Opinion ID: 16304
Heading Depth: 4
Heading Rank: 8

Heading: computer system = $25,000

Text: 33 R.Vol. XI-117; XII-86-91. 34 The relative investment by Express is indeed significant. Although the driver's investment of a vehicle is no small matter, that investment is somewhat diluted when one considers that the vehicle is also used by most drivers for personal purposes. In Carrell v. Sunland Construction, Inc., 998 F.2d 330 (5th Cir.1993), the court found that welders were independent contractors partly because the welders invested an average of $15,000 each for welding equipment. There was no indication in Carrell that the welding equipment also was being used for personal purposes. Accordingly, the capital risk in Carrell was much greater. In Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1051 (5th Cir.1987), the court noted that a fireworks stand operator who used a computer to assist him while working involved no investment because he originally had purchased the home computer for school work. Even considering the additional maintenance on a vehicle which is used for a delivery service, we nonetheless conclude that the district court clearly erred in finding the drivers' relative investment to be significant. 35 The district court also concluded that, although no direct testimony was presented on this point, the aggregate investment of all the contract drivers is substantially more than that of Express. However, we find no support for the application of an aggregation principle with respect to the relative investment factor. See, e.g., Carrell v. Sunland Construction, Inc., 998 F.2d 330 (5th Cir.1993) (court of appeals did not combine the welder's average individual investment of $15,000 in trucks, machines, and tools when considering the relative investment factor). 36 The relative investment factor weighs in favor of the Secretary and toward employee status. 37 3. Degree to which employee's opportunity for profit and loss is determined by the alleged employer 38 The district court found that the drivers are compensated on a commission basis. According to the district court a driver's profit or loss is determined largely on his or her skill, initiative, ability to cut costs, and understanding of the courier business. The district court observed that the drivers who made the most money appeared to be the most experienced and most concerned with efficiency, while the less successful drivers tended to be inexperienced and less concerned with efficiency. 39 Although the Secretary maintains that Express controls customer volume and the amount charged to customers, we cannot say that the district court clearly erred in finding that the drivers' opportunity for profit and loss was determined by the drivers to a greater degree than Express. This is especially true because the drivers had the ability to choose how much they wanted to work and the experienced drivers knew which jobs were most profitable. 40 This factor points toward independent contractor status. The district court did not clearly err. 4. Skill and initiative required 41 The district court found that once a job is offered to the driver, the driver is not told which route to take--the driver must rely on his own judgment, knowledge of traffic patterns and road conditions in the Dallas-Fort Worth metroplex, ability to read a MAPSCO, and ability to anticipate the need for an alternate route. According to the district court, experienced drivers possess specialized skills beyond that of merely driving an automobile, and more experienced drivers tended to make more money than less experienced drivers. 42 The Secretary argues that the contract drivers are more like wage earners than independent entrepreneurs seeking a return on their risky capital investment. The Secretary is correct. In Mr. W Fireworks, 814 F.2d at 1053, we explained that initiative, not efficiency, determines independence. In that case, the court found clearly erroneous the district court's finding that fireworks stand operators had the skill and initiative indicative of independent contractors. In doing so, the court referred to Usery v. Pilgrim Equipment Co., 527 F.2d 1308, 1314 (5th Cir.1976), where the court reasoned that routine work which requires industry and efficiency is not indicative of independence and nonemployee status. The court further explained in Mr. W Fireworks that the operators were unable to exert initiative as all major components open to initiative--advertising, pricing, and most importantly the choice of fireworks' suppliers with which to deal are controlled by Mr. W. Mr. W. Fireworks, 814 F.2d at 1053. 43 As we found in Pilgrim Equipment, the key missing ingredient in the lower court's determination is initiative. 527 F.2d at 1314. The district court did not discuss initiative during its evaluation of this factor. We agree with the Secretary that the skill and initiative factor points toward employee status. The district court clearly erred in finding to the contrary. 