By Tracy M. Evans, Associate, Saxon, Gilmore, Carraway & Gibbons, P.A.
In a recent opinion issued on July 16, 2013, the Eleventh Circuit Court of Appeals reversed the Middle District of Florida’s entry of summary judgment in a case involving overtime and minimum wage protections of the Fair Labor Standards Act (“FLSA”). The plaintiffs in the case are former technicians who installed and repaired cable, internet, and digital phone services for the defendant, a service contractor for Bright House Networks. The district court initially entered summary judgment in favor of the defendant, finding that the plaintiffs are not employees of the defendant, but rather independent contractors, and therefore, not entitled to the protections of the FLSA. In reversing the district court’s decision, the Eleventh Circuit looked towards the “economic reality” of the relationship between the plaintiffs and the defendant, using a six-factor test to determine whether the plaintiffs are employees or independent contractors. The six factors used by the Court are as follows:
The nature and degree of the alleged employer’s control as to the manner in which the work is to be performed;
The alleged employee’s opportunity for profit or loss depending upon managerial skill;
The alleged employee’s investment in equipment or materials required for his or her task, or his or her employment of workers;
Whether the service rendered requires a special skill;
The degree or permanency and duration of the working relationship; and
The extent to which the service rendered is an integral part of the alleged employer’s business.
Looking at each of these factors and the facts of the case in the light most favorable to the plaintiffs (the non-moving parties), the Eleventh Circuit found that four of the six factors weighed strongly towards the status of the plaintiffs as employees. The remaining two factors only weakly favored independent contract status. The Eleventh Circuit concluded that summary judgment in favor of the defendant was therefore not appropriate because the plaintiffs could be found to be employees if all reasonable factual inferences are found in the plaintiffs’ favor.
In light of this opinion, businesses should be mindful of the duties, skills, and working relationships of the workers who they classify as independent contractors. The six-factor analysis applied by the Eleventh Circuit should be utilized to ensure that workers classified as independent contractors are not actually employees, entitled to protection under the FLSA, in order to prevent potentially liability for violations of the FLSA.
The full text of the Eleventh Circuit’s opinion is available at http://www.ca11.uscourts.gov/opinions/ops/201212614.pdf.
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