Okoro v. Pyramid 4 Aegis et al
Filing
42
DECISION AND ORDER signed by Magistrate Judge William E Callahan, Jr on 4/23/12 granting 28 Plaintiff's Motion for Summary Judgment. Scheduling Conference set for 5/10/2012 09:00 AM in Courtroom 242, 517 E Wisconsin Ave., Milwaukee, WI 53202 before Magistrate Judge William E Callahan Jr. (cc: all counsel) (kah)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CATHERINE OKORO,
Plaintiff,
v.
Case No. 11-C-267
PYRAMID 4 AEGIS and
JEROME BATTLES,
Defendants.
DECISION AND ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
I. PROCEDURAL BACKGROUND
On March 16, 2011, the plaintiff, Catherine Okoro (“Okoro”), filed a complaint naming
Pyramid 4 Aegis (“Aegis”) and Jerome Battles (“Battles”) as the defendants. She seeks unpaid
minimum wages, liquidated damages, interest, and attorney fees under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201. et seq., as well as damages for breach of contract (consisting of
$2,000.00 per month for the period of time that she worked for the defendants). In their answer to
the plaintiff’s complaint the defendants assert a counterclaim for interference with contract.
On February 17, 2012, Okoro filed a motion for summary judgment seeking an order from
the court in favor of her FLSA claim and dismissing the defendants’ counterclaim. In their response
brief (filed on March 16, 2012), the defendants assert that they do not object to the court’s dismissing
their counterclaim. However, they oppose Okoro’s motion for summary judgment on her FLSA
claim. On March 30, 2012, Okoro filed her reply brief. Thus, the plaintiff’s motion for summary
judgment is fully briefed and is ready for resolution. For the reasons that follow, the plaintiff’s
motion for summary judgment will be granted.
II. FACTUAL BACKGROUND
Accompanying the plaintiff’s motion was a set of proposed findings of fact to which the
defendants responded. A review of those documents demonstrates the following.
At all relevant times Battles has been the sole owner of Aegis, which is a for-profit company.
Okoro and Battles met in approximately 2008. At that time, Okoro sold worker’s compensation
insurance to Battles.
According to Okoro, she agreed to work for Battles to help him get his business started.
According to Battles, Okoro only agreed to work for Battles if he would have a relationship with her.
Okoro attended five Community Based Residential Training sessions. Two of these sessions
she attended with Battles. According to Battles, Okoro attended these sessions to learn the business
for her own benefit and he never asked her to attend the sessions.
Beginning on June 7, 2009, Okoro began performing work for Battles and Aegis. According
to Battles, the work that Okoro may have performed was done on a voluntary basis, without any
expectation of being paid. According to Battles, Okoro never asked to be paid and Okoro knew that
there was no money with which to pay her.
Each day that Okoro worked, she noted the time that she started work and the time that she
stopped working. Okoro also kept track of the total hours that she worked and recorded all of this
time on a time sheet that she created for the business. According to Battles, he never saw a time
sheet until this litigation started. He neither approved nor signed any time sheet submitted by Okoro.
Furthermore, according to Battles, Okoro never submitted either her time sheet or hours of work to
Paychex for payment.
2
According to Okoro, during the summer and early fall of 2011, her work primarily focused
on getting the business ready to accept clients. According to Battles, any actual work done by Okoro
was voluntary and was not requested by Battles.
According to Okoro, during this time period she worked five hours per day, at least five days
per week, and often on Saturdays as well. According to Battles, Okoro worked no regular hours and
no regular days. Furthermore, according to Battles, Okoro was a full time insurance salesperson and
much of the time spent at the business was in a social relationship with Battles.
According to Okoro, she initially spent a significant amount of time cleaning the facility and
purchasing necessary items for the facility. According to Battles, Okoro spent very little time
cleaning the facility and only purchased small items.
According to Okoro, during this time she spent significant time researching the many
regulations for a residential care facility to ensure that Aegis would be approved to accept a client.
