Court Opinion

ID: 2718920
Source: CourtListenerOpinion
Date Created: 2014-08-19 18:03:40.850034+00
Date Added: 2024-06-11T09:12:19.348630
License: Public Domain

SUPREME COURT OF MISSOURI
                                      en banc

Andro Tolentino,                     )
                                     )
              Appellant,             )
                                     )
vs.                                  )             No. SC93379
                                     )
Starwood Hotels & Resorts Worldwide, )
Inc., et al.,                        )
Westin Hotel Management, LP,         )
                                     )
              Respondents.           )

                   Appeal from the Circuit Court of Jackson County
                       The Honorable W. Brent Powell, Judge

                            Opinion issued August 19, 2014

          Andro Tolentino appeals the circuit court’s grant of summary judgment in

favor of Starwood Hotels & Resorts Worldwide Inc. and Westin Hotel

Management L.P (collectively, “Respondents”). Tolentino filed suit pursuant to

the Missouri Minimum Wage Law (MMWL), section 290.500, 1 et seq., alleging

that Respondents, as his joint employer along with Giant Labor Services Inc.,

(“GLS”), was liable for payment of the minimum wage. The court found that

there were genuine issues of material fact regarding whether Respondents were

Tolentino’s employer. The circuit court entered summary judgment in favor of

1
    All statutory references are to RSMo Supp. 2011, unless otherwise indicated..
Respondents on grounds that Respondents adequately compensated Tolentino and

that Respondents could not be liable for the alleged wage deficiency because it

was caused by GLS’s unforeseeable, illegal wage deductions.

      As the circuit court determined, there are genuine issues of material fact

precluding summary judgment on the issue of whether Respondents were

Tolentino’s employer. The judgment is reversed, however, because the MMWL

imposes an individual statutory duty on each employer to pay the minimum wage.

Therefore, if Respondents were Tolentino’s employer for purposes of MMWL,

GLS’s illegal wage deductions do not absolve Respondents from their independent

statutory duty to pay a minimum wage. The judgment is reversed, and the case is

remanded.

                                      Facts

      Starwood owns Westin Hotel Management, which operates the Westin

Crown Center in Kansas City, Missouri (“Hotel”). Respondents contract with

temporary staffing agencies to provide housekeepers on an as-needed basis. GLS

was one of the staffing agencies that provided Hotel with housekeepers.

      The contract between Respondents and GLS provided that Respondents

would inform GLS how many housekeepers were needed and that GLS would

provide them. Respondents paid GLS $5 for each room cleaned. GLS was

responsible for paying the housekeepers in any manner that complied with

applicable law. GLS paid Tolentino $3.50 per room cleaned.
       In January 2008, federal law enforcement officials informed Respondents

that GLS was under investigation for crimes including human trafficking, fraud in

foreign labor contracting, money laundering, fraud and extortion. Over the course

of approximately two years, Respondents cooperated with law enforcement in the

investigation and prosecution of GLS and its owners.

       In February 2008, GLS assigned Tolentino to work at Hotel as a

housekeeper. In April 2008, Respondents notified GLS that they no longer wanted

Tolentino to work as a housekeeper at Hotel because he failed to complete his

work in a timely manner. GLS reassigned Tolentino to a different hotel.

       During the pay period of April 12, 2008, through April 26, 2008 — the last

pay period during which Tolentino worked at Hotel — Tolentino cleaned 122

rooms and earned $427 prior to deductions. Tolentino’s net pay was $372.34 after

deductions for federal and state income tax, social security, and Medicare. GLS

deducted the remaining $372.34 from Tolentino’s paycheck for visa fees.

Tolentino’s take-home pay was $0.

       GLS and its owners subsequently were indicted on federal charges.

Respondents never were accused of having any role in or knowledge of GLS’s

criminal conspiracy. Although the charges against GLS were dismissed due to

lack of assets, GLS’s principals were convicted of labor racketeering based in part

on their withholding earned wages for visa fees. A federal court awarded

Tolentino restitution in the amount of $3,150, which the criminal judgment

identified as Tolentino’s total loss.

