Matrai v. DirecTV, LLC

• Decision Date: 04 March 2016
• Docket Number: Case No. 14-2022-SAC
• Citation: 168 F.Supp.3d 1347
• Parties: Kari Matrai and Kenny Matrai, Plaintiffs v. DirecTV, LLC, Defendant.
• Court: U.S. District Court — District of Kansas

168 F.Supp.3d 1347

Kari Matrai and Kenny Matrai, Plaintiffs

v.DirecTV, LLC, Defendant.

Case No. 14-2022-SAC

United States District Court, D. Kansas.

Signed March 4, 2016

Heather J. Schlozman, Mark V. Dugan, Dugan Schlozman LLC, Overland Park, KS, for Plaintiff.

Robert J. Hingula, Douglas C. McKenna, Joseph E. Bant, Lewis Rice LLC, Kansas City, MO, for Defendant.

MEMORANDUM AND ORDER

Sam A. Crow, U.S. District Senior Judge

The case comes before the court on the defendant DirecTV, LLC's (“DirecTV”) motion for summary judgment (Dk. 67) and on the plaintiffs Kari and Kenny Matrai's motion for partial summary judgment (Dk. 70). The plaintiffs are husband and wife and equal owners of K+K Outfitters (“K+K”). The plaintiffs did satellite television installations for DirecTV as part of the following arrangement. DirecTV through a service provider agreement (“SPA”) contracted some of its Topeka installation work to Quest Integrated Systems, Inc. (“Quest”), and Quest through a separate agreement subcontracted this work to AM Entertainment LLC (“AME”), and AME contracted with the plaintiffs through an installer agreement which Kenny Matrai signed on behalf of K+K. (Dk. 66, Pretrial Order, Stipulations, pp. 1-2). As set forth in the pretrial order, the individual plaintiffs allege they were employees for the joint employers, DirecTV and its subcontractors, Quest and AME, under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.

They claim entitlement to unpaid overtime compensation from DirecTV for this FLSA violation.

DirecTV moves for summary judgment arguing that the plaintiffs were independent contractors of AME and so they are unable to prove they were employees of DirecTV and are not entitled under the FLSA to overtime compensation. DirecTV alternatively argues that the plaintiffs are exempt commissioned employees in a retail or service establishment and that the plaintiffs are pursuing some damages unrecoverable under FLSA. The plaintiffs also have filed a motion seeking partial summary judgment on the issue that they both were employees of DirecTV entitled to both minimum wage and overtime compensation. The plaintiffs say the issues of law are sharply contested but the facts underlying them are undisputed. In contrast, the defendant's contend the plaintiff's motion misstates and misconstrues the record and lacks the facts to sustain their legal positions. The court finds the factual record to be disputed so as to prevent a summary judgment ruling on whether the plaintiffs were employees of DirecTV. The factual record, however, is not disputed on the defendant's alternative exemption argument. The court grants summary judgment for the defendant based on the retail and service establishment exemption for commissioned employees.

SUMMARY JUDGMENT STANDARDS

“Summary judgment is appropriate only if ‘the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.’ ” Tolan v. Cotton , ––– U.S. ––––, 134 S.Ct. 1861, 1866, 188 L.Ed.2d 895 (2014)

(quoting Fed. R. Civ. P. 56(a) ). At the summary judgment stage, the court is not to be weighing evidence, crediting some over other, or determining the truth of disputed matters, but only deciding if a genuine issue for trial exists. Id. The court performs this task with a view of the evidence that favors most the party opposing summary judgment. Id. “Cross-motions for summary judgment are to be treated separately; the denial of one does not require the grant of another.” Buell Cabinet Co., Inc. v. Sudduth , 608 F.2d 431, 433 (10th Cir.1979). At the same time, with the filing of cross-motions, the court is “entitled to assume that no evidence needs to be considered other than that filed by the parties but summary judgment is nevertheless inappropriate if disputes remain as to material facts.” Atlantic Richfield Co. v. Farm Credit Bank of Wichita , 226 F.3d 1138, 1148 (10th Cir.2000).

STIPULATIONS OF FACTS

In the pretrial order, the parties have stipulated to the following facts. During the time period relevant to this action, 2010 through 2013, DirecTV had a SPA with Quest covering a portion of DirecTV's installation work in Topeka and surrounding areas. The SPA made Quest “responsible for ‘provid [ing] at its own expense, all office space and supplies, office overhead (such as telephone, copier and facsimile expense), labor, skills, tools and other equipment and personnel necessary for it to perform the [installations].’ ” (Dk. 66, Pretrial Order, p. 2). By a separate agreement, Quest subcontracted this work to AME.

