Court Opinion

ID: 4209795
Source: CourtListenerOpinion
Date Created: 2017-10-06 14:00:58.847245+00
Date Added: 2024-06-11T14:14:39.952631
License: Public Domain

Case: 16-13829       Date Filed: 10/06/2017      Page: 1 of 16

                                                                     [DO NOT PUBLISH]

                     IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT
                            _________________________

                                    No. 16-13829
                             _________________________

                      D.C. Docket No. 8:15-cv-00076-SCB-TGW

SCOTT AXEL,

                                                                        Plaintiff-Appellant,
                                           versus

FIELDS MOTORCARS OF FLORIDA, INC.,
                                                                       Defendant-Appellee.
                             _________________________

                      Appeal from the United States District Court
                          for the Middle District of Florida
                           _________________________

                                     (October 6, 2017)

Before ED CARNES, Chief Judge, and WILLIAM PRYOR, Circuit Judge, and
MOORE, * District Judge.

*
 Honorable K. Michael Moore, United States District Chief Judge for the Southern District of
Florida, sitting by designation.
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MOORE, District Judge:

      Scott Axel (“Plaintiff”) was learning the business of automobile wholesaling

from his father, a wholesaler employed by Fields Motorcars of Florida, Inc.

(“Fields Motorcars”). Plaintiff shadowed his father for fifteen months. During this

time, Plaintiff also did additional wholesale work, as well as some retail work. This

arrangement continued until Fields Motorcars terminated Plaintiff’s father in the

spring of 2014, at which point Plaintiff stopped coming to work as well. Plaintiff

received no compensation during those fifteen months and, following his father’s

termination, sued Fields Motorcars, alleging violations of the Fair Labor Standards

Act, 29 U.S.C. §§ 201–219 (“FLSA”), and the Florida Minimum Wage Act, Fla.

Stat. § 448.10, et seq. (“FMWA”).

      On summary judgment, the district court stated that Plaintiff’s unorthodox

employment did not neatly fit into traditional employment categories and

concluded that Plaintiff was not a Fields Motorcars employee. Because it found

that Plaintiff was not an employee, the district court granted summary judgment in

favor of Fields Motorcars on the FLSA and FMWA claims. Plaintiff now appeals

that decision. After careful consideration and with the benefit of oral argument, we

conclude that material issues of fact remain which preclude the entry of summary

judgment.

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                                    I. BACKGROUND

       Fields Motorcars is a multi-marque automobile dealer operating nationally.

It sells and leases new and used automobiles, and also services international

automobile brands. Towards the end of 2012, Plaintiff applied for a sales position

at Fields Motorcars but Plaintiff did not receive an offer. In the years preceding his

employment application, Plaintiff was arrested for driving while intoxicated,

terminated as an Enterprise Rent-A-Car management assistant for failing to show

up to work, and sought treatment for drug addiction at a residential drug treatment

facility for approximately eight months.

       Plaintiff’s father, Michael Axel, worked as an automobile wholesaler for

Fields Motorcars at its Lakeland BMW and Mercedes stores. Michael spoke with

Gary Gordon, the General Manager of the Lakeland BMW and Mercedes stores

and Michael’s direct supervisor, about finding a job for his son—in sales or in any

other open position.1 Mr. Gordon told him that he was not hiring any new

employees at that time. Michael suggested that Fields Motorcars hire Plaintiff as an

employee and that Michael would split his own compensation or commissions with

Plaintiff. Mr. Gordon rejected this proposal. They discussed an arrangement

whereby Michael would hire Plaintiff as his own employee and teach Plaintiff how

to become an automobile wholesaler, with the future possibility of assuming

1
 The Parties dispute who first suggested that Scott work for Michael. Michael testified that Mr.
Gordon first made the suggestion but Mr. Gordon denies this.
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Michael’s role upon his retirement. A few days later, Plaintiff met with Michael

and Mr. Gordon to discuss the arrangement. There was no agreement that Fields

Motorcars would compensate Plaintiff while he was learning how to be a

wholesaler. According to Plaintiff, Mr. Gordon said “[a]s long as you try to learn

everything you can that your dad knows, you know, we’ll try to ease you in here.”

Michael did not split his compensation with Plaintiff or pay him directly, but did

provide Plaintiff and his children with a place to live and other financial support.