                                         3
       On April 21, 2010, Tolentino filed a class action suit alleging that

Respondents and GLS were his employers and that Respondents failed to comply

with sections 290.502 and 290.505 of the MMWL. Tolentino alleged that GLS’s

practice of paying housekeepers based on the number of rooms cleaned, instead of

hours worked, resulted in an illegal wage deficiency. Tolentino also alleged that

he was deprived of minimum wage and overtime compensation because of the visa

fees deducted from his paycheck.

       Respondents moved for summary judgment. Respondents argued that they

were not subject to MMWL liability because they were not Tolentino’s employer.

Respondents also asserted that, even if GLS’s practice of paying its employees

$3.50 per room could be attributed to them, the $427 Tolentino earned prior to

deductions reflected a legal wage rate of $7.76 per hour. Finally, Respondents

asserted that they could not be held liable for GLS’s illegal wage deductions.

       The circuit court granted Respondents’ motion for summary judgment. The

court concluded that genuine issues of material fact existed as to whether

Respondents and GLS were Tolentino’s employers. Although the court assumed

that Respondents were Tolentino’s employer, the court determined that

Respondents were entitled to summary judgment for two reasons. First, the circuit

court concluded that Respondents adequately compensated Tolentino. Second, the

court determined that the only reason Tolentino did not receive the minimum wage

was because of GLS’s illegal deductions. The court held that even if Respondents

                                          4
were Tolentino’s employer, Respondents “cannot be held responsible for the

unforeseen criminal activity committed by GLS.”

          Tolentino appeals the grant of summary judgment. 2 He asserts that there

are genuine issues of material fact as to whether Respondents and GLS were his

joint employers. Tolentino then argues that the MMWL provides that

Respondents are jointly and severally liable for the payment of minimum wages

regardless of GLS’s illegal wage deductions. Respondents assert that they were

not Tolentino’s joint employer and, if they were, they cannot be held liable for

GLS’s illegal wage deductions.

                                     Standard of Review

          Appellate review of summary judgment is essentially de novo. ITT

Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376

(Mo. banc. 1993). Summary judgment is appropriate when “there is no genuine

issue as to any material fact” and “the moving party is entitled to judgment as a

matter of law.” Rule 74.04(c)(6). The moving party must establish an

“undisputed right to judgment as a matter of law.” ITT, 854 S.W.2d at 380. The

record is reviewed in the light most favorable to Tolentino as the non-moving

party. Id. at 376.

          Respondents’ liability, if any, is premised on whether they were Tolentino’s

employer. The analysis of whether Respondents employed Tolentino along with

GLS is inherently fact intensive because it requires an assessment of the record in

2
    This Court has jurisdiction pursuant to Mo. Const., art. 5, sec. 10.

                                                5
light of multiple factors. The fact intensive nature of the analysis means that the

issue of joint employment is often not suitable for resolution by means of

summary judgment. See Barfield v. New York City Health & Hosp. Corp., 537
F.3d 132, 143-44 (2d Cir. 2008) (“Because of the fact-intensive character of a

determination of joint employment, we rarely have occasion to review

determinations made as a matter of law on an award of summary judgment.”).

                           Missouri Minimum Wage Law

          The MMWL requires employers to pay their employees the minimum wage

for all hours worked. An “employer” is “any person acting directly or indirectly in

    the interest of an employer in relation to an employee.” Section 290.500(4). An

    “employee” is “any individual employed by an employer.” Section 290.500(3). 3

                                 Joint Employment

         Tolentino asserts that Respondents and GLS were joint employers. The

MMWL does not use or define the term “joint employer.” The MMWL utilizes

the term “employer.” As noted, the MMWL defines “employer” as “any person

acting directly or indirectly in the interest of an employer in relation to an

3
  With respect to Tolentino’s claim for overtime compensation, section 290.505.4
provides expressly that “[e]xcept as may be otherwise provided under sections
290.500 to 290.530, this section shall be interpreted in accordance with the Fair
Labor Standards Act [FLSA] ….” Section 290.505 – “this section” – applies to
claims for overtime compensation. Further, the Missouri Department of Labor has
promulgated regulations providing that except as otherwise provided by Missouri
law, the interpretation and enforcement of the MMWL follows the Federal Fair
Labor Standards Act of 1938 (FLSA), 29 U.S.C. section 201, et seq. See section
290.505.4; 8 C.S.R. 30-4.010(1) (2010).

