15‐3424‐cv

Thomas v. TXX Servs., Inc.

      

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

   

SUMMARY ORDER

          

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.  CITATION TO A SUMMARY

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE

OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.  WHEN CITING A

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE

FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ).  A

PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED

BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in

the City of New York, on the 25th day of October, two thousand sixteen.

PRESENT: DENNY CHIN,

    SUSAN L. CARNEY,

     Circuit Judges,

    BRIAN M. COGAN,

     District Judge.

*

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

CECIL THOMAS, individually and on behalf of all

others similarly situated, JOHN DEAN, individually

and on behalf of all others similarly situated,

     Plaintiffs‐Appellants,

MUHAMMAD ASIF, NARESH BOORANI, MARK

BOURNE, EDGAR CAMPOS, JOSE H. CANCELA,

CUSH RACK CUNNINGHAM, SOLOMON

DESNOES, OSCAR F. GONZALEZ, JAMES

CORNELIUS GRANT, DONALD HENDRICKS,

CARL HENRY, KORHAN KIZIL, DERELL LEWIS,

WINSTON LINDSAY, ROSA MARIN, GONZALO

                                                 

*

   Judge Brian M. Cogan, United States District Court for the Eastern District of

New York, sitting by designation.
‐ 2 ‐ 

V. MORALES, ANITA MOROCHO, PATRICIA E.

MUNOZ, VICTOR A. OGUNBEDEDE, ALMA D.

POPOCOL, ANDREW THOMPSON, IAN GEORGE

THOMPSON, IREAL B. WADADA, COURTNEY

SMITH, NICHOLAS BARATTA, IBRAHIM

TAKANE, MARLON OLIVEIRA, MANUEL A.

MIRANDA, BRANNE GONZALEZ, HAMILTON

VASCO, WUILINTON MEJIA, DIOGENES A.

GARCIA, AUDRE MAURICE HOLMES, HECTOR

RODOLFO MARTINE ANDRADE, LAMONTE

DAVID DEFRECCE, JOSEPH MORRIS, RUPPERTO

PIZZO, TERENCE TOMLIN, LIONEL SMITH, LUIS

D. FLORES, ISIDORO D. DIZON, JR., ERNST

DENIZARD, OSCAR RODRIGUEZ, GERMAN A.

MORAN RIOS, TEJDHARI RAGHUBIR, THOMAS J.

GARGER, BORIS BABAEW, ADRIANA

ORTELLADO, DENIZHAN OZTURK, ALEJANDRO

SOLIS, HECTOR R. MARTINEZ, JOSE E. PICO,

JOSE PLUTARCO PICO‐ALVIA, DAISY E.

ALVANADO, KARL DONOVAN BUCKLE, WON S.

HAN, ABRAHIEM MOHAMAD, DEXTER C.

ALEXANDER, LESTER ALEXANDER, LUIS

XAVIER VILLALVA, ROBERT PERDUE, HARPAL

SAWHNEY, EDUARDO FERNANDEZ, STEPHEN

ANTHONY JOHN, MUHAMMAD ASHIQ,

KONSTANTINOS VASILIOU, RICHARD S.

ARMSTRONG, TYRONE DAVIS, ELWOOD

CHAPMAN, OLIVER JACQUES SIMON, DEGOU

GEORGE PAUL, HECTOR R. MARTINEZ,   

Plaintiffs,   

        

    v.           15‐3424‐cv

           

TXX SERVICES, INC., PATRICIA DOUGAN HUNT,     

     Defendants‐Appellees.**

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

                                                 

**   The Clerk of Court is directed to amend the caption to conform with the above.
‐ 3 ‐ 

FOR PLAINTIFFS‐APPELLANTS: DENISE A. SCHULMAN, D. Maimon

Kirschenbaum, Joseph & Kirschenbaum LLP,

New York, New York.

FOR DEFENDANTS‐APPELLEES: JEFFREY W. PAGANO, Ira M. Saxe, Crowell &

Moring LLP, New York, New York.  

Appeal from the United States District Court for the Eastern District of

New York (Feuerstein, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is VACATED,

and the case is REMANDED for further proceedings consistent with this order.  

Plaintiffs‐appellants appeal the district courtʹs judgment entered October

14, 2015 awarding summary judgment to defendants‐appellees TXX Services, Inc.

(ʺTXXʺ) and Patricia Dougan Hunt pursuant to Federal Rule of Civil Procedure 56 and

dismissing plaintiffsʹ claims.  By order entered September 30, 2015, the district court

accepted the report and recommendation of the magistrate judge (Locke, M.J.)

recommending that the court grant summary judgment in favor of defendants, on the

grounds that plaintiffs were independent contractors and not employees under the Fair

Labor Standards Act (ʺFLSAʺ), 29 U.S.C. §§ 201 et seq., and the New York Labor Law

(ʺNYLLʺ), N.Y. Lab. Law §§ 190 et seq.  We assume the partiesʹ familiarity with the

underlying facts, procedural history, and issues on appeal.

