Eneque et al v. Metropolitan Cable Communications, Inc. et al
Filing
157
MEMORANDUM OPINION AND ORDER re: 121 MOTION for Summary Judgment filed by Time Warner Cable of New York City. Time Warner's motion 121 for summary judgment is GRANTED. (Signed by Judge Richard J. Holwell on 9/30/2011) (lmb)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ENEQUE JEAN-LOUIS, ANGEL PINAREYES,
TOMAS TORRES-DIAZ, ROSELIO MENDOZA,
EDWIN PEGUERO, JONNATAL PERALTA, and
ROBIN SORIANO, Individually and on Behalf of
All Other Persons Similarly Situated,
Plaintiffs,
09 Civ. 6831 (RJH)
-againstMETROPOLITAN CABLE COMMUNICATIONS,
INC., RICHARD PANG, JOHN SNYDER, BILL
BAKER, PATRICK LONERGAN, JOHN GAULT,
and TIME WARNER CABLE of NEW YORK
CITY, a DIVISION OF TIME WARNER
ENTERTAINMENT CO., L.P.,
MEMORANDUM OPINION
AND ORDER
Defendants.
Richard J. Holwell, District Judge:
In this action, Plaintiffs are current or former employees of defendant
Metropolitan Cable Communications, Inc. (“Metro”) who work as technicians installing
telecommunications services provided to New York City residents by defendant Time
Warner Cable of New York City (“Time Warner”). Purporting to represent a class of
fellow Metro technicians, Plaintiffs allege that defendants—Metro, Metro executives, and
Time Warner—did not pay them for overtime at the “time and a half” rates required by
the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”). Time Warner has
moved for summary judgment on the ground that the FLSA only applies to an
“employer” and there is no genuine issue of material fact precluding the Court from
determining as a matter of law that Time Warner was not Plaintiffs’ employer. For the
following reasons, the Court agrees and grants Time Warner’s motion.
1
BACKGROUND
Time Warner provides cable services to over one million subscribers in the New
York City area. (See Pl.’s 56.1 Stat. ¶ 1.) To install cable for these subscribers, Time
Warner contracts with Metro and two other companies, Uptown Communications &
Electric (“Uptown”), and Broadband Express, neither of whom is a party to this action.
(See Pl.’s 56.1 Stat. ¶ 2.) During the time period relevant to this action, Metro contracted
only with Time Warner. (See Pl.’s 56.1 Stat. ¶ 4.)
Metro, not Time Warner, hires technicians to perform installations at Time
Warner customers’ homes. (See Pl.’s 56.1 Stat. ¶ 2.)1 Prospective technicians apply
directly to Metro, interview with Metro personnel at Metro’s facility, hear from Metro
personnel that they have been hired, and receive paperwork from Metro. (See Pl.’s 56.1
Stat. ¶¶ 15-18.) None of the Plaintiffs met or communicated with anyone from Time
Warner prior to being hired by Metro. (See Pl.’s 56.1 Stat. ¶ 19.) Time Warner requires
Metro to conduct criminal background checks on prospective technicians, but it does not
require Metro to provide the results of those checks. (Pl.’s 56.1 Stat. ¶ 158; Dec. of S.
Silverman, Nov. 8, 2010 (“Silverman Dec.”) Ex. 41 at 95.) In fact, Metro is not even
required to inform Time Warner when it hires a technician. Metro assigns each
technician a number and approximately every six months provides Time Warner with a
list of technicians and their numbers. (See Def.’s 56.1 Stat. ¶ 13; Pl.’s 56.1 Stat. ¶ 103.)
When Metro hires a technician, the relationship between Metro and the technician
is governed by a collective bargaining agreement (“CBA”) between Metro and Local 3,
1
Time Warner also employs some technicians who are capable of performing
installations. (See Pl.’s 56.1 Stat. ¶ 2.) However, the parties do not appear to contest that
Time Warner contracts with Metro, Uptown, and Broadband Express to perform the
overwhelming majority of installations.
2
International Brotherhood of Electrical Workers (“Local 3”). (See Defs.’ 56.1 Stat. ¶ 35;
Pl.’s 56.1 Stat. ¶ 35.) Among other things, the CBA provides for a 40 hour work week;
specifies pay rates for work during that regular week; provides for “time and a half” rates
for overtime and work on holidays and double rates for work on Sundays; regulates
vacation periods as well as personal, sick and bereavement days; and provides for
pension fund contributions. (See Pl.’s 56.1 Stat. ¶ 37.) Time Warner is not a party to the
CBA and did not participate in negotiating it. (See Pl.’s 56.1 Stat. ¶ 36.)
Metro equips new technicians with radios; a set of the tools that Time Warner has
indicated are necessary to perform installation work; uniforms that display the Metro
logo; and, in some cases, trucks with Metro logos that reside at Metro’s facility. (See
Pl.’s 56.1 Stat. ¶¶ 48, 50, 59, 65-68.) Metro also provides technicians with a Metro
identification card. (See Pl.’s 56.1 Stat. ¶ 61.) Time Warner’s agreement with Metro
requires Metro technicians to report to Time Warner’s facility to obtain an additional
identification card that contains the words “Contractor,” “Metropolitan,” and “Time
Warner.” (See Pl.’s 56.1 Stat. ¶ 64.)2 Metro technicians do not visit Time Warner’s
facility for any other reason. And Time Warner provides only (a) the cable boxes and
other similar devices that Metro technicians connect in customers’ homes and (b) socalled “lock box keys” that provide access to cable connections in the field. (See Pl.’s
56.1 Stat. ¶¶ 53-57.)
2
Time Warner’s agreement with the Borough of Queens to provide cable services in
Queens requires that any Time Warner contractor who “routinely comes into contact with
members of the public at their places of residence must wear a picture identification card
indicating his or her name, the name of such subcontractor” and Time Warner. (See Pl.’s
56.1 Stat. ¶ 62.)
3
New technicians train by shadowing Metro personnel in the field. (See Pl.’s 56.1
Stat. ¶¶ 42-44.) Technicians also attend periodic training sessions regarding new
products and work specifications. (See Pl.’s 56.1 Stat. ¶¶ 42-44.) There is evidence that
Time Warner personnel attended and provided documents used at some of these training
sessions, in particular a session regarding customer relations. However, the parties
dispute the extent to which Time Warner personnel train Metro technicians. On the other
hand, there is documentary evidence that Time Warner sends Metro so-called “Tech
Tips” and other communications containing installation specifications, and Plaintiffs
testified that Metro distributed similar communications to Metro technicians. (See Dec.
of R. Asher, Dec. 22, 2010 (“Asher Dec.”) Ex. 2 at 31; id. Exs. 44-48; Pl.’s 56.1 Stat. ¶
126.)
Metro technicians report to work at Metro’s facility at times specified by Metro
managers and are required to contact Metro managers if they will be late or absent. (See
Pl.’s 56.1 Stat. ¶¶ 70, 71.) None of the Plaintiffs has ever contacted Time Warner for that
reason. (See Pl.’s 56.1 Stat. ¶ 72.) By the time that technicians arrive at work, Time
Warner has provided Metro with 700-800 work orders based on installation requests from
Time Warner customers. (See Pl.’s 56.1 Stat. ¶ 73.)3 The work orders specify time
windows of several hours in which Metro must perform the services the customer has
requested. (See Pl.’s 56.1 Stat. ¶ 74.) However, the work orders do not contain any
instructions as to how Metro should assign technicians to implement them. (See Pl.’s
56.1 Stat. ¶ 75.) Rather, Metro managers organize the work orders into routes and
distribute them to technicians as they arrive. (See Pl.’s 56.1 Stat. ¶¶ 76-78.) On some
3
By that time, Time Warner has also provided Metro with cable boxes and other devices.
(See Pl.’s 56.1 Stat. ¶¶ 54-57.)
4
occasions, several of the Plaintiffs did not receive a route if they arrived at work late.
(See Silverman Dec. Ex. 48 at 136-37.)
Metro technicians normally perform their work alone. However, their work does
require some communication with both Metro and Time Warner. Metro technicians
sometimes call Metro foremen regarding technical issues or missing equipment. (See
Pl.’s 56.1 Stat. ¶¶ 80, 81.) And Metro technicians contact Time Warner if they have
difficulty installing a modem; if a customer asks to make changes to the Time Warner
service he or she has ordered; if a customer is not at home; or if the technician encounters
difficulties accessing the premises. (See Pl.’s 56.1 Stat. ¶ 80.) In addition, Metro
technicians contact Time Warner’s automated ARU system to connect customers’ cable
service. In doing so, the technicians report the time that they began the installation job
and the automated system records the connection time as the time that the technician
completed the job. (See Pl.’s 56.1 Stat. ¶ 154.)
