Opinion ID: 784757
Heading Depth: 4
Heading Rank: 3

Heading: Carter and Herman

Text: 41 Carter and Herman are consistent with Rutherford, and neither case supports the application of the test used by the District Court in the circumstances presented in the instant case to negate employer liability. The question before us in Carter was whether prisoners who performed work for an educational institution could be considered employees of that institution under the FLSA. Carter, 735 F.2d at 12. In rejecting the district court's conclusion that they could not be considered employees as a matter of law, we did not purport to identify all factors that could bear on the employer status question. Instead, we stated that the economic reality test  include[s]  an inquiry into the four factors. Id. (emphasis added). We then determined that summary judgment in favor of the defendant was inappropriate considering that the defendant exercised most of the typical employer prerogatives encompassed by the four factors. Id. at 14-15. Carter thus stands solely for the proposition that the four factors applied by the District Court in the instant case can be sufficient to establish employer status. Carter did not hold, nor could it have held in light of Rutherford, that those factors are necessary to establish an employment relationship. 8 42 In our more recent decision in Herman, moreover, we affirmed the District Court's determination after a bench trial that a company chairman jointly employed the company's employees where the chairman exercised three of the four employer prerogatives identified in Carter. In doing so, we reiterated that economic reality is determined based upon all the circumstances, [and] any relevant evidence may be examined so as to avoid having the test confined to a narrow legalistic definition. Herman, 172 F.3d at 139 (emphasis in original). Thus, as in Carter, we indicated in Herman that where the four factors weigh in favor of a district court's finding of joint employment, that finding will not be disturbed on appeal. We did not suggest — indeed, we expressly denied — that the four factors borrowed from the Ninth Circuit in Carter are the exclusive touchstone of the joint employment inquiry under the FLSA. 43 Because the District Court in the instant case interpreted our precedents to demand an exclusive four-factor test, we vacate its judgment and remand for further proceedings.