, screwdrivers, etc),
cable cutting and insulation tools, and a power meter specific to the cable installation industry.
According to LeCom Communications manager John Byrd IV, LeCom Communications
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purchased all requisite tools in bulk and made them available for sale to technicians at a discounted
rate, deducting the cost from technicians’ paychecks (or instructing a technician’s contracting
house to do so). The total cost of all required tools was a couple hundred dollars.
LeCom Communications provided its employee technicians with vehicles, although the
defendants maintain that independent contractor and subcontractor technicians were required to
provide their own vehicles. But at least some subcontractors were provided with vehicles by their
subcontracting houses. Plaintiff Allen Cleague, a subcontractor through Reynolds Quality
Installation, was provided with an RQI vehicle. About a month after he started work, Cleague was
transferred to DCD/EPIQ, where he was reclassified as a W-2 employee and provided with a
DCD/EPIQ vehicle. Plaintiff Damon Franklin, an Erotech subcontractor, was provided with an
Erotech vehicle.
LeCom Communications distributed installation materials to the plaintiffs and other
technicians daily before their morning departure. They reported to LeCom to retrieve pre-made
packs consisting of all the equipment the tech would need for that day. The plaintiffs did not use
any of their own installation materials.
3. Training
LeCom Communications did not require potential employees to have any experience. Jeff
Gendron testified that new employees with no cable installation experience were required to
complete an intensive one-week classroom course on Comcast’s particular system. Then they
were assigned to ride along with a more experienced technician for six to eight weeks before they
were allowed to complete installations on their own.
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In his deposition, Gendron averred that LeCom Communications did not set specific
requirements for subcontractor qualifications, leaving training and hiring up to individual
contracting houses.
Although Gendron stated that LeCom Communications expected
subcontracting houses to bring on technicians with experience in the cable installation field, the
plaintiffs averred that in practice contracting houses did not require any qualifications and provided
only limited training. Plaintiffs Allen Cleague and Damon Franklin, subcontractors for RQI and
Erotech respectively, testified that they were hired with no cable installation experience and that
their training consisted of nothing more than three weeks shadowing a more experienced
technician.
4. Work and Route Assignments
Until November of 2015 LeCom Communications was entirely responsible for assigning
jobs to technicians. Each morning, LeCom Communications technicians would report to LeCom
Communications’s Trumbull warehouse for route assignments and to pick up the hardware that
was to be installed in customers’ homes. Byrd said that technicians were not required to report at
a specific time, and arrived typically between 6:30 and 8:30 AM. But according to the plaintiffs,
technicians were required to report by 7:00 AM.
LeCom Communications would provide each technician with a list of jobs in a specific
area that comprised their “route” for the day. Each day, Comcast sent LeCom Communications
proposed routes without assignment to a specific technician.
Byrd or other LeCom
Communications supervisors would generally reshuffle individual jobs into routes that were,
according to LeCom Communications, more efficient, geographically logical, or better suited to
LeCom Communications’s workforce. Byrd and other supervisors would then assign the routes
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to technicians based on skill level, geographic familiarity, experience, and other factors. LeCom
Communications had the sole authority to determine which technician was assigned to which
route; technicians were unable to choose the geographic area or type of jobs to which they would
be assigned — although LeCom Communications supervisors would sometimes honor a
technician’s request for changes. After being assigned their routes, technicians would wait in line
to pick up the equipment to be installed (cable, fittings, set-top boxes, etc) also from the LeCom
Communications warehouse.
According to Byrd, he and other LeCom Communications managers “turned a blind eye”
to technicians running errands inside their assigned service area or taking breaks, as long as all
jobs were completed within the windows outlined on their route sheet.
In November 2015, Comcast instituted a new routing system called the Dynamic Dispatch
System (DDS), which substantially changed the way technicians were assigned work. The new
system eliminated the leeway that LeCom Communications had allowed in route assignments.
After DDS went into effect, Comcast assumed all responsibility for assigning routes and jobs to
technicians, and LeCom Communications supervisors were not able to alter the routes in any way.
All LeCom Communications technicians were issued iPhones, which Comcast used to assign jobs
and track their completion.
Through their phones, technicians were required to keep Comcast continually updated on
their status (en route to a job, at a job in progress, refueling, etc). If a technician entered an
unexpected status or fell behind on his route, Comcast employees would call or email Byrd and
other LeCom Communications supervisors, who would then contact the technician’s contracting
house supervisor or in some cases, contact the technician directly.
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According to Byrd, he and other LeCom Communications supervisors quickly recognized
that DDS was taking a significant toll on technicians. Unlike the previous system, under which
technicians were free to take breaks between jobs as long as the jobs were completed on time, DDS
required technicians to work nearly constantly. Technicians were required to keep Comcast
constantly abreast of their status, and Comcast’s “tech accountability” staff complained to LeCom
Communications whenever technicians were not working as efficiently as possible.
Byrd
acknowledged that, after DDS went into effect, a technician working a twelve-hour day had likely
been working or commuting between jobs nearly constantly for all twelve hours. To alleviate
some pressure, Byrd and the other LeCom Communications managers decided to transition to a
five-day work week, though technicians were still given the option to work six days.
Under both systems, technicians were required to complete all the jobs on their route within
the prescribed time frame. The plaintiffs testified that technicians were not allowed to refuse any
jobs that LeCom Communications assigned them. RQI subcontractor DeAngelo Sutton says that
in one instance, he refused an inconveniently located job and received a text message or email
from Jay Gendron, a LeCom Communications manager (and relative of Jeff Gendron), informing
Sutton that was being suspended for a day. The listed jobs typically represented ten hours or more
of work per day. Technicians were allotted specific amounts of time to complete each job and
specific time windows within which each job needed to be done. LeCom Communications
dispatchers would sometimes call technicians and require them to perform additional jobs not on
their route. The plaintiffs testified that if LeCom Communications dispatchers assigned additional
jobs, they were unable to refuse under threat of suspension or termination.
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After technicians completed their route, they were to call LeCom Communications’s
dispatchers (if they were a LeCom Communications employee or independent contractor) or their
own supervisor (if they were a subcontractor) and receive a “clear code,” signifying that LeCom
Communications had no additional jobs in their area and allowing them to return to the warehouse
to drop off unused equipment and go home.
LeCom Communications technicians were required to wear uniforms that identified them
as authorized representatives of Comcast and of LeCom Communications. Technicians also were
required to display the Comcast logo on their vehicles.
Subcontractors and independent
contractors were required to purchase the uniforms and magnetic vehicle decals from LeCom
Communications.
5. Quality Control
As part of their fulfilment agreement, Comcast required LeCom Communications to audit
at least 10% of the jobs LeCom Communications technicians completed. Jeff Gendron testified
that to satisfy this 10% requirement, LeCom Communications supervisors physically inspected the
work of employees and used Comcast-issued tools to remotely assess a customer’s cable
connection quality.
LeCom Communications required subcontracting houses to submit
documentation demonstrating that they had inspected at least 10% of the work performed by their
own subcontractors. Gendron testified that, to his knowledge, LeCom Communications did not
audit the work of independent contractors unless a customer complained that a job had not been
completed properly, in which case LeCom Communications dispatched another technician to fix
the problem. The plaintiffs testified that in practice, their work was regularly inspected by LeCom
Communications supervisors and not by their own contracting houses. Plaintiff Benion stated that
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he received emails addressing customer complaints and quality control issues directly from LeCom
Communications supervisors through a “supervisors@lecominc.com” email address.
Comcast itself would often send representatives to audit randomly selected jobs, regardless
of the employment classification of the technician who had performed the work. If Comcast
representatives found an installation to be defective or noncompliant with Comcast’s guidelines,
Comcast would report that defect to LeCom Communications and a technician would be
dispatched to correct the error. Sometimes technicians were required to fix their own mistakes,
and other times they were dispatched to fix the mistakes of other technicians, regardless of
employment classification or subcontracting house affiliation.