Both Metro and Time Warner assess the technicians’ work. Metro foremen
conduct some quality control inspections. (See Pl.’s 56.1 Stat. ¶ 82.) Time Warner
personnel do more: they conduct some 800-900 quality control assessments per week,
amounting to 2-4% of all installations that Metro technicians perform. (See Pl.’s 56.1
Stat. ¶ 86.) Time Warner memorializes in writing the results of these assessments and
provides copies to Metro. (See Pl.’s 56.1 Stat. ¶ 88.) Time Warner also contracts with an
outside vendor to contact customers within 45 minutes regarding installations that Metro
technicians have performed at their homes. (See Pl.’s 56.1 Stat. ¶ 96.) In this system,
known as ECHO, Metro and Time Warner have access to customers’ responses in real
time. (See Pl.’s 56.1 Stat. ¶ 97.) Finally, Time Warner compiles and provides to Metro
5
data as to how often technicians use Time Warner’s automated systems, a snapshot of the
number of open and completed installations, how often Metro technicians complete
installations in specified time windows, and how often technicians must make additional
visits to correct installation problems. (See Def.’s 56.1 Stat. ¶ 92; Pl.’s 56.1 Stat. ¶¶ 92,
144-154.)
Time Warner and Metro discuss these assessments and reports at monthly
meetings. (See Pl.’s 56.1 Stat. ¶¶ 93-94, 168-70.) Metro uses the assessments and
reports in determining if, when, and how to discipline Metro technicians. (See Def.’s
56.1 Stat. ¶¶ 90, 143.) In addition, Plaintiffs have presented evidence that Time Warner
contacts Metro regarding the worst performing technicians and asks Metro to advise
“what actions will be taken.” (See Silverman Dec. Exs. 29-30.) However, though the
parties dispute whether Metro or Time Warner was actually responsible for disciplining
or firing certain technicians, the record does not contain any evidence that Time Warner
has ever instructed Metro to discipline or fire any individual technician. Neither of the
Plaintiffs who were terminated discussed his termination with anyone from Time Warner;
rather, both were notified by Metro personnel. (See Pl.’s 56.1 Stat. ¶¶ 24-25.)
It is undisputed that Time Warner has the power to remove any Metro technician
from the list of technicians authorized to perform installations at Time Warner customers’
homes. (See Pl.’s 56.1 Stat. ¶¶ 29-30.) Yet Time Warner’s decision to de-authorize a
technician does not mean that the technician can no longer work for Metro or perform
installations for Time Warner. A de-authorized technician can perform other kinds of
work for Metro or leave Metro to install Time Warner cable as an Uptown or Broadband
Express employee. (See Pl.’s 56.1 Stat. ¶¶ 31, 34.)
6
At the end of each week, Metro provides Time Warner with an invoice for every
job that Metro technicians have completed and requests payment at per-job rates
established by Time Warner. (Asher Dec. Ex. 2 at 30.) Metro identifies the rate
applicable to a given job based on the rate code that Time Warner has assigned to that job
and which appears on the work orders. (Pl.’s 56.1 Stat. ¶ 35; Asher Dec. Ex. 3 at 45-46.)
Time Warner checks the invoice against its own data regarding the number of completed
installations, deducts faulty installations, and pays Metro the difference. (See Aff. of
J.W. Baker Jan. 25, 2011, ¶ 2; Asher Dec. Ex. 2 at 93-94.) Pursuant to the CBA with
Local 3, Metro pays its technicians at fixed rates for each hour of work. (See Silverman
Dec. Ex. 44 at 54-55, 60; Ex. 46 at 22-23; Ex. 47 at 25-26; Ex. 48 at 48; Asher Dec. Ex.
18 ¶ 6.) Metro also provides additional compensation based on the number of jobs that a
technician completes. (See Asher Dec. Ex. 5 at 36; Ex. 9 at 87; Ex. 10 at 25-26; Ex. 18
¶¶ 6-7.) Metro technicians received payment in the form of paychecks containing a
Metro logo, and these payments were reflected on W-2 forms issued by Metro. (See Pl.’s
56.1 Stat. ¶ 39.) No plaintiff ever received any payment from Time Warner. (See id.)
On August 3, 2009, Plaintiffs filed this action against Metro and Time Warner
alleging that they had violated the FLSA by failing to pay Metro technicians one and a
half times their normal hourly wage for each hour they worked in excess of forty hours in
certain weeks. Plaintiffs filed an amended complaint on October 23, 2009. On February
24, 2010, Plaintiffs moved to amend their complaint a second time to add a retaliation
claim against Time Warner, Metro, and various Metro executives. Specifically, Plaintiffs
sought leave to allege that that the defendants had retaliated against them for filing or
joining this action by reassigning them to less lucrative or more demanding routes and
7
assigning the most lucrative routes to new or less senior technicians. The Court granted
Plaintiffs’ motion on April 29, 2010 and Plaintiffs filed a second amended complaint on
May 5, 2010.
The parties engaged in discovery limited to the issue of whether Time Warner
jointly employed Metro technicians. On November 8, 2010, Time Warner moved for
summary judgment on the ground that it does not jointly employ Metro technicians.
LEGAL STANDARD
Summary judgment is proper if the moving party shows that “there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. Proc. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
“In deciding whether there is a genuine issue of material fact as to an element essential to
a party’s case, the court must examine the evidence in the light most favorable to the
party opposing the motion, and resolve ambiguities and draw reasonable inferences
against the moving party.” Abramson v. Pataki, 278 F.3d 93, 101 (2d Cir. 2002) (internal
quotation marks omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). However, a party opposing summary judgment “may not rely merely on
allegations or denials in its own pleading; rather, its response must—by affidavits or as
otherwise provided in this rule—set out specific facts showing a genuine issue for trial.”
Fed. R. Civ. Proc. 56(e).
Under the law in this Circuit, “the inquiry as to whether an entity is an employer
for purposes of the FLSA involves three determinations. First, there are historical
findings of fact that underlie each of the relevant factors. Second, there are findings as to
the existence and degree of each factor. Finally, there is the conclusion of law to be
8
drawn from applying the factors, i.e., whether an entity is a joint employer.” Zheng v.
Liberty Apparel Co., Inc., 355 F.3d 61, 76 (2d Cir. 2003) (“Zheng I”). “In order to grant
summary judgment for defendants, the District Court would have to conclude that, even
where both the historical facts and the relevant factors are interpreted in the light most
favorable to plaintiffs, defendants are still entitled to judgment as a matter of law.” Id.
“To reach that conclusion, the Court need not decide that every factor weighs against
joint employment.” Id. at 76-77 (emphasis in original).4
DISCUSSION
A. Relevant Law
The FLSA provides that “no employer shall employ any of his employees . . . for
a workweek longer than forty hours unless such employee receives compensation for his
employment in excess of the hours above specified at a rate not less than one and onehalf times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). Hence only
4
The Second Circuit’s statement that “[i]n the context of a jury trial, the question
whether a defendant is a plaintiff[’]s joint employer is a mixed question of law and fact”
does not mean that joint employer determinations are never amenable to summary
judgment. Zheng v. Liberty Apparel Co., Inc., 617 F.3d 182, 185 (2d Cir. 2010) (“Zheng
II”). As set forth more fully below, in Zheng v. Liberty Apparel Company, Inc., 355 F.3d
61 (2d Cir. 2003) (“Zheng I”), the Second Circuit reversed the district court’s decision to
grant summary judgment on the joint employment issue and remanded for consideration
of additional factors relevant to that determination. On remand, the district court denied
summary judgment on the ground that genuine issues of material fact existed regarding
three of the factors the Second Circuit identified. See 617 F.3d at 185. The matter was
then tried to a jury which found that the defendants were liable as joint employers. See
id. The defendants appealed on the ground that the joint employer question was one for
the court, not the jury. See id. In Zheng II, the Second Circuit rejected that argument and
declined to engage in de novo review of the jury’s verdict. In doing so, however, the
Second Circuit specifically contrasted the procedural posture of its prior decision wherein
the district court had granted summary judgment: “to the extent [the prior decision in
Zheng I] contemplated de novo review of a joint employment determination, it did so
only in the context of summary judgment, not a jury trial.” Id. at 186. Hence nothing in
Zheng II casts doubt on the propriety of treating joint employment as a question of law
where there are no genuine issues of material fact requiring a jury trial.
9
an “employer” can be liable for failing to pay “time and a half” rates for overtime.5 The
instant motion turns on whether Time Warner is Plaintiffs’ “employer” for purposes of
the FLSA.
The term “employer” in the FLSA “includes any person acting directly or
indirectly in the interest of an employer in relation to an employee and includes a public
agency, but does not include any labor organization (other than when acting as an
employer) or anyone acting in the capacity of officer or agent of such labor
organization.” 29 U.S.C.A. § 203(d). “Because the statute defines employer in such
broad terms,” Herman v. RSR Security Services Ltd., 172 F.3d 132, 139 (2d Cir. 1999),
and its definitional section uses the term it purports to define, the statute “offers little
guidance on whether a given individual is or is not an employer.” Id.
In the usual case, a court faced with such an ambiguous statute might turn to how
the law has elsewhere defined the employer-employee relationship. Indeed, “[i]in
instances where Congress uses terms—such as employer and employment—‘that have
accumulated settled meaning under . . . the common law,’ courts generally infer, unless
the statute indicates otherwise, that ‘Congress means to incorporate the established
meaning of these terms,’ e.g., ‘the conventional master-servant relationship as understood
by common-law agency doctrine.’” Barfield v. New York City Health and Hosp. Corp.,
537 F.3d 132, 141 (2d Cir. 2008) (ellipsis in original) (quoting Nationwide Mut. Ins. Co.
v. Darden, 503 U.S. 318, 322-23 (1992)).
