Keller v. Miri Microsystems LLC

• Decision Date: 26 March 2015
• Docket Number: No. 14–1430.,14–1430.
• Citation: 781 F.3d 799
• Parties: Michael KELLER, Plaintiff–Appellant, v. MIRI MICROSYSTEMS LLC, Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

781 F.3d 799

Michael KELLER, Plaintiff–Appellant

v.MIRI MICROSYSTEMS LLC, Defendant–Appellee.

No. 14–1430.

United States Court of Appeals, Sixth Circuit.

Argued: Nov. 19, 2014.

Decided and Filed: March 26, 2015.

ARGUED:David A. Hardesty, Gold Star Law, P.C., Troy, Michigan, for Appellant. Aaron D. Graves, Bodman PLC, Troy, Michigan, for Appellee. ON BRIEF:David A. Hardesty, Caitlin E. Malhiot, Gold Star Law, P.C., Troy, Michigan, for Appellant. Aaron D. Graves, Donald H. Scharg, Bodman PLC, Troy, Michigan, for Appellee.

Before: NORRIS, MOORE, and GIBBONS, Circuit Judges.

MOORE, J., delivered the opinion of the court in which GIBBONS, J., joined. NORRIS, J. (pp. 817–20), delivered a separate dissenting opinion.

OPINION

KAREN NELSON MOORE, Circuit Judge.

Defendant Miri Microsystems, LLC (“Miri”) is a satellite-internet-dish installation company. Michael Keller installed satellite-internet dishes for Miri's customers six days each week. Keller alleges that Miri did not compensate him adequately as an employee under the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 207 et seq., by failing to pay him overtime compensation. Miri contends, in contrast, that Keller was an independent contractor, rather than an employee, and therefore not entitled to overtime pay.

The FLSA's definition of “employee” is strikingly broad and “stretches the meaning of ‘employee’ to cover some parties who might not qualify as such under a strict application of traditional agency law principles.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992). To effect Congress's broad purpose, we must look to see whether a worker, even when labeled as an “independent contractor,” is, as a matter of “economic reality,” an employee. Rutherford Food Corp. v. McComb, 331 U.S. 722, 729, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947) ( “Where the work done, in its essence, follows the usual path of an employee, putting on an ‘independent contractor’ label does not take the worker from the protection of the Act.”). Ordinarily, it is the court's job to determine whether a company has inappropriately classified a worker as an independent contractor. Werner v. Bell Family Med. Ctr., Inc., 529 Fed.Appx. 541, 543 (6th Cir.2013). However, when the evidence, viewed in the light most favorable to the plaintiff, reveals that there is a genuine issue of material fact whether the worker is an employee or an independent contractor, then summary judgment is inappropriate. See Imars v. Contractors Mfg. Servs., Inc., No. 97–3543, 165 F.3d 27, 1998 WL 598778, at *6 (6th Cir. Aug. 24, 1998). In those cases, it is the task of the trier of fact to review the evidence and weigh the factors to decide whether the plaintiff-worker is economically dependent upon the defendant-company. See Id. We believe that this is just such a case.

We also must decide whether Keller has offered sufficient evidence that he worked more than forty hours each week based on his and Miri's deposition testimony. We believe that Keller has presented sufficient evidence to show a genuine issue of material fact. Accordingly, we VACATE the district court's judgment and REMAND the case for consideration by the trier of fact.

I. BACKGROUND

Miri is a limited liability company that operates in Michigan and provides installation services for HughesNet and iDirect, nationwide providers of satellite internet systems and services. Keller was one of approximately ten satellite-internet technicians who installed satellite dishes for Miri.

Miri is one of many middlemen in the satellite-installation-services business. Customers purchase satellite internet services from HughesNet, and then HughesNet forwards those orders on to a distributor, Recreational Sports and Imports (“RS & I”).¹ Next, RS & I sends the installation order to Miri, which provides installation services for the upper part of the Lower Peninsula of Michigan. Customers may choose a time block during which a technician will install the satellite dish, and Miri assigns installation jobs to technicians who work in the territory where the customer resides.

Keller began installing satellite dishes for Miri as a technician while he was working for ABC Dishman, a subcontractor, after he attended a HughesNet satellite-dish-installation certification course given by Miri. After working for ABC Dishman for some time, Keller began installing satellite-internet dishes for Miri directly.

