Court Opinion

ID: 9390876
Source: CourtListenerOpinion
Date Created: 2023-04-28 20:00:59.315403+00
Date Added: 2024-06-11T17:18:37.839179
License: Public Domain

USCA11 Case: 22-11135     Document: 37-1       Date Filed: 04/28/2023   Page: 1 of 10

                                                    [DO NOT PUBLISH]
                                      In the
                 United States Court of Appeals
                          For the Eleventh Circuit

                            ____________________

                                   No. 22-11135
                             Non-Argument Calendar
                            ____________________

        DIANNA YODER,
        Individually and on behalf of other similarly situated
        KELLEY WILLIAMS,
        Individually and on behalf of other similarly situated
        JOSHUA DAVIS,
        RICHARD BUTTS,
                                                       Plaintiﬀs-Appellants,
        CLINT WALDING,
                                                                   Plaintiﬀ,
        versus
        FLORIDA FARM BUREAU, et al.
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        2                     Opinion of the Court                22-11135

                                                              Defendants,

        FLORIDA FARM BUREAU CASUALTY INSURANCE
        COMPANY,
        FLORIDA FARM BUREAU GENERAL INSURANCE COMPANY,
        SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY,

                                                     Defendants-Appellees.

                            ____________________

                  Appeal from the United States District Court
                      for the Northern District of Florida
                    D.C. Docket No. 1:19-cv-00070-AW-GRJ
                           ____________________

        Before WILSON, ROSENBAUM, and JILL PRYOR, Circuit Judges.
        PER CURIAM:
               Plaintiffs-Appellants appeal the district court’s summary
        judgment order holding that they were “independent contractors”
        rather than “employees” of the Defendants-Appellees, and there-
        fore not entitled to the overtime protections afforded by the Fair
        Labor Standards Act (FLSA), 29 U.S.C. § 297. After careful review
        of the record, we agree with the district court’s determination and
        AFFIRM.
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        22-11135                  Opinion of the Court                              3

                                              I.
               Appellants Diana Yoder, Kelley Williams, Joshua Davis, and
        Richard Butts are four insurance agents (collectively, the Agents).
        Each entered separate contracts with Appellees Florida Farm Bu-
        reau Casualty Insurance, Florida Farm Bureau General Insurance
        Company, and Southern Farm Bureau Life Insurance Company
        (collectively, Farm Bureau) to exclusively sell and service Farm Bu-
        reau products. The Agents’ income came exclusively from com-
        missions of Farm Bureau products that they issued or renewed.
        The Agents operated from Farm Bureau agencies located in offices
        that were supplied, operated, and provided by Farm Bureau. 1
               Following the termination of their contracts, the Agents
        sued Farm Bureau claiming entitlement to overtime pay as em-
        ployees under the FLSA. Farm Bureau moved for summary judg-
        ment, arguing that the Agents were independent contractors under
        the FLSA, thus extinguishing any entitlement to overtime pay. In
        response, the Agents argued that Farm Bureau controlled every sig-
        nificant aspect of their work, and that the Agents had no oppor-
        tunity for profit or loss and were not required to personally invest
        in materials for work. Thus, they are employees entitled to over-
        time pay under the FLSA.

        1 The parties dispute this fact, but at summary judgment we construe all facts
        in favor of the nonmovant. See Scantland v. Knight, 721 F.3d 1308, 1310 (11th
        Cir. 2013).
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        4                      Opinion of the Court                22-11135

                The district court granted summary judgment for Farm Bu-
        reau, finding the Agents were independent contractors. The dis-
        trict court drew guidance from caselaw, analyzed the Scantland v.
        Knight, 721 F.3d 1308 (11th Cir. 2013), factors, and found that four
        of the factors favored independent contractor status while two,
        permanency and integrality, favored employee status. Ultimately,
        the court concluded that “[the Agents] chose how to grow their
        business. They chose how much of their own money to invest . . . .
        They retained discretion to hire staff to help them. In short, they
        had substantial control over how they worked and how much they
        earned—making them economically independent.” Yoder v. Fla.
        Farm Bureau Cas. Ins. Co., No. 1:19-cv-70-AW-GRJ, 2022 WL
        1055184, at *10 (N.D. Fla. Mar. 9, 2022).
              The Agents timely appealed.
                                          II.
               We review an appeal from summary judgment de novo and
        apply the same legal standards as the district court. Scantland , 721
        F.3d at 1310. “The court shall grant summary judgment if the mo-
        vant shows that there is no genuine dispute as to any material fact
        and the movant is entitled to judgment as a matter of law.” Fed.
        R. Civ. P. 56(a). “The court must view all evidence most favorably
        toward the nonmoving party, and all justifiable inferences are to be
        drawn in the nonmoving party’s favor.” Scantland, 721 F.3d at
        1310.
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        22-11135                 Opinion of the Court                             5