                                           6
employee.” Section 290.500(4). The facts of this case indicate that Respondents

and GLS directly or indirectly acted in one another’s interest with respect to

Tolentino. Respondents received cleaning services from Tolentino and GLS

profited by being able to place Tolentino at Hotel. This is a situation in which

both Respondents and GLS could be viewed as Tolentino’s “employer” for

purposes of the MMWL. 4

       In cases involving multiple alleged employers, Missouri courts have

utilized several factors to ascertain whether a particular work relationship qualifies

as an employer-employee relationship to which the MMWL applies. Fields v.

Advanced Health Care Mgmt. Servs., LLC, 340 S.W.3d 648, 654 (Mo. App. 2011)

(citing Baker v. Stone County, Missouri, 41 F. Supp. 2d 965, 979-81 (W.D. Mo.

1999); see also Barfield, 537 F. Supp. at 141-143),; Conrad v. Waffle House, Inc.,

351 S.W.3d 813 (Mo. App. 2011) (applying the test adopted in Fields). In Fields,

the court of appeals utilized five factors: (1) who has the power to hire and fire the

worker; (2) who supervises and controls the worker’s work schedule and

conditions of work; (3) who determines the rate and method of payment of the

worker; (4) who maintains work records; and (5) whether the alleged employers’

4
 Federal courts have found joint employment when, as in this case, an
employment staffing agency supplies workers to another entity. See, eg., Barfield,
537 F. Supp. at 143-44 (hospital was joint employer of nurses supplied by an
employment staffing agency); Ansoumana v. Gristede’s Operating Corp., 255 F.
Supp. 2d 184 (S.D. N.Y. 2003) (supermarket chain was joint employer of delivery
drivers supplied by an employment staffing agency).

                                          7
premises and equipment were used for the plaintiff’s work. Fields, 340 S.W.3d at

654 (citing Baker, 41 F. Supp. 2d at 981).

       Federal courts have referred to the first four factors identified in Fields as

“formal” factors indicating the existence of joint employment. See, e.g., Barfield,
537 F.3d at 143. Although the federal courts have employed a variety of

additional “functional” factors in analyzing FLSA cases, these factors are derived

from FLSA definition of the term “employ,” which includes the phrase “suffer or

permit to work.” 29 U.S.C. § 203(g). 5 The United States Supreme Court has

recognized repeatedly that the broad definition of the term “employ” utilized by

the FLSA requires a broad construction of the term. See Nationwide Mut. Ins. Co.

v. Darden, 503 U.S. 318, 326 (1992); Rutherford Food Corp. v. McComb, 331
U.S. 722, 729 (1947). The “functional” factors employed by the federal courts are

premised on the FLSA’s broad definition of the term “employ.” The MMWL does

not define the term “employ.” Analysis of so-called “formal” factors indicates the

existence of genuine disputes regarding material facts that preclude summary

judgment. For purposes of this case, this Court will analyze Tolentino’s claim

with reference only to the “formal” factors identified by the federal courts.

5
  The functional factors include: (1) whether the alleged employer’s premises and
equipment were used for the plaintiffs’ work; (2) whether plaintiffs shifted from one
putative joint employer's premises to that of another; (3) the extent to which the work
performed by plaintiffs was integral to the overall business operation; (4) whether
plaintiffs' work responsibilities remained the same regardless of where they worked; (5)
the degree to which the alleged employer or its agents supervised plaintiffs’ work, and (6)
whether plaintiffs worked exclusively or predominantly for one defendant. Barfield, 537
F.3d at 143; Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61, 72 (2d Cir. 2003).

