RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 05a0348p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

LYDIA DEMSKI,

Petitioner,

v.

UNITED STATES DEPARTMENT OF LABOR,

Respondent,

INDIANA MICHIGAN POWER COMPANY,

Intervener.

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No. 04-3753

On Appeal from the Department of Labor (except OSHA).

No. 02-084.

Argued: July 21, 2005

Decided and Filed: August 17, 2005 

Before: KENNEDY, CLAY, and GILMAN, Circuit Judges

_________________

COUNSEL

ARGUED: Carol A. Dunning, QUARTO DUNNING, New York, New York, for Petitioner. Roger

Wilkinson, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent.

J. Patrick Hickey, PILLSBURY, WINTHROP, SHAW, PITTMAN, LLP, Washington, D.C., for

Intervenor. ON BRIEF: Carol A. Dunning, QUARTO DUNNING, New York, New York, Brett

K. Bacon, FRANTZ WARD, Cleveland, Ohio, for Petitioner. Carol Arnold, Paul Frieden, UNITED

STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent. J. Patrick Hickey, Julia

E. Judish, PILLSBURY, WINTHROP, SHAW, PITTMAN, LLP, Washington, D.C., for Intervenor.

_________________

OPINION _________________

KENNEDY, Circuit Judge. Petitioner Demski seeks review of the decision of the

Administrative Review Board of the Department of Labor, which denied her claim because it found

that she was not an employee for the purposes of the whistleblower provisions of the Energy

Reorganization Act, 42 U.S.C. § 5851. Because we agree that Petitioner was not an employee of

Defendant-Intervener Indiana Michigan Power Company (I & M), we DENY her petition for

review.

1
No. 04-3753 Demski v. DOL Page 2

1

Petitioner’s complaint to OSHA was against the American Electric Power Company (AEP). I & M is a wholly

owned subsidiary of AEP.

2

The ALJ found that because Congress did not specifically define the term “employee” in the ERA, the

common law definition of the term applied based on Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992).

This common law definition incorporates the master-servant relationship. Id.

BACKGROUND

Petitioner Demski was the president and sole shareholder of two different corporations,

American Nuclear Resources, Inc., and Scope Services, Inc. (The corporations are hereinafter

referred to as ANR/Scope). ANR/Scope supplied contract labor (both skilled and unskilled) as well

as technical knowledge to power-generating plants. I & M entered into three contracts with

ANR/Scope. Under the contracts, ANR/Scope agreed to maintain ice condensers at the Donald C.

Cook Nuclear Power Plant in Bridgman, Michigan, augment plant staff, and maintain plant buildings

and grounds. The terms of the agreements expressly provided that ANR/Scope were not agents or

employees of I & M.

I & M never paid Petitioner a salary nor did it offer her benefits. She did not have an I &

M supervisor. She did have two offices at the Cook plant, a security badge and clearance, and the

right to use Cook office supplies. She participated in meetings with I & M management (although

not daily meetings), and she responded to I & M management inquiries. Two other managers of

ANR/Scope were responsible for overseeing the day-to-day management of the contracts.

Petitioner learned of serious safety problems with an ice condenser. She reported those

problems and raised concerns to I & M. I & M then terminated its ice condenser contract with

ANR/Scope. It also refused her bids to continue the other two contracts, and revoked the employee

access badges for her and her employees.

Petitioner filed a complaint with the Department of Labor’s Occupational Safety and Health

Administration (OSHA) both individually and as a representative of ANR/Scope, alleging that

American Electric Power Company (AEP)1

 wrongfully terminated ANR/Scopes’ contracts because

Demski reported safety concerns. Without determining whether she was an employee, OSHA found

that her complaint had merit. AEP then sought a hearing before an administrative law judge (ALJ)

who, before hearing the case, dismissed Petitioner’s claims against AEP and substituted I & M as

a party because I & M was the legal holder of the licenses for the Cook plant.

The ALJ also ruled that ANR/Scope were improperly listed as complainants because, under

the Energy Reorganization Act (ERA), only employees can recover for discrimination; corporations

may not recover. The ALJ ruled that Petitioner was not a covered employee because she was not

an employee as the common law defined the term.2

 Additionally under Nationwide Mut. Ins. Co.

v. Darden, 503 U.S. 318, 322-23 (1992), the ALJ found that the multiple-factor Darden test was not

triggered because Petitioner was not a hired party in that she did not receive financial compensation

from I & M. The ALJ found, in the alternative, that most of the Darden factors indicated that she

was not an employee. The ALJ also found that Petitioner was not an employee of ANR/Scope

because she was the sole shareholder of both companies. 

The Administrative Review Board of the Department of Labor affirmed the findings of the

ALJ. Petitioner then sought review in this court. In her petition, she asserts only that she was an

employee of I & M for the purposes of the ERA. She does not argue that she is an employee of

ANR/Scope.
No. 04-3753 Demski v. DOL Page 3

ANALYSIS

To determine whether Petitioner was an employee of I & M, we must first determine if

Congress defined the term employee in the statute in question. In the absence of a congressional

definition or an explicit delegation of congressional authority to the agency, we determine how the

agency responsible for implementing the statute (in this case, the Department of Labor) understands

the term, and, under Chevron U.S.A., Inc., v. Natural Resources Defense Council, Inc., 467 U.S. 837,

843 (1984), we determine whether such an understanding is a “reasonable interpretation” of the

statute. Id. at 844. 