5. Permanency of the relationship 44 The Secretary conceded at oral argument that the district court correctly determined the permanency issue. We agree. The majority of drivers work for Express for a short period of time. Drivers are able to work for other courier delivery companies, and the Independent Contractor Agreement does not contain a covenant-not-to-compete. The permanency factor points toward independent contractor status. 6. Other factors 45 Both sides encourage the court to look to other factors in addition to the preceding five factors. The Secretary emphasizes that the work performed by the drivers is an integral and indispensable part of Express' business. Express argues that the contract provided that the drivers were independent contractors and the drivers' uniforms indicate same. 46 The determination of employee status is very fact intensive, and as with most employee-status cases, there are facts pointing in both directions. Carrell v. Sunland Construction, Inc., 998 F.2d 330, 334 (5th Cir.1993). In this case, three of the five traditional factors point toward independent contractor status. We conclude that the district court did not err in finding that the drivers were independent contractors. 47 We are confident in this result not only because the various factors weigh in favor of independent contractor status, but also because of Supreme Court precedent with respect to this issue. In United States v. Silk and Harrison v. Greyvan Lines, Inc., 331 U.S. 704, 67 S.Ct. 1463, 91 L.Ed. 1757 (1947), a consolidated case, the court concluded that the drivers were independent contractors. In Silk, Albert Silk, doing business as Albert Silk Coal Co., sold coal at retail. His coalyard consisted of two buildings, one for an office and the other a gathering place for workers. Silk owned no trucks himself but contracted with workers who owned their own trucks to deliver coal at a uniform price per ton. When an order for coal was taken in the office, a bell rang in the building used by the truckers. The truckers voluntarily adopted a call list upon which their names came up in turn, and the top man on the list had the opportunity to deliver coal. The truckers could and often did refuse to make a delivery without penalty. The truckers were not instructed how to do their jobs, but were merely given a ticket telling them where the coal was to be delivered and whether to collect the charge. Any damage caused by the truckers were paid by the company. The truckers could go as they please and could haul for others when they pleased. The truckers paid all expenses of operating their trucks. 48 Greyvan Lines involved an interstate trucking business carrying mostly household furniture. Here the truckers were required to haul exclusively for Greyvan; furnish their own trucks and necessary equipment; furnish their own insurance; pay for all loss or damage to shipments; pay all expenses of operation; indemnify the company for any loss caused by the truckers; paint the designation Greyvan Lines on their trucks; collect all money due the company from shippers or consignees; personally drive their trucks at all times or be present on the truck when a competent relief driver was driving; and follow all rules, regulations, and instructions of the company. As remuneration, the truckers received from the company a percentage of the tariff charged by the company. The contract was terminable at any time by either party. A contract between the company and Local No. 711 of the International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers of America was in effect. 49 In both Silk and Greyvan Lines, the Court concluded that the truckers were independent contractors. The Court reasoned that these drivers owned their own trucks and were small businessmen. The control exercised, the risk undertaken, and the opportunity for profit from sound management led the Court to conclude that the truck drivers were independent contractors. In Greyvan Lines, the drivers were required to haul exclusively for the company and to paint the company logo on their vehicles; nonetheless, the Supreme Court concluded they were independent contractors. Comparatively, it is easier to conclude independent contractor status for the drivers in the case at bar. 50 Finally, the Secretary maintains that the drivers in this case are analogous to piece-workers who have been held to be employees in numerous instances. See, e.g., McLaughlin v. Seafood, Inc., 867 F.2d 875 (5th Cir.1989) (seafood backers, pickers, and peelers are employees under FLSA); Usery v. Pilgrim Equipment Co., 527 F.2d 1308 (5th Cir.1976) (operators of laundry pickup stations are employees under FLSA); Dole v. Snell, 875 F.2d 802 (10th Cir.1989) (cake decorators are employees under FLSA). We disagree. More analogous to the Express contract drivers are the welders in Carrell and the truck drivers in Silk and Greyvan Lines. 51 The conclusion of the district court that the drivers were independent contractors is affirmed. Accordingly, we need not address whether the Secretary met her burden of establishing that the requested damages were reasonable.