According to Battles, Aegis was approved to accept clients prior to Okoro appearing at the business.
According to Okoro, she also spent time putting processes in place for the smooth running
of the business. For example, she began drafting job descriptions, setting up Paychex for payroll
processing, and hiring the accountant for the business. According to Battles, all job descriptions in
community based residential facilities (“CBRF”) are set by the State of Wisconsin; Okoro did not
have to draft the job descriptions; Okoro may have contacted Paychex to handle the payroll, but
Okoro did not hire an accountant for the business.
According to Okoro, marketing was also an important part of her job. Efforts she took to
market Aegis included: creating a flyer about Aegis; sending the flyer and other information about
the group home to agencies that might refer clients to Aegis; driving to nursing homes, mental health
facilities and placement agencies to solicit for clients; organizing and attending open houses held at
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the facility; connecting Aegis with referral networks; and, making solicitation calls on behalf of the
group home.
According to Battles, Okoro did modify a flyer that was originally drafted by Adrian Wade;
Okoro did send out the flyer to solicit business, but Battles told her not to do so; Battles and Okoro
did walk to some nursing homes but it was often after a date or going out to eat; Okoro did organize
and attend at least one open house; Battles does not know what Okoro is referring to when she claims
that she connected Aegis with referral networks; and Okoro did make some phone calls on behalf of
the business, however, she did so on her own volition.
According to Okoro, in November 2009, the first client came to stay at the facility; Battles
cannot recall when the first client came to the facility.
According to Okoro, once the facility started accepting clients, she increased the hours that
she worked. Starting on November 2, 2009, she began working seven hours per day for five days per
week, and rarely on the weekends. According to Battles, Okoro never worked seven hours per day
for five days per week; Okoro had a full time job as an insurance agent and she had an office on 93rd
and Capitol Drive.
According to Okoro, once the first client came to stay, it was necessary to hire staff to provide
care; she was responsible for interviewing and hiring employees. According to Battles, Okoro
interviewed caregivers but Battles did the hiring.
According to Okoro, she assumed additional responsibilities with the employees. She was
responsible for employee supervision; creating the work schedule for employees; presiding over
employee meetings; confirming hours worked by various employees; submitting the hours to Paychex
for the employees to receive their paychecks; filling in for employees who did not show up for work;
issuing discipline; and, responding to requests for information from the Unemployment Division.
4
Battles admits that Okoro may have checked on caregivers in limited situations; states that
both Okoro and Battles made out work schedules; states that Okoro may have had employee meetings
once or twice on her own volition, and that these meetings consisted of conversations with
employees; states that both he and Okoro confirmed work hours; admits that Okoro submitted the
hours to Paychex for the employees to receive their paychecks; states that Okoro could not fill in for
employees as she was neither certified as a caregiver nor as an administrator; states that Okoro only
issued discipline on one or two occasions, and then she was harsh with one or two of the employees
and Battles had to talk to her about that; and, states that Okoro did respond to the Unemployment
Division on a few occasions.
According to Okoro, with the clients she had additional responsibilities, which included the
following: her being the primary contact with case managers; her being the primary contact with
doctors; her being the primary contact with families and employers of clients in the facility; her
picking up clients from jobs and bringing them to doctors’ appointments; her being the primary
contact with pharmacies and health care agencies for client prescriptions; her picking up client
prescriptions that were not otherwise delivered; and, her shopping for groceries necessary for the
clients.
According to Battles, Okoro would go back to her own insurance office and call a case worker
on occasion; he does not know if she was the primary contact with doctors (caregivers are to contact
doctors if necessary); with regard to contacting families, Battles was the primary contact, the
caregivers were the secondary contact and Okoro may have called the families on occasion; Okoro
rarely, if ever, transported a client because the business contracted with a transportation service;
Adrian Wade contacted pharmacies, Battles contacted the pharmacies, and Okoro shared that
responsibility; Okoro shared with Adrian Wade and Battles the responsibility of picking up client
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prescriptions that were not otherwise delivered; and, Okoro may have stopped for a few groceries on
occasion.