The ERA defines the term “employer,” but does not define the term “employee.” See 42

U.S.C. § 5851. Additionally, the relevant regulations do not define the term. See 29 C.F.R. § 24.1-

24.5. Both the ALJ and the Administrative Review Board relied on Supreme Court precedent,

specifically Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992), to find that, in the

absence of a statutory definition, the term “employee” is defined as the common law defines it.

Darden also indicates that the common law defines an employee as the conventional master-servant

relationship. Id. Darden provides further guidance to lower courts in determining when a “hired

party is an employee under the general common law of agency.” Id. (quoting Community for

Creative Non-Violence v. Reid, 490 U.S. 730, 751-52 (1989) (“In determining whether a hired party

is an employee under the general common law of agency, we consider the hiring party’s right to

control the manner and means by which the product is accomplished. Among the other factors

relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the

location of the work; the duration of the relationship between the parties; whether the hiring party

has the right to assign additional projects to the hired party; the extent of the hired party’s discretion

over when and how long to work; the method of payment; the hired party’s role in hiring and paying

assistants; whether the work is part of the regular business of the hiring party; whether the hiring

party is in business; the provision of employee benefits; and the tax treatment of the hired party.”)).

Neither party appears to argue that the Department of Labor’s understanding of the term “employee”

is an unreasonable one. We agree that the agency understanding is reasonable in that the agency

relies on Supreme Court precedent in reaching its understanding of the term in the absence of a

congressionally supplied definition. 

We now turn to the question of whether the Administrative Review Board appropriately

granted summary judgment to I & M. We review a grant of summary judgment de novo. Adams

v. City of Auburn Hills, 336 F.3d 515, 518 (6th Cir. 2003). In reviewing a grant of summary

judgment for lack of a dispute of a material fact, we construe the evidence in the light most favorable

to Petitioner and draw all reasonable inferences in his favor. Aiken v. City of Memphis, 190 F.3d

753, 755 (6th Cir. 1999) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.

574, 587, 106 S. Ct. 1348 (1986)).

In reviewing the grant of summary judgment to I & M, the only relevant question is whether

Petitioner is an employee of I & M as the common law defines the term. The Darden factors require

Petitioner to be a hired party. She is not. See O’Connor v. Davis, 126 F.3d 112, 115 (2d Cir. 1997).

Cf. Shah v. Deaconess Hosp., 355 F.3d 496, 499 (6th Cir. 2004). I & M never hired her in the sense

that we understand the term. It is undisputed that no contractual relationship of any sort existed

between I & M and Demski. Instead, I & M had contracts with ANR/Scope, and Petitioner was the

sole shareholder of ANR/Scope. That Petitioner was the sole shareholder does not mean that I &

M had any sort of a contractual or employment relationship with her. The law does not transfer

contractual relationships so easily.

Additionally, viewed in the light most favorable to Petitioner, the record in this case fails to

disclose any dispute regarding any of the Darden factors. Petitioner’s relationship with I & M is

not a master-servant relationship. Petitioner had complete control over how to fulfill ANR/Scopes’
No. 04-3753 Demski v. DOL Page 4

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Petitioner mentions that she worked at the reactor, had offices there, and could use I & M office supplies. The

fact that she could not control where she worked stems from the fact that ANR/Scopes’ contracts were related to one

nuclear reactor at one location. Those facts are not indicative of whether she was employed by I & M. Thus, even if

Petitioner was on-site daily, this factor would only marginally enhance her case under the Darden factors.

contractual obligations. She chose whether to seek to renew the agreements, just as I & M was free

to renew or not renew them. I & M could not assign more or different work to Petitioner or

ANR/Scope than the contracts allowed. Petitioner had control over how ANR/Scope fulfilled its

contractual obligations to I & M and who should perform that work.3

 She had exclusive control

over the hiring and compensation of ANR/Scope employees who worked on the three contracts.

Petitioner, as the sole shareholder and principal of ANR/Scope, was in the business of providing

services to the owners of nuclear reactors. Petitioner’s compensation came from any profits

ANR/Scope made on the contracts with I & M, not from a salary or an hourly wage provided by I

& M. Finally, the record does not contain any information that would indicate that I & M provided

Petitioner any benefits, or that it withheld social security or income taxes from any payments to

ANR/Scope on her behalf. The Darden factors indicate that Petitioner was not an employee, but that

her solely owned corporations were independent contractors.

Finally, we briefly address Petitioner’s argument that because nuclear safety is of critical

importance, this court should construe the term “employee” broadly. While we agree with Petitioner

that nuclear safety is extremely important, we cannot read the ERA in the manner Petitioner wishes.

To do so would subvert a reasonable agency determination, one based on Supreme Court precedent.

Congress may always expand the definition of employee under the ERA beyond the common law

definition by amending the statute if it believes that nuclear safety so requires. In the meantime, we

defer to the agency’s reasonable interpretation.

CONCLUSION

For the foregoing reasons, we DENY the petition for review.