Answering an advertisement for installers that AME posted on the internet, Kenny Matrai telephoned and later met with Jeremy Knighton, an AME tech supervisor, and was told “about the technical requirements and certifications that were necessary for the work.” Id. AME trained the Matrais for this installation work which included observing Knighton and another technician on the job. AME instructed the Matrais on completing installations and arranged for their receipt of the necessary certifications for this work.

On January 13, 2011, Kenny Matrai executed the installer agreement with AME and signed it on behalf of K+K. Kenny and his wife, Kari, are “ ‘ike 50/50 owners' of K+K.” Id. at 3. Kari did the “book work” for K+K. The agreement required K+K to have its own insurance, and the Matrais obtained a liability insurance policy for K+K and renewed it through June of 2015. There also were provisions governing the parties' termination of the agreement. Kenny Matrai signed a document describing, “Quest's requirements for contacting customers and dispatch regarding installation appointments and for completing and turning in paperwork to get paid.” Id.

When signing the installer agreement, Kenny Matrai initialed paragraphs that required K+K “ ‘to provide and pay for all materials, tools and equipment;’ to obtain the necessary certifications to do the work; and to be responsible for ‘all applicable taxes.’ ” Id. He also initialed a provision that said, “the agreement was ‘for independent contracting services' and that ‘the contracting party provides no benefits ....’ ” Id. The Matrais have stipulated that, they “initially believed that they were independent contractors.” Id.

AME provides “DirecTV with necessary information about the technician's schedule, geographic area of work, and skill set (i.e. information on certifications and specialized skills) and requests a tech number for the technician.” Id. DirecTV issued tech numbers to both Kari and Kenny Matrai, and these numbers are used to indicate that, “the installer is authorized to do DirecTV installations.” Id.

In doing installation work for DirecTV, the Matrais drove themselves to the customer appointments and completed the work using their own vehicle and tools pursuant to the installer agreement with AME. The Matrais completed their installation work orders without anyone else accompanying them in the vehicle or on the worksite.

AME paid the Matrais for the completed installation work orders. On a weekly basis, AME sent information of its completed work orders to Quest, and Quest would compile the information of its completed work orders and send that to DirecTV who wired weekly payments to Quest “for the aggregate, completed work orders.” Id. at 4. Quest, in turn, paid AME for those work orders completed by AME. “DirecTV did not issue paychecks, paystubs, W-2s, or 1099s to the Matrais,” and it “did not maintain personnel files, payroll records, performance evaluations, or benefits information, for the Matrais.” Id. The court reserves its discussion of other facts, controverted and not, used in the evaluation of different factors and elements under FLSA law.

FLSA ANALYSIS

The FLSA creates a cause of action against employers who violate the overtime compensation and/or minimum wage requirements mandated in the Act. An “employer” subject to the FLSA is defined as “any person acting directly or indirectly in the interest of an employer in relation to an employee....” 29 U.S.C. § 203(d)

. An “employee” is defined as “any individual employed by an employer.” § 203(e)(1). The FLSA “defines the verb ‘employ’ expansively to mean, ‘suffer or permit to work.’ ” Nationwide Mut. Ins. Co. v. Darden , 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992) (quoting 29 U.S.C. § 203(g). Concerning a joint-employer relationship, one court offers this summary of the law:

The DOL, the regulatory body responsible for enforcing the FLSA, has enacted regulations outlining when multiple parties may be jointly liable under the FLSA due to the existence of a joint-employer relationship. See 29 C.F.R. § 791.2

. Since Congress has not directly addressed the issue of when a joint-employer relationship exists, and since the regulations enacted by the DOL are based on a permissible reading of the FLSA, this Court grants deference to the DOL's regulations. See

Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 842–43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).... The regulation states:

[A] joint employment relationship generally will be considered to exist in situations such as: [...] Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or [...] Where the employers [...] 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. These regulations are broad and demonstrate intent to impose broad liability under the FLSA on both organizations and officers. According to these regulations, if one employer is acting in the interest of another, or if one employer is controlled by another, a joint-employer relationship exists, and “all joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions...