### In the



# United States Court of Appeals

For the Seventh Circuit

No. 17

‐ 2685

A NTHONY E. S IMPKINS

, Plaintiff

‐ Appellant

,

v.

D U P AGE H OUSING A UTHORITY

, et al

., Defendants

‐ Appellees.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 15 C 9103

— Charles R. Norgle

, Judge.

A RGUED M ARCH 27, 2018

— D ECIDED J UNE 20, 2018

Before W OOD

, Chief Judge, and B AUER and K ANNE

, Circuit

Judges.

B AUER

, Circuit Judge. Anthony Simpkins sued the DuPage

Housing Authority and DHA Management, Inc. (collectively,

DHA), alleging various violations of the Fair Labor Standards

Act (FLSA), the Illinois Minimum Wage Law (IMWL), the

Illinois Employee Classification Act (IECA), the Illinois2 No. 17

‐ 2685

Prevailing Wage Act (IPWA), and the Family and Medical

Leave Act (FMLA). On cross

‐ motions for summary judgment,

the district court held that Simpkins was not an employee of

DHA, but rather an independent contractor. Therefore, it

granted summary judgment in favor of DHA as to the federal

claims and relinquished jurisdiction over the state law claims.

Because there are genuine disputes of fact that are material to

the determination of Simpkins’ employment status, we reverse

and remand.

I. BACKGROUND

Simpkins began working for DHA in November 2009. He

and DHA entered into an agreement titled “Independent

Contractor Agreement,” with an expected completion date of

June 2011. The contract stated that his duties were to include

“general labor as needed” to complete the rehabilitation of

vacant properties that were part of DHA’s Neighborhood

Stabilization Program to make them suitable for new occu

‐

pants. In that role, he performed carpentry, maintenance, and

handyman work such as demolition, remodeling, removing

fixtures, and discarding trash.

In 2011, the rehab work slowed down and Simpkins began

working primarily at Ogden Manor, a townhome community

for which DHA served as the on

‐ site management. He per

‐

formed much of the same work, but eventually focused

specifically on maintenance work. Ogden Manor’s property

manager and maintenance supervisor, who were DHA

employees, gave Simpkins his list of job duties and prioritized

the order in which he needed to complete those tasks.No. 17

‐ 2685 3

In May 2012, Simpkins and DHA entered into another

“Independent Contractor Agreement.” This agreement des

‐

cribed the scope of work as “general labor for maintenance”

at Ogden Manor. The agreement originally stated that the

expected completion date for that work was July 2012. How

‐

ever, that date was later crossed out by hand and replaced with

“To Be Determined.” Simpkins continued to work at Ogden

Manor until May 2015.

From November 2009 through May 2015, Simpkins worked

full

‐ time and exclusively for DHA. Pursuant to DHA’s

instructions, Simpkins reported his hours by submitting

invoices, and he was paid bi

‐ weekly via paper check. DHA

issued Simpkins 1099

‐ MISC tax forms to file his taxes, while

others whom DHA considered employees were issued W

‐ 2

forms. Simpkins was aware that DHA considered him an

independent contractor, and he repeatedly requested, to no

avail, that his supervisors convert him to a regular employee.

DHA did not provide him with pension, insurance, or other

similar fringe benefits.

In May 2015, Simpkins was injured in a car accident, after

which his relationship with DHA ended. He filed this lawsuit

in October 2015, claiming that DHA had repeatedly failed to

pay him overtime, and that DHA was required to provide him

with certain disability benefits. The parties filed cross

‐ motions

for summary judgment. The district court granted DHA’s

motion and ruled that Simpkins was not an employee of DHA

under the FLSA. Accordingly, it granted DHA’s motion as to4 No. 17

‐ 2685

the federal claims 1 and relinquished jurisdiction of the state

law claims.

II. DISCUSSION

A. Legal Standards

Summary judgment is appropriate only where there is no

genuine issue of material fact and the moving party is entitled

to judgment as a matter of law. Fed. R. Civ. P. 56(a). When

ruling on a motion for summary judgment, “[t]he court should

neither look the other way to ignore genuine issues of material

fact, nor strain to find material fact issues where there are

none.” Sec’y of Labor, U.S. Dep’t of Labor v. Lauritzen

, 835 F.2d

1529, 1534 (7th Cir. 1987) (internal quotation marks and citation

omitted).