According to Okoro, she acted as a representative for the group home. In this capacity, she
represented Aegis in court for a client who was detained. She also represented Aegis for client
reviews and awards at their jobs. She was also contacted by an attorney on behalf of one of Aegis’s
clients. According to Battles, he is unaware of these facts.
According to Okoro, she continued to perform work for Aegis through May 18, 2010.
According to Battles, Okoro stopped appearing at Battles’s group home on or about May 18, 2010.
According to Okoro, she has never been paid for any of the work that she did for Aegis.
Battles admits this, but asserts that she never asked for pay, never submitted time sheets to either
Battles or Paychex, and was specifically told that there was no money with which to pay her.
Okoro asserts that she is a single mother of four teenage children; that she is solely
responsible for the financial support of her family; and, that at all times she believed that her work
for Aegis would eventually be compensated. According to Battles, Okoro had a full time job working
for Farmers Insurance Company and she was specifically told that she would not be compensated for
any work done at the time when the community based residential facility was operating in the red.
III. SUMMARY JUDGMENT STANDARD
A district court shall grant summary judgment where “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). “Material facts” are those that, under the applicable substantive law, “might
affect the outcome of the suit.” See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
dispute over a “material fact” is “genuine” if “the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Id.
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“[A] party seeking summary judgment always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it
believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). A party asserting that a fact cannot be or is genuinely disputed must support
the assertion by
(A) citing to particular parts of materials in the record, including depositions,
documents, electronically stored information, affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions, interrogatory
answers, or other materials; or (B) showing that the materials cited do not establish
the absence or presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1). However, a mere scintilla of evidence in support of the nonmovant’s
position is insufficient. See Delta Consulting Group, Inc. v. R. Randle Constr., Inc., 554 F.3d 1133,
1137 (7th Cir. 2009).
To determine whether a genuine issue of material fact exists, the court must review the
record, construing all facts in the light most favorable to the nonmoving party and drawing all
reasonable inferences in that party’s favor. See Heft v. Moore, 351 F.3d 278, 282 (7th Cir. 2003)
(citing Anderson, 477 U.S. at 255). “‘[I]n the light most favorable’ . . . ‘simply means that summary
judgment is not appropriate if the court must make a choice of inferences.’” Harley-Davidson Motor
Co., Inc. v. PowerSports, Inc., 319 F.3d 973, 989 (7th Cir. 2003) (quoting Smith v. Severn, 129 F.3d
419, 426 (7th Cir. 1997)).
IV. DISCUSSION
First of all, the defendants have abandoned their counterclaim for tortious interference with
contract and do not oppose the court’s granting summary judgment dismissing such counterclaim.
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Thus, the plaintiff’s motion to dismiss the defendants’ counterclaim will be granted. This then gets
us to the plaintiff’s motion for summary judgment on her FLSA claim.1
The plaintiff claims that she is entitled to be compensated under the FLSA for the work that
she performed for Aegis. She also claims that Aegis and Battles are jointly liable to her for such
compensation. For their part, the defendants argue that any work performed by Okoro was voluntary
and performed without any expectation of monetary compensation. Thus, they argue that any work
she may have performed does not fall under the provisions of the FLSA.
Congress enacted the FLSA to eliminate “in industries engaged in commerce or in the
production of goods for commerce, . . . labor conditions detrimental to the maintenance of the
minimum standard of living necessary for health, efficiency, and general well-being of workers”
because such conditions “(1) cause[] commerce and the channels and instrumentalities of commerce
to be used to spread and perpetuate such labor conditions among the workers of the several States;(2)
burden[] commerce and the free flow of goods in commerce; (3) constitute[] an unfair method of
competition in commerce; (4) lead[] to labor disputes burdening and obstructing commerce and the
free flow of goods in commerce; and (5) interfere[] with the orderly and fair marketing of goods in
commerce.” 29 U.S.C. § 202(a). In general, work constitutes employment when there is an
expectation of in-kind benefits in exchange for services. See Tony & Susan Alamo Found. v. Sec’y
of Labor, 471 U.S. 290, 301 (1985).
