Benion v. Lecom, Inc.

• Decision Date: 30 September 2018
• Docket Number: Case Number 15-14367
• Citation: 336 F.Supp.3d 829
• Parties: Harry BENION, Zachary Goodgall, Damon Franklin, and Leslie Morgan, Plaintiffs, v. LECOM, INCORPORATED, LeCom Communications, Inc., Joseph Lentine, and Jeffrey Gendron, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

336 F.Supp.3d 829

Harry BENION, Zachary Goodgall, Damon Franklin, and Leslie Morgan, Plaintiffs,

v.LECOM, INCORPORATED, LeCom Communications, Inc., Joseph Lentine, and Jeffrey Gendron, Defendants.

Case Number 15-14367

United States District Court, E.D. Michigan, Southern Division.

Signed September 30, 2018

Daniel Chung-Ho Tai, Frances J. Hollander, David M. Blanchard, Blanchard and Walker, PLLC, Ann Arbor, MI, Harold Lichten, Lichten & Liss-Riordan PC, Boston, MA, for Plaintiffs.

Alecia M. Golm, Andary, Andary, Davis & Andary, Robert C. Davis, Davis, Listman, Brennan, Mt. Clemens, MI, James R. Andary, Andary, Andary, Mount Clemens, MI, Lauren M. Phillips, Phillips Law Firm PLLC, Plymouth, MI, Seth D. Matus, Matus Law Office, P.C., Naperville, IL, Catrina Farrugia, David J. Domstein & Associates, PLLC, Bingham Farms, MI, for Defendants.

OPINION AND ORDER GRANTING IN PART PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AGAINST DEFENDANT LECOM COMMUNICATIONS, GRANTING MOTION FOR SUMMARY JUDGMENT BY DEFENDANT LECOM, INC., DENYING MOTIONS FOR SUMMARY JUDGMENT PLAINTIFFS AND BY DEFENDANTS LECOM COMMUNICATIONS, JOSEPH LENTINE, AND JEFFREY GENDRON AND BY PLAINTIFFS, AND DISMISSING AMENDED COMPLAINT AGAINST DEFENDANT LECOM, INC. ONLY

DAVID M. LAWSON, United States District Judge

The plaintiffs allege that they were employed as cable television installers by the defendants, who misclassified them as independent contractors to avoid paying them overtime premium wages required by the Fair Labor Standards Act. Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. The Court denied the defendants' motion to dismiss the FLSA claim and conditionally certified the case as a collective action. After the complaint was amended to add defendants Joseph Lentine and Jeffrey Gendron, and the parties completed discovery, they filed their respective motions for summary judgment, which are pending before the Court. The plaintiffs move for partial summary judgment of liability as to defendants LeCom, Inc. and LeCom Communications, Inc. They filed a separate motion for partial summary judgment of liability against defendants Joseph Lentine and Jeffrey Gendron. LeCom, Inc., LeCom Communications, Inc., Lentine, and Gendron each have filed separate motions for summary judgment of dismissal. The record contains undisputed facts establishing that the plaintiffs were employees of LeCom Communications, Inc. within the meaning of the FLSA, but that LeCom, Inc. was not involved in an employment capacity as to any of the cable installers. Therefore, the Court will grant the plaintiffs' motion for partial summary judgment as to LeCom Communications, Inc. only and grant LeCom, Inc.'s motion for summary judgment. Fact questions preclude granting summary judgment on the remaining questions, and therefore the Court will deny the other summary judgment motions.

I.

The facts were summarized in detail in the opinion on the motion to dismiss. Benion v. Lecom, Inc. , 2016 WL 2801562, at *1-3 (E.D. Mich. May 13, 2016), reconsideration denied, 2016 WL 3254611 (E.D. Mich. June 14, 2016). LeCom Communications hired both employees and contractors to furnish fulfillment services (cable installation and service) to several Michigan cable companies, all of which are now owned by Comcast, Inc. The plaintiffs, who are in the second category, maintain that in order to be hired, LeCom requires individuals to contract with one of five specific subcontractor companies at LeCom's direction. However, the plaintiffs allege that in reality, it is LeCom, and not the subcontracting companies, that is employing, assigning work to, and directing each technician.

The facts in the earlier opinion on the motion to dismiss were of necessity taken from the pleadings. Discovery now has been completed, and the parties have furnished a fulsome factual record. Except where indicated, the facts discussed below either were admitted or are otherwise uncontested.

A. LeCom Inc. and LeCom Communications, Inc.

The defendants continue to insist that LeCom Inc. and LeCom Communications, Inc. are distinct companies that have nothing in common besides their ownership. The plaintiffs conflate their references to those companies, referring to both as "LeCom."