However, the Supreme Court has observed that the “Act contains its own
definitions, comprehensive enough to require its application to many persons and
5
The anti-retaliation provision of the FLSA also uses the term “employer.” Cf. 29
U.S.C. § 218c.
10
working relationships, which prior to this Act, were not deemed to fall within an
employer-employee category.” Rutherford Food Corp. v. McComb, 331 U.S. 722, 729
(1947). In particular, the FLSA “defines the verb ‘employ’ expansively to mean ‘suffer
or permit to work.’” Darden, 503 U.S. at 326 (quoting 29 U.S.C. § 203 (g)). This
“definition of ‘employ’ is broad.” Rutherford Food Corp., 331 U.S. at 728; see also
Zheng I, 355 F.3d at 66. Indeed, it is “the broadest definition” of the term “that has ever
been included in any one act.” United States v. Rosenwaser, 323 U.S. 360, 363 n.3
(1945) (quoting 81 Cong. Rec. 7657 (1937) (statement of Sen. Hugo L. Black)). And this
“striking breadth . . . stretches the meaning of ‘employee’ to cover some parties who
might not qualify as such under a strict application of traditional agency law principles.”
Darden, 503 U.S. at 326.
“An entity ‘suffers or permits’ an individual to work if, as a matter of ‘economic
reality,’ the entity functions as the individual’s employer.” Zheng I, 355 F.3d at 66; see
also Barfield, 537 F.3d at 141 (“[T]he determination of whether an employer-employee
relationship exists for purposes of the FLSA should be grounded in ‘economic reality
rather than technical concepts,’ Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33
(1961) (internal quotation marks omitted), determined by reference not to ‘isolated
factors, but rather upon the circumstances of the whole activity,’ Rutherford Food Corp.
v. McComb, 331 U.S. at 730.”). Again, it is somewhat circular to define one who
“employs” in terms of whether “the entity functions as the individual’s employer.”
However, the purpose of the “economic reality” test—“to expose outsourcing
relationships that lack a substantial economic purpose”—points to a lodestar for
determining when an employer has outsourced work in name only: the “overarching
11
concern is whether the alleged employer possessed the power to control the workers in
question.” Herman, 172 F.3d at 139.
Notably, control in this context is not an all or nothing concept. “Control may be
restricted, or exercised only occasionally, without removing the employment relationship
from the protections of the FLSA, since such limitations on control ‘do not diminish the
significance of its existence.’” Id. (quoting Donovan v. Janitorial Servs., Inc., 672 F.2d
528, 531 (5th Cir. 1982)). And “even when one entity exerts ‘ultimate’ control over a
worker, that does not preclude a finding that another entity exerts sufficient control to
qualify as a joint employer under the FLSA.” Barfield, 537 F.3d at 148. Accordingly,
the Second Circuit has recognized that a worker can have more than one employer for
purposes of the FLSA. Indeed, “[t]he regulations promulgated under the FLSA expressly
recognize that a worker may be employed by more than one entity at the same time.”
Zheng I, 355 F.3d at 66; see also Barfield, 537 F.3d at 141. Cf. 29 C.F.R. § 791.2
(2003).6
6
The relevant Department of Labor regulation, 29 C.F.R. § 791.2 (2003), provides:
(b) Where the employee performs work which simultaneously benefits two or
more employers, or works for two or more employers at different times during the
workweek, a joint employment relationship generally will be considered to exist
in situations such as:
(1) Where there is an arrangement between the employers to share the employee's
services, as, for example, to interchange employees; or
(2) Where one employer is acting directly or indirectly in the interest of the other
employer (or employers) in relation to the employee; or
(3) Where the employers are not completely disassociated with respect to the
employment of a particular employee and may be deemed to share control of the
employee, directly or indirectly, by reason of the fact that one employer controls,
is controlled by, or is under common control with the other employer.
12
How do courts ascertain “economic reality?” The very open-endedness of the
term denotes that it is “a flexible concept to be determined on a case-by-case basis by
review of the totality of the circumstances.” Barfield, 537 F.3d at 141-42. In Carter v.
Dutchess Community College, 735 F.2d 8 (2d Cir. 1984), the Second Circuit identified
four factors particularly relevant to the joint employment inquiry: “‘whether the alleged
employer (1) had the power to hire and fire the employees, (2) supervised and controlled
employee work schedules or conditions of employment; (3) determined the rate and
method of payment; and (4) maintained employment records.’” Id. at 12 (quoting
Bonnette v. Calif. Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983)). The
Court of Appeals has described these as factors as a test “for determining when an entity
exercises sufficient formal control over a worker to be that worker’s employer under the
FLSA. . . .” Barfield, 537 F.3d at 143.
However, “the broad language of the FLSA . . . demands that a district court look
beyond an entity’s formal right to control the physical performance of another’s work
before declaring that the entity is not an employer under the FLSA.” Zheng I, 355 F.3d at
69. Hence not only is “[n]o one of the four factors standing alone . . . dispositive,”
Herman, 172 F.3d at 139, but the Second Circuit has “expressly denied” the proposition
“that the four factors borrowed from the Ninth Circuit in Carter are the exclusive
touchstone of the joint employment inquiry under the FLSA.” 355 F.3d at 71. While
those factors “can be sufficient to establish employer status,” “Carter did not hold . . . that
those factors are necessary to establish an employment relationship.” Id. (emphasis in
original). Rather, “in certain circumstances, an entity can be a joint employer under the
13
FLSA even when it does not hire and fire its joint employees, directly dictate their hours,
or pay them.” Id. at 70.
In Zheng I, the Second Circuit identified six additional factors that district courts
“will find illuminating” in determining whether a putative joint employer exercises
functional control:
(1) whether [the putative joint employer]’s premises and equipment were used for
the plaintiffs’ work; (2) whether the Contractor Corporations had a business that
could or did shift as a unit from one putative joint employer to another; (3) the
extent to which plaintiffs performed a discrete line-job that was integral to [the
putative joint employer]’s process of production; (4) whether responsibility under
the contracts could pass from one subcontractor to another without material
changes; (5) the degree to which the [putative joint employer] or [its] agents
supervised plaintiffs’ work; and (6) whether plaintiffs worked exclusively or
predominantly for [the putative joint employer].
Id. at 71-72. A district “court is also free to consider any other factors it deems relevant
to its assessment of the economic realities.” Id. at 72.
“[B]y looking beyond a defendant’s formal control over the physical performance
of a plaintiff’s work, the ‘economic reality’ test—which has been distilled into a
nonexclusive and overlapping set of factors—gives content to the broad ‘suffer or permit’
language in the statute.” Id. at 76 (quoting 29 U.S.C. § 203(g)). “However, by limiting
FLSA liability to cases in which defendants, based on the totality of the circumstances,
function as employers of the plaintiffs rather than mere business partners of plaintiffs’
direct employer, the test also ensures that the statute is not interpreted to subsume typical
outsourcing relationships.” Id.
Applying similar multifactor tests, several federal courts, including one in this
Circuit, have held that telecommunications service providers such as Time Warner are
not joint employers of contract technicians who install those services. See Lawrence v.
Adderley Ind., Inc., No. CV-09-2309, 2011 WL 666304 (E.D.N.Y. Feb. 11, 2011);
14
Jacobson v. Comcast Corp., 740 F. Supp. 2d 683 (D. Md. 2010). Cf. Smilie v. Comcast
Corp., No. 07-CV-3231 (N.D. Ill.) (Slip Op., Feb. 25, 2009) (attached as Ex. 52 to
Silverman Dec.). But see Keeton v. Time Warner Cable, Inc., No. 2:09-CV-1095, 2011
WL 2618926 (S.D. Ohio, July 1, 2011) (applying different Sixth Circuit test and finding
material issues of fact as to joint employment issue. Recently the Supreme Court of the
State of New York, Queens County, granted summary judgment to Time Warner in a
purported class action by MCC employees that raised claims virtually identical to those
presently before the Court. Rodriguez v. Metro Cable Commc’ns, Inc., No. 21517/2008
(N.Y. Sup. Ct. July 26, 2011).
B. Application
The Court will begin its analysis by applying the four Carter factors “to examine
the degree of formal control,” if any, exercised by Time Warner. Barfield, 537 F.3d at
143. If Time Warner “lacked formal control,” the Court will then apply the six Zheng
factors and any other relevant factors “to assess whether” Time Warner “nevertheless
exercised functional control” over Plaintiffs. Id.
1. Formal Control
a.
