Weisel v. Singapore Joint Venture, Inc., 77-2181

• Citation: 602 F.2d 1185
• Decision Date: 19 September 1979
• Docket Number: No. 77-2181,77-2181
• Parties: 24 Wage & Hour Cas. (BN 276, 87 Lab.Cas. P 33,834 Gary E. WEISEL, Plaintiff-Appellant, v. SINGAPORE JOINT VENTURE, INC., a Florida Corporation, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1185

602 F.2d 1185

24 Wage & Hour Cas. (BN 276, 87 Lab.Cas. P 33,834

Gary E. WEISEL, Plaintiff-Appellant, v. SINGAPORE JOINT VENTURE, INC., a Florida Corporation Defendant-Appellee.

No. 77-2181.

United States Court of Appeals Fifth Circuit.

Sept. 19, 1979.

Mark King Leban, Rosen & Bronis, Stephen J. Bronis, Miami, Fla., Mechanic & Goldstein, Stephen Mechanic, North Miami, Fla., for plaintiff-appellant.

Donald S. Shire, Associate Sol., Washington, D. C., for Dept. of Labor, amicus curiae.

Heidi D. Miller, Dept. of Labor, Fair Labor Standards Division, Washington, D. C., amicus curiae.

E. David Rosen, Michael J. Rosen, Miami, Fla., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BROWN, Chief Judge, CLARK and VANCE, Circuit Judges.

JOHN R. BROWN, Chief Judge:

While the case before us will have little or no effect on the course of Anglo-American jurisprudence, the outcome is of vital importance to Gary E. Weisel, the plaintiff-appellant. From April 1, 1974, to December 31, 1975, Weisel worked as a parking valet at the Singapore Hotel/Motel (the Singapore Hotel), ¹ owned and operated by the defendant, Singapore Joint Venture, Inc. (Singapore J. V.). Throughout his period of employment at the hotel, Weisel's compensation consisted entirely of gratuities from hotel guests and others using the parking facilities. All was quiet on the Singapore Hotel front until one day several months after quitting his job Weisel learned about something called "minimum wage." Weisel decided to explore the possibility of filing a lawsuit and thereafter brought this suit. Sitting without a jury, the Trial Court ruled that minimum wage laws did not apply because Weisel was not an "employee" of the hotel for purposes of the Fair Labor Standards Act, 29 U.S.C.A. § 201 Et seq. (FLSA). The Trial Court reasoned that Weisel's service was a mere "luxury" and that his day-to-day orders came from individuals outside the hotel.

We hold that the Trial Court incorrectly concluded that Weisel was not an employee of the hotel for purposes of the FLSA. We therefore reverse and remand for a determination of the proper relief.

I

Most of the essential facts of this case are not in dispute. Defendant admits that the Singapore Hotel is subject to the minimum wage provisions of the FLSA ² and must therefore pay the statutory minimum wage to all employees. It is also undisputed that if Weisel was indeed an employee of the Singapore Hotel, he is entitled to unpaid minimum wages totaling $4,657.60.

The following facts are also undisputed. Gary Weisel was hired by Ben Pascal and his partner Al Valone to serve as a parking valet. Pascal and the Singapore Hotel had an unwritten agreement whereby Pascal would park cars, keep the front of the hotel clean, rent cars to hotel guests, and assist guests in carrying their luggage into the hotel. In consideration for these services, Pascal was entitled to tips of up to fifty cents per car for valet parking and to 50% of the rental car fees. He was also given permission to rent several hotel parking spaces to hotel employees and others and to keep all of the money he collected. ³ The fifty cent maximum gratuity on tips for parking was fixed by Meyer Wassell, President and Chairman of the Board of Singapore J. V. ⁴

In addition to parking cars, Weisel was required to help unload luggage from cars arriving at the hotel and to sweep the floor at the hotel's entrance. ⁵

During working hours, Weisel was required by the defendant, Singapore J. V., to wear a uniform designating the name "Singapore Hotel." The uniform was supplied by the hotel at no expense to Weisel.

Concerning Weisel's supervision, Meyer Wassell admitted at trial that if he gave an instruction concerning the parking valet to either Al Ronin, the hotel's general supervising manager, or to Pascal, he expected these instructions to be carried out. Wassell also testified that he had the power to hire and fire Pascal and that he did in fact fire him. ⁶

While working at the Singapore Hotel, Weisel was issued an identification card by the Bal Harbour Police Department. The $2.00 fee for obtaining the card was paid by the Singapore Hotel. Moreover, the card indicated that Weisel was employed by the Singapore Hotel. ⁷

Weisel received a couple of small benefits from the hotel. First, he received two Christmas bonuses. Second, he got his meals at the hotel restaurant at an employees' discount. ⁸

On one occasion, while parking a car, Weisel accidently struck and killed a guest of the hotel. Although the hotel's insurance policy explicitly excluded independent contractors from coverage, the insurance company nonetheless paid out over $100,000 for settlement of a claim filed as a result of the accident. In a deposition taken during the course of the law suit brought by the deceased's estate, Meyer Wassell stated that Weisel was an employee of the hotel. Mr. Wassell also admitted that he, Wassell, had the power to fire anyone hired by Pascal and could veto the hiring of any individual selected by Pascal. Moreover, Mr. Wassell claimed that he told Mr. Pascal "how to run the operation."

