United States District Court, E.D. New York
JOSEPH ARENA, on behalf of himself and all others similarly situated, Plaintiffs,
PLANDOME TAXI INC. and ROBERT MARMO, an individual, Defendants.
David H. Rosenberg, Esq., Bryan Arbeit, Esq., Jeffery K. Brown, Esq., Leeds Brown Law, P.C., Carle Place, New York, Attorneys for Plaintiffs.
David S. Feather, Esq., The Law Offices of David S. Feather, Garden City, New York, Attorneys for Defendants.
MEMORANDUM & ORDER
DENNIS R. HURLEY, Senior District Judge.
Plaintiff, Joseph Arena ("Arena"), brought this action on behalf of himself and those similarly situated (collectively, "Plaintiffs"), claiming violations of the Fair Labor Standards Act ("FLSA"), New York State Labor Law ("Labor Law"), and New York Code of Rules and Regulations ("NYCRR"), and for wrongful conversion of his funds. Plaintiffs allege that defendants Plandome Taxi Inc. ("Plandome") and Robert Marmo ("Marmo") (collectively, "Defendants"), failed to pay them the applicable minimum wage, overtime, and spread of hours pay required by law. In addition, Plaintiffs claim that Defendants wrongfully withheld and converted their funds by deducting monies from their wages. Presently before the Court is Defendants' motion for summary judgment pursuant to Federal Rule of Civil Procedure ("Rule") 56. For the reasons set forth below, Defendants' motion is granted in part and denied in part.
The material facts, drawn from the Complaint, the papers submitted with respect to the instant motion, and the parties' Local Civil Rule 56.1 Statements, are undisputed unless otherwise noted.
Plandome is a corporation organized under the laws of the State of New York with a principal place of business in Nassau County, New York. Marmo states that he is the sole shareholder of Plandome. (Affidavit of Robert Marmo, sworn to on August 29, 2012 ("Marmo Aff.") at 1.) Plandome provides transportation within the Town of North Hempstead and its surrounding communities, including transportation to airports. While Defendants argue that Plandome advertises itself as a taxi company, Plaintiffs argue that Plandome advertises itself as a transportation and airport service. Plandome provides transportation services to individuals who call its dispatcher located at its base station. Plaintiffs assert that the passengers are required to arrange their routes in advance, and the drivers may not deviate without authorization from the pre-arranged routes. Defendants asserts that Plandome does not have contracts for recurrent transportation, and the fares it charges customers are based upon geographical zones.
Taxis are forbidden by law to cruise the streets of the Town of North Hempstead for fares. Instead, the taxis must be dispatched from base stations or operate from taxi stands. Plandome claims that it maintains taxi stands at the Manhasset train station and on Plandome Road in Manhasset. Plaintiffs, on the other hand, dispute Plandome's characterization of its stands as taxi stands; instead, they assert that passengers arrange for for-hire services at those locations. Similarly, Plaintiffs dispute Defendants' characterization of Defendants' vehicles as taxicabs, asserting instead that Defendants' vehicles were for-hire vehicles. Defendants state that Plandome's vehicles were licensed as taxicabs by the Town of North Hempstead, the company was registered by Nassau County Taxi and Limousine Commission ("NCTLC") as a taxi company, and Plandome's vehicles had special license plates issued by the New York State Department of Motor Vehicles ("DMV") only to taxicabs. (Marmo Aff. at 2.) However, Plaintiffs state that "Defendants selectively identify one car... to support the fact that all of their cars [we]re licensed as taxicabs, " and the license plate on the vehicle provided by Defendants as evidence was not issued through the DMV, but, rather, was issued through the NCTLC as a plate for for-hire vehicles. (Pls.' R. 56.1 Counterstmt. ¶¶ 4, 5.) Additionally, Plaintiffs assert that the evidence indicates that not all of Plandome's vehicles were properly registered with the NCTLC. ( Id. ¶ 4.)
