The undisputed facts relevant to the present motion are as
follows. In 1978, Frishberg met with Leon C. Rosenberg
("Rosenberg"), national sales manager for Esprit, to discuss
selling Esprit merchandise. Their eventual agreement that
Frishberg would sell women's wear for Esprit as a commissioned
salesperson was memorialized in a letter from Rosenberg to
Frishberg, dated October 9, 1978. Esprit claims that this
letter embodied the entirety of the agreement between the
parties, while Frishberg maintains that his agreement with
Rosenberg, and therefore with Esprit, was partly written and
The letter agreement stated the terms of Frishberg's
engagement as follows: his sales territory included all of New
Jersey, Long Island, upstate New York, and the New York
metropolitan region, less certain accounts; his remuneration
would be a commission of eight percent (8%) of net shippings;
he was to sell only Esprit merchandise; and he was to hire two
salespeople to work for him in selling Esprit products.
Initially, Frishberg was paid directly by Esprit, as were the
two salespeople he hired to work with him. During this period
Esprit deducted payroll taxes from the commissions it paid to
Frishberg. However, in 1981 Frishberg formed Dee Bee Sales, a
New York corporation of which he was sole shareholder and
through which he sold Esprit goods. From that date forward,
Frishberg and the salespeople he hired were paid by Dee Bee
Sales, which deducted payroll taxes on their behalf, and Esprit
paid commissions on the merchandise sold by all these people
directly to Dee Bee Sales.
Frishberg d/b/a Dee Bee Sales employed several salespeople
and assistants from 1981 to 1989, including two that covered
the upstate New York sales territory for Dee Bee Sales. Esprit
provided these salespeople with drawing accounts, but only on
the condition that Frishberg d/b/a Dee Bee Sales guarantee
them. On at least one occasion, Frishberg had to pay Esprit
$5,000 to cover the overdrafts of a Dee Bee Sales salesperson.
Frishberg d/b/a Dee Bee Sales kept two offices, one in the
basement of Frishberg's house in East Meadow, New York, and the
other a condominium showroom in Atlantic City, New Jersey.
Frishberg purchased and maintained these two offices at his own
expense. Frishberg d/b/a Dee Bee Sales also paid a fee to
Esprit for the use of an Esprit showroom in New York City.
Frishberg d/b/a Dee Bee Sales paid many of its own business
expenses, including rental space for displaying merchandise,
automobile expenses, hotel rooms, telephone bills, and other
travel costs. Esprit, however, paid all expenses when Frishberg
and the salespeople employed by Dee Bee Sales attended
quarterly Esprit sales meetings. Frishberg and the employees of
Dee Bee Sales received no traditional employee benefits from
Esprit. Dee Bee Sales paid for Frishberg's pension plan,
medical expenses, disability insurance, life insurance, and
vacations.*fn2 Frishberg also worked largely on his own,
without daily supervision by Esprit. Frishberg set his own
schedules and appointments with clients. He did, however,
report at least weekly to Esprit officials regarding the sales
Dee Bee Sales had produced in his territory.
Esprit sold its products through two sales forces, salaried
sales representatives and commissioned sales representatives.
When Frishberg first began to sell for Esprit, most of Esprit's
sales force consisted of commissioned sales representatives,
the status both he and the other employees of Dee Bee Sales
assumed. Esprit's sales strategy at this time was to focus on
specialty stores around the country in an effort to establish
the company's name and image. As Esprit's reputation and size
grew in the 1980's, Esprit changed its sales approach,
concentrating more on major accounts such as large department
stores. During this period Esprit took several steps to
centralize the sales force, including establishing regional
sales offices staffed with salaried sales representatives for
each of four regions. These salaried sales representatives
serviced many of the company's larger accounts.*fn3
Beginning in 1983, Esprit reduced the commission rate
applicable to commissioned sales representatives several times.
That year the rate was reduced from 8% to 6%, in 1984 it was
reduced to 5%, and then in 1988 it was further reduced to 4%.
These commission reductions all affected Frishberg and Dee Bee
Sales. In 1988, Esprit also moved the United States Navy
account, a large account that had been very profitable for
Frishberg, from Dee Bee Sales to the Esprit regional office in
New York. Throughout this period Frishberg and Dee Bee Sales
continued their relationship with Esprit.
In 1989, Esprit management continued the change in its sales
approach. It pulled "in-house," i.e. into the closest regional
sales office, most of the remaining major store accounts that
were still being sold to by commissioned sales representatives.
In accordance with this plan, Richard Baker ("Baker"),
president of Esprit's women's wear division, called Frishberg
on October 27, 1989, to inform him that the Stern's account, to
which Frishberg had been selling and which constituted a large
part of his business, was being reassigned to the regional
office in New York.
A letter to Frishberg dated October 31, 1989, explained the
restructuring and confirmed the removal of the Stern's account.
