Wilde v. County of Kandiyohi, 93-1642

• Decision Date: 27 January 1994
• Docket Number: No. 93-1642,93-1642
• Citation: 15 F.3d 103
• Parties: 63 Fair Empl.Prac.Cas. (BNA) 1167, 63 Empl. Prac. Dec. P 42,789 Caryn WILDE, Appellant, v. The COUNTY OF KANDIYOHI; Kandiyohi County Economic Development Partnership, Inc., a Minnesota corporation; Kandiyohi County Rural Development Finance Authority; Wilton F. Croonquist, individually and in his capacity of Executive Director of Kandiyohi County Rural Development Finance Authority, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 103

15 F.3d 103

63 Fair Empl.Prac.Cas. (BNA) 1167,

63 Empl. Prac. Dec. P 42,789

Caryn WILDE, Appellant, v. The COUNTY OF KANDIYOHI; Kandiyohi County Economic Development Partnership, Inc., a Minnesota corporation Kandiyohi County Rural Development Finance Authority Wilton F. Croonquist, individually and in his capacity of Executive Director of Kandiyohi County Rural Development Finance Authority, Appellees.

No. 93-1642.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 10, 1993.

Decided Jan. 27, 1994.

Robert J. Zohlmann, New London, MN, argued, for appellant.

James R. Andreen, Minneapolis, MN, argued, for appellee.

Before FAGG and WOLLMAN, Circuit Judges, and VIETOR, ^* District Judge.

FAGG, Circuit Judge.

Caryn Wilde owns small businesses that rent executive office space and provide secretarial services. Wilton Croonquist, the executive director of the Kandiyohi County Economic Development Partnership, Inc. and the Kandiyohi County Rural Development Finance Authority, rented office space from Wilde and used her secretarial services. Alleging Croonquist sexually harassed her at work, Wilde brought this action against Croonquist, the Partnership, the Authority, and the County of Kandiyohi (collectively the appellees) under Title VII of the Civil Rights Act of 1964. See 42 U.S.C. Secs. 2000e to 2000e-17 (1988 & Supp. III 1991). The district court concluded Wilde was not protected under Title VII because she was not an "employee" of the Partnership or the Authority within the meaning of the statute, and thus, the district court granted summary judgment in the appellees' favor on Wilde's Title VII claim. Wilde v. County of Kandiyohi, 811 F.Supp. 446, 451-53, 455 (D.Minn.1993). Wilde appeals and we affirm.

Title VII protects workers who are "employees," but does not protect independent contractors. See Spirides v. Reinhardt, 613 F.2d 826, 829-30 (D.C.Cir.1979). Title VII defines "employee" as "an individual employed by an employer." 42 U.S.C. Sec. 2000e(f) (Supp. III 1991). Given the absence of any helpful legislative guidance on the breadth of this circular definition, courts have developed tests to distinguish between employees and independent contractors for the purposes of Title VII.

Borrowing from interpretations of the term "employee" in the context of the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. Secs. 201-219 (1988 & Supp. IV 1992), one federal appellate court examines the economic realities underlying the work relationship to decide whether the worker is likely to be susceptible to the discriminatory practices Title VII was designed to eliminate. Armbruster v. Quinn, 711 F.2d 1332, 1340, 1341 & n. 7 (6th Cir.1983). This test is based on the court's view that the statute should " 'be read in light of the mischief to be corrected and the end to be attained.' " Id. at 1340 (quoting NLRB v. Hearst Publications, 322 U.S. 111, 124, 64 S.Ct. 851, 857, 88 L.Ed. 1170 (1944)). Emphasizing the broad remedial goals of Title VII, the court extended "coverage to all those who are in a position to suffer the harm the statute is designed to prevent, unless specifically excluded." Id. at 1341.

Because Title VII and the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634 (1988 & Supp. IV 1992), do not include the FLSA's expansive definition of the term "employ," most courts have reasoned that application of the expansive economic realities test is unwarranted in discrimination cases brought under Title VII or the ADEA. Instead, nearly every appellate court has applied a test described as a hybrid of the common-law test and the economic realities test. Oestman v. National Farmers Union Ins. Co., 958 F.2d 303, 305 (10th Cir.1992); Mares v. Marsh, 777 F.2d 1066, 1067-68 & n. 2 (5th Cir.1985); Garrett v. Phillips Mills, Inc., 721 F.2d 979, 981-82 (4th Cir.1983); EEOC v. Zippo Mfg. Co., 713 F.2d 32, 37-38 (3d Cir.1983); Cobb v. Sun Papers, Inc., 673 F.2d 337, 340-41 (11th Cir.), cert. denied, 459 U.S. 874, 103 S.Ct. 163, 74 L.Ed.2d 135 (1982); Unger v. Consolidated Foods Corp., 657 F.2d 909, 915 n. 8 (7th Cir.1981), cert. denied, 460 U.S. 1102, 103 S.Ct. 1801, 76 L.Ed.2d 366, and cert. denied, 464 U.S. 1017, 104 S.Ct. 549, 78 L.Ed.2d 723 (1983); Lutcher v. Musicians Union Local 47, 633 F.2d 880, 883 & n. 5 (9th Cir.1980); Spirides, 613 F.2d at 831-32. Under the hybrid test, the term "employee" is construed in light of general common-law concepts, taking into account the economic realities of the situation. Cobb, 673 F.2d at 340-41.

To decide whether a person is an employee or independent contractor under the common law of agency, the totality of the working relationship is examined. The Restatement provides a nonexhaustive list of factors for consideration. See Restatement (Second) of Agency Sec. 220(2) (1958). The hiring party's right to control the manner and means of the worker's product is an important, but not dispositive, factor. Id. comment i. Under the hybrid test, a court typically weighs the common-law factors listed in the Restatement and some additional factors related to the worker's economic situation, like how the work relationship may be terminated, whether the worker receives yearly leave, whether the worker accrues retirement benefits, and whether the hiring party pays social security taxes. See, e.g., Oestman, 958 F.2d at 305.

In deciding Wilde is not an employee of the Authority or the Partnership within the meaning of Title VII, the district court applied the hybrid test. Wilde asserts the district court should have applied the broader economic realities test of Armbruster. We disagree.

The Supreme Court recently stated that when a statute does not helpfully define the term "employee," courts should not imply a meaning that is broader than the common-law definition. Nationwide Mut. Ins. Co. v. Darden, --- U.S. ----, ---- - ----, 112 S.Ct. 1344, 1348-49, 117 L.Ed.2d 581 (1992) (adopting common-law test for deciding who qualifies as an "employee" under ERISA). The Supreme Court rejected the lower court's view that the term should be construed " 'in the light of the mischief to be corrected and the end to be attained [by the statute],' " id. --- U.S. at ----, 112 S.Ct. at 1349 (quoting Hearst, 322 U.S. at 124, 64 S.Ct. at 857), the same reasoning used to justify the economic realities test in Armbruster. The Supreme Court noted it had abandoned this view, and now presumes Congress intended a common-law definition for the term "employee" unless Congress clearly indicates otherwise. Id. Application of the economic realities test results in Title VII coverage for some common-law independent contractors because they are vulnerable to discrimination arising in the course of their work. Because the economic realities test is based on the premise that the term should be construed in light of Title VII's purpose and the construction is broader than at common law, Darden precludes the test's application.

In Darden, the Supreme Court summarized the common-law test as follows:

"In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in...