Arena drove five-passenger vehicles for Plandome, and had a New York State Class E driver's license, which Defendants argue he was required to have in order to drive a taxicab. Arena worked for Plandome from August 9, 2011 to November 10, 2011. During that time period, however, he drove a taxi for Plandome on only fifty-five (55) days. There were no ramifications if Arena chose not to work on a particular day. Arena maintained a daily trip sheet for Plandome on which he wrote the time his shift began and ended, the identification number of the taxicab he drove, his daily passenger pick-ups and drop-offs, the times of the individual trips, and the amounts of the fares. The trip sheets were completed by Arena and submitted at the end of each shift. Plandome asserts that it did not keep the daily trip sheets, but inputted into its computer the starting and ending times of each driver's shift, the total amount of the fares, and a computation of the driver's earnings.
Arena was paid in gross sums, and was issued a 1099 Form that Arena argues was issued to him after the Complaint in the instant action was filed. Arena asserts that other similarly situated drivers were issued W-2s by Defendants and were requested to sign New York State Department of Labor forms indicating that they were employees who earned the legally mandated wages.
According to Plaintiffs, Plandome charged a flat rate for fares which included sales tax. (Decl. of Joseph Arena, sworn to on Oct. 12, 2012 ("Arena Decl.") ¶ 21; Decl. of Ruben Fraiberg, sworn to on Oct. 12, 2012 ("Fraiberg Decl.") ¶ 22.) Further, Plaintiffs assert that Plandome had "house accounts" for frequent customers. (Arena Decl. ¶ 23.) While Defendants argue that Arena was paid based upon a pre-arranged formula consisting of one-half (50%) of the fares he collected minus a $6.00 dispatcher fee, $5.00 radio fee, and $3.00 dent fund fee, Arena argues that the drivers were also required to pay the taxes on the collected fares, as well as gasoline for the taxis. In addition, while Defendants state that Arena received his tips directly from his customers, Arena states that any tips charged on house accounts or credit cards went instead directly to Defendants. Both parties agree that Arena's remuneration did not change during the time he drove for Defendants.
I. Summary Judgment Standard
Summary judgment pursuant to Rule 56 is appropriate only where admissible evidence in the form of affidavits, deposition transcripts, or other documentation demonstrates the absence of a genuine issue of material fact, and one party's entitlement to judgment as a matter of law. See Viola v. Philips Med. Sys. of N. Am., 42 F.3d 712, 716 (2d Cir. 1994). The relevant governing law in each case determines which facts are material; "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). No genuinely triable factual issue exists when the moving party demonstrates, on the basis of the pleadings and submitted evidence, and after drawing all inferences and resolving all ambiguities in favor of the non-movant, that no rational jury could find in the non-movant's favor. Chertkova v. Conn. Gen'l Life Ins. Co., 92 F.3d 81, 86 (2d Cir. 1996).
To defeat a summary judgment motion properly supported by affidavits, depositions, or other documentation, the non-movant must offer similar materials setting forth specific facts that show that there is a genuine issue of material fact to be tried. Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996). The non-movant must present more than a "scintilla of evidence, " Del. & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252) (internal quotation marks omitted), or "some metaphysical doubt as to the material facts, " Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)) (internal quotation marks omitted), and cannot rely on the allegations in his or her pleadings, conclusory statements, or on "mere assertions that affidavits supporting the motion are not credible." Gottlieb v. Cnty. of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (internal citations omitted).
The district court considering a summary judgment motion must also be "mindful... of the underlying standards and burdens of proof, " Pickett v. RTS Helicopter, 128 F.3d 925, 928 (5th Cir. 1997) (citing Anderson, 477 U.S. at 252), because the "evidentiary burdens that the respective parties will bear at trial guide district courts in their determination[s] of summary judgment motions." Brady v. Town of Colchester, 863 F.2d 205, 211 (2d Cir. 1988). "[W]here the nonmovant will bear the ultimate burden of proof at trial on an issue, the moving party's burden under Rule 56 will be satisfied if he can point to an absence of evidence to support an essential element of the nonmoving party's claim." Id. at 210-11. Where a movant without the underlying burden of proof offers evidence that the non-movant has failed to establish her claim, the burden shifts to the non-movant to offer "persuasive evidence that his claim is not implausible.'" Id. at 211 (citing Matsushita, 475 U.S. at 587).