       Towards the middle or end of January 2013, Plaintiff began working with

his father. On a typical day, Plaintiff and his father arrived at the Lakeland BMW

store together at around 8:30 or 9:00 in the morning. Alongside his father, Plaintiff

reviewed inventory, attended a daily used-car meeting with Mr. Gordon, and

would then go to lunch. In the afternoon, Plaintiff would meet with the used car

manager, who would have a list of cars for Plaintiff to post for sale. Plaintiff posted

cars on an internal website called TradeRev, an on-line auction for dealers who

subscribe to the website. In order to post on TradeRev, Plaintiff used an application

on his phone and had to enter a password that was provided to him by Lance

Lightsey—the sales manager. Plaintiff spent several hours each day posting

vehicles for wholesale on TradeRev. Additionally, Plaintiff also possibly discussed

cars that could be listed for retail sale and new inventory, as well as cars that

needed to be posted on eBay or Craigslist. Plaintiff researched cars that were for

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sale at auction. Plaintiff also purchased cars from other Fields Motorcars

dealerships, and brought them to the Lakeland BMW and Mercedes stores.

Plaintiff estimates that he signed at least sixty or seventy purchase agreements.

      Plaintiff learned what the role of an automobile wholesaler entailed from his

father. These duties included traveling to different auctions and researching

vehicles that were for sale at auction. Plaintiff never attended auctions without his

father and rarely came to work at either of the Lakeland Mercedes or Lakeland

BMW stores without his father. Unrelated to wholesaling, Plaintiff also did some

retailing, including posting cars for sale on eBay and Craigslist. Other minor and

infrequent tasks Plaintiff might have done included washing a car, filling a car with

fuel, or picking a car up at an auction. Plaintiff estimates that he worked in excess

of 60 hours per week. In mid-May of 2014, Plaintiff stopped working at Fields

Motorcars.

                          II. STANDARD OF REVIEW

      The determination of an individual’s employment status under the FLSA is a

question of law and reviewed de novo. Schumann v. Collier Anesthesia, P.A., 803
F.3d 1199, 1207 (11th Cir. 2015).

      Decisions granting summary judgment under Fed. R. Civ. P. 56 are reviewed

de novo. Evans v. Stephens, 407 F.3d 1272, 1277 (11th Cir. 2005). Summary

judgment is appropriate only “if the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue of material fact and that the court does not make

credibility determinations, but instead believes the evidence of the non-movant and

all justifiable inferences are drawn in his favor. Evans, 407 F.3d at 1277. And

“when conflicts arise between the facts evidenced by the parties, we credit the

nonmoving party’s version.” Id. at 1278.

                                     III. THE FLSA2

       In 1938, Congress enacted the FLSA “to aid the unprotected, unorganized

and lowest paid of the nation’s working population; that is, those employees who

lacked sufficient bargaining power to secure for themselves a minimum

subsistence wage.” Brooklyn Sav. Bank v. O’Neill, 324 U.S. 697, 707 n. 18 (1945).

However, the FLSA’s protections extend only to employees. Schumann, 803 F.3d

at 1207. The FLSA broadly defines an “employee” as “any individual employed by

an employer,” and an “employer” as “any person acting directly or indirectly in the

interest of an employer in relation to an employee.” 29 U.S.C. §§ 203(d) and

(e)(1). To “employ” is “to suffer or permit to work.” 29 U.S.C. § 203(g).

       These broad definitions are intended to be “comprehensive enough” to

include “working relationships, which prior to this Act, were not deemed to fall

within an employer-employee category.” Rutherford Food, 331 U.S. 722, 729

2
 The same legal standards that apply to Plaintiff’s FLSA claim also apply to the FMWA claim.
See Article X, Section 24, Fla. Const.
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(1947) (quoting Walling v. Portland Terminal Co., 330 U.S. 148, 150 (1947)).

“Without doubt the Act covers trainees, beginners, apprentices, or learners if they

are employed to work for an employer for compensation.” Portland Terminal, 330
U.S. at 151 (emphasis added).Thus, not all trainees are covered.

      To determine whether an individual is an employee or an exempted trainee,

courts look to the totality of the circumstances. Layton v. DHL Exp. (USA), Inc.,

686 F.3d 1172, 1181 (11th Cir. 2012). As training programs and internships have

evolved over time, so have the relevant tests and considerations.