6. Pay
All technicians were paid on a per-job basis, in accordance with rates established by
Comcast. Certain jobs were worth more money than others. Independent contractors and
subcontractors received a flat rate per job and were not able to earn overtime pay. Subcontractors
typically received a check each week from their respective contracting house. LeCom
Communications and DCD/EPIQ W-2 employees were eligible to earn overtime and were paid
under a system in which the total value of the jobs an employee completed in a pay period was
divided by the total number of hours in that pay period to calculate an hourly rate. This hourly
rate was then used as the basis to calculate how much overtime pay, if any, an employee would
receive. Employee technicians received time-and-a-half pay for hours worked past 40 per week.
According to Byrd, LeCom Communications and DCD/EPIC would pay the difference between
an employee technician’s earnings and minimum wage if an employee earned less than minimum
wage (though Byrd asserts that technicians rarely made that little).
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If Comcast found that a job was “out of spec,” either through inspection or through remote
testing, Comcast would refuse to pay LeCom Communications for the job. In turn, LeCom
Communications would determine who was the responsible tech and, unless the tech returned to
the customer and fixed the issue, deduct the job from the technician’s pay (if they were an
employee) or direct the technician’s contracting house to deduct the job from the technician’s pay
(if they were a subcontractor). When Comcast refused to pay LeCom Communications for a job,
LeCom Communications had no recourse to appeal Comcast’s decision. Similarly, technicians
who saw their pay deducted had no way to challenge LeCom Communications’s decision. Plaintiff
Damon Franklin, an Erotech subcontractor, asserted that LeCom Communications directed
Erotech not to pay him for jobs “on many occasions.”
7. Time Off
Jeff Gendron testified that independent contractors were able to work anywhere from one
to seven days a week. The record overwhelmingly contradicts this assertion. The plaintiffs
testified that technicians were required in practice to work six days a week.
LeCom
Communications Manager John Byrd also testified that all technicians were required to work sixday weeks (before the institution of the Dynamic Dispatch System):
Q. So are you saying before [Dynamic Dispatch], just to clarify, it was a six-day-aweek job and that's what techs were expected to work —
A. Yes.
Q. — is six days a week? And after [Dynamic Dispatch] they’re working so hard
that LeCom for techs, whether independent contractors or employees, started to
move to a five-day-a-week requirement instead of a six-day-a-week?
A. Yes.
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Byrd Dep. at 112 (Pg ID 1232). According to Jerelle Hannah, owner of DCD/EPIQ, “[r]egardless
of the classification . . . all technicians show up for work at the LeCom facility each day, on a
schedule controlled by LeCom . . . LeCom set the start time and the number of days per week.”
Hannah also stated that the work performed by DCD/EPIQ employees was identical to the work
performed by independent contractors and subcontractors.
Comcast required LeCom Communications to provide a breakdown of available technician
manpower every day. Purportedly to satisfy this requirement, LeCom Communications required
all technicians to submit requests for time off, whether they were employees, subcontractors, or
independent contractors.
Regardless of a technician’s employment classification, LeCom
Communications seems to have had the final say as to whether technicians were granted time off.
On several occasions, DeAngelo Sutton, an RQI subcontractor, was asked to submit his requests
directly to LeCom Communications in a box at the LeCom Communications warehouse using
what he described as a “LeCom form.” At some point, LeCom Communications had supplied
subcontractors with forms bearing LeCom Communications’s name to deal with discipline, time
off, billing, payroll deductions, and other “routine matters.” According to Jeff Gendron, those
forms were supposed to be used as a template, and not distributed to technicians or actually used.
Gendron testified that, as soon as he learned that contracting houses were using the unaltered
forms, he advised all contracting houses “to cease using [LeCom Communications] forms and to
create their own forms based upon the Comcast Master Agreement.”
Regardless of the forms used, the plaintiffs assert that LeCom Communications regularly
denied requests for time off and cite several specific instances in which LeCom Communications
denied a subcontractor’s request for leave (one of which was ultimately reversed). In 2015, Leslie
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Morgan, then a subcontractor for LeCom Communications contracting house Great Link
Communications, requested additional days off per week from Great Link. Morgan’s supervisor,
Joe Dade, informed him he would have to get permission from LeCom Communications. Morgan
submitted a written request for time off, which was initially denied by Jay Gendron, who told
Morgan that “it is a six-day work week.”
After Morgan persisted in his request, LeCom
Communications granted him time off. Raphael Sutton, a subcontractor working with RQI,
requested time off through LeCom Communications, and his request was denied. The plaintiffs
also cite an instance in which Harry Benion was denied time off by The Buccilli Group, the
contracting house for which he worked, although they do not provide support for the claim that
LeCom Communications was directly involved in this denial.
8. Supervision and Meetings
Technicians were grouped into “territory teams” that corresponded to the geographic area
in which they worked. Each of these teams was supervised by an LeCom Communications
manager and included a mixture of employees, independent contractors, and subcontractors. The
LeCom Communications supervisors responsible for the teams held performance meetings at
LeCom Communications’s warehouse that technicians were required to attend. In addition to these
smaller team meetings, LeCom Communications would hold weekly meetings of all technicians
in which managers, particularly Jay Gendron, would review all technicians’ performance metrics
and suggest ways in which they could improve.
LeCom Communications also posted all
technicians’ performance scores, regardless of employment classification, on a large screen at their
warehouse.
Plaintiff Cleague alleges that LeCom Communications managers “frequently
threatened to fire [him] and other technicians at these meetings.” Both the small team and all-18-
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technician meetings were mandatory. Morgan was suspended for failing to attend a weekly
meeting.
Every Wednesday, Jeff Gendron held a meeting with territory team leaders and contracting
house owners (or their representatives).
At these meetings, Gendron and other LeCom
Communications managers would discuss the performance of individual technicians, sometimes
recommending termination, suspension, or docking their pay, regardless of employment
classification or contracting house affiliation. As a team leader, DeAngelo Sutton attended these
meetings, and testified that Gendron and other LeCom Communications managers regularly made
employment decisions regarding subcontractors:
At a number of these meetings, I heard the Gendrons speak specifically about the
performance of specific technicians who were independent contractors for the
subcontractors. Specifically, I remember Mr. Jay Gendron ordering that a
contractor by the name of Karon be fired as well as another technician by the name
of Jackie Turner. The contractor complied with this request. On another occasion,
Reynolds Quality Installations (who paid me) wanted to let someone go by the
name of Ray Willis but LeCom manager Gendron told me that Willis was not to be
fired.
D. Sutton Decl. at ¶ 13 (Pg ID 1317).
Some time in 2014 or 2015, LeCom Communications instituted the “MIDAS Program,”
an incentive program that placed each technician in one of ten teams. Those teams included
employees and subcontractors, with no distinction made between them. Members of the highest
performing team were awarded a bonus at the end of each month. According to Byrd, who
managed one of the teams, there were at least three iterations of the MIDAS Program, one of which
involved teams separated by subcontracting house, another which involved mixed employment
status teams, and a third that was limited to employee technicians only. In addition to the regular
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weekly meetings, technicians were also occasionally required to attend meetings related to the
MIDAS program.
Harry Benion and DeAngelo Sutton previously had worked as employee technicians for
LeCom Communications. Both Benion and Sutton left LeCom Communications for at least a year
and returned as subcontractors. Benion testified that, under both classifications, he was supervised
by LeCom Communications managers in the same manner. Benion also testified that his schedule
and duties were identical under both classifications.
Plaintiff Allen Cleague worked as a
subcontractor through RQI and later as an employee of DCD/EPIQ. Cleague said that he was
supervised by LeCom Communications managers in the same manner and held to the same
schedule and work requirements while working for both RQI and DCD/EPIQ despite his change
in employment classification.
In April of 2016, LeCom Communications communicated to its various subcontractor
houses that as of May 2016, LeCom Communications would no longer work with contracting
houses that used subcontractors and would require all contracting house-affiliated technicians to
be W-2 employees of their respective houses. Jeff Gendron testified that the decision to switch to
W-2 employees only was an internal LeCom Communications idea (not suggested by Comcast)
and that LeCom Communications owner Joseph Lentine was not involved in the decision (although
he was made aware of it). Gendron did not explain why LeCom Communications decided to make
this change.