II. WHETHER ARENA WAS AN EMPLOYEE OR INDEPENDENT CONTRACTOR
A. FLSA Standard
As a threshold matter, in order for Arena's clams under the FLSA to survive dismissal, Arena must show that he was an employee of Plandome, rather than an independent contractor. See Arena v. Delux Transp. Servs., Inc., 2014 WL 794300, at *7 (E.D.N.Y. Feb. 25, 2014). The FLSA defines an "employee" as "any individual employed by an employer, " 29 U.S.C. § 203(e)(1), and to "employ" as "to suffer or permit to work." 29 U.S.C. § 203(g). "Under the FLSA, the question of whether an employee-employer relationship exists is one of economic reality.'" Velu v. Velocity Express, Inc., 666 F.Supp.2d 300, 305 (E.D.N.Y. 2009) (quoting Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33 (1961)).
There is no "rigid rule" for determining whether an employer-employee relationship exists; indeed, "[t]he Second Circuit has applied slightly different factors in different types of cases." Arena, 2014 WL 794300, at *7-8. For example, in a case evaluating whether a prisoner who tutored in a community college's class program at prison was an employee covered by the minimum wage requirements of the Fair Labor Standards Act, the Second Circuit considered "whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records." Carter v. Dutchess Cmty. Coll., 735 F.2d 8, 12 (2d Cir. 1984) (citation and internal quotation marks omitted).
In another case, Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2003), which evaluated whether a garment manufacturer was a joint employer of garment workers hired as subcontractors, the Second Circuit applied factors which "indicate that an entity has functional control over workers even in the absence of... formal control." Id. at 72. Those factors include:
(1) [W]hether [the defendant's] premises and equipment were used for the plaintiffs' work; (2) whether the [direct employer] had a business that could or did shift as a unit from one putative joint employer to another; (3) the extent to which plaintiffs performed a discrete line-job that was integral to [the defendant's] process of production; (4) whether responsibility under the contracts could pass from one subcontractor to another without material changes; (5) the degree to which the [defendant] or [its] agents supervised plaintiffs' work; and (6) whether plaintiffs worked exclusively or predominantly for the [defendant].
Id. ; see also Arena, 2014 WL 794300, at *8.
Furthermore, in the case Brock v. Superior Care, Inc., 840 F.2d 1054, 1058-59 (2d Cir. 1988), in which the Second Circuit analyzed whether a nurse was an employee or independent contractor of a health care agency, the Court applied several factors identified in United States v. Silk, 331 U.S. 704, 716 (1947) to determine the employment relationship, including: "(1) the degree of control exercised by the employer over the workers, (2) the workers' opportunity for profit or loss and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship, and (5) the extent to which the work is an integral part of the employer's business."
While the Court is guided by the above-mentioned factors, the Court may "consider any other factors it deems relevant to its assessment of the economic realities, '" Zheng, 355 F.3d at 72, and the determination of the employment relationship is ultimately based upon the totality of the circumstances. See Barfield v. N.Y.C. Health and Hosps. Corp., 537 F.3d 132, 141 (2d Cir. 2008) ("[T]he determination of whether an employer-employee relationship exists for purposes of the FLSA should be grounded in economic reality rather than technical concepts, determined by reference not to isolated factors, but rather upon the circumstances of the whole activity." (citations and internal quotation marks omitted)). The essential inquiry is "whether, as a matter of economic reality, the worker depend[s] upon someone else's business for the opportunity to render service or [is] in business for [himself]." Brock, 840 F.2d at 1059.
Based upon the foregoing, the Court will analyze the germane factors to assess the economic reality in this case. Notably, since many of the above-identified factors overlap with each other, the analysis of some factors will necessarily involve the analysis of other analogous factors.