The minimum wage provisions of the FLSA apply only to workers who are “employees”
within the meaning of the Act. 29 U.S.C. § 206(a)(1). Under the FLSA, an “employee” is defined
as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). An “employer” includes “any
1
The court assumes that the plaintiff’s motion is only on the issue of liability, leaving the issue
of damages to be addressed in future proceedings.
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person acting directly or indirectly in the interest of an employer in relation to an employee . . . .”
29 U.S.C. § 203(d). To “employ” is defined as to “suffer or permit to work.” 29 U.S.C. § 203(g).
For purposes of social welfare legislation, such as the FLSA, “‘employees are those who as a matter
of economic reality are dependent upon the business to which they render service.’” Sec’y of Labor
v. Lauritzen, 835 F.2d 1529, 1534 (7th Cir. 1987) (quoting Mednick v. Albert Enterprises, Inc., 508
F.2d 297, 299 (5th Cir. 1975)). A court is required to look past the “technical concepts” of
employment and determine if the “economic reality” is such that an individual would be deemed an
employee for purposes of the FLSA. Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33
(1961). To assess the “economic reality of the nature of the working relationship, courts do not look
to a particular isolated factor but to all the circumstances of the work activity.” Lauritzen, 835 F.2d
at 1534 (citing Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947)). The determination
of an individual’s employment status is a legal rather than a factual determination. Karr v. Strong
Detective Agency, Inc., 787 F.2d 1205, 1206 (7th Cir. 1986).
When determining whether a worker is an employee under the FLSA, the court is required
to apply a “six-factor test to determine the ‘economic reality’ of the situation.” Estate of Suskovich
v. Anthem Health Plans of Virginia, Inc., 553 F.3d 559, 565 (7th Cir. 2009) (citing Lauritzen, 835
F.2d at 1534). The six factors are as follows: (1) the nature and degree of the alleged employer’s
control as to the manner in which the work is to be performed; (2) the alleged employee’s opportunity
for profit or loss depending upon her managerial skill; (3) the alleged employee’s investment in
equipment or materials required for her task, or her employment of workers; (4) whether the service
rendered requires a special skill; (5) the degree of permanency and duration of the working
relationship; and (6) the extent to which the service rendered is an integral part of the alleged
employer’s business. Lauritzen, 835 F.2d at 1534-35. Each of the criteria “must be applied with
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[the] ultimate notion in mind” that “dependence . . . indicates employee status.” Id. at 1538 (quoting
Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311-12 (5th Cir. 1976)).
However, this six-factor test is of limited assistance in this present case. This test is generally
utilized in deciding the question of whether a worker is an employee or an independent contractor.
But, here, the question is not whether Okoro was an employee or an independent contractor. The
relevant question is whether Okoro was an employee or a volunteer.
The Supreme Court has defined a volunteer as “[a]n individual who, ‘without promise or
expectation of compensation, but solely for his personal purpose or pleasure, work[s] in activities
carried on by other persons either for their pleasure or profit.’” Alamo Found., 471 U.S. at 295
(quoting Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947)). Since the Alamo decision,
the Department of Labor has promulgated regulations defining the term “volunteer,” at least as such
term applies to those volunteering their services for units of state and local government.
(a) An individual who performs hours of service for a public agency for civic,
charitable, or humanitarian reasons, without promise, expectation or receipt of
compensation for services rendered, is considered to be a volunteer during such hours.
Individuals performing hours of service for such a public agency will be considered
volunteers for the time so spent and not subject to sections 6, 7, and 11 of the FLSA
when such hours of service are performed in accord with sections 3(e)(4)(A) and (B)
of the FLSA and the guidelines in this subpart.
