Lasater v. DirecTV, LLC

• Decision Date: 02 November 2017
• Docket Number: Case No. 2:16-cv-01373-SVW-AS
• Parties: Jeremy LASATER v. DIRECTV, LLC
• Court: U.S. District Court — Central District of California

322 F.Supp.3d 988

Jeremy LASATER

v.DIRECTV, LLC

Case No. 2:16-cv-01373-SVW-AS

United States District Court, C.D. California.

Filed November 2, 2017

George A. Hanson, Alexander T. Ricke, Pro Hac Vice, Jason Toji Calabro, Stueve Siegel Hanson LLP, Kansas City, MO, Todd C. Werts, Lear Werts LLP, Columbia, MO, Jason S. Hartley, Pro Hac Vice, Stueve Siegel Hanson LLP, San Diego, CA, for Jeremy Lasater.

Galit A. Knotz, Gregory W. Knopp, Christopher K. Petersen, Jonathan P. Slowik, Susan Kay Leader, Akin Gump Strauss Hauer and Feld LLP, Los Angeles, CA, for DirecTV, LLC.

Proceedings: IN CHAMBERS ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT AND SUMMARY ADJUDICATION [57]

STEPHEN V. WILSON, U.S. DISTRICT JUDGE

I. Introduction

This case was filed in early 2016 and has now reached summary judgment. The individual Plaintiffs are scheduled for trials that span from November 2017 and into December 2017. DirecTV has claimed for years that the Installers it hires through Contracting Companies are independent contractors, not employees. The Installers claim that they are employees as a matter of law, and are eligible for various California and Fair Labor Standards Act statutory protections. Both parties ask this Court to determine the Installers' status as a matter of law.

The Court finds that the Installers are DirecTV's employees under both FLSA and California Law, and that DirecTV cannot claim a 207(i) exemption based on the facts. The Court also finds that, under the facts provided, only three of the nine Installers have a separate claim for minimum wage violations under FLSA. None of the Installers have a viable gap time claim.¹ The Court determines that the statute of limitations for this case is two years, not three, as DirecTV's FLSA violation is not willful. And the Court provides guidance regarding how to calculate overtime wages, although the final calculation remains a question for the fact-finder.

In coming to this decision, the Court recognizes the risks that corporations face when hiring a subcontractor. Corporations like DirecTV should—and do—have the right to contract with subcontractors and set parameters to ensure efficiency and quality. And corporations should be able to do so without having to qualify as a joint-employer. But here, DirecTV has gone well beyond setting parameters for efficiency and quality. In asking this Court to find that the Installers are independent contractors and not employees, DirecTV asks this Court to prioritize form over substance. DirecTV asks this Court to consider DirecTV's legal arrangements with various Contracting Companies, but to essentially ignore the actual work environment for the Installers working at those Contracting Companies.

For a jury to find for DirecTV, it would have to conclude that the Installers were not employees under either FLSA or California law. To reach this conclusion, the jury would have to ignore the substantial control DirecTV exerted over the Installers. The jury would have to ignore the hiring guidelines DirecTV established, guidelines that far exceeded any guidelines provided by the Contracting Companies. The jury would have to ignore how DirecTV was the only customer for many of these Contracting Companies, effectively setting the rate of payment for each Installer. And they would have to ignore the Contractor Agreement, which stated that the Contracting Companies were not allowed to work for other cable or television installation companies.

DirecTV asks this Court to believe that these Contracting Companies were not shell corporations. But even if the Court does believe that, the Court can still draw only one conclusion. DirecTV's influence over the Contracting Companies, its ability to hire and de facto fire Installers, its ability to schedule shifts and supervise Installers, and its control over even minute aspects of the Installers' work environment all show an employer-employee relationship. And DirecTV cannot show a genuine dispute over any material fact that would demonstrate otherwise.