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II.
There are six motions for summary judgment (or partial summary judgment) pending. In
essence, the plaintiffs ask for a determination of liability against all the defendants, and each of
the four defendants seek dismissal.
Summary judgment is appropriate “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.” Fed. R. Civ. P.
56(a). When reviewing the motion record, “[t]he court must view the evidence and draw all
reasonable inferences in favor of the non-moving party, and determine ‘whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law.’” Alexander v. CareSource, 576 F.3d 551, 557-58 (6th
Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)).
“The party bringing the summary judgment motion has the initial burden of informing the
district court of the basis for its motion and identifying portions of the record that demonstrate the
absence of a genuine dispute over material facts.” Id. at 558. (citing Mt. Lebanon Personal Care
Home, Inc. v. Hoover Universal, Inc., 276 F.3d 845, 848 (6th Cir. 2002)). “Once that occurs, the
party opposing the motion then may not ‘rely on the hope that the trier of fact will disbelieve the
movant’s denial of a disputed fact’ but must make an affirmative showing with proper evidence in
order to defeat the motion.” Ibid. (quoting Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479
(6th Cir. 1989)).
“[T]he party opposing the summary judgment motion must do more than simply show that
there is some ‘metaphysical doubt as to the material facts.’” Highland Capital, Inc. v. Franklin
Nat’l Bank, 350 F.3d 558, 564 (6th Cir. 2003) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio
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Corp., 475 U.S. 574, 586 (1986)) (internal quotation marks omitted). A party opposing a motion
for summary judgment must designate specific facts in affidavits, depositions, or other factual
material showing “evidence on which the jury could reasonably find for the plaintiff.” Anderson,
477 U.S. at 252. If the non-moving party, after sufficient opportunity for discovery, is unable to
meet her burden of proof, summary judgment is clearly proper. Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986).
Irrelevant or unnecessary factual disputes do not create genuine issues of material fact. St.
Francis Health Care Centre v. Shalala, 205 F.3d 937, 943 (6th Cir. 2000). A fact is “material” if
its resolution affects the outcome of the lawsuit. Lenning v. Commercial Union Ins. Co., 260 F.3d
574, 581 (6th Cir. 2001). “Materiality” is determined by the substantive law claim. Boyd v.
Baeppler, 215 F.3d 594, 599 (6th Cir. 2000). An issue is “genuine” if a “reasonable jury could
return a verdict for the nonmoving party.” Henson v. Nat’l Aeronautics & Space Admin., 14 F.3d
1143, 1148 (6th Cir. 1994) (quoting 477 U.S. at 248).
The Fair Labor Standards Act (FLSA) requires employers to compensate employees who
work more than 40 hours in a week at the premium rate of one and one-half times their base rate
of pay. 29 U.S.C. § 207(a)(1). “The provisions of the statute are ‘remedial and humanitarian in
purpose,’ and ‘must not be interpreted or applied in a narrow, grudging manner.’” Monroe v. FTS
USA, LLC, 860 F.3d 389, 396 (6th Cir. 2017) (quoting Tennessee Coal, Iron & R. Co. v. Muscoda
Local No. 123, 321 U.S. 590, 597 (1944)).
Under the statute, a qualifying “employer” includes “any person acting directly or
indirectly in the interest of an employer in relation to an employee,” and a qualifying “employee”
is simply “any individual employed by an employer.” 29 U.S.C. § 203(d), (e)(1). To “employ”
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means “to suffer or permit to work.” Id. at § 203(g). “These are wide-ranging definitions; indeed,
the Supreme Court has stated that “‘[a] broader or more comprehensive coverage of employees
. . . would be difficult to frame.’” Acosta v. Cathedral Buffet, Inc., 887 F.3d 761, 765 (6th Cir.
2018) (quoting United States v. Rosenwasser, 323 U.S. 360, 362 (1945)). “The statutory language
‘stretches the meaning of “employee” to cover some parties who might not qualify as such under
a strict application of traditional agency law principles.’” Acosta, 887 F.3d at 761 (quoting Mendel
v. City of Gibraltar, 727 F.3d 565, 569 (6th Cir. 2013)).
To determine whether an employer-employee relationship exists, courts are directed to
“look to the economic realities of the business relationship in light of all the relevant factors.”
Acosta, 887 F.3d at 765 (citing Ellington v. City of East Cleveland, 689 F.3d 549, 555-56 (6th Cir.
2012)). “This ‘economic reality’ standard, however, is not a precise test susceptible to formulaic
application.” Ellington, 689 F.3d at 555 (citing Donovan v. Brandel, 736 F.2d 1114, 1116 (6th
Cir. 1984)).
“It prescribes a case-by-case approach, whereby the court considers the
‘circumstances of the whole business activity[.]” Ibid.
A. LeCom Inc.
The plaintiffs concede that under the economic realities test, LeCom, Inc. cannot be found
to be the plaintiffs’ employer under the FLSA. They contend, however, that its interrelations with
LcCom Communications, namely common ownership, favor joint employer status. See Skills Dev.
Serv., Inc. v. Donovan, 728 F.2d 294, 300 (6th Cir. 1984) (stating that “a worker may be jointly
employed by two entities, each of which is responsible for complying with the [act]”) (citing 29
C.F.R § 791.2(a)); Keeton v. Time Warner Cable, No. 09-1085, 2011 WL 2618926 (S.D. Oh. July
1, 2011) (“[E]ither the [Keller] ‘economic realities’ test or the Int’l Longshoremen ‘joint
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employment’ test could provide a ground for determining that an entity is an employer under FLSA
and responsible for paying overtime wages.”).
Although the parties quibble over the precise test that applies, the Sixth Circuit identified
four factors in determining whether two companies are joint employers: the interrelation of
operations between the companies, common management, centralized control of labor relations,
and common ownership. Int’l Longshoremen’s Ass’n, AFL-CIO, Local Union No. 1937 v. Norfolk
Southern Co., 927 F.2d 900, 902 (6th Cir. 1991) (quoting Metro. Detroit Bricklayers Dist. Council
v. J.E. Hoetger & Co., 672 F.2d 580, 584 (6th Cir. 1982)); but see Sanford v. Main Street Baptist
Church Manor, Inc., 327 F. App’x 587, 594 (6th Cir. 2009) (suggesting a three-factor test
considering (1) an exercise of authority to hire, fire, and discipline; (2) control over pay and
insurance; and (3) supervision).
LeCom, Inc. attempts to dissociate itself from LeCom Communications, arguing that none
of the pertinent factors are satisfied in this case because LeCom, Inc. operates a separate utility
business that never engaged the plaintiffs. The plaintiffs point to LeCom Communications’s and
LeCom Inc.’s shared email domain and website to establish the requisite connection between the
companies.
They also emphasize that Lentine served as president and co-owner of both
companies, and according to Gendron, Lentine was the ultimate decisionmaker as to
compensation. But unless LeCom, Inc. is found to be a “sham” corporation, the common
ownership or financial control inquiry is not met merely because Lentine owned both companies.
See Swallows v. Barnes & Noble Book Stores, Inc., 128 F.3d 990, 996 (6th Cir. 1997) (quoting
E.E.O.C. v. Wooster Brush Co. Employees Relief Ass’n, 727 F.2d 566, 572 (6th Cir. 1984)). There
is no evidence that LeCom, Inc. is a sham or otherwise was formed for an improper purpose.
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The evidence does not support a finding of joint employer status. Lentine asserts that
LeCom, Inc. had no hiring or firing authority over the plaintiffs, input into their schedules, control
over their compensation, or involvement in the maintenance of their employment records. The
plaintiffs seem to believe that more evidence exists linking LeCom, Inc. to LeCom
Communications’s operations, but that Lentine intentionally deleted emails that contained
information bearing on this issue. However, the Court must consider the evidence before it, and
it cannot be said that a jury reasonably could conclude that LeCom, Inc. was a joint employer
under the relevant factors.