“The Supreme Court has instructed the courts to construe

the terms ‘employee’ and ‘employer’ expansively under the

FLSA.” Vanskike v. Peters

, 974 F.2d 806, 807 (7th Cir. 1992)

(citing Nationwide Mut. Ins. Co. v. Darden

, 503 U.S. 318, 326

(1992)). The conclusion of whether an individual qualifies as an

employee under the Act requires an examination of the totality

of the circumstances, with the ultimate goal of determining the

“economic reality of the working relationship.” Id. at 808

(citations omitted). The FLSA considers employees those “who

as a matter of economic reality are dependent upon the

1 In his response to DHA’s motion for summary judgment, Simpkins

conceded that dismissal of his FMLA claim was appropriate. Accordingly,

the only question before us now is whether the court was correct to grant

summary judgment on his FLSA claim.No. 17

‐ 2685 5

business to which they render service.” Lauritzen

, 835 F.2d at

1534 (internal quotation marks and citation omitted).

In Lauritzen

, we compiled a list of factors “to assist in

determining the true nature of the relationship,” while explain

‐ ing that “no criterion is by itself, or by its absence, dispositive

or controlling.” Id. at 1534. It is also important to note that the

Lauritzen factors are not the exclusive means by which the

ultimate determination can be made. See

, e.g.

, Berger v. Nat’l

Collegiate Athletic Ass’n

, 843 F.3d 285, 291 (7th Cir. 2016) (“We

have declined to apply mulitfactor tests in the employment

setting when they ‘fail to capture the true nature of the relation

‐ ship’ between the alleged employee and the alleged em

‐ ployer.”) (quoting Vanskike

, 974 F.2d at 809). Instead, the

inquiry is aimed at determining the economic reality of the

working relationship by examining the totality of the circum

‐

stances. Id. at 290.

The posture of this case, as well as the parties’ citations in

support of their preferred standards of review, present an

opportunity for clarification of those standards, which is both

long overdue and critical to the result here. In Lauritzen

, we

explained that “the determination of workers’ status is a legal

rather than a factual one,” meaning it is subject to de novo

review. 835 F.2d at 1535. We also noted, however, that the

underlying factual findings that lead to that legal determina

‐

tion are to be reviewed for clear error. Id.

To explain that distinction, we cited the Fifth Circuit’s

decision in Brock v. Mr. W Fireworks

, 814 F.2d 1042 (5th Cir.

1987). See Lauritzen

, 835 F.2d at 1535. In that case, after outlin

‐ ing a similar multifactor test, the Fifth Circuit explained that6 No. 17

‐ 2685

there were three types of findings relevant to the determination

of employment status: 1) “historical findings of fact” that

underlie a finding regarding the relevant factors; 2) findings on

the factors themselves, which are based on inferences drawn

from the historical facts; and 3) the ultimate legal conclusion

based on those two types of factual findings. Mr. W Fireworks

,

814 F.2d at 1044–45. The court concluded that because the first

two types of findings were factual in nature, they are subject to

clear error review, while the third is subject to de novo review.

Id.

That analysis, however, has limited applicability in the

context of reviewing a ruling on a motion for summary

judgment. Mr. W Fireworks was before the Fifth Circuit

following a three

‐ day bench trial, during which the district

court acted as the trier of fact and resolved all disputed issues.

Id. at 1043. By contrast, on summary judgment, a district court

makes no factual findings of its own. Instead, it is required to

construe the facts in the light most favorable to the nonmoving

party and identify, but not resolve, material factual disputes.

Accordingly, a ruling on summary judgment does not present

the same types of factual findings to which the court was

referring in Mr. W Fireworks

.

To summarize then, our task here is to determine whether

the district court was correct in concluding that there were no

disputes of fact material to the determination of Simpkins’

employment status, and that DHA was entitled to judgment as

a matter of law. We review that conclusion de novo

, and

because the court granted DHA’s motion, we review the facts

in the light most favorable to Simpkins. Selective Ins. Co. of S.C.

v. Target Corp.

, 845 F.3d 263, 266 (7th Cir. 2016).No. 17

‐ 2685 7

B. Disputed Factual Issues

The record in this case abounds with factual disputes that

are material to the determination of the true relationship

between Simpkins and DHA. As we have noted, none of

the individual factors set forth in Lauritzen and its progeny

are dispositive of the ultimate determination, which is the

economic reality of the relationship. In light of that, the

discussion that follows should not be construed as exhaustive

of either the factors that may be relevant to determining the

parties’ true economic relationship or the specific factual issues

that remain unresolved.