One of the few truly disputed facts concerned who gave Weisel his day-to-day orders. Weisel testified at trial that he received advice and commands from hotel manager Ronin. Meyer Wassell, during the course of his testimony, implied that Weisel's day-to-day orders came from Pascal, although Wassell provided no concrete evidence of this. Moreover, Wassell admitted that He gave Pascal the orders which Pascal apparently gave to Weisel. ⁹

After hearing all of the testimony presented, the Trial Court entered its findings of fact and conclusions of law. The Court found that Gary Weisel was not an employee of the Singapore Hotel.

II

In 1938, Congress enacted the FLSA to eliminate the low wages and long working hours then plaguing the American labor market. An important part of the solution was the guarantee of a minimum wage to every "employee" engaged in interstate commerce or working for an enterprise engaged in interstate commerce. 29 U.S.C.A. § 206. Since the FLSA is limited to employees, an employer can avoid the minimum wage requirement by establishing that a particular person is an independent contractor rather than an employee.

The FLSA explains what is meant by the term "employee," but the "definition" provides little help. An employee is one "employed by an employer." 29 U.S.C.A. § 203(e)(1). "Employer" is not defined except for the cryptic remark that the term "includes any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C.A. § 203(d). "Employ" is defined as including "to suffer or permit to work." 29 U.S.C.A. § 203(g).

The Supreme Court has attempted to provide guidance to lower courts in distinguishing between employees and independent contractors (and given the definitions discussed above, courts need all the guidance they can get). In its 1947 "trilogy," the Court explained that such terms as "independent contractor" and "employee" are to be given flexible definitions and should not be limited to their common law meanings. See United States v. Silk, 1947, 331 U.S. 704, 67 S.Ct. 1463, 91 L.Ed. 1757 (for purposes of employment taxes on employers under the Social Security Act, as amended); Bartels v. Birmingham, 1947, 332 U.S. 126, 67 S.Ct. 1547, 91 L.Ed. 1947 (same); Rutherford Food Corp. v. McComb, 1947, 331 U.S. 722, 67 S.Ct. 1473, 91 L.Ed. 1772 (for purposes of the FLSA).

In Silk, the Supreme Court provided a number of guidelines to differentiate between an employee and an independent contractor, including the degree of control the business has over the worker and the worker's opportunities for profit or loss. ¹⁰ The Court emphasized, however, that "no one (factor) is controlling nor is the list complete." 331 U.S. at 716, 67 S.Ct. at 1469, 91 L.Ed. at 1769.

It is often possible for both sides to point to the presence or absence of particular Silk factors. Yet such an attempt to apply mechanically the components of Silk represents a distortion of that case. Silk clearly emphasized that the ultimate issue is whether as a matter of "economic reality" the particular worker is an employee. 331 U.S. at 713, 67 S.Ct. at 1463, 91 L.Ed. at 1767. See also Goldberg v. Whitaker House Cooperative, 1961, 366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100 (indicating that " 'economic reality' rather than 'technical concepts' is . . . the test of employment").

In Mednick v. Albert Enterprises, Inc., 5 Cir., 1975, 508 F.2d 297, this Court attempted to apply the precise guidelines of Silk in determining whether one whose job was to oversee the operation of cardrooms at an apartment house-hotel was an employee or an independent contractor. The Court observed that these guidelines, when "considered in isolation . . . produce no clear cut conclusion." Id. at 300. Yet the Court noted that the mechanical approach taken by both sides gave "too little weight" to matters of economic reality. Based on economic realities, the Court found that the worker qualified as an employee.

As in Mednick, we think that a rigid application of the Silk guidelines would be a futile exercise. Instead of quibbling over the presence or absence of particular Silk factors, we proceed to an analysis of the economic realities.

The touchstone of "economic reality" in analyzing a possible employee/employer relationship for purposes of the FLSA is dependency. As we stated in Usery v. Pilgrim Equipment Company, Inc., 5 Cir., 1976, 527 F.2d 1308, 1311, Cert. denied, 1976, 429 U.S. 826, 97 S.Ct. 82, 50 L.Ed.2d 89, the "final and determinative question" is whether "the personnel are so dependent upon the business with which they are connected that they come within the protection of FLSA or are sufficiently independent to lie outside its ambit."

We think that the Trial Court ignored...