1. The Degree of Control Exercised by Defendants
In support of their position that Arena was an independent contractor, Defendants produce undisputed evidence that Arena worked for Defendants only from August 9, 2011 to November 10, 2011, and only for 55 days during that period. (Defs.'s R. 56.1 Stmt. ¶¶ 21, 22.) There were no ramifications if Arena chose not to work on any given day. ( Id. ¶ 27.) Further, Arena was paid in a gross sum, and was issued a 1099 Form. ( Id. ¶¶ 29, 30.) These facts provide some support for a finding that Arena was an independent contractor. See Browning v. Ceva Freight, LLC, 885 F.Supp.2d 590, 600 (E.D.N.Y. 2012) ("The ability to reject assignments without penalty can support a finding of independent contractor status."); Velu, 666 F.Supp.2d at 307 (finding plaintiff's "control over his own... work schedule" a relevant factor in the determination that plaintiff was an independent contractor); cf. Hart v. Rick's Cabaret Int'l., Inc., 2014 WL 4822199, at *18 (S.D.N.Y. Sept. 10, 2014) (finding the fact that the plaintiff "dancers were required to perform a minimum number of days per week, " and "were required to get permission for not appearing as required or scheduled" indicated an employer/employee relationship under the Labor Law).
Nonetheless, Arena points to several facts which indicate that he was an employee of Plandome rather than in independent contractor. For instance, Plandome dictated the hours the drivers worked, and required the drivers to work on holidays. (Arena Decl. ¶¶ 18, 19; Fraiberg Decl. ¶¶ 19, 20). The drivers were not permitted to choose their own passengers or to drive to destinations without Plandome's prior approval. (Arena Decl. ¶¶ 10, 11, 15, 16; Fraiberg Decl. ¶¶ 11, 12, 16, 17.) The drivers were asked not to drive if they refused to drive the passengers who had made arrangements with Plandome. (Arena Decl. ¶ 9; Fraiberg Decl. ¶ 10.) The drivers were not permitted to take unauthorized breaks or go home without Plandome's permission, and upon being given permission to leave, the drivers were required to refuel the company vehicles and perform thorough maintenance and cleanliness inspections of the vehicles. (Arena Decl. ¶ 20; Fraiberg Decl. ¶ 21.) The drivers were required to maintain and submit daily trip sheets which recorded the times the drivers arrived at and left the base station, the identification number of the vehicles driven, lists of all trips made, and the fares charged. (Arena Decl. ¶ 34; Fraiberg Decl. ¶ 35.) Finally, Arena argues that although he was issued a 1099 Form, the 1099 Form was issued after the Complaint was filed, and evidence shows that other drivers were also issued W-2s which indicated that they were wage-earning employees. (Arena Decl. ¶ 35; Fraiberg Decl. ¶¶ 36-37.)
2. The Opportunity for Profit or Loss
As to this factor, Defendants argue that "[Arena] dictated his own schedule, " and had the opportunity to drive taxicabs for other companies, including Plandome's competitors. (Aff. of Robert Marmo, sworn to on Aug. 29, 2012 ("Marmo Aff.") ¶¶ 22, 23.) Plaintiffs, on the other hand, dispute that the drivers were permitted to drive for Plandome's competitors. (Arena Decl. ¶ 10; Fraiberg Decl. ¶ 11.) Plaintiffs assert that the drivers were not permitted to share their personal phone numbers with passengers so as to permit the passengers to call them directly, nor were they permitted to determine the amounts of fares to charge the customers. (Arena Decl. ¶¶ 14, 21, 22; Fraiberg Decl. ¶¶ 15, 22, 23.) Plaintiffs additionally argue that any tips that were charged on passengers' credit cards or house accounts went to Plandome rather than to the drivers. (Arena Decl. ¶ 33; Fraiberg Decl. ¶ 34.)
3. The Degree of Skill and Independent Initiative Required to Perform the Work
While the parties agree that Arena was required to maintain a special license, i.e., a New York State Class E driver's license, (Defs.'s R. 56.1 Stmt. ¶ 24), Arena argues that other than the special driver's license, "there [we]re barely any additional skills required to" drive for Plandome as the drivers were "required to simply drive passengers... to pre-authorized locations, and to adhere to company policies." (Pls.' Mem. in Opp'n. at 21-22.)
Although Arena was required to have a special license and the ability to navigate his passengers safely between locations, both characteristic of an independent contractor, Arena, 2014 WL 794300, at *10; Leach v. Kaykov, 2011 WL 1240022, *19 (E.D.N.Y. March 30, 2011), Arena did not need to exercise independent initiative with respect to obtaining passengers because all trip arrangements were made by Plandome, and the drivers were not permitted to independently cruise the neighborhoods to find ...