                                             III.
                To determine an individual’s employment status under the
        FLSA, “courts look to the ‘economic reality’ of the relationship be-
        tween the alleged employee and alleged employer and whether
        that relationship demonstrated dependence.” Id. at 1311. “Ulti-
        mately, in considering economic dependence, the court focuses on
        whether an individual is in business for himself or is independent
        upon finding employment in the business of others.” Id. at 1312
        (internal quotation marks omitted). Because “a constricted inter-
        pretation of the [the FLSA] by courts would not comport with [the
        FLSA’s] purpose,” our circuit holds that “[t]he common law con-
        cepts of ‘employee’ and ‘independent contractor’ [are] specifically
        rejected as determinants of who is protected” by the FLSA. Usery
        v. Pilgrim Equip. Co., 527 F.2d 1308, 1311 (5th Cir. 1976). 2
               We use the following six non-exhaustive Scantland factors to
        guide the economic reality inquiry:
               (1) the nature and degree of the alleged employer’s
                   control as to the manner in which the work is to
                   be performed;
               (2) the alleged employee’s investment in equipment
                   or materials required for his task, or his employ-
                   ment of workers;

        2 Decisions from the former Fifth Circuit predating the close of business on
        September 30, 1981, are binding precedent in the Eleventh Circuit. Bonner v.
        City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc).
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        6                      Opinion of the Court                 22-11135

              (3) whether the service rendered requires a special
                  skill;
              (4) the degree of permanency and duration of the
                  work relationship;
              (5) the extent to which the service rendered is an in-
                  tegral part of the alleged employer’s business;
              (6) the extent to which the service rendered is an in-
                  tegral part of the alleged employers’ business.
        Scantland, 721 F.3d at 1312.
                                            IV.
                The Agents allege two overarching errors with the district
        court’s reasoning: first, that drawing guidance from non-FLSA
        caselaw was erroneous, and second, the court misapplied the rele-
        vant test by dismissing the dispositive factor: economic depend-
        ence. After careful review, we find that the Agents were properly
        classified as independent contractors. We address each argument
        in turn.
                                 A.     Non-FLSA Caselaw
               “The common law concepts of ‘employee’ and ‘independent
        contractor’ [are] specifically rejected as determinants of who is pro-
        tected” by the FLSA. Usery, 527 F.2d at 1311 (emphasis added).
        The Agents argue that the district court erred by drawing guidance
        from common law authority to determine employment status. We
        disagree. The district court employed the proper FLSA standard as
        the determinant of the Agents’ employment status: economic inde-
        pendence. See Yoder, 2022 WL 1055184, at *10 (“This conclusion
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        22-11135                   Opinion of the Court                                 7

        follows careful consideration of the six Scantland factors . . . [b]ut
        this was not simply counting factors. I considered each factor in
        the context of the overall issue, which is economic dependence.”).
        Thus, the cases the district court drew guidance from did not
        amount to error because it did not change the scope of the relevant
        analysis.
                                   B.      Economic Independence
               The Agents next argue that the district court applied the in-
        correct analyses to determine the outcome of the individual Scant-
        land factors. They claim that instead of focusing on whether the
        Agents were dependent on Farm Bureau, the court focused on
        common law concepts of employment. We disagree.
               The court correctly identified the proper rubric for deter-
        mining each factor under our caselaw. See Yoder, 2022 WL 1055184,
        at *3–9 (citing to Scantland, 721 F.3d 1308, for the proper scope of
        each factor and analyzing each under the stated scope). 3
                                            i.      Control
               The Agents contend that Farm Bureau controlled every sig-
        nificant aspect of their work. Under the control factor, we consider