Hiring and Firing
The first factor relevant to formal control is “whether the alleged employer . . .
had the power to hire and fire the employees,” Carter, 735 F.2d at 12. In terms of hiring,
the undisputed evidence shows that Time Warner does not receive applications from
putative Metro technicians; interview or review applicants; inform applicants that they
have been hired; or provide new hires with employment forms. It is further undisputed
that none of the Plaintiffs met or communicated with any Time Warner employee prior to
15
being hired as a Metro technician. While Time Warner requires Metro to conduct
criminal background checks of applicants, Time Warner does not require Metro to report
the results of the background checks and Metro does so only on occasion. (See
Silverman Dec. Ex. 41 at 95.) In short, Metro, not Time Warner, has the power to hire
Metro technicians.
Whether Time Warner has the power to fire technicians requires more extended
discussion. It is undisputed that plaintiffs Jean-Louis and Pinareyes—the only named
plaintiffs who were terminated—learned about their termination from Metro employees
and that no Time Warner employee ever discussed the termination with Jean-Louis or
Pinareyes. (See Pl.’s 56.1 Stat. ¶¶ 25-27; Silverman Dec. Ex. 44 at 101.) Nor do
Plaintiffs point to any evidence that Time Warner actually terminated any Metro
technician.
True, Time Warner’s agreement Metro provides that Time Warner has “the right
to have removed from any [installation] site any employee agent, subcontractor or subcontractor of contractor who violates” certain rules of conduct. (See Silverman Dec. Ex.
1 at III.F.) That is, Time Warner has the power to “de-authorize” any Metro technician
from installing Time Warner services at customers’ home while employed by Metro. But
it is undisputed that a Metro technician whom Time Warner has prohibited from perform
installation work while employed by Metro may continue working for Metro in some
other capacity, say as a dispatcher or warehouse worker, or leave Metro and later perform
installations while working as a technician for another company. (See Pl.’s 56.1 Stat. ¶¶
31, 34, 91.) Hence Time Warner’s decision to de-authorize a given Metro technician
from doing installation work while employed by Metro is not the same as a decision to
16
either (a) prevent a Metro technician from working for Metro altogether; or (b) prevent a
Metro technician from working for another service company that does installation work
for Time Warner. It is difficult to describe a decision by Time Warner that has neither
consequence as equivalent to a decision to fire a Metro technician.
Plaintiffs, however, appeal to the common sense notion that Metro has no reason
to continue employing technicians who cannot perform installations or whom Time
Warner—its sole source of revenue—finds problematic. Thus Plaintiffs argue that by
preventing a given Metro technician from performing installation work while employed
by Metro or informing Metro that a given technician has failed quality control metrics,
Time Warner can effectively eliminate any reason for Metro to continue employing a
given technician. In other words, like the plaintiffs in Jacobson, Plaintiffs argue that
“[b]ecause the Installation Companies have virtually no positions for a technician to fill
other than performing installation work for Comcast, de-authorization in effect
constitutes ‘firing.’” Jacobson, 740 F. Supp. 2d at 689.
Time Warner notes that the Jacobson court rejected that argument. Indeed, the
court found that the first Carter factor did not weigh in favor of joint employment
because it was “only in the context of quality control . . . that Comcast exercises power
over the hiring or firing of technicians.” Id. at 689-90; accord Lawrence, 2011 WL
666304 at *9. But it is unclear why that makes a difference. For one thing, since poor
performance seems like one of the most common reasons for firing an employee,
recognizing an exception for the de facto power to fire for poor performance would
threaten to swallow the rule. For another, “[c]ontrol may be restricted, or exercised only
occasionally, without removing the employment relationship from the protections of the
17
FLSA, since such limitations on control do not diminish the significance of its existence.”
Herman, 172 F.3d at 139 (quotation marks omitted). If Time Warner has the de facto
power to fire Metro technicians for poor performance, whether or not Time Warner has
the de facto power to fire Metro technicians for reasons unrelated to their performance
would not necessarily “diminish the significance” of the power it does have.
The problem for Plaintiffs is that their economic reality argument has more to do
with theory than reality. The only evidence in the record regarding Time Warner’s
decision to remove Metro technicians from the list of persons authorized to perform
installations indicates that Time Warner did so only in the case of a handful of
technicians out of the hundreds Metro employed. (See Defs.’ 56.1 Stat. ¶ 32.) Nor is
there any evidence in the record that Time Warner ever asked, let alone demanded, that
Metro actually fire any technician. Plaintiffs point to several e-mails in which Time
Warner personnel have inquired with Metro regarding individual technicians who
performed poorly on quality control assessments. (See Asher Dec. Exs. 61-62.) Yet, as
Time Warner points out, these e-mails merely show that Time Warner asked Metro what
actions would be taken regarding a poorly performing technician.
It is true that Time Warner’s economic leverage might have led Metro to conclude
that it could not afford the risk of any action short of firing a problematic technician even
if Time Warner had not explicitly demanded as much. But there is no evidence in the
record that Metro terminated any employee about which Time Warner specifically
complained, never mind that Metro did so as a matter of course. On the contrary, e-mails
show that Metro personnel told Time Warner that “more information is needed when
doing an analysis to grade a technician”; that “numbers on the[ir] own stand no merit”;
18
and that one of the technicians about whom Time Warner inquired was actually “a very
good tech.” (See Asher Dec. Ex. 61; Silverman Dec. Ex. 28.) That record undermines
Plaintiffs’ suggestion that a complaint from Time Warner was an order to fire.
Plaintiffs also point to Metro General Manger Bill Baker’s testimony regarding a
message to Metro technicians in which he stated that “they,” meaning Time Warner,
“will not want any tech that doesn’t ground,” a process designed to reduce dangerous
electrocution risks, “properly in their system” and that the technicians “know what that
means to [them].” (See Asher Dec. Ex. 2 at 229.) However, as the testimony itself
makes clear, Baker did not testify that he would terminate any technician who was
removed from Time Warner’s system for failing to ground. Baker merely testified that,
whether or not Time Warner had de-authorized such a technician, Metro itself would as a
matter of course terminate any employee who failed to ground because Time Warner
would not want such an employee to enter customers’ homes. It is hardly an admission
that Time Warner had the power to fire Metro technicians to say that Metro would
terminate technicians who posed a safety risk to customers of its only client and proved
unable to comply with standards of service that client had identified as important.
In short, this case is far afield from Barfield where it was undisputed that
“Bellevue had the undisputed power to hire and fire at will agency employees referred to
work on hospital premises. . . .” Barfield, 537 F.3d at 144. On the contrary, considering
the record as a whole, it is clear that Time Warner had no power to hire or fire any Metro
technician but instead had the more limited power to de-authorize a technician.
Accordingly, the first Carter factor does not support a finding that Time Warner jointly
employed Metro technicians.
19
b.
Work Schedules and Conditions
The second factor relevant to formal control is whether the putative joint
employer “supervised and controlled employee work schedules or conditions of
employment,” Carter, 735 F.2d at 12.
It is undisputed that Metro technicians receive job assignments as follows. Time
Warner receives requests to install Time Warner cable services. Based on those requests,
Time Warner creates work orders identifying the customer who has made the order, the
services required, and the time window in which the customer has requested that the
services be performed. (See Pl.’s 56.1 Stat. ¶ 74.) Time Warner provides the work
orders to Metro. (See Pl.’s 56.1 Stat. ¶ 73.) However, Time Warner does not provide any
instructions as to how Metro should assign technicians to perform the work orders. (See
Pl.’s 56.1 Stat. ¶ 75.) Rather, Metro personnel organize the work orders into routes and
assign those routes to Metro technicians each morning. (See Pl.’s 56.1 Stat. ¶¶ 76-78.) It
is further undisputed that Metro tells its technicians when to report in the morning; that
technicians contact Metro if they are running late or will be absent; and that no Plaintiff
ever contacted Time Warner about those issues. (See Pl.’s 56.1 Stat. ¶¶ 70-72.)
Accordingly, the undisputed facts appear to demonstrate that Metro rather than Time
Warner “supervised and controlled employee work schedules.”
Plaintiffs argue that a technician’s “day is fully controlled by TWCNYC’s time
windows” in which Time Warner expects Metro to complete installation jobs. (Pl.’s
Opp’n at 10.) That argument ignores the difference between affecting and supervising or
controlling. To be sure, the fact that Time Warner tells Metro to perform certain jobs at
certain times affects when technicians perform those jobs; if Time Warner does not send
20
Metro any work orders for jobs between 3 and 4 p.m., no Metro technicians will work
during those hours. However, if Time Warner does send Metro work orders for jobs
between 3 and 4 p.m., Metro, not Time Warner, decides which technicians will work on
which job and whether a technician will work on any jobs in that period at all. In fact,
plaintiff Pinareyes testified that on some days, Metro did not assign him any routes and
the earlier he arrived at work, the better chance he had to get a route. (See Silverman
Dec. Ex. 48 at 136-37.) That testimony makes clear that Time Warner did not determine
whether or when Metro technicians worked. See Smilie, Slip. Op. at 6 (“Comcast simply
gave Frontline work pursuant to the contract, work that Frontline was free to perform
using whatever staffing manner it chose.”); Cf. Moreau v. Air France, 356 F.3d 942, 950
n.5 (9th Cir. 2004) (Air France did not control schedules of contract personnel servicing
planes on the tarmac where Air France “schedule[d] its flight . . . which necessarily
indicated when the services were to be performed” but contractors “remained responsible
for designating which employees would report to service the aircraft”).