The letter did not terminate Frishberg, but expressed Esprit's
wish "to help you refocus your attention on the many other
accounts and potential customers in your area. . . ." Baker
sent another letter to Frishberg on December 4, 1989, once
again confirming the restructuring and the removal of Stern's
from his charge. In a letter dated December 6, 1989, Frishberg
requested that airline tickets for the upcoming national sales
meeting in Phoenix be forwarded to him, in accordance with past
practice. No tickets were sent, and Frishberg did not attend
the sales meeting. Various negotiations and this lawsuit
Esprit has moved for summary judgment on all of plaintiffs'
claims. To prevail on such a motion, the moving party must
establish that "there is no genuine issue as to any material
fact and that [it] is entitled to judgment as a matter of law."
Rule 56(c), F.R.Civ.P. The court is not to "determine the truth
of the matter but to determine whether there is a genuine
[factual] issue" which must be reserved for trial. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505,
2510-11, 91 L.Ed.2d 202 (1986). All evidence submitted must be
viewed in a light most favorable to the party opposing the
motion, Matsushita Elec. Industrial Co. v. Zenith Radio Corp.,
475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986),
and the court must resolve all doubts, ambiguities and
inferences in the non-movant's favor. United States v. Diebold,
Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176
The summary judgment hurdle is not insurmountable, however.
The Supreme Court has noted that "[i]f the evidence [submitted
by the party opposing summary judgment] is merely colorable .
. . or is not significantly probative . . . summary judgment
may be granted." Liberty Lobby, supra, 477 U.S. at 249-50, 106
S.Ct. at 2510-11. The Court has explained that "[o]ne of the
principal purposes of the summary judgment rule is to isolate
and dispose of factually unsupported claims or defenses, and we
think it should be interpreted in a way that allows it to
its purpose." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24,
106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Thus, once the
movant has pointed out to the court the absence of a fact
issue, the "opponent must do more than simply show that there
is some metaphysical doubt as to the material facts. . . . [It]
must come forward with `specific facts showing that there is a
genuine issue for trial.'" Matsushita, supra, 475 U.S. at
586-87, 106 S.Ct. at 1355-56 (citations and footnotes omitted).
Esprit does not contend that there are no genuine issues of
material fact regarding plaintiffs' discrimination claims under
the ADEA and the state human rights law. Esprit argues instead
that, based on the undisputed facts, plaintiff Frishberg is not
an employee of Esprit but an independent contractor, and that
he therefore has no claim under the ADEA or the state
A. Employee or Independent Contractor Status
Before any plaintiff can make out a case of employment
discrimination under the ADEA, he must demonstrate that he is
an employee or a prospective employee of the defendant. The
ADEA provides no cause of action for independent contractors.
Hyland v. New Haven Radiology Assoc., P.C., 794 F.2d 793, 797
(2d Cir. 1986); E.E.O.C. v. Zippo Mfg. Co., 713 F.2d 32, 35 (3d
Cir. 1983); Hickey v. Arkla Industries, Inc., 699 F.2d 748 (5th
Cir. 1983); Carney v. Dexter Shoe Co., 701 F. Supp. 1093 (D.N.J.
1988); Donohue v. Pendleton Woolen Mills, Inc., 47
Empl.Pract.Dec. ¶ 38,364, 1988 WL 36317 (S.D.N.Y. 1988)
(Cedarbaum, J.). The New York Human Rights Law also protects
employees, not independent contractors. Mehtani v. New York
Life Ins. Co., 145 A.D.2d 90, 537 N.Y.S.2d 800, 802-03 (1st
Dept.), appeal dismissed in part and denied in part, 74 N.Y.2d
835, 545 N.E.2d 631, 546 N.Y.S.2d 341 (1989). Thus the status
of plaintiffs as employees of or independent contractors to
Esprit is key to the viability of their discrimination claims
under both the ADEA and state law.
Courts have adopted what they term a "hybrid" test for
determining whether someone is an employee or an independent
contractor within the meaning of the ADEA. This approach
combines the "economic realities" test from the Fair Labor
Standards Act context with the "right to control" test from the
common law. Thus a court must examine the "`economic realities
of the relationship viewed in light of the common law
principles of agency and the right of the employer to control
the employee.'" Zippo Mfg. Co., supra, 713 F.2d at 37, (quoting
Cobb v. Sun Papers, 673 F.2d 337, 341 (11th Cir. 1982)). Since
New York law distinguishes between employees and independent
contractors in a sufficiently similar manner, the court will
use the federal test for both state and federal claims.*fn4
Under this test, "the extent of the employer's right to
control the means and manner of the worker's performance is the
most important factor," Spirides v. Reinhardt, 613 F.2d 826,
831 (D.C. Cir. 1979), although other factors to consider
(1) the kind of occupation, with reference to
whether the work usually is done under the
direction of a supervisor or is done by a
specialist without supervision; (2) the skill
required in the particular occupation; (3) whether
the "employer" or the individual in question
furnishes the equipment used and the place of
work; (4) the length of time during which the
individual has worked; (5) the method of payment,
whether by time or by the job; (6) the manner in
which the work relationship is terminated; i.e. by
one or both parties, with or without notice and
explanation; (7) whether annual leave is afforded;
(8) whether the work is an integral part of the
business of the
"employer"; (9) whether the worker accumulates
retirement benefits; (10) whether the "employer"
pays social security taxes; and (11) the intention
of the parties.
Id. at 832.