                                            8
                              Power to Hire and Fire

       The first formal factor pertains to the alleged joint employer’s authority to

hire and fire the worker. Respondents assert they had no authority to hire

Tolentino. Respondents note that GLS initially hired Tolentino and assigned him

to work at Hotel. Tolentino, however, asserts that Respondents interviewed him

prior to his performing any work at Hotel to determine whether he was suitable for

work at Hotel. Tolentino also asserts that, prior to commencing work at Hotel, he

was required to review and sign two documents containing Westin’s performance

standards for housekeepers. Respondents assert that Tolentino has “embellished”

the extent of the alleged interview and that the documents simply inform

housekeepers of their responsibilities.

       When viewed in the light most favorable to Tolentino, the record indicates

that there remains a genuine factual dispute regarding Respondents’ authority to

hire Tolentino. If, as Tolentino alleges, he was required to interview successfully

and then sign performance standards documents before commencing work at

Hotel, he may be able to establish that Respondents effectively “hired” him for

MMWL purposes by exercising practical control over whether he commenced

work and earned wages. The issue of whether Tolentino “embellished” the extent

of the alleged interview process illustrates the existence of an unresolved genuine

and material factual dispute with respect to Respondent’s ability to hire Tolentino.

       Respondents also assert that they had no authority to fire Tolentino.

Although Respondents admit they could request that GLS stop sending an

                                          9
unsatisfactory worker, Respondents note that GLS was not required to fire that

worker. This assertion begs the question as it assumes that GLS was the sole

employer for purposes of the MMWL. Additionally, as Tolentino notes,

Respondents directed GLS to not assign him for additional work at Hotel. If

Respondents have the authority to tell GLS not to send a certain housekeeper to

work at Hotel, then Respondents arguably retain the practical authority to prevent

that worker, at least temporarily, from working and earning a wage. In that sense,

Tolentino and similarly situated housekeepers are economically dependent on both

Respondents and GLS as joint employers. The parties’ differing accounts

constitute a genuine factual dispute with respect to Respondents’ authority to fire

Tolentino.

                              Supervision and Control

       Respondents assert that they did not supervise or control Tolentino’s work

schedule or work conditions. Tolentino rebuts this assertion by alleging that he

had to attend meetings every morning he worked at the Hotel during which he was

informed of his daily assignments. Tolentino also asserts that Hotel staff enforced

Respondents’ cleaning standards by inspecting the rooms cleaned by Tolentino

and other housekeepers and requiring housekeepers to redo any work that was

determined to be deficient.

       Respondents characterize this oversight as necessary quality control

measures rather than control or supervision indicative of employment. This

argument begs the question. While Respondents would be expected to ensure that

                                         10
housekeepers provided by GLS performed in accordance with Hotel standards, the

issue is the extent of that control and supervision.

       The degree of supervision and control allegedly exerted by Respondents

also distinguishes this case from three FLSA cases cited by Respondents in which

federal district courts determined, by summary judgment, that cable technicians

supplied to cable television providers by another company were not jointly

employed by the cable television providers. See Lawrence v. Adderley Indus.,

Inc., No. 09-2309, 2011 WL 666304 (E.D.N.Y. Feb. 11, 2011); Jacobson v.

Comcast Corp., 740 F. Supp. 2d 683 (D. Md. 2010); Zampos v. W & E

Commc’ns., Inc., 970 F. Supp. 2d 794 (N.D. Ill. 2013). In each case, the

technicians were responsible for installing cable in customers’ homes and were

supplied to the cable company pursuant to a contract with another company. The

cable technicians’ work involved a variety of technical tasks requiring a higher

degree of skill than required for the housekeeping positions at issue in this case.

The higher degree of skill and expertise is important because “the degree of skill

required to perform those jobs weighs against a finding of employer status.”

Lawrence, 2011 WL 666304 at 10, (citing Chao v. Mid-Atl. Installation Servs.,

Inc., 16 F. App’x. 104 (4th Cir. 2001)). In contrast, the housekeeping work at

issue in this case, although important and valuable, is relatively simple, repetitive,

and subject to a greater degree of supervision and control by the alleged joint

employer.

