Salinas v. Commercial Interiors, Inc.

Decision Date25 January 2017
Docket NumberNo. 15-1915,15-1915
Citation848 F.3d 125
Parties Mario SALINAS; William Ascencio, Plaintiffs, on behalf of themselves and others similarly situated ; Bernaldino Salinas; Franklin Henriquez, Plaintiffs–Appellants, and Jose Dolores Mancia; Osmel Hernandez; Henry Garcia Viera; Henry Garcia, Plaintiffs, v. COMMERCIAL INTERIORS, INC., Defendant–Appellee, and J.I. General Contractors, Inc.; Juan Flores Ramirez, personally; Isaias Flores Ramirez, personally, Defendants. Secretary of Labor; National Employment Law Project; Laborers' International Union of North America Mid–Atlantic Regional Organizing Coalition; Centro De Los Derechos Del Migrantes, Amici Supporting Appellant.
CourtU.S. Court of Appeals — Fourth Circuit

ARGUED: Sally Jean Dworak–Fisher, PUBLIC JUSTICE CENTER, Baltimore, Maryland, for Appellants. Michael J. Jack, LAW OFFICES OF MICHAEL J. JACK, Marriottsville, Maryland, for Appellee. Dean Romhilt, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Amicus Secretary of Labor. ON BRIEF: Darin M. Dalmat, Kathy L. Krieger, JAMES & HOFFMAN, P.C., Washington, D.C., for Appellants. M. Patricia Smith, Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, Paul L. Frieden, Counsel for Appellate Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Amicus Secretary of Labor. Brian J. Petruska, LIUNA MID ATLANTIC REGIONAL ORGANIZING COALITION, Reston, Virginia; Catherine K. Ruckelshaus, NATIONAL EMPLOYMENT LAW PROJECT, INC., New York, New York, for Amici National Employment Law Project, Laborers' International Union of North America Mid–Atlantic Regional Organizing Coalition, and Centro De Los Derechos Del Migrantes.

Before WYNN, FLOYD, and HARRIS, Circuit Judges.

Reversed by published opinion. Judge Wynn wrote the opinion, in which Judge Floyd and Judge Harris joined.

WYNN, Circuit Judge:

J.I. General Contractors, Inc. ("J.I."), a now-defunct framing and drywall installation subcontractor owned by brothers Juan and Isaias Flores Ramirez, directly employed Plaintiffs Mario Salinas, William Ascencio, Bernaldino Salinas, and Franklin Henriquez as drywall installers. During its existence, J.I.—and therefore Plaintiffs—worked almost exclusively for Commercial Interiors, Inc. ("Commercial"), a company offering general contracting and interior finishing services, including drywall installation, carpentry, framing, and hardware installation.

Plaintiffs sued J.I., the Ramirez brothers, and Commercial (collectively, "Defendants") for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq. ; the Maryland Wage and Hour Law, Md. Code Ann., Lab. & Empl. §§ 3–401 et seq. ; and the Maryland Wage Payment and Collection Law, Md. Code Ann., Lab. & Empl. §§ 3–501 et seq. According to the complaint, Commercial and J.I. jointly employed Plaintiffs, (1) requiring aggregation of Plaintiffs' hours worked for Commercial and J.I. to assess compliance with the FLSA and Maryland law and (2) rendering Commercial and J.I. jointly and severally liable for any violations of the statutes.

The district court granted summary judgment to Commercial, holding that Commercial did not jointly employ Plaintiffs because J.I. and Commercial entered into a "traditionally ... recognized," legitimate contractor-subcontractor relationship and did not intend to avoid compliance with the FLSA or Maryland law. J.A. 1138–39.1 But the legitimacy of a business relationship between putative joint employers and the putative joint employers' good faith are not dispositive of whether entities constitute joint employers for purposes of the FLSA. Rather, joint employment exists when (1) two or more persons or entities share, agree to allocate responsibility for, or otherwise codetermine —formally or informally, directly or indirectly—the essential terms and conditions of a worker's employment and (2) the two entities' combined influence over the essential terms and conditions of the worker's employment render the worker an employee as opposed to an independent contractor.

Applying this test, we conclude, based on the undisputed facts, that Commercial jointly employed Plaintiffs for purposes of the FLSA and the analogous Maryland law. Accordingly, we reverse.

I.
A.

J.I. directly employed Plaintiffs as drywall installers. Since 2009, J.I. contracted to provide labor for two companies: Commercial and a now-defunct contractor known as P & P. Nearly all of J.I.'s work came through its contracts with Commercial. Notably, J.I. contracted to provide labor for P & P only when Commercial had no work available for J.I. to complete—which occurred twice, at most. Thus, as J.I. employees, Plaintiffs worked almost exclusively for Commercial during the course of their employment.