(b) Congress did not intend to discourage or impede volunteer activities undertaken
for civic, charitable, or humanitarian purposes, but expressed its wish to prevent any
manipulation or abuse of minimum wage or overtime requirements through coercion
or undue pressure upon individuals to “volunteer” their services.
(c) Individuals shall be considered volunteers only where their services are offered
freely and without pressure or coercion, direct or implied, from an employer.
(d) An individual shall not be considered a volunteer if the individual is otherwise
employed by the same public agency to perform the same type of services as those for
which the individual proposes to volunteer.
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29 C.F.R. § 553.101. “The question of whether an individual is a volunteer is a matter of law to be
determined by the court.” Purdham v. Fairfax Cnty. Sch. Bd., 637 F.3d 421, 428 (4th Cir. 2011).
In this regard, Okoro argues that, under the FLSA, employees may not volunteer services to
for-profit employers. More precisely, she argues as follows:
In fact, the exemption for volunteers applies only when the work performed
is solely for the benefit of (alleged) volunteer - as it would be if the person were going
to school. Only in this limited circumstance can a person be treated as an unpaid
“volunteer.” http://www.dol.gov/whd/regs/compliance/whdfs71.htm. In fact, not
even employees’ own protestations that they were volunteers are dispositive. Tony
and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290, 301 (1985).
....
. . . Mr. Battles further admits that Pyramid 4 Aegis is a for-profit business. This fact
is a clear distinction from those cases cited by Defendants. The few cases cited by
Defendants with a finding that the plaintiff was a volunteer all involved either public
sector employers (Rodriguez v. Township of Holiday Lakes; Benshoff v. City of
Virginia Beach; and Todaro v. Township of Union) or non-profit organizations
(Turner v. Unification Church). Additionally, whether Defendants actually make a
large profit . . . is beside-the-point. The business is meant to generate a profit, and
thus cannot engage unpaid volunteers. See http://www.dol.gov/elaws/esa/flsa/
docs/volunteers.asp.
In DOL Opinion Letter FLSA2002-9 (Oct. 2, 2002), the Department of Labor
explained why the exemption for volunteers rarely if ever applies in the context of
for-profit enterprises. Among other reasons, employers who engage unpaid
“volunteers” gain an unfair competitive advantage from the payment of substandard
wages, or as here, no wages at all. See Alamo Foundation, 471 U.S. at 299; Brooklyn
Savings Bank v. O’Neil, 324 U.S. 697 (1945). As the Supreme Court explained in
Alamo Foundation, “if an exception to the Act were carved out for employees willing
to testify that they performed work ‘voluntarily,’ employers might be able to use
superior bargaining power to coerce employees to make such assertions, or to waive
their protections under the Act. Such exceptions to coverage would affect many more
people than those workers directly at issue in this case and would be likely to exert
a general downward pressure on wages in competing businesses.” 471 U.S. at 302.
Likewise here, as a for-profit business, Defendants secured an economic
benefit from Ms. Okoro’s work. She solicited clients, prepared the facility,
interviewed staff, submitted payroll, purchased items for the business, supervised
staff, created work schedules, confirmed employee hours, picked up medication and
performed other tasks -- all work Mr. Battles admits Ms. Okoro performed for
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Pyramid 4 Aegis. By contrast, Defendants have failed to identify any personal benefit
that Ms. Okoro purportedly received from her work for this for-profit business.
Thus, the record does not support a finding that Ms. Okoro worked “solely for
h[er] personal purpose or pleasure.” Walling, 330 U.S. at 152. To the contrary, the
undisputed facts reflect that Defendants did suffer or permit Ms. Okoro to work as
defined expansively in the FLSA. 29 U.S.C. § 203(g). Consequently, Defendants
were required to pay Ms. Okoro at least the minimum wage for all her hours worked.