TXX is a transportation company that delivers freight for customers by

receiving freight at its facility and engaging drivers to deliver the freight to retailers.  
‐ 4 ‐ 

Hunt is an owner and shareholder of TXX.  Plaintiffs are former and current delivery

drivers who, through business entities, entered into contracts with TXX to deliver

freight for TXX customers.  They allege that defendants violated the FLSA by

withholding overtime wages and violated the NYLL by reducing their wages, failing to

pay wages in a timely manner, withholding overtime wages, and failing to comply with

notice requirements.

In November 2013, defendants filed a motion for judgment on the

pleadings that relied on affidavits.  The district court referred the matter to the

magistrate judge (Wall, M.J.), who recommended that the motion not be converted to a

motion for summary judgment, that the parties be permitted to conduct additional and

limited discovery, and that the motion, which he treated as a motion to dismiss under

Federal Rule of Civil Procedure 12(b)(6), be denied.  The district court decided to

convert defendantsʹ motion for judgment on the pleadings into a motion for summary

judgment, set a deadline for supplemental submissions, and allow plaintiffs to take a

deposition under Federal Rule of Civil Procedure 30(b)(6), but no other depositions.   

In September 2014, defendants filed a motion for summary judgment

which the district court referred to another magistrate judge (Locke, M.J.).  On May 22,

2015, the magistrate judge filed a report and recommendation that (1) applied the multi‐

factor tests set forth in Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir. 1988), and

Deboissiere v. Am. Modification Agency, No. 09‐CV‐2316 (JS)(MLO), 2010 WL 4340642
‐ 5 ‐ 

(E.D.N.Y. Oct. 22, 2010), (2) concluded that plaintiffs were independent contractors and

not employees under the FLSA and NYLL, and (3) recommended that the district court

grant summary judgment in favor of defendants.  

On September 30, 2015, the district court accepted and adopted the

magistrate judgeʹs report and recommendation, over plaintiffsʹ objections, and granted

defendantsʹ motion for summary judgment.  The district court then dismissed plaintiffsʹ 

claims on October 14, 2015.  Plaintiffs appeal that award of summary judgment as

improper because they claim the district court resolved factual disputes in defendantsʹ 

favor, failed to credit plaintiffsʹ evidence and draw reasonable inferences in their favor,

and erred in holding that plaintiffs were not employees under the FLSA and NYLL.   

We review an award of summary judgment de novo and will affirm only if

the record, viewed in favor of the party against whom judgment was entered, shows

that there are no genuine issues of material fact and that the moving party is entitled to

judgment as a matter of law.  Barfield v. N.Y.C. Health and Hosps. Corp., 537 F.3d 132, 140

(2d Cir. 2008).   

    The inquiry into employee status under the FLSA concerns whether,

based on the totality of circumstances and ʺas a matter of economic reality, the workers

depend upon someone elseʹs business for the opportunity to render service or are in

business for themselves.ʺ  Brock, 840 F.2d at 1059.  Under the fact‐intensive ʺeconomic

realityʺ test, courts consider
‐ 6 ‐ 

(1) the degree of control exercised by the employer over the workers,

(2) the workersʹ opportunity for profit or loss and their investment in the

business, (3) the degree of skill and independent initiative required to

perform the work, (4) the permanence or duration of the working

relationship, and (5) the extent to which the work is an integral part of the

employerʹs business.

Id. at 1058‐59.  The ʺexistence and degree of each factor is a question of fact while the

legal conclusion to be drawn from those facts ‐‐ whether workers are employees or

independent contractors ‐‐ is a question of law.ʺ  Id. at 1059.

    A determination of whether a worker qualifies as an employee under the

NYLL depends upon factors such as whether he or she ʺ(1) worked at his [or her] own

convenience, (2) was free to engage in other employment, (3) received fringe benefits,

(4) was on the employerʹs payroll, and (5) was on a fixed schedule.ʺ  Deboissiere, 2010

WL 4340642, at *3 (citing Bynog v. Cipriani Grp., Inc., 1 N.Y.3d 193, 198 (2003), and Velu v.

Velocity Exp., Inc., 666 F. Supp. 2d 300, 307‐08 (E.D.N.Y. 2009)).  The analysis focuses on

ʺthe degree of control exercised by the purported employer over the results produced or

the means used to achieve the results.ʺ  Bynog, 1 N.Y.3d at 198.

    We conclude the district court erred in granting summary judgment to

defendants.  First, instead of determining whether issues of fact existed for trial, the

district court resolved the issues of fact itself.  For example, the district court (1) found

that plaintiffs have ʺultimate control over their routes,ʺ (2) concluded that TXX

exercised only ʺlimited controlʺ over drivers, (3) concluded that many of TXXʹs

requirements for the drivers were ʺdictatedʺ by the nature of its business or imposed by
‐ 7 ‐ 

customers, rather than by TXX itself, and (4) found that ʺeach bid was essentially a

separate job,ʺ even though some plaintiffs had provided services to TXX ʺfor many

years.ʺ  S. App. at 33, 35, 37, 39.