J.I. generally was responsible for hiring and firing Plaintiffs, though one Plaintiff testified that a Commercial foreman threatened him with termination due to work the Commercial foreman viewed as substandard. And on another occasion, when J.I. had difficulty enrolling in an insurance program mandated for a particular jobsite, Commercial required several Plaintiffs to complete applications for employment with Commercial and to work directly for Commercial on the project. Typically, J.I. paid Plaintiffs; however, on at least a few occasions, Plaintiffs received paychecks issued by Commercial.

Commercial also played a role in determining Plaintiffs' daily and weekly schedules. At each jobsite, the general contractor and others, including Commercial, decided upon the start and end times for work on the jobsite. In addition to regular hours on the site, Commercial foremen told certain Plaintiffs to work additional hours or to report to work on Sundays. Commercial also was involved in determining where Plaintiffs worked each day. Commercial's superintendent regularly communicated Commercial's site-specific staffing needs to the Ramirez brothers, who assigned J.I.'s employees in accordance with Commercial's requests.

While working on Commercial's jobsites, Plaintiffs wore hardhats and vests bearing the Commercial logo. And Commercial foremen gave J.I. supervisors sweatshirts branded with Commercial's logo for those supervisors to wear while working on Commercial projects. In addition to these outward markers, Plaintiffs were instructed to tell anyone who asked that they worked for Commercial.

Upon reporting to the assigned jobsite each day, Commercial required Plaintiffs to sign in on timesheets provided by Commercial and bearing Commercial's logo. Commercial retained these timesheets, storing them in a temporary office typically located on each jobsite before sending them to Commercial's main office in Maryland for retention. Using these timesheets, Commercial foremen recorded the time Plaintiffs reported to work, as well as the time Plaintiffs finished working each day. By contrast, J.I. did not keep or maintain written records of Plaintiffs' hours.

After signing in for work on nearly every morning, Commercial required Plaintiffs to attend meetings. At these meetings, Commercial foremen gave instructions regarding the projects Plaintiffsneeded to complete and the methods they needed to follow in doing so. Commercial also required Plaintiffs to attend a weekly safety meeting. Because Plaintiffs are native Spanish speakers and speak limited English, J.I. supervisors generally translated the Commercial foremen's instructions to Plaintiffs.

Commercial foremen continually supervised Plaintiffs as they completed their assigned tasks. For example, when J.I. did not have a supervisor at a jobsite, Commercial foremen told Plaintiffs what to do and how to do it. And regardless of whether J.I. had a supervisor at a jobsite, Commercial foremen "check[ed]" Plaintiffs' work throughout each day to "[m]ak[e] sure that the work [wa]s quality." J.A. 78c. Commercial foremen also verified that J.I. employees' work was "acceptable" before Commercial issued payment to J.I. J.A. 81b. If Plaintiffs' work was not up to Commercial's standards or specifications and J.I. had a supervisor on site, Commercial communicated the deficiencies to Plaintiffs via J.I.'s onsite supervisors. Plaintiffs were then expected to remedy the identified shortcomings.

Commercial owned and provided nearly all the tools and materials Plaintiffs used to complete their tasks, even though Commercial's contract with J.I. provided that J.I. was obligated to provide all materials and equipment. In particular, Commercial supplied Plaintiffs with nail guns, chop saws, lasers, safety goggles, ropes, gloves, earplugs, and gangboxes (metal storage boxes) for overnight tool storage. Commercial also provided the materials Plaintiffs needed to complete their work, including metal studs used for framing and the drywall installed on Commercial projects. By contrast, J.I. did not own or provide Plaintiffs with any equipment or materials, and Plaintiffs provided only small, handheld tools.

B.

On July, 2, 2012, Plaintiffs filed a collective action under the FLSA, the Maryland Wage and Hour Law, and the Maryland Wage Payment and Collection Law against Defendants in the United States District Court for the District of Maryland.2 The complaint alleged that Defendants willfully failed to pay Plaintiffs' wages, including overtime wages, in violation of the FLSA and Maryland law. Plaintiffs asserted that they were jointly employed by Commercial and J.I., rendering Commercial and J.I. jointly and severally liable for any violations of the FLSA or Maryland statutes.3

Commercial moved for summary judgment, arguing that it did not jointly employ Plaintiffs. To determine whether Commercial and J.I. jointly employed Plaintiffs, the district court created and applied a novel multifactor test focusing on the legitimacy of the contracting relationship between Commercial and J.I. and whether the putative joint employers intended to evade federal and state wage and hour laws. In particular, the court's test examined...

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