Badon v. Berry's Reliable Res.

• Decision Date: 09 June 2022
• Docket Number: Civil Action 19-12317,20584,21-596
• Parties: STACEY BADON, ET AL. v. BERRY'S RELIABLE RESOURCES, LLC, ET AL.
• Court: U.S. District Court — Eastern District of Louisiana

STACEY BADON, ET AL.
v.
BERRY'S RELIABLE RESOURCES, LLC, ET AL.

Civil Action Nos. 19-12317, 20584, 21-596

United States District Court, E.D. Louisiana

June 9, 2022

SECTION D (3)

THIS ORDER RELATES TO ALL CASES

ORDER AND REASONS

WENDY B. VITTER, UNITED STATES DISTRICT JUDGE

Before the Court is Plaintiffs' Motion for Partial Summary Judgment.^[1] The Motion is opposed, ^[2] and Plaintiffs have filed a Reply.^[3] After careful review of the Motion, the parties' briefs, the record, and the applicable law, the Court GRANTS Plaintiffs' Motion for Partial Summary Judgment.

I. FACTUAL BACKGROUND

This case involves a wage dispute. On August 27, 2019, Plaintiff Stacy Badon filed a Complaint alleging she had been underpaid under the Fair Labor Standard Act (“FLSA”).^[4] According to the Complaint, Badon began working for Defendant Berry's Reliable Resources, a home health caregiver, in 2016.^[5] Plaintiff alleges she was paid an hourly wage of $8.00.^[6] Plaintiff further alleges that she worked fifty-six hours per week performing services for Defendants' clients but was never paid

1

overtime for the hours she worked in excess of forty hours per week.^[7] Badon's Complaint alleges a collective action pursuant to 29 U.S.C. § 216(b) on behalf of all persons since August 2016 who worked for Defendants and were not paid overtime.^[8]On February 18, 2020, Anthony Badon filed a similar Complaint, ^[9] and his case was consolidated with Stacey Badon's.^[10] Both Plaintiffs also assert a claim under the Louisiana Wage Payment Act (“LWPA”), in which Plaintiffs allege that Defendants improperly deducted costs for workers compensation and failed to repay Plaintiffs after their termination.^[11]

On April 26, 2022, Plaintiffs filed a Motion for Partial Summary Judgment on the issue of whether Plaintiffs are properly classified as “independent contractors” or “employees.”^[12] In their motion, Plaintiffs argue that the Plaintiffs were employees of the Defendants under both the FLSA and LWPA because Plaintiffs were not able to independently contract with the state to provide services to consumers and because of the level of control exerted by Defendants over them.^[13] Defendants oppose the motion and contend that Plaintiffs have failed to present any new evidence and are independent contractors as expressly indicated by the parties' subcontract agreement

2

and by the Plaintiffs' actions.^[14] Plaintiffs filed a reply arguing that they were employees because the Defendants determined what work they did, supervised their work, and had the ability to fire them.^[15]

II. LEGAL STANDARD

A. Summary Judgment Standard

Summary judgment is appropriate where there is no genuine disputed issue as to any material fact, and the moving party is entitled to judgment as a matter of law.^[16] When assessing whether a dispute regarding any material fact exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.”^[17] While all reasonable inferences must be drawn in favor of the nonmoving party, a party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions or “only a scintilla of evidence.”^[18] Instead, summary judgment is appropriate if a reasonable jury could not return a verdict for the nonmoving party.^[19]

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.”^[20] The

3

non-moving party can then defeat summary judgment by either submitting evidence sufficient to demonstrate the existence of a genuine dispute of material fact, or by “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.”^[21] If, however, the nonmoving party will bear the burden of proof at trial on the dispositive issue, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim.^[22] The burden then shifts to the nonmoving party who must go beyond the pleadings and, “by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,' designate ‘specific facts showing that there is a genuine issue for trial.'”^[23]