LeCom, Inc.’s motion for summary judgment will be granted, and the plaintiffs’ motion
for partial summary judgment will be denied as to that defendant.
B. LeCom Communications
The parties agree that the plaintiffs performed work for LeCom Communications, but the
defendant insists that the plaintiffs’ subcontractor agreements establish that they were not
“employees.” As noted above, however contractual agreements and intentions are not dispositive
considerations, and the presence of an additional subcontracting agency separating LeCom
Communications and the plaintiffs did not alter Keller’s precedential guidance on this issue. The
Court believes that applying the undisputed facts to those factors establish that LeCom
Communications is liable to the plaintiffs under the FLSA. The parties briefly address whether
LeCom Communications qualifies as a “joint employer,” but because the economic realities test
establishes that point, the Court will not discuss the merits of that alternate theory of liability.
The Court evaluates the factors against the evidence viewed in the light most favorable to
the defendant to determine if the plaintiffs are “employees.” No one factor is controlling. Instead,
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the test under the FLSA “looks to whether the putative employee is economically dependent upon
the principal or is instead in business for himself.” Lilley v. BTM Corp., 958 F.2d 746, 750 (6th
Cir. 1992); Keller, 781 F.3d at 807.
1. The permanency of the relationship between the parties
“Generally, independent contractors have variable or impermanent working relationships
with the principal company because they ‘often have fixed employment periods and transfer from
place to place as particular work is offered to them, whereas “employees” usually work for only
one employer and such relationship is continuous and indefinite in duration.’” Keller, 781 F.3d at
807 (quoting Baker v. Flint Eng'g & Constr. Co., 137 F.3d 1436, 1442 (10th Cir. 1998)). “If a
worker has multiple jobs for different companies, then that weighs in favor of finding that the
worker is an independent contractor.” Ibid. In Keller, the court reasoned that a jury could find that
the plaintiff was an employee where he never turned down job assignments from the defendant,
and he believed that he could be terminated for intransigence. Id. at 808. The court also noted
that several aspects of the job were outside of his control, such as where the customers lived, when
the customers were available, and the amount of time to drive to each customer’s house. Ibid.
The parties disagree about variability in the plaintiffs’ schedules. Defendant Gendron
testified LeCom Communications employees were required to work five days a week, but the
“independent contractors” enjoyed some degree of flexibility:
Q:
And the independent contractor technicians, you’re saying that they could
work one day, two days, three days, four days, five, six, seven days a week?
A:
Whatever they wanted.
Gendron Dep. at 123 (Pg ID 1128). However, the plaintiffs’ testimony overwhelmingly indicates
that they were in fact required to work six days a week and had no say in the matter. Nor could
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they refuse an assignment without fear of discipline. See Benion Decl. ¶ 7, 12 (1362-1364) (“I
was required to work six days per week . . . I never refused a job for fear of being fired or
disciplined by LeCom”); Cleague Decl. ¶ 8 (Pg ID 1377) (“LeCom required me to report to work
at its warehouse early each morning, six days a week”); Morgan Decl. ¶¶ 6, 9 (Pg ID 1310) (“When
I began work, LeCom Communications managers informed me that I would be required to work
six days per week . . . Mr. Gendron said that he would not be able to approve the time off because
‘it is a six-day work week.’”). And LeCom Communications manager John Byrd testified that
prior to shifting to the Dynamic Dispatch System, all technicians were required to work six days a
week.
The defendants allege that the four named plaintiffs’ work history indicates that they
moved from employer to employer on a regular basis while working for LeCom Communications.
The defendants make only one citation to the record, arguing that plaintiff Morgan testified that
he formed his own company to install Comcast equipment as an independent group. However,
Morgan’s testimony indicates that he formed an LLC through which he provided services to Great
Link Communications and LeCom Communications. His deposition does not show that he was
able to perform work for other cable installation groups while he was under LeCom
Communications’s subcontractor agreement, and merely demonstrates that he was paid for his
work as an independent company rather than as an individual. That Morgan formed an LeCom
Communications does not directly refute the plaintiffs’ evidence that LeCom Communications
technicians, whether operating as individuals or through LLCs, had no opportunity to seek work
elsewhere. Further, the defendants allege (without citing the record) that plaintiffs Benion,
Goodgall, and Franklin did not file taxes for a number of years, so it is impossible to know whether
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they received income from other sources. However, this absence of evidence does not help the
defendants satisfy their burden on summary judgment.
The record also indicates that the plaintiffs had no time or opportunity to pursue work
elsewhere. Although Gendron testified that the plaintiffs could work for other companies if they
chose, the plaintiffs were expected to work full days, regularly working between 60 and 90 hours
a week. LeCom Communications argued that the plaintiffs were allowed to and did work for other
companies while employed by LeCom Communications, referencing plaintiff Zachary Goodgall’s
deposition, in which he testified that he began doing cable installation for LeCom Communications
as an Erotech subcontractor in 2015. But Goodgall’s testimony does not say anything about
whether he concurrently performed cable installation work for other companies. The defendant
also cited plaintiff Harry Benion’s deposition, but his testimony does not establish that Benion
worked for multiple companies at the same time. Benion stated that he worked at Erotech until
November 2014 at which time he switched to the Buccilli Group which had a contract with LeCom
Communications.
The parties disagree about at what time technicians were required to report each morning,
but it was no later than 8:30 a.m. LeCom Communications provided each technician with the list
of jobs that comprised their route for the day, and those jobs were to be completed within specific
amounts and windows of time. Although supervisors turned a blind eye to technicians running
errands during the day so long as their work was completed, after Comcast’s Dynamic Dispatch
System went into effect, technicians working twelve-hour days likely had no time for breaks. They
were also not allowed to leave for the day until they received a “clear code” from their supervisor
or dispatcher that there were no additional jobs in their area. Moreover, the plaintiffs were often
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denied time off and could be fired at any time. In Hollis v. Dump Cable, Inc., the court found that
“this type of exclusivity is indicative of the existence of an employer-employee relationship.” No.
13-01077, 2014 WL 12526724, at *5 W.D. Tenn. June 23, 2014).
This factor favors a finding that the technicians were employees of LeCom
Communications.
2. The degree of skill required for the rendering of the services
“‘Skills are not the monopoly of independent contractors.’” Keller, 781 F.3d at 809
(quoting Sec’y of Labor, U.S. Dep’t of Labor v. Lauritzen, 835 F.2d 1529, 1537 (7th Cir. 1987)).
The inquiry is focused on whether an individual’s profits increased because of the “‘initiative,
judgment[,] or foresight of the typical independent contractor,’ or whether his work ‘was more like
piecework.’” Ibid. (quoting Rutherford, 331 U.S. at 730). The Sixth Circuit noted that “[i]t is also
important to ask how the worker acquired his skill.” Ibid. (citing Scantland v. Jeffry Knight, Inc.,
721 F.3d 1308, 1318 (11th Cir. 2013)). An independent contractor is more likely to have gained
the relevant skill though “formal education, an apprenticeship, or years of experience.” Ibid.
However, “if the worker’s training period is short, or the company provides all workers with the
skills necessary to perform the job,” the worker is more likely an employee. Ibid. The Sixth
Circuit noted in Keller that although a satellite installation technician’s skill may make them more
efficient, the profession is not one that “rises or falls on the worker’s special skill.” Ibid.
The defendant argues that independent contractors possessed greater skill than employeetechnicians at LeCom Communications. Byrd testified that every job was assigned points based
on how much time Comcast believed it should take, not the actual time on the job. Comcast used
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a points-based system to measure how much it should be billed in a day. Without elaboration, it
is not clear that this point system necessarily was based on the skill of subcontractor-technicians.
Certainly, cable installation technicians are skilled workers. See Herman v. Mid-Atl.
