- Which of the three employment status determination tests does the Court apply to determine whether Keller was an employee?
- Of the factors considered critical by the court in reaching its conclusion, which seem more critical to a determination of employment status? Do you agree with the court in its choice to apply the economic realities test?
- Why did the court deny summary judgment for the defendant? Why is there still value in this decision?
Issue: Whether a technician who installed satellite dishes was an employee under the Fair Labor Standards Act (FLSA) and was therefore entitled to overtime compensation.
Facts: Miri is a limited liability company that operates in Michigan and provides installation services for HughesNet and iDirect. Miri is one of many middlemen in the satellite-installation-services business. Customers purchase satellite internet services from HughesNet, and then Hughes-Net forwards those orders on to a distributor, Recreational Sports and Imports (“RS & I”). Next, RS & I sends the installation order to Miri, which provides installation services for the upper part of the Lower Peninsula of Michigan. Customers may choose a time block during which a technician will install the satellite dish, and Miri assigns installation jobs to technicians who work in the territory where the customer resides.
Keller began installing satellite dishes for Miri as a technician while he was working for ABC Dishman, a subcontractor, after he attended a HughesNet satellite-dish-installation certification course given by Miri. After working for ABC Dishman for some time, Keller began installing satellite-internet dishes for Miri directly. Miri pays technicians by the job, not by the hour. HughesNet pays Miri $200 for each basic installation, $80 for repairs, $80 for de-installation, and between $130-145 for upgrades. Miri pays the technician the bulk of these fees, but keeps a percentage. Keller worked six days a week from 5:00 am to midnight, taking only Sunday off. Keller completed two to four installations per day, and he had to travel between jobs. Miri paid Keller $110 per installation and $60 for each repair he performed. Miri did not withhold federal payroll taxes from Keller’s payments or provide Keller benefits.
On November 23, 2012, Keller stopped working for Miri. Soon thereafter, he filed this lawsuit, alleging that Miri’s payment system violates the FLSA.
Decision: The Court noted that the FLSA defines an “employee” as “any individual employed by an employer.” According to the FLSA, “`[e]mploy’ includes to suffer or permit to work.” We have interpreted this framework, in light of the legislative purpose, to set forth a standard that “`employees are those who as a matter of economic reality are dependent upon the business to which they render service.'” To assist our application of the economic-reality test, the Court identified six factors to consider 1) the permanency of the relationship between the parties; 2) the degree of skill required for the rendering of the services; 3) the worker’s investment in equipment or materials for the task; 4) the worker’s opportunity for profit or loss, depending upon his skill; 5) the degree of the alleged employer’s right to control the manner in which the work is performed; and 6) whether the service rendered is an integral part of the alleged employer’s business.
The Court concluded that there are many genuine disputes of fact and reasonable inferences from which a jury could find that Keller was an employee. Summary judgment for the defendant is not appropriate when a fact finder could reasonably find that a FLSA plaintiff was an employee. The Court held that a jury could reasonably find that Keller was a Miri employee, and Miri is not entitled to summary judgment as a matter of law.