Nor did Time Warner supervise or control Metro technicians’ “conditions of
employment.” In Zheng I, the Second Circuit cautioned that “the degree to which the
defendants supervise the plaintiffs’ work . . . can be misinterpreted to encompass run-ofthe-mill subcontracting relationships.” Zheng I, 355 F.3d at 74. Hence while “the law
does not require an employer ‘to look over his workers’ shoulders every day in order to
exercise control,’” Barfield, 537 F.3d at 147 (quoting Brock v. Superior Care, Inc., 840
F.2d 1054, 1060 (2d Cir. 1988)), “supervision with respect to contractual warranties of
quality and time of delivery has no bearing on the joint employment inquiry, as such
21
supervision is perfectly consistent with a typical, legitimate subcontracting arrangement.”
Zheng I, 355 F.3d at 75.7
That admonition undercuts Plaintiffs’ argument that Time Warner’s “Quality
Control inspectors . . . function as de facto supervisors of the Metro technicians.” (Pl.’s
Opp’n at 35). Plaintiffs go to great lengths to show that sixteen full-time Time Warner
personnel conduct 800-900 random quality control assessments per week on what
amounts to some 4% of all jobs; that Time Warner contracts to obtain real-time feedback
regarding Metro installations directly from Time Warner customers; that Time Warner
uses its assessments and the ECHO results to compile extensive and detailed data
regarding these assessments; and that Time Warner provides this data to Metro and
discusses it with Metro in monthly meetings. (See Pl.’s 56.1 Stat. ¶¶ 86-88, 90, 92-94,
96-97; 141-154). However, all of this evidence shows that Time Warner makes efforts to
ensure that Metro is providing quality service; the evidence does not show that Time
Warner controls the day-to-day manner in which technicians provide that service. Cf.
Jacobson, 740 F. Supp. 2d at 691 (“Comcast’s quality control procedures ultimately stem
from the nature of their business and the need to provide reliable service to their
7
It is true that the Second Circuit made these statements in expounding upon the fifth
functional Zheng factor rather than the second formal Carter factor. But it would be
strange if quality supervision “has no bearing” on “the degree to which the [putative joint
employer] or [its] agents supervised plaintiffs’ work,” Zheng I, 355 F.3d at 74, but
nevertheless were relevant in determining whether a defendant “supervised and
controlled employee work schedules or conditions of employment,” Carter, 735 F.2d at
12. Indeed, the Second Circuit’s statement in Zheng I that “extensive supervision weighs
in favor of joint employment only if it demonstrates effective control of the terms and
conditions of plaintiff’s employment,” Zheng I, 355 F.3d at 75 (emphasis added),
strongly suggests that the two inquiries are largely the same. Thus the Court will apply
the second Carter factor bearing in mind the Second Circuit’s admonition that
“supervision with respect to contractual warranties of quality and time of delivery has no
bearing on the joint employment inquiry. . . .” Id.
22
customers, not the nature of the relationship between the technicians and Comcast.”);
accord Lawrence, 2011 WL 666304 at *9; Smilie, Slip. Op. at 7 (“Comcast’s requiring
Frontline (and its contract technicians) to meet Comcast’s quality standards is not an
indication of control and is entirely consistent with the role of a contractor who is hired to
perform highly technical duties.”) (internal citation omitted).
Plaintiffs make much of the fact that Metro used the quality control assessments
in disciplining technicians. That is hardly surprising; indeed, it would be strange if Metro
ignored reports regarding its employees’ performance. However, the fact that Metro used
data from Time Warner in making decisions about its employees’ conditions of
employment does not mean that Time Warner controlled those conditions where there is
no evidence that any Time Warner directly contacted any Metro technician regarding the
results of any quality control assessment or was present when any Metro technician was
disciplined. Nor is there any evidence that Time Warner instructed Metro to take any
particular disciplinary action or provide any particular assistance to any Metro technician
on the basis of a quality control assessment. At most, the evidence shows that Time
Warner provided the results of quality control assessments to Metro, discussed them on a
general level in monthly meetings, and occasionally inquired about what Metro planned
to do about the worst performing technicians. That evidence cannot justify an inference
of joint employment.
There is also evidence that Time Warner played a limited role in training Metro
technicians. For example, Time Warner personnel were present at, participated in, and
provided materials for some training sessions regarding customer care and new
equipment. (See Pl.’s 56.1 Stat. ¶ 41; Asher Dec. Exs. 57, 59.) And Time Warner sent
23
Metro “Tech Tips” and other training communications that Metro distributed to
technicians. (See Asher Dec. Exs. 44-48; Pl.’s 56.1 Stat. ¶ 126; Silverman Dec. Ex. 43 at
53-54.) However, “even if [Time Warner]’s actions in specifying the work to be
performed” and indirectly communicating those specifications to Metro technicians “do
constitute some control over the work or working conditions of the employee,” that does
not mean that “a joint employment relationship is necessarily formed. . . .” Moreau, 356
F.3d at 951. There is no evidence that Time Warner employees participated in Metro
technicians’ initial training, or were present at any time other than during random quality
control assessments when Metro technicians performed installations. (See Pl.’s 56.1 Stat.
¶¶ 42-44.) On the contrary, it is essentially undisputed both that trainee technicians
shadowed Metro technicians rather than Time Warner personnel and that Metro foremen,
not Time Warner personnel, provided assistance and retraining to poorly performing
Metro technicians. (See id. ¶¶ 43, 45.)
Finally, Plaintiffs point to evidence that Metro technicians communicate with
Time Warner while performing their work. For example, Metro technicians may contact
Time Warner if they have difficulty installing a modem; if a customer asks to make
changes to the Time Warner service he or she has ordered; if a customer is not at home;
or if the technician encounters difficulties accessing the premises. (Pl.’s 56.1 Stat. ¶ 80.)
Yet this is not evidence that Time Warner controls how Metro technicians do their jobs; it
is merely a function of the fact that Metro technicians install Time Warner cable. It would
be quite unusual if a service provider never had any contact with its client, and the
existence of such contact does not support an inference of supervision and control.
24
In sum, the undisputed facts demonstrate that Time Warner did not control Metro
technicians’ work schedules. Plaintiffs’ evidence regarding Time Warner’s quality
control assessments cannot establish control of work schedules or conditions of
employment under the law of this Circuit. And while Time Warner did play some
minimal indirect role beyond quality control in the ongoing training of Metro technicians,
the second Carter factor weighs strongly in the other direction.
c.
Rate and Methods of Payment
The third factor relevant to formal control is whether the putative joint employer
“determined the rate and method of payment,” Carter, 735 F.2d at 12. It is undisputed
that the agreement between Metro and Local 3 provides for a regular eight hour day and a
40 hour work week; fixed hourly rates of compensation for work during those regular
hours; “time and a half” rates for overtime work and work on holidays; and double rates
for work on Sundays. (See Pl.’s 56.1 Stat. ¶ 37; Silverman Dec. Ex. 10.) It is further
undisputed that Time Warner is not a party to the agreement between Metro and Local 3
and played no part in negotiating it. (See Pl.’s 56.1 Stat. ¶ 36.) And it is also undisputed
that Metro technicians were paid by Metro with paychecks containing a Metro logo; that
these payments were reflected on W-2 forms issued by Metro; and that no plaintiff ever
received any payment from Time Warner. (See Pl.’s 56.1 Stat. ¶ 39.) These undisputed
facts would seem to weigh strongly in favor of finding that Time Warner did not
determine Metro technicians’ “rate and method of payment.” Cf. Jacobson, 740 F. Supp.
2d at 692.
Plaintiffs, however, argue that “[t]he rates technicians are paid are wholly
dependent on the rates TWCNYC pays to Metro.” (Pl.’s Opp’n at 12.) The argument
25
runs as follows. Time Warner assigns a billing code to each installation job depending on
the type of work performed. Those billing codes appear on the work orders for each job
along with the technician number of the technician assigned to the job. Metro technicians
submit these work orders to Time Warner after completing each job. Time Warner uses
these work orders to assess whether Metro has accurately calculated in its weekly
invoices the number of jobs that Metro technicians have completed. Time Warner
reconciles these numbers and deducts jobs that Time Warner does not believe have been
correctly performed. And, according to Plaintiffs, if Time Warner charges back a given
job, Metro does not pay the technician for that job. Thus Time Warner’s decisions
purportedly affect whether a Metro technician gets paid for a given job.
The problem for Plaintiffs is that there is no competent evidence that (a) Metro
does not pay technicians for jobs that Time Warner charges back to Metro or (b) that
Time Warner instructs Metro to do so. Baker has submitted a sworn affidavit averring
that “Metro does not pass the charge-back on to a technician for an installation that is not
completed according to TWCNYC’s specifications.” (See Aff. of J.W. Baker Jan. 25,
2011, ¶ 3.) In opposition to Baker’s statement, Plaintiffs submit only (1) a conclusory
statement by a Metro technician that “Metro’s pay of its techs is controlled by
TWCNYC” (see Asher Dec. Ex. 16, Aff. of L. Barco, Dec. 6, 2010 ¶ 9; see also id. ¶ 5),
and (2) a statement by another technician that Baker told him that Metro changed the rate
that it pays Metro technicians for certain jobs when Time Warner changed the billing
codes for those jobs (see Asher Dec. Ex. 60, Aff. of R. Santana, Dec. 17, 2010, ¶¶ 47-53).