Installation Servs., Inc., 164 F. Supp. 2d 667, 675 (D. Md. 2000) (finding there is no question that
cable installation is a skilled trade). However, “where, as here, a company hires installers with no
prior experience and allows them to learn the necessary skills in just a few weeks of on-the-job
training, the skills involved must necessarily be fairly simple.” Hollis, 2014 WL 12526724, at *6
(collecting cases). The parties agree that LeCom Communications did not require employees to
have any prior experience. New employees with no cable installation experience were required to
complete a two week in-class course on Comcast’s system, followed by six to eight weeks of “ridealongs” with a more experienced technician.
With respect to subcontractors, LeCom
Communications expected subcontracting houses to dispatch experienced installers, but
nevertheless left training up to them. The plaintiffs employed by subcontractors testified that they
received only limited training. Although there is some testimony that technicians were dispatched
based in part on skill level, the evidence overwhelmingly indicates that whatever skill the
technicians possessed was acquired on the job. See Swinney v. AMcomm Telecommunications,
Inc, 30 F. Supp. 3d 629, 636 (E.D. Mich. 2014) (“This providing and accepting of unskilled
workers favors the Court viewing Plaintiffs as employees. . . .”).
This factor also weighs in favor of finding that the plaintiffs were employees.
3. The worker’s investment in equipment or materials for the task
To determine whether a worker’s capital investment shows evidence of economic
independence, courts “must compare the worker’s investment in the equipment to perform his job
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with the company’s total investment, including office rental space, advertising, software, phone
systems, or insurance.” Keller, 781 F.3d at 810. “Investment in something like welding equipment
signals a greater degree of economic independence because it is not a common item that most
people use daily.” Ibid. The Keller court weighed the plaintiff’s investments in a vehicle, tools,
and parts against the defendant’s investment in office space, telephones, and computers to schedule
installation appointments. Id. at 811. The court discounted the investment in the plaintiff’s
vehicle, however, because the vehicle may also be used for personal purposes and is therefore an
item used in everyday life.
Here, the defendants assert that cable installation requires a unique set of tools. However,
LeCom Communications purchased all requisite tools in bulk and sold them to technicians at a
discounted rate, deducting the amounts from the technicians’ paychecks or instructing the
contracting house to do so. Those tools cost the plaintiffs a couple hundred dollars up-front.
LeCom Communications employees were provided with tools and transportation, while
“independent contractors” and subcontractors were required to provide their own common power
and hand tools, cable cutting and insulation tools, and a power meter specific to the cable
installation industry. Independent contractor and subcontractor technicians generally took care of
their own transportation, but at least some plaintiffs were provided with vehicles from their
subcontracting houses. On the other hand, LeCom Communications was responsible for providing
all installation materials and equipment and maintained a warehouse for its operations, although
no estimate as to those costs is evident in the record.
Because the record does not contain evidence of all the parties relative costs, it is not
possible to determine conclusively which side’s investment outweighed the other’s.
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nevertheless reasonable to conclude that in procuring the installation equipment and renting the
warehouse, the defendants expended considerably more money than the plaintiffs, who spent only
a couple hundred dollars up-front acquiring tools. In Hollis, the court found this factor to be
neutral, 2014 WL 12526724, at *5, and in Keller, the court concluded that “the trier of fact should
decide how Keller’s capital investments compared to Miri’s.” 781 F.3d 799, 811. However, in
Swinney, the court found that the defendant’s scheme of deducting amounts from plaintiffs’
paychecks based on tools and vehicles rented supported a finding in the plaintiffs’ favor. 30 F.
Supp. 3d at 637.
This factor weighs slightly in favor of the plaintiffs based on the facts before the Court.
4. The worker’s opportunity for profit or loss, depending upon his skill
This factor questions whether workers “had an opportunity for greater profits based on
[their] management and technical skills.” Keller, 781 F.3d at 812 (citing Brandel, 736 F.2d at
1119). It is undisputed that Comcast sent LeCom Communications proposed routes each day, and
LeCom supervisors would then decide the number and type of assignments the plaintiffs were
given. Assignments were based not only on skill level, but also geographic familiarity, experience,
and other factors. LeCom Communications had sole authority over this process. And once the
Dynamic Dispatch System was implemented, Comcast assumed all responsibility for assigning
routes and jobs to technicians. And under both schemes, technicians were required to complete
their routes within Comcast’s prescribed time frame, and they were not allowed to refuse any jobs
assigned to them, even those assigned later in the day. The plaintiffs were also limited in their
ability to hire assistants because all technicians, including assistants, were subject to LeCom
Communications’s screening processes.
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Byrd testified that under LeCom Communications’s points-based system, a subcontractor
could complete an eight-hour day worth of points in three hours, describing it as “the glory of it”
so that LeCom Communications could increase its revenue. But speculation collides with the
evidence that the plaintiffs’ routes, assignments, and reporting duties were strictly regimented and
foreordained the hours they must spend on the job.
Furthermore, the plaintiffs had no say in the pay they received. All technicians were paid
on a piecework basis, receiving a flat rate per job, in accordance with rates established by Comcast.
Some jobs, like installation jobs, paid better than troubleshooting or repair jobs, but LeCom had
sole authority in deciding which assignments the plaintiffs received. Contrary to the defendants’
unsupported assertions, the pace at which the plaintiffs work did not affect their ability to earn
more money. There did exist opportunities to earn bonus pay through the MIDAS Program, in
which all technicians, regardless of employment status, participated. However, by its third
iteration, MIDAS incentives were made available only to employee technicians, foreclosing the
opportunity for extra earnings to independent contractors or subcontractors. Furthermore, it is
undisputed that LeCom Communications would deduct the plaintiffs’ pay when it found their work
to be unsatisfactory or equipment went missing — the familiar “charge back” practice that courts
have found weighs in favor of employee status. See Scantland, 721 F.3d at 1314 (explaining that
uncontestable chargebacks that reflect the actual value of the job instead of the cost of damages
are “more consistent with disciplining employees”).
This factor also favors the plaintiffs because their skill had no bearing on their ability to
increase profits.
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5. The degree of the alleged employer’s right to control
the manner in which the work is performed
“‘Courts, in evaluating this factor, have considered such details as whether workers may
choose how much and when to work, . . . whether they must wear uniforms, and how closely their
work is monitored and controlled by the purported employer.’” Swinney, 30 F. Supp. 3d at 638
(quoting Scruggs v. Skylink, Ltd., No. CIV.A. 3:10-0789, 2011 WL 6026152, at *3 (S.D.W. Va.
Dec. 2, 2011)).
As described above, the plaintiffs had essentially no control over their assignments and
schedule. Under both the initial LeCom Communications system and Comcast’s DDS, the
plaintiffs were expected to work at least six days a week and were assigned routes from which they
could not deviate. These facts are undisputed. The plaintiffs’ preferences for a particular
geographic area or type of job were not considered, although before implementation of DDS,
LeCom Communications supervisors would sometimes honor a technician’s request for changes.
Once their routes were completed, the plaintiffs could not retire for the day until they received a
“clear code” from LeCom Communications. LeCom Communications also had final say as to the
plaintiffs’ requests for time off.
For at least part of their time working for LeCom
Communications, the plaintiffs were required to submit request-for-leave forms bearing LeCom
Communications’s name, and even those working for subcontracting houses were at LeCom
Communications’s mercy.
Furthermore, in accordance with their contractual obligations to Comcast, LeCom
Communications required its technicians to wear uniforms that identified them as authorized
representatives of Comcast and LeCom Communications. They also had to display the Comcast
logo on their vehicles. In Hollis, the court found that these same circumstances suggested that the
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plaintiffs were employees. See Hollis, 2014 WL 12526724, at *8 (“Installers were required to
wear Company uniforms and to advertise the Company’s logo on their vehicles.”); but see Keller,
781 F.3d at 815-16 (“Miri did not require that Keller wear a uniform with Miri’s or HughesNet’s
logo . . . A uniform can often be a sign of control, but the uniforms were not required, nor did they
connect Keller to Miri.”).
Moreover, LeCom Communications maintained direct supervisory authority over the
plaintiffs, including absolute power to terminate technicians and the right to monitor their work.