        3 The Agents encourage us to adopt the standard set out in Garcia-Celestino v.
        Ruiz Harvesting, Inc., 898 F.3d 1110 (11th Cir. 2018) (Garcia-Celestino II) and
        Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d 1276 (11th Cir. 2016) (Garcia-
        Celestino I) for our analysis. But those cases apply the “Aimable factors” test
        for joint employment under the FLSA, not the Scantland economic reality
        test—relevant here—to determine an alleged employee’s employment status
        under the FLSA. Garcia-Celestino I, 843 F.3d at 1294.
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        8                         Opinion of the Court                22-11135

        the “nature and degree of the alleged employer’s control as to the
        manner in which the work is to be performed. Control is only sig-
        nificant when it shows an individual exerts such a control over a
        meaningful part of the business that she stands as a separate eco-
        nomic entity.” Scantland, 721 F.3d at 1313 (internal quotation
        marks omitted). The evidence the Agents point to reflect control
        over aspects like what products can be sold and what the commis-
        sion rate is, but the evidence does not go towards the manner in
        which the work is to be performed. The record reflects that the
        Agents are free to control the manner in which they work. Nota-
        bly, they pursued their own leads, determined their own methods
        for developing sales, and hired and maintained support staff if they
        determined a need for assistance. Thus, there was not sufficient
        control to label the parties as the same “economic entity.” Usery,
        527 F.2d at 1313.
                            ii.     Opportunity for Profit and Loss
                The Agents next maintain that the facts the district court re-
        lied on for evaluating the Agents’ opportunity for profit and loss—
        their discretion to decide which sales methods to prioritize, decide
        how best to use their time each day, and opportunity to hire staff,
        and advertise—had nothing to do with managerial skill. See Scant-
        land, 721 F.3d at 1316 (stating that this factor “considers the alleged
        employee’s opportunity for profit or loss depending upon his mana-
        gerial skill” (emphasis added)). The facts the district court pointed
        to reflect managerial skill and thus were proper determinants of
        this factor.
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        22-11135                Opinion of the Court                         9

                                     iii.   Investments
               Next, the Agents argue that the district court considered
        more than the necessary investments and therefore erroneously
        found that this factor pointed towards independent contractor sta-
        tus. Instead, the court should have focused exclusively on the in-
        vestments that the business required to operate. See id. at 1317 (stat-
        ing that the investment factor “considers the alleged employee’s
        investment in equipment or materials required for his task, or his
        employment of workers”).
                In analyzing this factor, Scantland focused on whether the
        alleged employee’s ability to hire employees was illusory—an op-
        tional investment. Id. at 1316–17. Usery focused on the employees’
        risk capital. See Usery, 527 F.2d at 1313–14. Neither of the cases
        compared the investment between the alleged employer and em-
        ployee. Thus, a reading of our precedent reveals that courts may
        analyze investments the alleged employee has the ability to make
        and may also consider the alleged employee’s risk capital.
               We agree with the Agents that they did not have significant
        investments in the materials required for their tasks. Farm Bureau
        provided the software necessary to complete and log their duties.
        However, the Agents did invest personal capital into advertising
        and had the ability to employ support staff without the approval of
        Farm Bureau. The latter investment would be wholly the Agents’,
        as they would be responsible for paying the salary of those hired
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        10                        Opinion of the Court                     22-11135

        staff members. Thus, they had the ability to hire workers, and also
        invested significant risk capital for the success of their business. 4
                                       iv.     Other factors
                Finally, we agree with the district court’s well-reasoned anal-
        ysis of the remaining factors. We agree with its determination that
        licensure implicates special skill of an independent contractor, an
        average of 18 years indicates permanence of an employee, and the
        Agents’ role is integral to Farm Bureau’s business, again indicating
        an employment relationship.
                                                 V.
               Applying the Scantland factors with an eye towards eco-
        nomic independence reveals that the Agents exercised sufficient
        control over their business. Accordingly, we AFFIRM the district
        court’s order.
               AFFIRMED.

        4 See Yoder, 2022 WL 1055184, at *7–8 (discussing the various risk capital the
        Agents invested into their business).