      The seminal case analyzing whether trainees are employees under the FLSA

is Walling v. Portland Terminal Co. In Portland Terminal, individuals participated

in a week-long practical training course provided by the defendant railroad. 330
U.S. at 149. During training, an individual would first learn by observation and

then, under close supervision, be permitted to do actual work that did not displace

any of the regular employees’ work. Id. The Supreme Court concluded that,

because the railroads received no immediate advantage from the trainees’ work,

the trainees were not employees under the FLSA. Id. at 153. The Supreme Court

stated that it did not ignore “the argument that such a holding may open up a way

for evasion of the law. But there are neither findings nor charges here that these

arrangements were either conceived or carried out in such a way as to violate either

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the letter or the spirit of the minimum wage law.” Id. Thus, in Portland Terminal,

the Supreme Court focused on the immediate advantage to the employer.

      More than sixty years later, this Court considered the employment status of

students enrolled in a program that required clinical placement as part of a course

of study. Schumann, 803 F.3d at 1199. In Schumann, plaintiffs were twenty-five

former student registered nurse anesthetists who attended a master’s degree

program that required both classroom and clinical training, with the goal of

becoming certified registered nurse anesthetists. Id. at 1202. As part of the clinical

training, the students were required to participate in a minimum of 550 clinical

cases in a variety of surgical procedures. Id.at 1203. Additionally, the students

completed other tasks during the clinical phase of training, such as cleaning

equipment, preparing forms, and stocking anesthesia carts. Id. at 1204. The

students alleged that they were employees entitled to FLSA protection because

defendant benefited financially by using their services instead of certified

registered nurse anesthetists whom they would have had to pay. Id. The district

court found that the students were not employees and granted summary judgment

in favor of defendant. Id. at 1202. On appeal, this Court stated that the best way to

discern the primary beneficiary in a relationship where both the intern and the

employer may benefit significantly is to “focus on the benefits to the student while

still considering whether the manner in which the employer implements the

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internship program takes unfair advantage of or is otherwise abusive towards the

student.” Id. at 1211.

       In Schumann, the Court analyzed seven non-exhaustive considerations,

borrowed from the Second Circuit, that are helpful in determining the primary

beneficiary of modern internships. Id. at 1211–1212 (citing Glatt v. Fox

Searchlight Pictures, Inc., 791 F.3d 376 (2d Cir. 2015)).3 These factors are:

       1. The extent to which the intern and the employer clearly understand that
          there is no expectation of compensation. Any promise of compensation,
          express or implied, suggests that the intern is an employee—and vice
          versa.
       2. The extent to which the internship provides training that would be similar
          to that which would be given in an educational environment, including
          the clinical and other hands-on training provided by educational
          institutions.
       3. The extent to which the internship is tied to the intern’s formal education
          program integrated coursework or the receipt of academic credit.
       4. The extent to which the internship accommodates the intern’s academic
          commitments by corresponding to the academic calendar.
       5. The extent to which the internship’s duration is limited to the period in
          which the internship provides the intern with beneficial learning.
       6. The extent to which the intern’s work complements, rather than
          displaces, the work of paid employees while providing significant
          educational benefits to the intern.
       7. The extent to which the intern and the employer understand that the
          internship is conducted without entitlement to a paid job at the
          conclusion of the internship.

Id. (quoting Glatt, 791 F.3d at 384). The Schumann Court, upon finding the Glatt

analysis inconclusive, was unable to determine the primary beneficiary of that

3
 The Schumann Court cited to a prior version of the Glatt opinion which was subsequently
amended and superseded.
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particular employment relationship. Id. at 1214. The Court vacated the district

court’s grant of summary judgment and remanded for further proceedings. Id. at

1215.

        Thus, in Schumann, this Court focused on the primary beneficiary of the

internship relationship. Schumann also tells us that an individual’s employment

status may be bifurcated depending on either the task or hours worked beyond

what could be fairly expected. Id. at 1214. Importantly, the Court noted that

        in applying the factors to ascertain the primary beneficiary of an
        internship relationship, we caution that the proper resolution of a case
        may not necessarily be an all-or-nothing determination. That is, we
        can envision a scenario where a portion of the student’s efforts
        constitute a bona fide internship that primarily benefits the student,
        but the employer also takes unfair advantage of the student’s need to
        complete the internship by making continuation of the internship
        implicitly or explicitly contingent on the student’s performance of
        tasks or his working of hours well beyond the bounds of what could
        fairly be expected to be a part of the internship.