The plaintiffs’ subcontracting agreement noted that LeCom Communications could terminate their
contract for any reason and included a non-compete clause that limited the plaintiffs’ ability to
pursue similar work for six months after their relationship ended. LeCom Communications also
routinely inspected the plaintiffs’ work and would dock their pay if the job was not up to Comcast
standards. Additionally, all technicians, regardless of employment status and under threat of
discipline, were required to attend performance meetings. Unlike in Swinney, where there was a
dispute as to whether meetings were mandatory, 30 F. Supp. at 639-40, the defendants do not
contest that all technicians were required to attend performance meetings. See Swinney, 30 F.
Supp. at 640 (“If Defendant compelled the meetings, threatened termination, and backcharged for
absences, the Court would be more inclined to find that Plaintiffs and Defendant had an employeeemployer relationship.)
In addition to technician meetings, Gendron admitted that LeCom
Communications supervisors held weekly management meetings where they would frequently
make employment decisions based on technician performance, including having final say on
whether a subcontracting house could terminate a technician.
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Unlike in Keller, where Keller made some decisions free from Miri’s control, including
bringing assistants on some installation jobs and responding to customer needs without first
checking in with Miri, 781 F.3d at 814-15, the plaintiffs here had no such autonomy. The record
indicates that technicians were required to seek LeCom Communications’s permission before
enlisting help or amending a work order.
The defendants apparently do not dispute this evidence. Instead, the defendants focus their
argument on the several Comcast-imposed requirements and assert that LeCom Communications’s
control functions are “characteristic of the industry” and should not be factored into the Keller
analysis. The defendants rely on Herman v. Mid-Atlantic Installation Services, 164 F. Supp. 2d
667, 672 (D. Md. 2000), where the court concluded that having to comply with the defendant’s
and Comcast installation specifications was “entirely consistent with the standard role of a
contractor who is hired to perform highly technical duties.” That court went on to say that the
strict procedures and requirements imposed on installers by way of defendant’s contract with
Comcast “stem from the nature of the business and the need to provide reliable service and
convenience to the consumers, not the nature of the relationship between MAT and Installers.” Id.
at 674.
But this and similar blame-shifting arguments have been rejected by other courts. In
Scantland, the court disagreed with the defendants’ argument that its “quality control measures
and regulation of schedules stemmed from the ‘nature of the business’”:
The economic reality inquiry requires us to examine the nature and degree of the
alleged employer’s control, not why the alleged employer exercised such control.
Business needs cannot immunize employers from the FLSA’s requirements. If the
nature of a business requires a company to exert control over workers to the extent
that Knight has allegedly done, then that company must hire employees, not
independent contractors.
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721 F.3d at 1316; see Swinney, 30 F. Supp. 3d at 642 (declining to follow Herman); see also Keller,
799 F.3d at 814 (explaining that requiring technicians to comply with HughesNet specifications
did not foreclose a jury from finding that Miri controlled Keller’s job performance through its
initial training and hiring practices).
At oral argument on the motions, defense counsel insisted that LeCom Communications
had no authority to terminate the plaintiffs, citing only Gendron’s declaration from April of this
year, where he testified that LeCom Communications did not have authority to discipline or fire a
technician performing services for a subcontractor. But his statement plainly is contradicted by
LeCom’s own subcontractor agreement and DeAngelo Sutton’s testimony from June 2017 that he
specifically recalled at a supervisor meeting Gendron ordering the termination of two
subcontractor-technicians. Sutton also noted that when his subcontractor group wanted Sutton to
fire a subcontractor-technician, Gendron instructed Sutton not to fire him.
Byrd also testified that he was responsible for keeping performance metrics for all
technicians, including those classified as independent contractors. Byrd explained that on a daily
basis he sent real-time numbers to the field “so people were aware and conscious, see what tech
was failing.” These numbers would be discussed at weekly management meetings. He noted that
this kind of supervision occurred without regard to the technicians’ classification because to
Comcast, all technicians were considered the same.
The evidence overwhelmingly establishes that LeCom Communications controlled every
aspect of the way the plaintiffs received their assignments and performed their work. This factor
weighs heavily in favor of the plaintiffs.
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6. Whether the service rendered is an integral part of the alleged employer’s business
“The more integral the worker’s services are to the business, then the more likely it is that
the parties have an employer-employee relationship.” Keller, 781 F.3d at 815 (quoting Keeton v.
Time Warner Cable, Inc., No. 09-1085, 2011 WL 2618926, at *6 (S.D. Ohio July 1, 2011)).
Because “the only services [the defendant] provides are satellite-dish installation and repair,” ibid.,
there is no genuine dispute of material fact as to whether the plaintiffs are integral to LeCom
Communications’s business. See also Swinney, 30 F. Supp. 3d at 647 (“Given the necessity of the
technicians to fulfill daily cable installation requirements, the Court finds this factor favors finding
an employee status.”). In fact, without the plaintiffs and those similarly situated contractors,
LeCom Communications, which exclusively furnishes fulfillment services to cable companies,
would have no business.
7. Additional factors
The Sixth Circuit also considers whether “the business had ‘authority to hire or fire the
plaintiff,’ and whether the defendant-company ‘maintains the plaintiff’s employment records.’”
Id. at 807 (quoting Ellington, 689 F.3d at 555). Under the parties’ subcontractor agreement,
LeCom Communications had the power to terminate the plaintiffs at any time, with or without
cause. The plaintiffs also expressed that they operated under the threat of termination if they
refused assignments or their performance was deemed unsatisfactory, and that fact appears to be
undisputed. Moreover, because LeCom Communications supervisors regularly reviewed the
plaintiffs’ performance metrics and filed disciplinary paperwork and requests for time off, it can
be said reasonably that it maintained at least some of the plaintiffs’ employment records.
* * * * * * * * *
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Applying the relevant factors to the undisputed facts, it is clear that the plaintiffs were
employees of LeCom Communications. No reasonable jury could conclude otherwise. The
plaintiffs’ motion for partial summary judgment of liability against LeCom Communications will
be granted.
C. Individual Liability
Lentine and Gendron both argue that they were not the plaintiffs’ “employers” within the
meaning of the FLSA. They each heavily rely on Dole v. Elliott Travel & Tours, Incorporated,
942 F.2d 962 (6th Cir. 1991), to divorce themselves from the plaintiffs’ claims. The plaintiffs
argue that their evidence overwhelmingly supports a contrary finding, or at least presents a
question of fact reserved for a jury. The evidence in the record could support both arguments, but
it is not conclusive either way. Neither side is entitled to a judgment as a matter of law.
Acknowledging that “[t]he FLSA contemplates there being several simultaneous
employers who may be responsible for compliance with the FLSA,” id. at 965 (citing Falk v.
Brennan, 414 U.S. 190, 195 (1973)), the Dole court declared that “[t]he overwhelming weight of
authority is that a corporate officer with operational control of a corporation’s covered enterprise
is an employer along with the corporation, jointly and severally liable under the FLSA for unpaid
wages.’” id. at 965 (citing Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983)). In adopting
the multi-factor test announced in Agnew, the court explained that “‘corporate officers with a
significant ownership interest who ha[ve] operational control of significant aspects of the
corporation’s day to day functions, including compensation of employees, and who personally
made decisions to continue operations despite financial adversity during the period of nonpayment’ [qualify as] employers under the FLSA.” Id. (quoting Agnew, 712 F.2d at 1512)). The
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court cautioned that “[n]o one factor is dispositive.” Id. at 965 (quoting Donovan v. Sabine
Irrigation Co., Inc., 695 F.2d 190, 195 (5th Cir. 1983)). Moreover, “[t]o be classified as an
employer, it is not required that a party have exclusive control of a corporation’s day-to-day
functions,” id. at 966, and delegation of duties to lower level managers does not preclude a finding
of “employer” status. Ibid.