The first statement cannot defeat summary judgment and the latter makes a very different
26
argument regarding how Metro provides additional per-job compensation, not how Metro
compensates its technicians on an hourly basis—the focus of the FLSA and this suit.
It is true that the Second Circuit in Barfield recognized that a putative joint
employer who pays a contractor based on the number of hours the contractor’s employees
work has an effect on the amount that the contractor will pay those employees per hour.
And this might be a different case if Time Warner calculated the number of hours that
Metro technicians worked and paid Metro for those hours, and then Metro used those
calculations to pay its technicians. In those circumstances, Time Warner’s “calculations”
would have “conclusively determined the number of hours for which [the technicians]
would be paid” and the hourly rate that Time Warner paid Metro would have “effectively
set a cap on the hourly rate” that Metro would pay the technicians. Barfield, 537 F.3d at
145 (reasoning that hospital that calculated nurses’ hours and paid referral agencies based
on those calculations “exerted some control over [the plaintiff nurse]’s pay”).8
But Time Warner never calculates Metro technicians’ hours or compensates
Metro based on those calculations. On the contrary, the crux of Plaintiff’s argument is
that Time Warner’s rates per job effectively determines how much Metro paid its
technicians in addition to the hourly and overtime rates set by the agreement between
Metro and Local 3. Yet what Time Warner paid Metro for a given job no more
determines what Metro pays technicians per hour than customers who buy a given
product determine how the companies who produce the product pay the employees who
actually make it. To be sure, any company A that provides revenue to company B affects
what company B pays its employees, but the test is whether a putative joint employer
8
Nevertheless, the Barfield court concluded that such a fact pattern “does not tilt
decisively either way” for purposes of a Carter analysis. Barfield, 537 F.3d at 145.
27
determines pay rates, not whether it affects them. To infer joint employment from the
latter “would dramatically expand the FLSA to subsume traditional independent
contractor relationships.” Jacobson, 740 F. Supp. 2d at 692. Accordingly, the third
Carter factor weighs against finding that Time Warner jointly employs Metro
technicians.
d.
Records
The fourth factor relevant to formal control is whether the putative joint
employer “maintained employment records.” Carter, 735 F.2d at 12. It is undisputed
that Time Warner does not maintain personnel files for individual employees, time
sheets, pay stubs, or government employment forms. Further, it is undisputed that, unlike
the defendant in Barfield, Time Warner never “maintained employment records on the
matter most relevant to overtime obligations under the FLSA: the hours worked” by
individual Metro technicians. Barfield, 537 F.3d at 144 (emphasis added).
Time Warner does receive from Metro lists of Metro technicians and their
technician numbers—numbers which also appear on work orders that Metro technicians
submit after completing installation jobs. Further, the fact that Time Warner compiles
quality control data on individual technicians suggests that Time Warner is in possession
of raw data regarding how many jobs—as opposed to hours—an individual technician
has completed. Moreover, through its automated systems, Time Warner is aware of when
a technician has started and completed a given job. Hence, in theory, Time Warner
could make assumptions as to an installer’s travel time and roughly calculate how many
hours an individual technician has worked each day. But there is no evidence that Time
28
Warner does so. Nor is there any evidence that Time Warner maintains records designed
to track how many jobs an individual technician completes.
Instead, the record shows that, at most, such data appeared on quality control
records that Time Warner provided to Metro or in the aggregate on documents that Time
Warner used to verify that Metro correctly calculated the amount of work that Metro
technicians actually performed. (See Asher Dec. Exs. 23, 24, 29, 30, 31.) However,
because Metro is not required to notify Time Warner when it fires a technician (see Pl’s
56.1 Stat. ¶ 24) and can assign a substitute technician the same technician number but
only occasionally updates lists identifying the name of the technician assigned to each
number (see Asher Dec. Ex. 2 at 26-27), it is far from clear that Time Warner’s data
regarding technician codes actually corresponds to data on any individual technician.9
Hence this is not a case where a putative joint employer “signs off on” time sheets
completed by each plaintiff, “verif[ies] the number of hours worked by each” plaintiff
and “then provides records of the hours worked” to the plaintiff’s contractor employer
who uses the records to compensate the plaintiff on a per-hour basis. Barfield, 537 F.3d
at 136. Rather, this is a case where Time Warner maintains data that might be used to
determine how much a plaintiff worked as a byproduct of calculating how often that
plaintiff performed his work well.
9
Take the following example. Metro fires technician A with number 8706 on June 15,
hires technician B on June 16, and assigns him number 8706. Time Warner does not
receive an updated technician list until July 1. In that case, Time Warner could not know
until that time whether technician A or technician B completed the jobs associated with
number 8706. In fact, if the technician list did not indicate when technician B began
using number 8706—and there is no evidence that the list indicated as much—Time
Warner might never know whether the June jobs were completed by technician A or
technician B.
29
Jacobson is instructive in that regard. In that case, Comcast, like Time Warner
here, maintained “arrival and departure data for each cable technician” and “lists of cable
technicians and their employment status,” among other information. Jacobson, 740 F.
Supp. 2d at 692. Where there was “no evidence to indicate that maintenance of this type
of information [wa]s used to control a technician’s day to day employment, or that
Comcast retain[ed] records for any purpose beyond quality control,” the court found that
retaining such “records is only an extension of Comcast’s control procedures . . . . to
ensure that Comcast receives the services for which it is entitled, and that the individuals
fulfilling them are authorized to do so.” Id.; accord Lawrence, 2011 WL 666304 at *9.
That reasoning is persuasive. It would be strange if “supervision with respect to
contractual warranties of quality and time of delivery has no bearing on the joint
employment inquiry,” Zheng I, 355 F.3d at 75, but records created as part of that
supervision weighed in favor of finding joint employment. Since Time Warner’s records
correlating Metro technician numbers with particular installation jobs do not translate
into Metro technicians’ per hour compensation but are instead maintained largely as part
of Time Warner’s quality control process, those records do not weigh in favor of finding
that Time Warner jointly employs the technicians.
e.
Conclusion
In sum, the first, third, and fourth Carter factors weigh against finding that Time
Warner jointly employed Metro technicians and the second Carter factor weighs almost
entirely in the same direction. While there is evidence that Time Warner conducted
minimal supervision beyond quality control and that Metro technicians communicated
with Time Warner in certain circumstances, this evidence alone cannot sustain the
30
conclusion that Time Warner “possessed the power to control the workers in question”
where the other Carter factors negate that conclusion. Herman, 172 F.3d at 139. Rather,
the undisputed facts demonstrate that Time Warner did not exercise “formal control” over
Metro technicians. Barfield, 537 F.3d at 143.
2. Functional Control
That is not the end of the matter, however, because “in certain circumstances, an
entity can be a joint employer under the FLSA even when it does not hire and fire its joint
employees, directly dictate their hours, or pay them.” Zheng I, 355 F.3d at 70. The Court
must therefore apply the six factors the Second Circuit identified in Zheng as well as any
other factors that appear relevant to determine whether Time Warner exercised functional
control over Metro technicians as a matter of “economic reality.”
a.
Premises and Equipment
The first Zheng factor is “whether [the putative joint employer]’s premises and
equipment were used for the plaintiffs’ work,” id. at 72. This factor “is relevant because
the shared use of premises and equipment may support the inference that a putative joint
employer has functional control over the plaintiffs’ work.” Id. Nevertheless, the Second
Circuit has cautioned that “shared premises” are not “anything close to a perfect proxy
for joint employment (because they are . . . perfectly consistent with a legitimate
subcontracting relationship). . . .” Id.
The record shows that Metro technicians visit Time Warner’s premises only once
per year to pick up their identification cards at Time Warner’s facility. (See Pl.’s 56.1
Stat. ¶ 64.) And it is undisputed that Metro, not Time Warner, provides Metro
31
technicians with tools, radios, uniforms, and, in some cases, trucks. (See id. ¶¶ 48-52, 5960, 65-69.)
Plaintiffs make several efforts to overcome this strong evidence that Metro
technicians do not use Timer Warner’s premises and equipment. First, Plaintiffs argue
that Metro technicians work in Time Warner’s customers’ homes. (See Pl.’s Opp’n at
30.) That argument makes no sense because a home belongs to the customer, not Time
Warner.
Second, Plaintiffs argue that Metro technicians install equipment that belongs to
Time Warner. (See id.) That argument proves too much. Metro technicians who connect
cables to Time Warner cable boxes no more “use” those boxes than garment workers use
pieces of fabric. The cable boxes and fabric are not tools used to complete the service or
finish the product; they are uncompleted versions of the service or product. Yet if
finishing a product weighed in favor of finding that the producer of the product jointly
employs the person finishing it, then any company that outsourced any phase of
production would jointly employ anyone who did any work on the product. That result
cannot follow from applying a test that “ensures that the statute is not interpreted to
subsume typical outsourcing relationships.” Zheng I, 355 F.3d at 76.