                                          11
       The cable technician cases are further distinguishable because the alleged

joint employers did not exercise significant daily supervision over the technicians’

work. For instance, in Zampos, 970 F. Supp. 2d at 803, the court noted that

“Comcast does not observe W & E technicians activities throughout the day.” 970
F. Supp. 2d at 803. The Lawrence court noted that the cable company “does not

exercise any significant degree of supervision over plaintiff’s or any particular

technician’s work.” 2011 WL 666304 at *10. Finally, in Jacobson, the court

noted that “Comcast is not responsible for the day-to-day management of the

technicians . . . and does not dictate the technicians’ working conditions ….” 740
F. Supp. 2d at 691. Conversely, in this case, there remains a genuine factual

dispute regarding the extent of respondent’s supervision and control over

Tolentino’s work conditions.

                           Rate and Method of Payment

       Respondents assert that they had no control over the rate or method of

payment to Tolentino or any other housekeeper. Respondents further note that

they paid GLS, which in turn paid Tolentino. While Respondents correctly

describe the flow of money, it is also true that there is evidence that Respondents

determined both rate and method of payment by deciding to remit money to GLS

based on how many rooms Tolentino and other housekeepers cleaned. For

instance, there is evidence that Respondents not only made the decision to pay

housekeepers on a per-room basis but also raised the per-room rate in response to

an increase in the minimum wage. Viewed in the light most favorable to

                                         12
Tolentino, this evidence supports a finding that Respondents retained substantial

control over the rate and method of pay.

                          Maintenance of Work Records

       The final “formal factor” looks to whether the alleged joint employer

maintains work records. Respondents contend that they maintained no work

records such as employment applications, performance reviews, benefits

information and the like. Tolentino asserts that Respondents maintained time

sheets and productivity records and then utilized these records in support of its

decision to “fire” him from working at the Hotel. As with the other factors, there

are genuine factual disputes that should not be resolved by summary judgment.

       As established above, there are genuine disputes regarding the material

facts necessary and relevant to analysis of the formal factors indicating joint

employment. As the circuit court concluded, therefore, there are genuine,

unresolved factual issues as to whether Respondents were Tolentino’s joint

employer.

                 Unforeseen Criminal Acts of a Joint Employer

       Respondents assert that even if it is assumed that they were Tolentino’s

joint employer, summary judgment is appropriate because, as a matter of law,

GLS’s illegal wage deductions absolve Respondents from MWML liability. The

circuit court agreed, finding that that the only reason Tolentino was not

compensated adequately was because GLS illegally deducted visa fees from

                                           13
Tolentino’s paycheck. As a result, the trial court held that Respondents could not

be held liable under the MMWL for GLS’s unforeseen criminal activity.

       The issue of whether illegal wage deduction by a joint employer absolves

another joint employer of MMWL or FLSA liability appears to be an issue of first

impression. Respondents assert that holding it liable for GLS’s unforeseen

criminal acts is contrary to the purpose of the MMWL and to the common law of

agency and strict liability. Tolentino asserts that applying the MMWL to

Respondents does not hold Respondents liable for GLS’s illegal wage deductions

but, instead, simply requires Respondents to comply with its independent statutory

duty as a joint employer to pay a minimum wage. Tolentino is correct.

                              Purpose of the MMWL

       The primary role of courts in construing statutes is to ascertain the intent of

the legislature from the statutory language give an effect to that intent. Holtcamp

v. State, 259 S.W.3d 537, 540 (Mo. banc 2008); see also section 1.010 RSMo

2000 (“all acts of the general assembly, or laws, shall be liberally construed, so as

to effectuate the true intent and meaning thereof”). This generally applicable rule

of construction is augmented by the fact that the MMWL, like the FLSA, is a

remedial statute with the purpose of ameliorating the “unequal bargaining power

as between employer and employee” and to “protect the rights of those who toil,

of those who sacrifice a full measure of their freedom and talents to the use and

profit of others.” Specht v. City of Sioux Falls, 639 F.3d 814, 819 (8th Cir. 2011),

citing Bensoff v. City of Virginia Beach, 180 F.3d 136, 140 (4th Cir. 1999).