In Irizarry v. Catsimatidis, 722 F.3d 99 (2d Cir. 2013), the Second Circuit — surveying
opinions across the courts of appeals — provided further guidance on the issue of “operational
control.” The court began by noting that “[m]ost circuits to confront this issue have acknowledged
— and plaintiffs do not dispute — that a company owner, president, or stockholder must have at
least some degree of involvement in the way the company interacts with employees to be a FLSA
employer.’” Id. at 107 (collecting cases). The court concluded,
[e]vidence that an individual is an owner or officer of a company, or otherwise
makes corporate decisions that have nothing to do with an employee’s function, is
insufficient to demonstrate “employer” status. Instead, to be an “employer,” an
individual defendant must possess control over a company’s actual “operations” in
a manner that relates to a plaintiff's employment. It is appropriate, as we implicitly
recognized in [Herman v.] RSR [Sec. Servs. Ltd., 172 F.3d 132 (2d Cir. 1999)], to
require some degree of individual involvement in a company in a manner that
affects employment-related factors such as workplace conditions and operations,
personnel, or compensation—even if this appears to establish a higher threshold for
individual liability than for corporate “employer” status.
Id. at 109. The court nevertheless cautioned that “this does not mean that the individual ‘employer’
must be responsible for managing plaintiff employees — or, indeed, that he or she must have
directly come into contact with the plaintiffs, their workplaces, or their schedules — the
relationship between the individual’s operational function and the plaintiffs’ employment must be
closer in degree than simple but — for causation.” Id. at 110.
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1. Jeffrey Gendron
Gendron argues that the Dole factors favor him as he had no an ownership interest in
LeCom Communications or LeCom, Inc., did not hold an officer position, and lacked control of
LeCom Communications’s day-to-day operations. Gendron testified that he lacked check-writing,
banking, and hiring and firing authority. He also stated that he played no role in the plaintiffs’
compensation, noting that the plaintiffs received their payments and 1099s from the subcontractor
groups. As additional evidence of his lack of operational control, Gendron argues that the plaintiffs
themselves did not consider him to be their employer as they never notified him when they ceased
employment with their subcontractors. He also notes that during their employment, the plaintiffs
never wore any badge or uniform that displayed his name, nor did they drive any vehicles
personally owed by him.
The plaintiffs’ version of the facts casts significant doubt on Gendron’s assertions. The
plaintiffs point to Gendron’s deposition testimony and other LeCom Communications documents
that unquestionably implicate Gendron as the “top man” at that he played no role in the plaintiffs’
compensation. For example, Gendron held weekly meetings with the LeCom Communications
managers to discuss the performance of individual technicians, sometimes recommending
termination, suspension, or docking their pay, regardless of employment classification or
contracting house affiliation. Perhaps more damaging, Lentine testified that Gendron essentially
was solely responsible for LeCom Communications operations, including hiring and firing,
compensation, and all dealings with subcontractor groups.
Moreover, Gendron’s attempt to distinguish himself from the individual defendant in
Donovan v. Sabine Irrigation Co., Inc., 695 F.2d 190 (5th Cir. 1983), is not persuasive in light of
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the plaintiffs’ version of the facts. In that case, the Fifth Circuit affirmed the district court’s finding
of employer status where the defendant, among other things, “exercised pervasive control over the
business and financial affairs of Sabine Irrigation,” and “maintained continuous contact with his
Tulsa office and indirect control[] [over] many matters traditionally handled by an employer in
relation to employee (such as payroll, insurance, and income tax matters).” Id. at 195. In fact,
Donovan undermines Gendron’s position; the court went on to say that the trial court properly
“discounted [the defendant’s] self-serving disavowals of involvement in Sabine’s operations.”
Ibid. Viewing the facts in a light most favorable to the plaintiff, this Court must do the same. On
the other hand, the plaintiffs have not established that no reasonable juror could find for Gendron
as the extent of his involvement remains unclear.
The plaintiffs aptly cite Reich v. Circle C. Investments, Incorporated, 998 F.2d 324 (5th
Cir. 1993). There, not only did the defendant lack an ownership interest in the entity employer,
but he also lacked control of the day-to-day operations. Id. at 329. Despite all that, the court found
that he exercised sufficient “control over the work situation” to qualify as an employer. Ibid.
Notably, the defendant was “the driving force behind the nightclub.” Ibid. “[H]e hired two of the
dancers who testified at trial; several of the witnesses identified him as their supervisor and
testified that he gave specific instructions to employees; . . . he removed money from Circle C’s
safes; [and] he signed employees’ payroll checks.” Ibid. Likewise, Gendron’s lack of ownership
interest is not outcome determinative where he evidently played a non-negligible role in LeCom
Communications’s operations.
The parties’ conflicting accounts preclude summary judgment for either side.
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2. Joseph Lentine
Lentine similarly disavows his involvement in LeCom Communications’s day-to-day
operations since 2001, insisting that Gendron was the one in charge. In his affidavit, Lentine
explained that Gendron exclusively was responsible for determining all compensation at LeCom
Communications, and that Lentine has never overridden any of Gendron’s compensation-related
decisions. Lentine stated that Gendron similarly was in charge of all subcontracting decisions,
including division of labor and compensation for the groups’ services. He further noted that he
does not have any role in the hiring, disciplining, or firing of any LCC employees or technicians,
nor does he have any say in their schedules. Lentine also makes a variety of other assertions that
dissociate him from LeCom Communications, curiously citing unanswered requests for
admissions propounded on the plaintiffs.
Although not as strong as in Gendron’s case, the plaintiffs have put forth sufficient facts
that undercut Lentine’s “self-serving disavowals of involvement.” The plaintiffs initially note that
they timely responded to Lentine’s requests for admissions, denying many of the requests he cites
in his favor. Also, Lentine admitted that he and Gendron have held weekly meetings since 2001
to discuss LeCom Communications’s finances and other issues stemming from the company’s
relationship with Comcast, and that he executed all contracts with Comcast since 2007. There is
evidence that in addition to his status as president and owner of LeCom Communications, Lentine
signed payroll checks for LeCom Communications employees and approved the decision to hire
the plaintiffs as “independent contractors” in the first place. The plaintiffs assert that while
Gendron possessed hiring and firing authority, Lentine could have exercised such control if he
chose to do so. Lentine also made the decision to terminate LCC’s business with Comcast in 2017.
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The record contains a series of emails that indicate Lentine was more involved in LeCom
Communications’s operations than he lets on. In emails from August 2015 and February 2016,
Lentine consulted with Gendron on potential chargeback issues with Comcast and distribution of
bonuses. In an email with a Comcast agent dated December 11, 2014, Gendron and Lentine
discussed the possibility of a pay increase for LeCom Communications’s services. And in another
set of emails, Lentine explained to that same Comcast agent that LeCom Communications did
everything it promised it would do to meet Comcast’s “manpower forecast” for that month, citing
attrition as a reason for their disappointing performance. Those emails indicate that Lentine
regularly communicated with Comcast about LeCom Communications’s business.
The case law Lentine cites counsels against granting summary judgment in his favor. In
Fegley v. Higgins, 19 F.3d 1126 (6th Cir. 1994), the Sixth Circuit, applying the Dole test, found
that the CEO of the defendant corporation was personally liable under the FLSA. The court cited
the corporate officer’s significant ownership interest, control of significant functions of the
business, and salary setting and hiring authority among the relevant considerations. Id. at 1131.
The court also noted that the defendant was responsible for obtaining contracts for the
corporation’s prototype parts business. Ibid. Although Lentine has offered some evidence that he
played no part in LeCom Communications’s operations, at a minimum, he has conceded that he
was responsible for procuring LeCom Communications’s contracts with Comcast, undercutting
his defense that Gendron exclusively steered the ship.
In United States of Labor v. Cole Enterprises, Inc., 62 F.3d 775, 778 (6th Cir. 1995), the
Sixth Circuit reaffirmed the considerations announced in Dole and Fegley, explaining that “[o]ne
who is the chief executive officer of a corporation, has a significant ownership interest in it,
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controls significant functions of the business, and determines salaries and makes hiring decisions
has operational control and qualifies as an ‘employer’ for the purposes of FLSA.” (citing Fegley,
19 F.3d at 1131). Of relevance here, the court noted that the defendant “was engaged in running
the business, . . . authorized to issue checks on the corporate accounts, . . . had custody and control
of the employment records, . . . and was involved in scheduling of hours, payroll, and the hiring
of employees.” Ibid. When considering the facts put forth by both sides in this case, it is difficult
to conclude that Cole conclusively supports either party.