Finally, Plaintiffs point to evidence that Time Warner provides Metro technicians
with “lock box keys.” (See Def.’s 56.1 Stat. ¶ 53.) However, the fact that Time Warner
provides that lone piece of equipment is overwhelmingly outweighed by what Time
Warner does not provide and the fact that Metro technicians visit Time Warner facilities
only once per year. Accordingly, the first Zheng factor weighs against finding that Time
Warner jointly employs Metro technicians.
32
b.
Whether the Contractor Shifts as a Unit
The second Zheng factor is “whether the Contractor Corporations had a business
that could or did shift as a unit from one putative joint employer to another,” Zheng I, 355
F.3d at 72. This factor “is relevant because a subcontractor that seeks business from a
variety of contractors is less likely to be part of a subterfuge arrangement than a
subcontractor that serves a single client.” Id. Nevertheless, the Second Circuit has
cautioned that “the absence of a broad client base,” like “shared premises,” is not
““anything close to a perfect proxy for joint employment (because they are both perfectly
consistent with a legitimate subcontracting relationship). . . .” Id.
It is undisputed that, during the period at issue in this case, Metro technicians
performed work only for Time Warner. Hence the second factor might appear to weigh
in favor of finding that Time Warner jointly employed Metro technicians.
However, the Second Circuit has described the second factor as “whether the
Contractor Corporations had a business that could or did shift as a unit from one putative
joint employer to another,” Zheng I, 355 F.3d at 72 (emphasis added). And the
undisputed evidence shows that, as Time Warner argues, “Metro has its own resources (a
warehouse, tools, vehicles, and a cadre of employees) and can seek work from any other
cable company at any time.” (Defs.’ Br. at 45.) Moreover, Metro in the past provided
installation services for another cable company in New York, Cablevision, as well as
Dish Network in Florida.
Plaintiffs do not contest this point as a factual matter. Rather, they argue that the
Second Circuit in Barfield held that a defendant cannot lay claim to the second factor by
showing only that a contractor could shift its business to another putative joint employer.
33
Barfield involved an action by a nurse who worked for Bellevue Hospital through a
referral service. Bellevue argued that the second Zheng factor could not be decided
against it as a matter of law because it “did not concede that it was hospital policy to
require the referral agencies to assign the same workers for extended periods of time.”
Barfield, 537 F.3d at 147. The Second Circuit held that the defendants’ argument “fails
because they point to no record evidence indicating that agency health care workers
comprised units that shifted from hospital to hospital” and could not “refute that Barfield
herself was referred only to Bellevue and not to any other hospital.” Id. In that situation,
“the second Zheng factor [i]s established in favor of plaintiff as a matter of law.” Id. at
147-48.
The Court is not persuaded that the Barfield court intended its statement that
“Barfield herself was referred only to Bellevue and not to any other hospital” to mean
that a putative defendant employer must show that the plaintiff actually shifted from one
employer to another. It would not have made sense for the Second Circuit to interpret the
second factor that way when the Zheng court had listed “whether plaintiffs worked
exclusively or predominantly for [the putative joint employer]” as a separate factor.
Zheng I, 355 F.3d at 72. Indeed, the Second Circuit’s decision in Zheng I specifically
noted that while the second factor “overlaps substantially” with the sixth factor, “[t]he
factors are not identical . . . and capture different aspects of a business relationship’s
‘economic reality.’” Id. at 75 n.12. In particular, the court noted that “factor (6), but not
factor (2), would weigh in favor of joint employment if a subcontractor worked solely for
a single client but had the ability to seek out other clients at any time.” Id. (emphasis
added). The parties agree that is the case here. Accordingly, the second Zheng factor
34
does not weigh in favor of finding that Time Warner jointly employed Metro
technicians.10
c.
Whether Plaintiffs Have Discrete Line Jobs
The third Zheng factor is “the extent to which plaintiffs performed a discrete linejob that was integral to [the putative joint employer]’s process of production,” Zheng I,
355 F.3d at 72. “Interpreted broadly, this factor could be said to be implicated in every
subcontracting relationship, because all subcontractors perform a function that a general
contractor deems ‘integral’ to a product or service.” Id. at 73 (emphasis in original).
However, the Second Circuit has “not interpret[ed] the factor quite so broadly.” Id.
Rather, the Court of Appeals has recognized a spectrum spanning from, on one end,
“piecework on a producer’s premises that requires minimal training or equipment, and
which constitutes an essential step in the producer’s integrated manufacturing process,”
and, on the other end, “work that is not part of an integrated production unit, that is not
performed on a predictable schedule, and that requires specialized skills or expensive
technology.” Id.
10
Indeed, this case is different from Barfield. There, “[a]fter making arrangements with
a referral agency for temporary certified nursing assistants, Bellevue generally
contact[ed] the referred individuals directly to advise as to the shifts that [would] likely
need coverage” and “require[d] temporary nursing assistants to call the hospital two
hours before the start of the identified shifts to determine whether their services [were], in
fact, required.” Barfield, 537 F.3d at 136. Thus Bellevue transacted with individual
plaintiff nurses rather than with the referral agency, and that structure enabled Bellevue to
exercise control when it obtained plaintiff’s services. In other words, the fact that the
plaintiff did not work for other hospitals was the result of Bellevue’s actions towards her.
Here, however, Time Warner transacts with Metro technicians as a unit: it contracts with
Metro, sends Metro work orders, and lets Metro assign individual technicians to complete
those work orders. In those circumstances, where Time Warner does nothing to prevent
Metro from contracting to assign technicians to other cable companies, the fact that the
Plaintiffs do not work for other companies is not the result of Time Warner’s actions
towards them. Accordingly, that fact adds nothing to any inference of control.
35
As these statements suggest, and as Plaintiffs concede (see Pl.’s Opp’n at 33), the
third factor might apply with somewhat less vigor where, as here, the parties are engaged
in providing a service rather than manufacturing a product. Nevertheless, there is little
reason not to remain “mindful of the substantial and valuable place that outsourcing,
along with the subcontracting relationships that come with outsourcing, have come to
occupy in the American economy.” Id. at 73. Nor does there appear any reason why, to
the extent that the third Zheng factor does apply, “both industry custom and historical
practice should be consulted” since “insofar as the practice of using subcontractors to
complete a particular task is widespread, it is unlikely to be a mere subterfuge to avoid
complying with labor laws.” Id.
That is so here. Several reported cases cited by the parties demonstrate that
numerous cable companies across the country contract with installation companies in
much the same way that Time Warner contracts with Metro. See Keeton, 2011 WL
2618926; Lawrence, 2011 WL 666304; Jacobson, 740 F. Supp. 2d 683; Smilie v.
Comcast Corp., No. 07-CV-3231 (N.D. Ill.) (Slip Op., Feb. 25, 2009); Santelices v. Cable
Wiring and South Fla. Cable Contractors, Inc., 147 F. Supp. 2d 1313 (S.D. Fla. 2001);
Herman v. Mid-Atl. Installation Servs., Inc., 164 F. Supp. 2d 667 (D. Md. 2000).
Plaintiffs cite Zheng for the proposition that “the very prevalence of a custom may
‘be attributable to widespread evasion of labor laws.” Zheng I, 335 F.3d at 73-74. True
enough, but that possibility does not correspond with the reality that the mine run of other
courts has not found that cable companies jointly employ installation technicians who
work for contractors. That suggests that Time Warner’s agreement with Metro “is
unlikely to be a mere subterfuge to avoid complying with labor laws.” Id. at 73. Thus
36
the most Plaintiffs can say is that the third factor does not necessarily weigh against joint
employment.11
d.
Whether the Contractors are Fungible
The fourth Zheng factor is “whether responsibility under the contracts could pass
from one subcontractor to another without material changes,” Zheng I, 355 F.3d at 72.
“[T]his factor weighs in favor of a determination of joint employment when employees
are tied to an entity . . . rather than to an ostensible direct employer. . . .” Id. Conversely,
where “employees work for an entity (the purported joint employer) only to the extent
that their direct employer is hired by that entity, this factor does not in any way support
the determination that a joint employment relationship exists.” Id.
Plaintiffs argue that “all three of [Time Warner’s] contractors do the same work
and must follow the same specifications dictated by TWCNYC.” (Pl.’s Opp’n at 34.)
However, as Time Warner points out, the Second Circuit has stated that if the fourth
factor “weigh[ed] in favor of joint employment when a general contractor uses numerous
subcontractors who compete for work and have different employees,” the fourth factor
“would classify nearly all subcontracting relationships as joint employment
relationships—a result that finds no support either in the law or in our country’s
practices.” Zheng I, 355 at 74 n.11 (emphasis in original). Thus the fourth factor asks
not whether all of the putative joint employer’s contractors do the same work but
whether, if the putative joint employer hired one contractor rather than another, “the same
11
Nevertheless, “Zheng contemplates arrangements under which the totality of
circumstances demonstrate that workers formally employed by one entity operatively
function as the joint employees of another entity, even if the arrangements were not
purposely structured to avoid FLSA obligations.” Barfield, 537 F.3d at 146.