B. Employee Status Under the Fair Labor Standards Act.

The FLSA defines “employer” to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.”^[24] The FLSA “defines the verb ‘employ' expansively to mean ‘suffer or permit to work.'”^[25] An entity “suffers or permits” an individual to work if, as a matter of “economic reality, ” the entity functions as the individual's employer.^[26] The factors considered under the “economic reality” test include: (1) the degree of control exercised by the alleged employer; (2) the extent of the relative investments of the worker and alleged

4

employer; (3) the degree to which the worker's opportunity for profit and loss is determined by the alleged employer; (4) the skill and initiative required in performing the job; and (5) the permanency of the relationship.^[27] This test has been described as a “fact intensive inquiry.”^[28] The crux of the analysis is whether the worker is “economically dependent on the business to which he renders service or is, as a matter of economic [reality], in business for himself.”^[29] Importantly, the labels the parties assign to the relationship is not dispositive of the inquiry.^[30] That said, explicit contractual arrangements may be evidence of an employer-employee relationship or lack thereof.^[31]

C. Employee Status under the LWPA

The LWPA does not contain a definition of the term “employee.”^[32] As outlined in its previous Order, ^[33] in determining whether an employer/employee relationship exists, the court considers the factors set forth in Hickman v. Southern Pacific Transport Company.^[34] These factors are:

(1) whether there is a valid contract between the parties;

(2) whether the work being done is of an independent nature such that the contractor may employ non-exclusive means in accomplishing it;

5

(3) whether the contract calls for specific piecework as a unit to be done according to the independent contractor's own methods, without being subject to the control and direction of the principal, except as to the result of the services to be rendered;

(4) whether there is a specific price for the overall undertaking agreed upon; and

(5) whether the duration of the work is for a specific time and not subject to termination or discontinuance at the will of either side without a corresponding liability for its breach.^[35]

The appearance of control is the principal factor to determining whether an employee/employer relationship exists.^[36] It is not whether the defendant actually controlled the plaintiff's performance, but whether the defendant had the right to do so that is key.^[37]

III. FACTUAL BACKGROUND

A. Employee Status under the FLSA

As an initial matter, the Court notes that it has previously determined that the FLSA applies should the Court determine that Plaintiffs are employees of Defendants.^[38] The Fifth Circuit has held that “the ultimate conclusion that an individual is an ‘employee' within the meaning of the [Fair Labor Standards Act] is a legal determination rather than a factual one.”^[39] Applying the economic realities test

6

enunciated above by the Fifth Circuit, the Court now determines whether Plaintiffs qualify as employees under the FLSA.

Applying the first factor of the economic realities test, the Court evaluates the employer's right to control the work completed by Plaintiffs.^[40] Plaintiffs argue that Defendants controlled every aspect of their employment and had supervisory control over them.^[41] In response, Defendants contend that the work conducted by Plaintiffs was dictated by the State of Louisiana's Plan of Care for each consumer, not by the Defendants.^[42] Defendants further argue that they did not supervise Plaintiffs while at work.^[43]

In support of the first factor, Plaintiffs have provided the testimony of Terry Cooper, the representative of the Louisiana Department of Health. Ms. Cooper testified that it was the Defendant's “responsibility to assure that their employee or contract staff is adhering to what their assignment is and that they are adequately trained to perform the duties that they are assigned.”^[44] Ms. Cooper further testified that a direct service worker, such as Plaintiffs, cannot receive payment through these state programs directly.^[45] Ms. Cooper stated that the Plaintiffs were not on the payroll of the state, the state did not dictate their rate of pay, and the state did not directly involve themselves with the hiring and firing of these direct service

7

workers.^[46] Accordingly, Plaintiffs contracted with Defendants and were dependent upon their relationship with Defendants to receive consumers and work.^[47]

In addition, Defendants have admitted to exercising supervisory control over Plaintiffs.^[48] Specifically, Defendants hired employees called Service Coordinators whose job was to “supervise [DSWs] in consumer's homes.”^[49] Service Coordinators checked Plaintiffs' work with consumers, provided general oversight, and responded to any complaints.^[50] In her deposition...