29 U.S.C. § 207.
(Pl.’s Reply 4-6) (internal citation and footnote omitted).
Of course, in Alamo Foundation, the entity for which persons were performing “volunteer”
work was not a for-profit enterprise, like Aegis is. This court has been unable to find any regulations
addressing the circumstances under which a person can “volunteer” for a for-profit entity and have
his work not fall under the provisions of the FLSA. Indeed, that the court has been unable to find
such regulations would no doubt be touted by the plaintiff as support for her argument that one
cannot under any circumstances volunteer for any for-profit entity under the FLSA.
But, to say that one cannot under any circumstances volunteer for a for-profit entity might be
too sweeping a statement. After all, in Walling v. Portland Terminal Co., 330 U.S. 148 (1947), the
defendant railroad was a for-profit entity. The Supreme Court nevertheless found that the prospective
yard brakemen who were receiving training from the railroad without any monetary compensation
were not employees with the meaning of the FLSA.
The Act’s purpose as to wages was to insure that every person whose employment
contemplated compensation should not be compelled to sell his services for less than
the prescribed minimum wage. The definitions of “employ” and of “employee” are
broad enough to accomplish this. But, broad as they are, they cannot be interpreted
so as to make a person whose work serves only his own interest an employee of
another person who gives him aid and instruction. Had these trainees taken courses
in railroading in a public or private vocational school, wholly disassociated from the
railroad, it could not reasonably be suggested that they were employees of the school
within the meaning of the Act. Nor could they, in that situation, have been considered
as employees of the railroad merely because the school’s graduates would constitute
a labor pool from which the railroad could later draw its employees. The Fair Labor
Standards Act was not intended to penalize railroads for providing, free of charge, the
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same kind of instruction at a place and in a manner which would most greatly benefit
the trainees.
Accepting the unchallenged findings here that the railroads receive no
“immediate advantage” from any work done by the trainees, we hold that they are not
employees with the Act’s meaning. We have not ignored the argument that such a
holding may open up a way for evasion of the law. But there are neither findings nor
charges here that these arrangements were either conceived or carried out in such a
way as to violate either the letter or the spirit of the minimum wage law. We
therefore have no case before us in which an employer has evasively accepted the
services of beginners at pay less than the legal minimum without having obtained
permits from the administrator. It will be time enough to pass upon such evasions
when it is contended that they have occurred.
Id. at 152-53. With this in mind, it becomes necessary to consider more than just whether the
defendant is a for-profit entity.
In determining whether someone is an employer or a volunteer, this court has not stumbled
upon any factored test similar to that of the 6-factor economic realities test used to differentiate
independent contractors and employees. Rather, the court finds that the test for employment is
governed by a reasonableness standard that takes into account the totality of the circumstances. The
court is to review “‘the objective facts surrounding the services performed to determine whether the
totality of the circumstances’ establish volunteer status, . . . or whether, instead, the facts and
circumstances, objectively viewed, are rationally indicative of employee status.” Purdham, 637 F.3d
at 428 (quoting Cleveland v. City of Elmendorf, 388 F.3d 522, 528 (5th Cir. 2004)). In addition to
the “economic reality” of the situation, other factors to consider include whether there was an
expectation or contemplation of compensation, whether the employer received an immediate
advantage from any work done by the individual, the relationship of the parties, and the goals of the
FLSA. See Alamo Found., 471 U.S. at 300-01; Rutherford Ford Corp. v. McComb, 331 U.S. 722,
730 (1947) (stating that the employer-employee relationship “does not depend on such isolated
factors but rather upon the circumstances of the whole activity”); Lauritzen, 835 F.2d at 1534-35).
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It is the examination of objective indicia and the application of common sense with which this court
arrives at its determination of whether the plaintiff here is an employee for purposes of the FLSA.
According to Okoro, she never agreed to volunteer for Aegis; at all times, she expected to be
compensated for her work. Specifically, Okoro expected to be paid $2,000 per month for her work,
and in agreeing to defer her compensation until the facility garnered clients, she still worked with the
expectation that she would be paid. (Okoro Aff. ¶¶ 4, 7-9.) Battles, while arguing that Okoro was
a volunteer, also states that he intended to pay Okoro for her work if she qualified as an administrator
and if the business had enough money in the future. (Battles Aff. ¶¶ 6, 25.) The court notes Battles’s
expectation not for the purpose of weighing the parties’ competing assertions (for this would surely
contradict the FLSA’s remedial purpose) but to merely highlight that he too contemplated a
compensation mechanism for Okoro’s work.
Expectations aside, it is not entirely correct for the plaintiff to assert that the defendants have
failed to identify any personal benefit that Okoro purportedly received from her work for Aegis. In
his affidavit, Battles avers that when Okoro sold him worker’s compensation insurance for Aegis,
she told him “that she wanted to learn the group home business and therefore, she would learn the
business by working at Pyramid 4 Aegis for no compensation.” (Battles Aff. ¶ 5.)
This court is not unmindful of any claim that Okoro may have wanted to learn and indeed did
learn about the CBRF business. That may certainly have been part of her motivation in providing
Battles some assistance in his effort to build the business. However, Battles does not deny that the
work Okoro performed on behalf of Aegis conferred an immediate benefit to the company. Thus,
the facts in this case stand in stark contrast to those in Walling. In Walling, the lower court’s finding
that “the railroads receive[d] no ‘immediate advantage’ from any work done by the trainees” was
unchallenged. 330 U.S. 148, 153. Indeed, “the applicant’s work [did] not expedite the company
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business, but . . . sometimes [did] actually impede and retard it.” Id. at 150. In other words, the
railroad was not receiving any immediate benefit from the training that was being given to the
prospective brakemen.
Not so in the case at bar. The evidence here does not demonstrate that the work performed
by Okoro on behalf of Aegis interfered in any way with the business of Aegis. To the contrary, the
nature of the work that she performed, such as cleaning, picking up prescriptions, appearing in court
on behalf of clients at the facility, and calling in hours for caregivers to Paychex, was undeniably of
substantial assistance to Aegis. Even more to the point, such work was not akin to the “course of
practical training,” which the prospective yard brakemen in Walling received. Id. at 150. One hardly
needs to be trained in how to clean a facility, how to pick up prescriptions, and how to call in hours
for caregivers.
Additionally, the economic reality of the situation was that Okoro worked for Aegis for a
substantial length of time. The length of the “training course” that the prospective brakemen received
in Walling was seven or eight days. Id. at 149. By contrast, Okoro worked for Aegis over the course
of almost one year.
To be sure, Okoro and Battles had a “personal relationship” over the course of the relevant
time period. (Okoro Aff. ¶ 6.) While it may be that at least some of the time Okoro spent at Aegis
was to socialize with Battles, that particular matter may speak to the amount of damages to which
she is entitled; after all, socialization may not be the equivalent of work. For purposes of Okoro’s
motion, it is sufficient to find that, despite her relationship with Battles, she still performed
substantial work for Aegis, Aegis reaped a direct and immediate benefit from her work, and she had
a reasonable expectation that she would be compensated for her work. In sum, taking into account
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the totality of the circumstances in this case leads me to conclude that Okoro performed work for
Aegis as an employee and not as a volunteer.
Finally, it must not be forgotten that, by design, the FLSA’s purpose is “remedial and
humanitarian.” Tenn. Coal, Iron & R.R. Co. v. Muscodoa Local No. 123, 321 U.S. 590, 597 (1944),
superseded by statute, Portal-to-Portal Act of 1947, Pub. L. No. 80-49, 61 Stat. 86 (1947) (codified
as amended at 29 U.S.C. § 254). To effectuate this purpose, the FLSA requires courts to interpret
its application broadly. See id. With this in mind, allowing Aegis the benefit of Okoro’s free labor
when there existed an expectation of compensation would not comport with the FLSA’s purpose.