37
employees would continue to do the same work in the same place.” Id. at 74 (emphasis in
original).
There is no evidence that Metro technicians would continue installing Time
Warner cable if Time Warner severed its relationship with Metro. Since the undisputed
evidence shows that, rather than hiring technicians, Time Warner hires contractors who
hire technicians, all the evidence suggests that “when an Installation Company dissolves,
technicians wishing to continue working on behalf of [Time Warner] are required to
apply and be hired for a position from another Installation Company.” Jacobson, 740 F.
Supp. 2d at 693. Accordingly, the evidence suggests that Metro technicians work for
Time Warner “only to the extent that their direct employer is hired by that entity,” Zheng
I, 355 F.3d at 72. The fourth Zheng factor therefore weighs against finding that Time
Warner jointly employs Metro technicians.
e.
Supervision
The fifth Zheng factor is the degree to which the [putative joint employer] or [its]
agents supervised plaintiffs’ work,” Zheng I, 355 F.3d at 72. As set forth above with
respect to the second Carter factor, to the extent that Time Warner supervised Metro
technicians, it did so almost entirely “with respect to contractual warranties of quality and
time of delivery” that have “no bearing on the joint employment inquiry.” Zheng I, 355
F.3d at 75. True, there is evidence that Time Warner supervised Metro technicians in
some minimal capacity. But on balance, even considering all of the evidence in the light
most favorable to Plaintiffs, the fifth Zheng factor weighs almost entirely against finding
that Time Warner jointly employed Metro technicians.
38
f.
Whether the Contractor Works Exclusively or
Predominately for One Company
The sixth Zheng factor is “whether plaintiffs worked exclusively or predominantly
for [the putative joint employer].” Zheng I, 355 F.3d at 72. The parties do not dispute
that, during the time period at issue in this case, Metro technicians performed
installations only for Time Warner. Accordingly, this factor weighs in favor of finding
that Time Warner jointly employed Metro technicians.
g.
Other Relevant Factors
A district “court is also free to consider any other factors it deems relevant to its
assessment of the economic realities.” Zheng I, 355 F.3d at 72. The parties argue that
several other factors are relevant.
First, Plaintiffs point to the fact that Time Warner and Metro have the same
counsel in this action. They contend that this “raises issues as to what extent Metro is [a]
viable, autonomous entity with meaningful independence from its co-defendant.” (Pl.’s
Opp’n at 40.) Hardly. Plaintiffs cite no authority for the proposition that joint
representation implies joint employment and the Court is aware of none.
Second, both parties make arguments regarding how Metro technicians present
themselves to third parties. Plaintiffs point to evidence that the technicians’ identification
cards name Time Warner as well as Metro and that the technicians refer to Time Warner
in introducing themselves. (Pl.’s Opp’n at 41.) For its part, Time Warner points to
evidence that several of the Plaintiffs have represented to various legal authorities that
Metro is their employer. (Def.’s Br. at 25.)
The Court doubts that evidence of whether a third party has reason to believe that
Time Warner jointly employs Metro technicians is relevant to determining whether that is
39
true as a matter of economic reality. The economic reality test reflects an “overarching
concern” for “whether the alleged employer possessed the power to control the workers
in question.” Herman, 172 F.3d at 139. What a third party has seen or been told has
almost nothing to do with whether Time Warner in fact had such a power. In any event,
even if this factor were relevant, none of the evidence that the parties have advanced with
respect to it changes the balance that weights overwhelmingly against finding that Time
Warner jointly employed Metro technicians.
3. Conclusion
It is true that joint employment is a mixed question of law and fact and that
“[m]ixed questions of law and fact are ‘especially well-suited for jury determination. . .
.’” Zheng v. Liberty Apparel Co., Inc., 617 F.3d 182, 185 (2d Cir. 2010) (“Zheng II”)
(quoting Richardson v. N.Y. State Dep’t of Corr. Serv., 180 F.3d 426, 437 (2d Cir.
1999)). However, this is one case where the Court can “conclude that, even where both
the historical facts and the relevant factors are interpreted in the light most favorable to
plaintiffs, defendants are still entitled to judgment as a matter of law.” Zheng I, 355 F.3d
at 76.
“To reach that conclusion, the Court need not decide that every factor weighs
against joint employment.” Id. at 76-77 (emphasis in original). Nevertheless, the
undisputed facts show that almost every factor weighs against finding that Time Warner
jointly employed Metro technicians. The only factor weighing in favor of that finding is
that Metro technicians only install cable for Time Warner. Hence the question is whether
that fact alone can as a matter of law sustain the conclusion that Time Warner jointly
40
employed Metro technicians. The Court finds three reasons why the answer to that
question is “no.”
First, the Second Circuit has rejected the proposition that “the absence of a broad
client base is anything close to a perfect proxy for joint employment” because it is
“perfectly consistent with a legitimate subcontracting relationship.” Zheng I, 355 F.3d at
72. Rather, the Court have appeals has suggested merely that the fact that a contractor
performs work for only one business can serve “as a starting point in uncovering the
economic realities of a business relationship.” Id.
Second, it seems strange to conclude that Time Warner controls Metro technicians
because Metro contracts only with Time Warner where it is undisputed that Time Warner
does not control whether Metro does so. If Time Warner prohibited Metro from
contracting to provide installation services for any other cable provider, that fact along
with some evidence that Time Warner supervised or otherwise controlled technicians’
conditions of employment would suggest to a greater degree that Metro was separate in
name only. But where there is no evidence that Metro’s contracting with Time Warner
alone is the product of anything other than its own business decision, finding that Time
Warner controlled Metro for that reason alone turns the economic reality test on its head.
Third, consistent with this reasoning, several courts have concluded that cable
companies do not jointly employ contract technicians where the only factor weighing in
favor of a contrary result was the fact that the technicians install cable for only one
service provider. See Adderley, 2011 WL 666304 at * 10 (granting summary judgment
where “[t]he only relevant factor weighing in favor of a joint employment relationship is
the fact that Adderley . . . works exclusively for Cablevision, albeit by its own choice”);
41
Jacobson, 740 F. Supp. 2d at 693 (citing Zheng I and holding that, “by itself, the absence
of a single client base is not a proxy for joint employment”).
In post-briefing letters, Plaintiffs point to Keeton v. Time Warner Cable, Inc., No.
2:09-CV-1095, 2011 WL 2618926 (S.D. Ohio, July 1, 2011), in which the court denied
Time Warner summary judgment on the issue of whether it jointly employed cable
technicians employed by contractors. Keeton, however, is readily distinguishable from
this case.
Noting that “Time Warner does not directly address the factors laid out in
International Longshoremen[’s Association, AFL-CIO, Local Union No. 1937 v. Norfolk
Southern Co., 927 F.2d 900 (6th Cir. 1991)],” the Keeton court held that Time Warner
“had not met [its] burden of establishing that no genuine issue of material fact[] exists as
to whether [it] jointly employed the Plaintiffs with [their contractor], Reno Services.”
2011 WL 2618926, at * 7. The International Longshoremen factors include “(1) the
interrelation of operations between the companies; (2) common management; and (3)
centralized control of labor relations, and common ownership,” 927 F.2d at 902—factors
not identified by the Second Circuit in Zheng. Compare Zheng I, 355 F.3d at 72 (not
listing such factors). Applying these factors, the Keeton court concluded that “[a]
reasonable fact-finder could take the Plaintiffs’ claims as true regarding Time Warner’s
management of Plaintiffs’ daily routes to indicate that the Plaintiffs were both working
under a centralized control of labor relations and [that] Reno Services and Time Warner
had interrelated operations, fulfilling two of the three Int’l Longshoremen factors.” Id. at
*7. Indeed, the Plaintiffs alleged that they “beg[an] their days by reporting to a Time
Warner facility to receive their work orders”; “that once they reported to a Time Warner
42
facility at the beginning of the day, a Time Warner technician would print, organize, and
distribute the work orders among the various installers”; “that they then filled out route
sheets to give to a Time Warner dispatcher before departing to start their routes”; that
they “had to receive permission from the Time Warner dispatcher before they could
change the order in which they filled the work orders assigned to them on a particular
day”; and “that if they had doctor’s appointments, they would inform Time Warner so
that the dispatcher could schedule their route around the appointment.” Id. at *6.
As set forth above, the undisputed evidence here shows just the opposite: Metro
technicians report to work at Metro’s facility, receive work orders organized by Metro,
and report their absences or late arrivals to Metro. No reasonable fact-finder could infer
“interrelation of operations” between Metro and Time Warner or “centralized control of
labor relations” from that evidence. Id. at *7. Hence even taking into account the
factors with respect to which the Keeton court found that the plaintiffs’ evidence created
a material issue of fact, those factors create no such issue here.
43
CONCLUSION
For the foregoing reasons, Time Warner's motion [121] for summary judgment is
GRANTED.
SO ORDERED.
Dated: New York, New York
September~, 2011
\j-:>1 ~--~-~
Richard J. Holwell
United States District Judge
44
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