Opinion ID: 4159704
Heading Depth: 3
Heading Rank: 2

Heading: Entrepreneurial Opportunities

Text: The fact that Plaintiffs could (and did) work for CTG’s business rivals and transport personal clients while simultaneously maintaining their franchises without consequence suggests, in two respects, that CTG exercised minimal control over Plaintiffs. First, on its face, a company relinquishes control over its workers when it permits them to work for its competitors. Second, when an individual is able to draw income through work for others, he is less economically dependent on his putative employer. This lack of control, while In this vein, CTG issued Plaintiffs 1099 Forms, not W‐2 Forms, and Plaintiffs 22 classified themselves as independent contractors for tax purposes and took deductions for business expenses. Likewise, Plaintiffs did not receive health insurance, 401(k), retirement, or other benefits. See Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 171 (2d Cir. 1998) (affirming finding of independent contractor status when, inter alia, the worker “did not have the company withhold income or Social Security taxes [and] did not receive employee benefits such as health insurance”). 22 not dispositive, weighs in favor of independent contractor status. See, e.g., Keller v. Miri Microsystems LLC, 781 F.3d 799, 807 (6th Cir. 2015) (“If a worker has multiple jobs for different companies, then that weighs in favor of finding that the worker is an independent contractor.”); Herman v. Express Sixty‐Minutes Delivery Serv., Inc., 161 F.3d 299, 303 (5th Cir. 1998) (noting fact that “[t]he drivers can work for other courier delivery systems” supported independent contractor status); Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 171 (2d Cir. 1998) (affirming finding of independent contractor status when, inter alia, the worker “was allowed to sell merchandise on behalf of other companies”); see also Freund v. Hi‐ Tech Satellite, Inc., 185 F. App’x 782, 784 (11th Cir. 2006) (per curiam) (affirming district court’s finding that worker’s ability “to take jobs from” competitors, and to “take as many or as few jobs as he desired,” supported district court’s conclusion that there was not a “significant degree of permanence” in the relationship at issue); cf., e.g., Baker v. Flint Eng’g & Constr. Co., 137 F.3d 1436, 1442 (10th Cir. 1998) (stating that, generally speaking, “‘[e]mployees’ usually work for only one employer and such relationship is continuous and indefinite in duration” (quoting Dole v. Snell, 875 F.2d 810, 811 (10th Cir. 1989))). 23 More specifically, Plaintiffs here operated “business organization[s] that could or did shift as a unit from one [car‐service] to another,” suggesting Defendants did not exercise significant control. Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947). Neither Plaintiffs’ franchise agreements nor TLC regulations barred Plaintiffs from either providing rides arranged through dispatch bases other than the Franchisor Defendant with whom they had affiliated, or from driving for other, competing black‐car companies.23 The agreements likewise did not prohibit Plaintiffs from driving clients of their own (provided that payment by any CTG client was processed through the CTG system), or from picking up street hails (though doing so was forbidden by TLC rules). To be clear, pursuant to the economic reality test, “it is not what [Plaintiffs] could have done that counts, but as a matter of economic reality what they The Secretary of Labor incorrectly describes this practice as barred by TLC 23 regulations. As Plaintiffs admit in a post‐argument letter brief, TLC regulations permit black‐car drivers to provide rides for other black‐car companies provided certain disclosures are made to the customer. See 35 R.C.N.Y. § 59A‐11(e); Ltr. from Appellants to Court (Feb. 12, 2016); cf. N.Y.C. Taxi & Limousine Comm’n, Notice of Public Hr’g and Opportunity to Comment on Proposed Rules, Amendment of For Hire Dispatch Rules, TLC‐71, at unnumbered 3 (Sept. 12, 2014), http://rules.cityofnewyork.us/ sites/default/files/proposed_rules_pdf/fhv_dispatch_rules_final_9_12_14.pdf (noting the practice of dispatch bases to “dispatch[] vehicles affiliated with other bases . . . without the knowledge or consent of the vehicles’ affiliated bases,” giving rise to issues “not addressed in the TLC’s rules”). 24 actually do that is dispositive.” Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1047 (5th Cir. 1987). It is undisputed, however, that Plaintiffs here actually did provide rides to non‐CTG clients in at least three different ways. 24 First, many Plaintiffs provided rides by driving for competing black‐car companies. Tax returns demonstrate that Plaintiffs derived substantial revenue from this practice. Ranjit Bhullar, for instance, earned $395,081.90 driving for “Exec. Charge” between 2006 and 2008, and Malook Singh earned $206,568.71 driving for “Elite” between 2006 and 2009. Indeed, some 71% of deposed Plaintiffs earned at least some income by driving for non‐CTG black‐car companies. Second, it is undisputed that some Plaintiffs regularly drove personal clients. Anjum Ali, for example, had a repeat, non‐CTG customer who first hailed him in 2010 and later arranged for pick‐up in various places in New York It is certainly not unheard of for an individual to maintain two jobs at the same 24 time, and to be an “employee” in each capacity. Plaintiffs, however, unlike traditional employees, were free — without compromising their franchises or facing adverse consequences — to divide their time as they saw fit between CTG, its competitors, and personal clients. See Reyes v. Remington Hybrid Seed Co., 495 F.3d 403, 408 (7th Cir. 2007) (describing an independent contractor as an individual who “appears, does a discrete job, and leaves again”). Mazhar Saleem, for example, drove for five black‐car companies in addition to CTG between 2009 and 2012, earning sums that ranged between $539.10 at the low end to $11,052.00. 25 City by calling Ali at his home number.25 Jose Solorzano, for his part, also had one personal client for eight to ten years,26 and Avneet Koura was contacted directly “[o]nce or twice a week” by repeat personal clients between 2006 and 2008. J.A. 404–05. Plaintiffs made investments to build these relationships, too. Some created business cards describing their services, while others placed advertisements.27 Third, for the sake of completeness, many Plaintiffs also picked up passengers via street hail, despite TLC’s (apparently under‐enforced) prohibition of this practice. See 35 R.C.N.Y. § 55‐19. In fact, one driver admitted doing so while “logged in” to the CTG app and waiting in the dispatch queue. As with individual, non‐CTG clients, street hail passengers paid in cash or via independent merchant accounts, rather than through the CTG voucher system. Ali did not turn over any of that money to CTG for processing, nor was he 25 required to do so, since the customer was not a CTG client. 26 Despite CTG rules to the contrary, Solorzano billed this repeat CTG customer using his personal credit card merchant processing account, rather than the CTG voucher system. 27 Though “customer rapport” is arguably not “an initiative characteristic,” Mr. W Fireworks, 814 F.2d at 1053 (quoting Usery v. Pilgrim Equip. Co., Inc., 527 F.2d 1308, 1314 (5th Cir. 1976)), these long‐term relationships, at a minimum, demonstrate drivers’ independence, their exercise of initiative, and Defendants’ relative lack of “control” — all indicia of independent contractor status, Superior Care, 840 F.2d at 1058. 26 Moreover, these alternate means of generating revenue aside, Plaintiffs also wielded considerable independence and discretion when working under CTG’s umbrella. To offer rides to CTG clients, Plaintiffs could join a physical queue outside of a high volume client business, offer assistance to disabled customers seeking prearranged rides pursuant to CTG’s contract with the MTA, or book into CTG’s dispatch system. Further, some Plaintiffs who owned franchises chose not to drive at all and, instead of letting their franchises lie dormant, permitted other individuals to drive for them.28 See Silk, 331 U.S. at 718 (observing that truck‐drivers’ practice of “hir[ing] their own helpers” supported finding of independent contractor status). Accordingly, far from a circumstance, like that in Superior Care, where the individuals seeking “employee” classification “depended entirely on [the putative employer’s] referrals to find job assignments,” 840 F.2d at 1060, Plaintiffs here possessed considerable independence in maximizing their income through a variety of means. By toggling back and forth between different car companies and personal clients, and by deciding how best to obtain business from CTG’s clients, drivers’ “profits increased” through “‘the[ir] ‘initiative, Anwar Bhatti testified that Rajeev Kumar paid him $75 per week to drive for 28 Bhatti’s franchise. Jamshed Choudhry similarly rented the use of his franchise to third parties on two occasions for $75 per week and $130 per week, respectively. 27 judgment[,] or foresight’” — all attributes of the “typical independent contractor.” Keller, 781 F.3d at 809 (quoting Rutherford, 331 U.S. at 730). Whatever “control” CTG exerted over negotiated fares and its rolls of institutional clients, Plaintiffs retained “viable economic status that [could] be [and was] traded to other [car companies].” Usery, 527 F.2d at 1312. Thus, as a matter of economic reality, Plaintiffs’ affiliation with Defendants was but one means by which they generated income from their driving businesses.