Thus, to the extent that the plaintiff’s motion seeks a determination that she worked for Aegis
and is therefore entitled to compensation for such work under the FLSA, her motion will be granted.
Precisely how much work she performed for Aegis, and for how many hours she should be
compensated by Aegis, are matters for trial. It is enough to say that the work she performed for
Aegis, at least for purposes of the FLSA, was not as a volunteer, but rather as an employee.
There is one final matter to address. The plaintiff’s motion seeks a finding that the defendants
are jointly liable for any compensation due to her under the FLSA. She argues as follows:
The FLSA’s definition of “employer” is extremely broad and includes “any
person acting directly or indirectly in the interest of an employer in relation to an
employee.” 29 U.S.C. § 203(d). Consequently, it is black letter law that an
individual owner or officer of a corporation may be liable under the FLSA where that
individual is responsible for the violation. See Donovan v. Agnew, 712 F.2d 1509,
1514 (1st Cir. 1983) (“The 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[.]”); Solis v. Saraph[i]no’s, Inc., 2011 U.S. Dist. LEXIS 43904, *9-12 (E.D.
Wis. Apr. 22, 2011).
Here, the Amended Answer admits that Defendant Battles owns Pyramid 4
Aegis, “was primarily in control over operations and wages for Pyramid 4 Aegis,” and
“supervised Plaintiff’s . . . work.” (PFF ¶ 12) These admissions establish Defendant
Battles’ liability as a joint employer under the FLSA. 29 U.S.C. § 203(d); Agnew,
712 F.2d at 1514; Saraph[i]no’s, 2011 U.S. Dist. LEXIS 43904 at *9-12.
16
Accordingly, Plaintiff is also entitled to summary judgment on the issue of the joint
employer liability of Defendant Battles and Pyramid 4 Aegis on the FLSA claims.
(Pl.’s Br. 6-7.)
To be sure, Battles admits that he is the sole owner of Aegis. And the FLSA does impose
liability as an “employer” on “any person acting directly or indirectly in the interest of an employer
in relation to an employee[.]” 29 U.S.C. § 203(d). Furthermore, Battles has offered no argument in
opposition to the plaintiff’s joint employer liability argument.
As noted by the plaintiff, in Donovan v. Agnew, 712 F.2d 1509 (1st Cir. 1983), the court
stated 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 1514. More recently, another branch of this court
applied the above holding of Donovan in finding an owner and president of the corporate defendant
jointly and severally liable along with the corporation precisely because “he exercised control over
the employees with regard to employment and pay practices.” Solis v. Saraphino’s, Inc., No. 09-CV954, 2011 U.S. Dist. LEXIS 43904, at *10 (E.D. Wis. Apr. 22, 2011).
So too with Battles here. Again, there is no dispute that Battles is the sole owner of Aegis.
The undisputed facts also demonstrate that Battles had operational control over the activities of
Aegis. It therefore follows that Battles is jointly and severally liable with Aegis for any unpaid wages
that are ultimately found to be due to Okoro. Thus, on the joint and several liability issue the
plaintiff’s motion for summary judgment will be granted.
In conclusion, and for all of the foregoing reasons, the plaintiff’s motion for summary
judgment will be granted.
NOW THEREFORE IT IS ORDERED that the plaintiff’s motion for summary judgment
be and hereby is GRANTED;
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IT IS FURTHER ORDERED that a conference will be conducted on May 10, 2012 at 9:00
a.m. in Room 242, 517 E. Wisconsin Avenue, Milwaukee, WI 53202, for the purpose of discussing
with the parties the further steps that need to be taken in order to bring this action to final judgment.
SO ORDERED this 23rd day of April 2012 at Milwaukee, Wisconsin.
BY THE COURT:
s/ William E. Callahan, Jr.
WILLIAM E. CALLAHAN, JR.
United States Magistrate Judge
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