Miri pays technicians by the job, not by the hour. HughesNet pays Miri $200 for each basic installation, $80 for repairs, $80 for de-installation, and between $130–145 for upgrades. Miri pays the technician the bulk of these fees, but keeps a percentage.²

Keller worked six days a week from 5:00 am to midnight, taking only Sunday off. Keller completed two to four installations per day, and he had to travel between jobs. Miri paid Keller $110 per installation and $60 for each repair he performed. Miri did not withhold federal payroll taxes from Keller's payments or provide Keller benefits.

On November 23, 2012, Keller stopped working for Miri. Soon thereafter, he filed this lawsuit, alleging that Miri's payment system violates the FLSA. Miri filed a motion for summary judgment, arguing that Keller was an independent contractor for Miri, and therefore he was not entitled to overtime compensation under the FLSA. The district court granted Miri's motion for summary judgment, holding that Keller was an independent contractor for Miri, not an employee. Keller appeals. Miri also argues that Keller has not produced evidence to substantiate his claim that he worked more than forty hours per week.

II. DISCUSSION

A. Standard of Review

We review de novo a district court's order granting summary judgment, applying the standard set forth in Rule 56(a). Ellington v. City of E. Cleveland, 689 F.3d 549, 552 (6th Cir.2012). Summary judgment is proper when “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) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When conducting a review of the evidence under Rule 56(a), we view the evidence, “and all inferences drawn therefrom, in the light most favorable to the non-moving party”—Keller. Little Caesar Enters., Inc. v. OPPCO, LLC, 219 F.3d 547, 551 (6th Cir.2000). Summary judgment is improper if Keller has produced evidence “ ‘such that a reasonable jury could return a verdict’ ” in his favor. Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). “The relevant inquiry is ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ ” Id. (quoting Anderson, 477 U.S. at 251–52, 106 S.Ct. 2505 ).

Whether a FLSA plaintiff is an employee is a mixed question of law and fact. Lilley v. BTM Corp., 958 F.2d 746, 750 n. 1 (6th Cir.1992). “[W]here there is a genuine issue of fact or conflicting inferences can be drawn from the undisputed facts, ... the question is to be resolved by the finder of fact in accordance with the appropriate rules of law.” Id. (holding that employee status was an issue for a jury to resolve). We must therefore decide whether there is a genuine dispute of material fact as to whether Keller was an employee such that summary judgment is inappropriate.

B. Employee Status

Congress passed the FLSA with broad remedial intent. See Powell v. U.S. Cartridge Co., 339 U.S. 497, 509–11, 515, 70 S.Ct. 755, 94 L.Ed. 1017 (1950) (“[T]he primary purpose of Congress ... was to eliminate, as rapidly as practicable, substandard labor conditions throughout the nation.”). The FLSA aimed to “correct ‘labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers....' ” Donovan v. Brandel, 736 F.2d 1114, 1116 (6th Cir.1984) (quoting Dunlop v. Carriage Carpet Co., 548 F.2d 139, 143 (6th Cir.1977) ). “The FLSA requires ... employers to pay employees engaged in commerce a wage consistent with the minimum wage,” Ellington, 689 F.3d at 552 (citing 29 U.S.C. § 206(a) ), and instructs employers to pay employees overtime compensation, which must be no less than one-and-one-half times the regular rate of pay, if the employee works more than forty hours in a week. Id. (citing Baden–Winterwood v. Life Time Fitness, Inc., 566 F.3d 618, 626 (6th Cir.2009) ). Courts interpreting the FLSA must consider Congress's remedial purpose. See Lilley, 958 F.2d at 750.

Under the FLSA, only employees are entitled to overtime and minimum-wage compensation. See Ellington, 689 F.3d at 553. Independent contractors do not enjoy FLSA's protections. See Rutherford, 331 U.S. at 729, 67 S.Ct. 1473. The Supreme Court has recognized, however, that businesses are liable to workers for overtime wages even if the company “put[s] ... an ‘independent contractor’ label” on a worker whose duties “follow[ ] the usual path of an employee.” Rutherford, 331 U.S. at 729, 67 S.Ct. 1473. To carry out the remedial purpose of the FLSA, we must examine whether a business has misclassified an employee as an independent contractor.

The FLSA defines an “employee” as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). According to the FLSA, “ ‘[e]mploy’ includes to suffer or permit to work.” Id. § 203(g). We have interpreted this framework, in light of the legislative purpose, to set forth a standard that “ ‘employees are those who as a matter of economic reality are dependent upon the business to which they render service.’ ” Brandel, 736 F.2d at 1116 (quoting Carriage Carpet, 548 F.2d at 145 ). To assist our application of the economic-reality test, we have identified six factors to consider:³

1) the permanency of the relationship between the parties; 2) the degree of skill required for the rendering of the services; 3)

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