The first factor the district court analyzed in this case is the

nature and degree of control the putative employer exercised

over the manner in which the putative employee performed his

work. See Lauritzen

, 835 F.2d at 1535. On this point, the record

presents numerous competing facts. For example, DHA

assigned Simpkins to work specifically at the Ogden location

and set his schedule. Simpkins states that he regularly worked

from 8:30 a.m. to 4:30 p.m., but the parties dispute whether

DHA required him to work those set hours. Additionally,

DHA assigned Simpkins specific projects and dictated the

order in which he was to complete them. DHA argues that

Simpkins had the autonomy to determine the manner in which

those tasks were completed after they were assigned. How

‐

ever, the extent and effect of that autonomy remains in dispute,

particularly in light of the other ways in which DHA was in

control of Simpkins’ work and employment. Considering those

competing inferences in the light most favorable to Simpkins,

a reasonable trier of fact could find that DHA’s control over8 No. 17

‐ 2685

Simpkins weighs in favor of a typical employer

‐ employee

relationship.

There are also disputes in the record when it comes to

Simpkins’ investment in the tools, equipment, and materials

required to perform his work. See id

. (listing “the alleged

employee’s investment in equipment or materials required for

his task” as a factor to be considered). Simpkins maintains that

DHA purchased virtually everything he required, at times

going so far as to say that, after 2009, DHA supplied 99% of the

tools and 100% of the materials he used. He also cites deposi

‐

tion testimony from DHA’s executive director explaining that

DHA did not expect Simpkins to purchase his own materials.

However, as DHA points out, some of Simpkins’ allegations on

this point are contradicted by his tax returns, in which he

itemized certain purchases of materials in order to receive

deductions. Clearly, there is a factual dispute as to the origins

of the tools, materials, and equipment Simpkins regularly used

on the job, and while not dispositive by itself, such a dispute is

certainly material to the ultimate question.

Another factor the district court looked to is whether

specialized skill was required to complete the work. See id.

(listing “whether the service rendered requires a special skill”

as a relevant factor). On this point, the district court correctly

found that the record presents competing facts. Simpkins notes

that he never held any specialized licenses and only performed

rudimentary tasks that did not require special skill. He also

points out that DHA often hired other individuals to do

specialized work that he was not qualified to do. On the other

hand, DHA notes that, prior to working for DHA, Simpkins

had already acquired certain carpentry skills that he needed toNo. 17

‐ 2685 9

perform much of the rehab work he did. Clearly, whether

Simpkins had specialized skills, as well as the extent to which

he employed them in performing his work, are issues that

remain in dispute.

Finally, we turn to the factual ambiguities regarding the

existence and nature of the parties’ contracts. The district court

pointed out that the contracts were labeled “Independent

Contractor Agreement” and found that Simpkins’ compliance

with certain material terms of those contracts indicated his

understanding that he was, in fact, an independent contractor.

For example, the court noted that the contracts required

Simpkins to obtain his own worker’s compensation and

liability insurance coverage, which he did until January 2012.

It did not, however, address the impact, if any, of the fact that

after that date, Simpkins did not have any such coverage of his

own, despite signing another contract and continuing to work

at DHA for three more years. The court’s opinion also leaves

unanswered the question of how long and to what extent the

contracts actually governed the parties’ relationship. The

second contract stated that its expected completion date was

July 2012, which was then crossed out in favor of “To Be

Determined.” Simpkins continued to work at DHA until May

2015, and it is unclear whether the parties intended that

agreement to be open ended or when, if ever, a completion

date was determined and reached. Clearly, there are material

issues of fact as to the nature of these contracts that must be

resolved before the court can properly determine the impact

they had on the overall economic reality.

In sum, the summary judgment record presents numerous

factual disputes that are material to the determination of the10 No. 17

‐ 2685

true economic relationship between Simpkins and DHA.

Because those disputes are not appropriate for resolution at the

summary judgment stage, the court erred in concluding that

Simpkins was not an employee under the FLSA as a matter of

law.

III. CONCLUSION

For the foregoing reasons, the district court’s judgment is

vacated, the dismissed state law claims are reinstated, and the

case is remanded for a trial to conclusively establish the facts

surrounding the parties’ employment relationship.