    Second, the record demonstrates that there are issues of material fact that

preclude summary judgment.  The parties, for example, disputed whether (1) TXX

required drivers to drive delivery vehicles conforming to TXX specifications; (2) drivers

could take breaks on their delivery routes without facing disciplinary action by TXX;

(3) TXX required drivers to work a minimum number of hours; (4) plaintiffs were

economically dependent on TXX; and (5) TXX controlled plaintiffs and, if so, to what

extent.  

    Third, plaintiffs did not rely simply on conclusory assertions in opposing

summary judgment, but submitted sufficiently detailed affidavits.  Indeed, the parties

submitted conflicting evidence.  Defendants provided declarations signed by non‐party

drivers stating that they used vehicles of their own choosing and that they did not

follow TXX rules.1  Plaintiffs, in turn, proffered their own signed declarations asserting

that TXX required them to use vans over a particular size and under a particular weight

and to ensure that the vans had tinted windows.2  Defendants presented declarations

                                                 

1   See, e.g., App. at 65 (driver declaration asserting that he delivered freight ʺin

secure vehicles of the choosing of [the driversʹ business entities]ʺ).

2   See, e.g., id. at 393 (driver declaration claiming that ʺTXX requires vehicles that

weigh less than 10,000lbs in order to use passenger routes, as opposed to commercial routesʺ);

id. at 403, 409 (driver declaration stating that ʺTXX requires I use a van of a certain size for
‐ 8 ‐ 

suggesting that drivers had full discretion to take their own breaks and make personal

stops.3  Plaintiffs provided the signed declaration of another driver declaring that, when

he tried to take breaks or deviate from his route, he received calls from TXX

reprimanding him and instructing him to return to his deliveries. 4  Plaintiffs offered a

signed declaration from a driver claiming that he sometimes received calls from TXX in

the afternoon and on weekends directing him to complete more deliveries.5  

Defendants, on the other hand, provided copies of their contracts with the drivers

which expressly specify that drivers can reject assignments for any reason and are not

required to work a certain number of hours.6  Plaintiffs claimed that ʺthey worked

exclusively for TXXʺ and ʺcould not share work with others without TXXʹs approval,ʺ 

Appellantsʹ Reply Br. at 8 (citing App. at 384, 387, 403, 406, 414, 423), while defendantsʹ 

contracts with the drivers explicitly state that drivers can perform services for other

companies and hire assistants or helpers to complete deliveries.7  

                                                                                                                                                             

deliveriesʺ and ʺTXX requires that I tint the windows on my van in order to continue

performing work for themʺ).  

3   See, e.g., id. at 73 (driver declaration averring that he and other drivers ʺat all

times have decided[] . . .whether or not to take any stops for personal reasons, the nature of

those stops and the duration of those stopsʺ).

4   Id. at 416 (driver declaration asserting that ʺ[w]hen I deviated from my route, I

would receive a call from TXX reprimand[ing] me and instructing me to get back to deliveryʺ).

5   Id. (driver declaration stating that there were ʺtimes when TXX called me in the

afternoon and on Saturdays to perform more workʺ and that his compliance was required).

6   See, e.g., id. at 378 (contract providing that an ʺOwner‐Operator may accept or

reject any opportunities offered by TXX, without any reasonʺ and ʺis NOT required to perform

services for a minimum or maximum number of hours per day or per weekʺ).

7   See, e.g., id. at 378, 379 (contract stating that an ʺOwner‐Operator is encouraged to

and is free to offer his services to others and perform services for more than one company at a
‐ 9 ‐ 

    On this record, the district courtʹs award of summary judgment on the

issue of plaintiffsʹ status as employees under the FLSA and NYLL was unwarranted.  

See Velez v. Sanchez, 693 F.3d 308, 325‐31 (2d Cir. 1984) (vacating an award of summary

judgment in an FLSA case in part because there were genuine issues of material facts as

to whether plaintiff was an ʺemployeeʺ within the meaning of the FLSA); see also

Graziadio v. Culinary Inst. of Am., 817 F.3d 415, 422‐24 (2d Cir 2016) (vacating an award

of summary judgment in an action brought under the Family and Medical Leave Act

(FMLA) in part because there were factual disputes as to whether the FMLAʹs definition

of ʺemployer,ʺ which tracks the FLSAʹs definition of ʺemployer,ʺ covered the

defendant).

Accordingly, we VACATE the judgment of the district court and

REMAND the matter for further proceedings consistent with this order.

FOR THE COURT:

     Catherine OʹHagan Wolfe, Clerk

                                                                                                                                                             

timeʺ and ʺis not required to provide services personally and may hire assistants or helpers to

complete the workʺ); id. at 384, 387 (driver declaration asserting that ʺI was not allowed to share

stops or routes with other drivers without the approval of TXXʺ and ʺTXX prohibited me from

having contracts with any of TXXʹs customers for whom I made deliveriesʺ).