Gray v. Powers, 673 F.3d 352 (5th Cir. 2012), is distinguishable because the plaintiff failed
to offer any evidence of the individual defendant’s hiring and firing authority at the nightclub
where the plaintiff worked as a bartender.
Acknowledging that “employer status may be
appropriate where operational control coincides with one’s position as a shareholder, officer, or
owner,” it explained that “a status-based inference of control cannot alone suffice to create a
genuine fact issue whether Powers had power to hire or fire.” 673 F.3d at356. The court also
concluded that plaintiff failed to offer any evidence to support the other factors.
The plaintiffs’ recitation of case law is underdeveloped and similarly does not conclusively
support summary judgment in their favor. See Saavedra v. Lower’s Home Ctrs., 748 F. Supp. 2d
1273, 1288 (D.N.M. 2010) (applying FLSA-derived multifactor test in FMLA case where
plaintiff’s manager exercised direct supervisory control over plaintiff); Velasquez v. US 1 Farm
Market Inc., No. 13-00634, 2016 WL 2588160 (D. Conn. May 3, 2016) (individual defendant’s
“undisputed responsibilities, such as being involved in hiring decisions and determining employee
compensation, reflect[ed] operational control over significant aspects of Farm Market”) (emphasis
added); Jensen v. Redcliff Ascent, Inc., No. 13-00275, 2014 WL 2739297 (D. Ut. June 17, 2014)
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(collecting cases and allowing plaintiffs to amend complaint to include allegations against
individual defendants); Solis v. Universal Project Mgmt., No. H-08-1517, 2009 WL 4043362 (S.D.
Tex. Nov. 19, 2009) (question of fact if individual defendants were employers under the FLSA);
Doe v. Cin-Lan, Inc., No. 08-12719, 2009 WL 2568516 (E.D. Mich. Aug. 18, 2009) (Murphy, J.)
(declining to grant summary judgment in favor of individual defendant on issue of employer status
where record was incomplete due to discovery dispute).
In Alvarez Perez v. Sanford-Orlando Kennel Club, Incorporated, 515 F.3d 1150, 1160
(11th Cir. 2008), the Eleventh Circuit emphasized that “in order to qualify as an employer [under
the FLSA], an officer ‘must either be involved in the day-to-day operation or have some direct
responsibility for the supervision of the employee.’” (quoting Patel v. Wargo, 803 F.2d 632, 63738 (11th Cir. 1986)). The court concluded that the majority shareholder of the entity-employer,
after suffering a heart attack in 1998, did not take part in the supervision or hiring or firing of
employees or determine their compensation. Id. at 1161. The court did not give weight to the idea
that the defendant could have played a greater role in the day-to-day operations if he had desired,
noting that “unexercised authority is insufficient to establish liability as an employer.” Id. at 1161
(citations omitted). The plaintiffs in this case similarly cannot point to Lentine’s potential, but
unused, power to weigh in on hiring and firing decisions as well as compensation to establish
operational control.
There is no requirement that Lentine “have exclusive control of [LeCom
Communications’s] day-to-day functions” to qualify as an employer under the FLSA. Dole, 942
F.2d at 966. However, because the degree of his involvement remains in dispute, both Lentine’s
and the plaintiffs’ motions for summary judgment must be denied.
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D. Statute of Limitations
Defendants LeCom Communications and Lentine argue that there is no evidence of
willfulness in the record that would support an extension of the statute of limitations in this case.
They argue that LeCom Communications required the subcontractors to comply with the FLSA
and that they were unaware of any overtime violations. The plaintiffs respond that prior FLSA
overtime violations at LeCom Communications serve as actual notice to the defendants and that
they cannot now claim that they were unaware of the requirements of the statute. The plaintiffs
argue that the defendants’ actual notice supports a finding of reckless disregard for the statute’s
requirements.
Suits for unpaid overtime compensation “may be commenced within two years after the
cause of action accrued . . . except that a cause of action arising out of a willful violation may be
commenced within three years after the cause of action accrued.” 29 U.S.C. § 255(a). “A violation
is ‘willful’ if ‘the employer either knew or showed reckless disregard for the matter of whether its
conduct was prohibited by the [FLSA].’” Stultz v. J.B. Hunt Transport, Inc., 35 F. Supp. 3d 866,
878 (E.D. Mich. 2014) (Duggan, J.) (quoting McLaughlin v. Richland Shoe Co., 486 U.S. 128, 129
(1988)). “The plaintiff bears the burden of proving willfulness.” Id. at 878 (citation omitted).
The plaintiffs argue that the undisputed facts in this case closely mirror those in Dole,
where the Sixth Circuit found that the defendants’ violation of the FLSA was willful. In Dole, the
Secretary of Labor provided undisputed evidence that the defendants previously were investigated
by the Department of Labor (DOL) for overtime violations and that the prior violation was
“resolved upon payment of overtime wages and an assurance of future compliance with the
FLSA.” Dole, 942 F.2d at 967. The individual defendant in that case offered excuses similar to
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those presented by LeCom Communications and Lentine, all of which the court of appeals found
unpersuasive. The court concluded that as the “top man” at the corporation, the individual
defendant “had actual notice of the requirements of the FLSA by virtue of earlier violations, his
agreement to pay unpaid overtime wages, and his assurance of future compliance with the FLSA.”
Ibid.
Here, Gendron testified that in 2004 or 2005, the DOL investigated LeCom
Communications for failure to pay its W-2 employee-technicians overtime. The DOL found that
LeCom Communications had failed to pay overtime rates on piece rate amounts earned by
employees. LeCom Communications thereafter changed its policy for its employees to comply
with the FLSA.
He testified that once LeCom Communications began using independent
contractors in 2013, it did not extend its overtime policy to these technicians. Gendron stated that
the subcontracting agencies were responsible for making any necessary overtime payments.
In light of Dole and Gendron’s testimony, a jury reasonably could conclude that the
defendants had actual notice of their obligations under the FLSA and therefore willfully violated
its provisions. The defendants’ argument that these circumstances are different because the present
plaintiffs are not their employees, but independent contractors, falls flat as the alleged
misclassification of the plaintiffs is the very heart of this case. Summary judgment on this issue
will be denied.
III.
The undisputed facts establish that the plaintiffs are entitled to a judgment of liability
against LeCom Communications as a matter of law. Likewise, defendant LeCom, Inc. is entitled
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to a judgment of dismissal as a matter of law. Fact questions preclude summary judgment for or
against defendants Joseph Lentine and Jeffrey Gendron.
Accordingly, it is ORDERED that the plaintiffs’ motion for partial summary judgment
against LeCom Communications and LeCom, Inc. (R. 81) is GRANTED IN PART AND
DENIED IN PART. Judgment of liability against LeCom Communications is GRANTED. The
motion is DENIED in all other respects.
It is further ORDERED that the motion for summary judgment by defendant LeCom, Inc.
(R. 137) is GRANTED.
It is further ORDERED that the plaintiffs’ motion for partial summary judgment against
defendants Joseph Lentine and Jeffrey Gendron (R. 142) is DENIED.
It is further ORDERED that the motions for summary judgment by defendants Jeffrey
Gendron and Joseph Lentine (R. 135, 138) are DENIED.
It is further ORDERED that the motion for partial summary judgment by defendant
LeCom Communications (R. 136) is DENIED.
It is further ORDERED that the amended complaint is DISMISSED WITH
PREJUDICE as to defendant LeCom, Inc., only.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Date: September 30, 2018
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PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was
served upon each attorney or party of record herein by
electronic means or first-class U.S. mail on September 30,
2018.
s/Susan K. Pinkowski
SUSAN K. PINKOWSKI
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