Id. at 1214–1215.

        The factors and inquiries put forth in the Portland Terminal “immediate

advantage” test and the Schumann primary beneficiary test overlap substantially.

As this Court noted in Schumann, “the Glatt factors involve consideration of the

same or similar facts to those that the Supreme Court found important in Portland

Terminal and that the DOL Handbook guidance deemed relevant factors for

consideration.” Schumann, 803 F.3d at 1212.

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                                 IV. DISCUSSION

      During the fifteen months or so that Plaintiff worked at Fields Motorcars, he

was learning the business from his father, a wholesaler. Plaintiff was not enrolled

in a formal educational program, but he was undoubtedly afforded the opportunity

to learn a trade by observation and practical application.

      Although the scenarios described in Portland Terminal and Schumann are

not precisely analogous, the Schumann approach provides the most applicable

guidance for the employment relationship at hand. Specifically, we consider the

non-exhaustive Glatt factors in assessing the primary beneficiary of the

relationship between Plaintiff and Fields Motorcars, and we also bear in mind the

import of the analysis set forth in Portland Terminal.

      The first Glatt factor—expectation of compensation—does not support a

finding that Plaintiff was an employee. Plaintiff did not receive any compensation

for his work at Fields Motorcars—either from Fields Motorcars or his father.

Plaintiff understood that his father would earn commissions on the wholesaling

work that Plaintiff did. Plaintiff thought it was a good opportunity and hoped that it

might lead to a full-time position. Plaintiff did not expect to be compensated for

the work he was doing at Fields Motorcars. At best, Plaintiff expected future

employment but future employment and an expectation of compensation are not

one and the same.

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       The district court correctly noted that Glatt factors two through four are

inapplicable here as they are tailored to training in the context of a formal

academic program and neither party contends that the training at issue was part of

such a program.

       The fifth Glatt factor—duration—does not clearly cut one way or the other.

The relevant inquiry is whether the duration of the training was necessary to

accomplish the goals of the training. See Schumann, 803 F.3d at 1213. However,

the record is unclear as to what the goals of the training were, whether those goals

were met and, if so, when those goals were met. Despite these outstanding

threshold questions, certain facts bear noting.

       At fifteen months, the training period seems fairly long and it is not evident

from the record that Plaintiff’s work was limited to the period in which the training

provided beneficial learning. The training period was also presumably indefinite as

it was tied to Michael’s retirement, which had no date certain. 4 Plaintiff testified

that Mr. Gordon told him that “there was a good chance [he] could take

[Michael’s] position when and if [Michael] retired.” This fact is inconclusive but

suggests that the duration of the training might have been excessive. Consideration

of Plaintiff’s work schedule is also relevant to this inquiry. See id. at 1213–14 (“As

4
 We have no reason to know whether the training period would have continued but for
Michael’s termination. As previously noted, Plaintiff stopped coming to work in May of 2014—
which coincided with Michael’s termination.
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part of this consideration, the court should also evaluate the extent to which the

nature of the training requires the daily schedule that the intern must endure.”) It is

possible that Plaintiff’s alleged sixty-hour work week was excessive for purposes

of meeting the goals of his training.

      A review of the sixth Glatt factor—displacement of work—suggests that

Plaintiff was a trainee at times and an employee at others. The contours of

Plaintiff’s workday were primarily defined by his father’s job. Michael testified

that his duties as wholesale manager included: purchasing inventory for the

Lakeland Mercedes and Lakeland BMW stores, helping the used car managers

certify vehicles, assisting the sales staff, pricing cars, and clearing out inventory

after sixty days. Plaintiff spent much of his time shadowing his father—which

would support finding him a trainee. Plaintiff also came to work with his father

each day and attended meetings and auctions with his father.

      Plaintiff also did wholesaling work which his father did not do. This “extra”

wholesaling work—namely the TradeRev posting—was done at the direction of

others. Although categorized as wholesaling, Michael never posted vehicles to

TradeRev himself. Michael’s only involvement with the TradeRev postings was to

inform Mr. Lightsey that cars had been uploaded to the application. Plaintiff’s

TradeRev work displaced work that would have been done by Mr. Lightsey.