                                          14
Remedial statutes, like the MMWL, are construed broadly to effectuate the

statute’s purpose. Util. Serv. Co., Inc. v. Dep’t of Labor and Indus. Relations, 331
S.W.3d 654, 658 (Mo. banc 2011) (citing State ex rel. LeFevre v. Stubbs, 642
S.W.2d 103, 106 (Mo. banc 1982)). Doubts about the applicability of a remedial

statute are resolved in favor of applying the statute. Id. Determining whether the

MMWL applies to Respondents given GLS’s illegal wage deductions, therefore,

requires this Court to interpret the MMWL and attendant regulations broadly to

effectuate the statutory purpose of ensuring that employees receive the legally

mandated minimum wage.

       Respondents cite Writz v. Harrigill, 214 F. Supp. 813, 815 (S.D. Miss.

1963) for the proposition that one purpose of minimum wage laws is to shield

unsuspecting employers from liability when those employers exercise reasonable,

good faith efforts to comply with the law. That may be a purpose of the FLSA,

but is not the primary purpose of the MMWL. The self-evident central purpose of

minimum wage laws like the FLSA and the MMWL is to ensure that employers

pay employees a minimum wage. See, e.g., Specht, 639 F.3d at 819 (8th Cir. 2011)

(purpose of FLSA is to protect employees). Respondents’ position is inconsistent

with the purpose of the statute as it places the risk of underpayment squarely on

the shoulders of the employee, the very party whom the MMWL was enacted to

protect.

       Respondents also assert that the MMWL should be interpreted with

reference to the common law of agency and strict liability. This argument is based

                                         15
on the premise that common law principles must be used to supplement the

MMWL because the statute does not address expressly the issue of whether

Starwood is liable given GLS’s illegal wage deductions.

        The fact that the MMWL does not address expressly the precise factual

situation in this case does not mean that common law agency and strict liability

principles operate to insulate Respondents from an obligation to pay a minimum

wage.

        The threshold issue is whether Respondents can be considered to be

Tolentino’s “employer” pursuant to the MMWL. If Respondents are an

“employer” for purposes of the MMWL, there is nothing in the statute that

precludes liability for an employer based on common law agency or strict liability

principles. To the contrary, the MMWL plainly obligates employers to pay a

minimum wage to its employees. If Respondents are found to be Tolentino’s

employer along with GLS, then, it follows that Respondents are individually

responsible for paying a minimum wage. This result is consistent with the

remedial purposes of the statute and with persuasive federal authority holding that

joint employers are jointly liable for compliance with minimum wage laws. See

Karr v. Strong Detective Agency, Inc., a Div. of Kane Servs., 787 F.2d 1205, 1207

(7th Cir. 1986) (“joint employers are individually responsible for compliance with

                                        16
the FLSA”); Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983) (joint

employers are “jointly and severally liable under the FLSA for unpaid wages”). 6

      Respondents’ duty to pay a minimum wage was not contingent on GLS’s

acts or omissions. Instead, Respondents had an independent statutory duty as

Tolentino’s employer to pay him a minimum wage. GLS’s illegal wage

deductions, even if unknown or unforeseen by Respondents, do not absolve

Respondents of their MMWL obligations as an employer. Even if Respondents

remitted sufficient funds to GLS to enable GLS to pay the minimum wage,

Respondents, if found to be Tolentino’s employer, are not absolved from MMWL

liability due to GLS’s failure to pay a minimum wage to Tolentino.

                                   Conclusion

      The judgment is reversed, and the case is remanded.

                                         _________________________________
                                         Richard B. Teitelman, Judge

All concur.

6
  Respondents’ reference to strict tort liability is inapposite. The relationship
between Respondents and Tolentino was contractual. There are no tort claims at
issue in this case.

                                        17