It appears undisputed that LeCom, Inc. (LeCom) was founded in 1980, and is owned by Joseph Lentine and his brother Anthony. LeCom Communications, Inc. (LeCom Communications) was founded in 2001 and also is owned by Joseph and Anthony Lentine. LeCom Communications was founded to provide fulfillment services (cable installation and service) to a number of Michigan cable companies, all of which are now owned by Comcast, Inc. LeCom and LeCom Communications each maintain separate headquarters at an office building in Warren, Michigan, along with several other companies — some but not all of which are also owned by Anthony and Joseph Lentine. According to Lentine, LeCom and LeCom Communications have never shared a bank account, and maintain separate clientele, employees, insurance policies, vehicle fleets, day-to-day leadership, and operations. LeCom is a utility construction corporation that erects and services high-power utility poles in multiple states on contract with power and light companies, whereas LeCom Communications is a corporation that exists solely to provide cable fulfilment services to Comcast in Michigan.

Since its founding in 2001, all of LeCom Communications's day to day operations have been managed by defendant Jeff Gendron who, although he ultimately reported to Joseph Lentine, was given broad latitude to run the company. Although LeCom Communications once installed and serviced cable for a number of smaller cable companies, all of those companies have since been acquired by Comcast. Since 2007 or 2008, Comcast has been LeCom Communications's sole customer. Comcast contracts a number of fulfillment companies like LeCom Communications to provide cable installation and repair services in the Detroit area and all over the country.

1. Joseph Lentine

The Lentine brothers currently are the sole owners of LeCom Communications and LeCom, Inc. Joseph Lentine also is the president of both corporations. He has executed the Comcast contracts on behalf of LeCom Communications since 2007, although he points out that the contracts were "non-negotiable." The Comcast contracts contained most of the obligations and restrictions LeCom Communications imposed on technicians, discussed below. In addition to executing the Comcast contracts, Lentine helped draft the subcontractor agreements, which complied with Comcast's Installation Specification manual. The subcontractor agreements gave LeCom Communications the right to fire technicians at any time, for any or no reason. Lentine testified that he has no background in the cable fulfillment business.

Lentine determined Gendron's pay, regularly reviewed monthly financial statements, and approved the salaries for managers who worked under Gendron based on Gendron's recommendations. Joseph and his brother had check-signing authority and the power to withdraw money from the bank accounts of both companies. Lentine authorized Gendron's decision to hire the plaintiffs and others as "independent contractors." Lentine also approved the installation of GPS devices in company vehicles. Gendron says that he dealt primarily with Lentine when making compensation decisions pertaining to the subcontractors.

The plaintiffs furnished a series of e-mails between defendants Gendron and Lentine that discussed with Comcast bonuses, plans to reduce workforce, rates of pay, and performance metrics. In 2017, Lentine decided to terminate the cable installation business with Comcast due to profitability concerns. The work subsequently was transferred to a company called Amcomm and most of the LeCom technicians were laid off.

According to Lentine, he played no role in LeCom Communications's day-to-day operations. He testified that Gendron was responsible for screening and retaining the subcontractors and negotiating their agreements, decisions with which Lentine never interfered. Lentine also stated that he never hired, fired, or disciplined any LeCom Communications technicians, had no input in determining their schedules or routes, or provided the technicians with materials and equipment.

2. Jeffrey Gendron

Jeffrey Gendron used to own Elite Communications, Inc. (Elite), which participated in the cable fulfillment business for several service providers. In 2001, the company was acquired by the Lentine brothers and was renamed LeCom Communications, Inc. Joseph Lentine testified that Gendron approached him with an offer to purchase Elite.

Because the Lentine brothers did not have experience in cable fulfillment upon purchasing Elite, Gendron stayed on as general manager in charge of operations when the company was renamed. Gendron reported directly to Joseph Lentine while serving as LeCom Communications general manager from 2001 to November 2017. According to Lentine, Gendron was responsible for compensation decisions, hiring, retaining, or firing subcontractors, and maintaining employment records including scheduling and number of hours worked by technicians. Gendron admitted that on at least one occasion, he apparently fired a technician who had recruited help to complete jobs faster without obtaining permission from LeCom. But Gendron testified in a later deposition that he never hired or fired any employees of the subcontracting companies. Gendron also testified that he never defined work hours of employees of the subcontracting companies.

Gendron was never an officer or director of LeCom Communications. He testified that he never had check writing or banking authority on behalf of LeCom Communications. He said that that without banking authority, he did not issue checks from LeCom Communications to the subcontractors or the individual plaintiffs. The plaintiffs admit that they cannot provide evidence of Gendron's check writing.

B. Classificati...