II. Factual Background

DirecTV provides subscription direct broadcast satellite television service to customers nationwide. A DirecTV subscription requires the installation and activation of the DirecTV satellite dish, affixed to the customer's home or office, and a DirecTV box, connected to the television. Plaintiff's Statement of Uncontroverted Facts ("PSUF") ¶ 7. In some locations, DirecTV provides DirecTV "owned and operated" installation services. PSUF ¶ 11. In other locations, it sub-contracts all installation work to various contracting companies ("Contracting Companies"). PSUF ¶ 14. These Contracting Companies and DirecTV contract through a Service Provider Agreement ("SPA"). PSUF ¶ 21. The Contracting Companies then engage and train installer-technicians ("Installers") to render installation services for DirecTV.

The Installers have brought this case alleging that DirecTV violated the FLSA by repeatedly paying employees less than the federal minimum wage; failing to pay employees who worked in excess of 40 hours per week at a rate of one-and-a-half times the regular rate at which they were employed; and failing to keep and preserve accurate records of employees and the wages, hours, and other conditions of employment maintained by them since 2010. Plaintiffs allege that DirecTV is a joint employer of the Contracting Companies and is therefore liable under the FLSA. Plaintiffs allege that DirecTV also misclassified the Installers under California wage and employment laws. Plaintiff seek to recover unpaid minimum wage and overtime compensation and liquidated damages. Id.

III. Legal Standard

Summary judgment is proper where, viewing the evidence and inferences in favor of the nonmoving party, "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) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Material facts are those that may affect the outcome of the suit under governing law, and an issue of material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson , 477 U.S. at 248, 106 S.Ct. 2505.

Here the Court considers cross-motions for summary judgment, for which the Ninth Circuit has refined the standard of review. "[W]hen simultaneous cross-motions for summary judgment on the same claim are before the court, the court must consider the appropriate evidentiary material identified and submitted in support of both motions, and in opposition to both motions, before ruling on each of them." Tulalip Tribes of Wash. v. Wash., 783 F.3d 1151, 1156 (9th Cir. 2015). The Court "rule[s] on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the Rule 56 standard." Id.

IV. Under the Fair Labor Standards Act, Installers Worked As Employees of DirecTV, Not as Independent Contractors

a. FLSA Joint Employment Test

The FLSA broadly defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). In the Ninth Circuit, "the concept of joint employment should be defined expansively under the FLSA." Chao v. A-One Med. Servs., Inc., 346 F.3d 908, 917 (9th Cir. 2003) (quoting Torres-Lopez v. May, 111 F.3d 633, 639 (9th Cir. 1997) ). An employee may work for two employers simultaneously. 29 C.F.R. § 791.2(a). Joint employment may be found where the facts show "that employment by one employer is not completely disassociated from employment by the other employer(s)." Id. The scope of work for the employee of joint employers is considered "one employment," and the employers are considered "responsible, both individually and jointly, for compliance with all of the applicable provisions of the act, including the overtime provisions...." Id.

In the Ninth Circuit, joint employment is analyzed under the "economic reality" test. Chao, 346 F.3d at 917. "[D]etermination of whether an employer-employee relationship exists does not depend on 'isolated factors but rather upon the circumstances of the whole activity.' " Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1469 (9th Cir. 1983) (quoting Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S.Ct. 1473, 1477, 91 L.Ed. 1772 (1947) ). The determination is a question of law whereby "[t]he touchstone is 'economic reality.' " Id. (quoting Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961) ).

There are three situations in which a Court may find that a joint employment relationship exists:

(1) Where there is an arrangement between the employers to share the employee's services, as, for example, to interchange employees; or

(2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or

(3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.

29 C.F.R. § 791.2(b). Both situations two and three apply to this case.

Because Plaintiffs argue that these situations do exist, the Court must look at the economic-reality test in Bonnette . This four-factor test is not limited to, but primarily considers, whether the alleged employer:

(1) had the power to hire and fire the employees;

(2) supervised and controlled employee work schedules or conditions of employment;

(3) determined the rate and method of payment; and

(4) maintained employment records.

Bonnette, 704 F.2d at 1470.

Courts in the Ninth Circuit also look at additional factors depending on the potential joint employers. In Torres-Lopez v. May, 111 F.3d 633 ...