According to Plaintiff, much of his work (more than 50%) involved posting

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vehicles for sale on eBay, Craigslist, and TradeRev, and he testified that he spent

several hours a day on the TradeRev work. Also relevant, Plaintiff communicated

with and received direction from Tim Scheid, a Fields Motorcars employee,

regarding the TradeRev postings. Fields Motorcars hired Mr. Scheid to wholesale

vehicles for the various stores in Florida and represent them at auction. Mr. Scheid

had no authority over Michael’s employment at Fields, which also suggests that the

TradeRev work was beyond the scope of Plaintiff’s training.

       Apart from wholesaling, Plaintiff also posted vehicles for sale on eBay and

Craigslist. These tasks are related to retail sales, and were also beyond the scope of

Michael’s work. There is also evidence that Mr. Gordon oversaw this work

because Plaintiff once received a verbal warning from Mr. Gordon for spending

too much money listing cars on eBay. Plaintiff testified that he spent significantly

more time on these tasks than “the wholesaling business.”5

       We cannot properly weigh this factor without additional information. We

also note the possibility that Plaintiff’s work displaced Michael’s work as well.

       The seventh Glatt factor—entitlement to a paid job at the end of the

training—does not support a finding that Plaintiff was an employee. Even

weighing the evidence in the light most favorable to Plaintiff, the non-moving
5
 Plaintiff appears to draw a distinction between the online postings and the wholesaling work
done under Michael’s supervision. For purposes of weighing this factor, the distinction is not
critical but we note that the Parties agree that the TradeRev postings constitute wholesale-related
work.

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party, the record does not lead to the conclusion that Plaintiff and Fields Motorcars

both understood that Plaintiff would be entitled to a paid position at the conclusion

of the training.6

       Of the four applicable factors, expectation of compensation and entitlement

to a paid job at the conclusion of the training weigh in favor of finding that

Plaintiff was a trainee. Because material issues of fact remain, we are unable to

properly weigh the factors relating to duration and displacement of work. With the

record before us, we cannot determine the primary beneficiary of this employment

relationship.

       Given that the Glatt analysis proves inconclusive, we must look to the

totality of the circumstances when factors are disputed. Layton, 686 F.3d at 1181.

This is not a situation where a trainee infrequently performed ministerial tasks

during the course of a formalized training program. Plaintiff did wholesaling work

for his father, but he also did wholesaling work for Mr. Lightsey, as well as other

work unrelated to wholesaling. As noted above, material issues of fact remain

regarding how much time Plaintiff devoted to tasks that extended beyond his

training.

6
  Plaintiff testified that there was merely a “good chance” that Plaintiff would be hired “when
and if [Michael] retired.” But Plaintiff also testified that he “expected an opportunity to work full
time in the future.” Fields Motorcars characterizes the expectation as a possibility of future
employment rather than a promise. The Court is not persuaded that Plaintiff and Fields
Motorcars both understood that Plaintiff would be entitled to a paid job at the conclusion of
training and any inference to the contrary would be based upon speculation.
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       Without knowing how much time Plaintiff spent doing tasks unrelated to

wholesaling and how much time Plaintiff spent doing tasks that were related to

wholesaling but not under the purview of his father, we cannot properly assess

when Plaintiff was a trainee and when he was an employee. The facts here present

a situation where, as this Court noted in Schumann, the proper outcome may not be

an “all-or-nothing” determination. Material issues of fact remain and, based on the

record before us, we cannot conclude that Plaintiff was not an employee at times.

                                     V. CONCLUSION

       In light of the record and the relevant considerations, it appears that Plaintiff

might have been a trainee at times and an employee at others. We vacate the

district court’s entry of summary judgment for Fields Motorcars and remand for

further proceedings consistent with this opinion.7

       VACATED AND REMANDED.

7
  In light of the issues of fact that remain regarding Plaintiff’s employment status as to Fields
Motorcars and Plaintiff’s primary reliance upon informal guidance from the Department of
Labor which has since been withdrawn, the Court need not address Plaintiff’s argument that he
was an employee of both his father and Fields Motorcars by virtue of vertical joint employment.
See U.S. Dep’t of Labor, https://www.dol.gov/newsroom/releases/opa/opa20170607 (news
release June 7, 2017) (Last visited Oct. 2, 2017).
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