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Prejean v. Satellite Country, Inc.

United States District Court, W.D. Louisiana, Lafayette Division

October 15, 2019

CHRISTOPHER PREJEAN, on behalf of Himself and Other Persons Similarly Situated
v.
SATELLITE COUNTRY, INC., LYNN JENKINS & PAMELA MCCUE

          WHITEHURST, MAG. JUDGE

          RULING

          TERRY A. DOUGHTY, UNITED STATES DISTRICT JUDGE

         Pending before the Court is a Motion for Summary Judgment to Dismiss Claims of Opt-Ins Against Pamela McCue, Lynn Jenkins & Satellite Country (“Motion for Summary Judgment”) [Doc. No. 123] filed by Defendants. They contend that neither Pamela McCue (“McCue”), a former employee and officer of Satellite Country, Inc. (“Satellite Country”); Lynn Jenkins (“Jenkins”), the owner and CEO of Satellite Country; nor Satellite Country itself was the “employer” of the Opt-In Plaintiffs as that term is defined by the Fair Labor Standards Act (“FLSA”). Plaintiffs filed a Memorandum in Opposition to the motion [Doc. No. 130]. Defendants filed a reply. [Doc. No. 141].

         For the following reasons, Defendants' motion is GRANTED IN PART and DENIED IN PART.

         I. RELEVANT FACTS

         On September 14, 2017, Christopher Prejean, on behalf of himself and all others similarly situated, filed a Collective Action Complaint against Defendants Satellite, McCue, and Jenkins, alleging violations of provisions of the Fair Labor Standards Act (hereinafter “FLSA”) for failure to pay overtime wages. On April 17, 2018, this Court conditionally certified this matter as a Collective Action, and approximately fifty-five (55) Plaintiffs have joined the litigation.

         Satellite is a Texas corporation which has been in business for approximately twenty years and provides sales and fulfillment work for third party entities. While its headquarters and administrative offices are in Austin, Texas, it provides fulfillment work in limited markets, primarily the Lafayette, Baton Rouge, and Alexandria, Louisiana areas (known as “HUB installation locations”). Most of its work over the years has been provided on behalf of Dish Network Corporation (“DISH”), a home televisions services provider based in Colorado. DISH provides the direct-broadcast satellite provider DISH and the IPTV service Sling TV.

         Jenkins and McCue have been named individually as Defendants in this matter. They have a personal relationship and live together in Utah. With regard to Satellite Country, Jenkins is the founder and CEO and remains active with the company. McCue began working for Satellite Country in 2000, focusing on the administrative side of the business. She was formerly the President of the company, but relinquished all active roles in 2015. McCue continues to assist from time to time on issues that may arise, including gathering information responsive to discovery requests in this lawsuit.

         The third Defendant, Satellite Country itself, employs forty-nine persons as employees who receive W-2s from the company. These employees handle sales, advertising, fulfillment, administration, and management. During the collective period, however, Satellite Country contracted with satellite technicians to perform fulfillment work. Currently, Satellite Country has only twelve subcontractor technicians to perform the fulfillment services. It also has some technicians now who are employed to perform fulfillment work.

         The relationship with each of the Company's technicians starts once the technician is qualified to do DISH work orders and when the technician accepts routes through Satellite Country. The technicians do not have an exclusive relationship with the Company, and the Company does not prohibit the technician from working for DISH directly. Although Satellite Country contends that the technicians are not prohibited from working for other subcontracting companies who have a similar relationship with DISH, some of the technicians testified that the nature of the work effectively prevented them from doing so. Additionally, Satellite Country's manager, Derrick Wright, testified that technicians could not perform DISH work concurrently for other companies.[1]

         There is some question whether technicians must have formed an LLC prior to accepting work from Satellite Country. Although many of the technicians formed LLCs prior to contracting with the Company, and Satellite Country helped others do so, at least one technician testified that not all technicians were required to form LLCs.

         Most technicians who accept routes through Satellite Country work for less than six (6) months. Each of the technicians is responsible to (a) maintain his or her vehicle, (b) purchase the fuel for his or her vehicle; (c) purchase and maintain his or her tools, (d) have materials on hand necessary to complete accepted work orders, (e) purchase and maintain equipment necessary to complete accepted work orders, and (f) ensure the completion of work orders is done accurately and completely in line with DISH requirements. The technicians perform their work at the residence of a DISH customer.

         Technicians were required by Satellite Country to report to the warehouse by 6:00 a.m. to collect materials and attend a meeting before receiving schedules. Additionally, technicians are required to perform jobs within the time slots given. They are also required to receive work orders until 5:00 p.m. and to provide advance written notice if they are taking time off.

         For the last several years, including the collective period, Satellite Country's HUB managers have helped to facilitate the routing of DISH work orders to the technicians once DISH has indicated its needs on a given day. The HUB managers also assist the technicians with obtaining the appropriate equipment needed for the work orders.

         Satellite Country requires that technicians wear a uniform; identify themselves as representatives of Satellite Country; and drive a certain model, color, and year vehicle.

         Once the base rate of pay for a given work order is established by DISH within a given market, Satellite Country sets up a tier system that allocates a portion of that base rate to technicians who do DISH work orders through the company. Technicians are paid for the successful completion of work orders through a piece meal compensation system. Compensation for completion of work orders to the technicians is determined by the efficiency of completed DISH work orders, the procurement of tools, materials and equipment, management of expenses, and the accuracy and quality of their work. Satellite Country determines whether to pay technicians higher compensation based on completion of DISH work orders with a high level of accuracy and quality.

         On July 19, 2019, Defendants filed the instant Motion for Summary Judgment, contending that none of the three Defendants is an employer as defined by the FLSA and case law interpreting it.

         On August 9, 2019, Plaintiffs filed a Memorandum in Opposition to the Motion for Summary Judgment [Doc. No. 130], disputing the evidence relied upon by Defendants and arguing that there are genuine issues of material fact for trial that the three Defendants are employers under the FLSA.

         On August 21, 2019, Defendants filed a Reply Memorandum [Doc. No. 141].

         This matter is now ripe, and the Court is prepared to rule.

         II. LAW AND ANALYSIS

         A. Standard of Review

         “[W]hether a worker is an employee for FLSA purposes is a question of law. Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 377 (5th Cir. 2019) (citing Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1045 (5th Cir. 1987)).

         Summary judgment is appropriate when the evidence before a court 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). A fact is “material” if proof of its existence or nonexistence would affect the outcome of the lawsuit under applicable law in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is “genuine” if the evidence is such that a reasonable fact finder could render a verdict for the nonmoving party. Id.

         “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Anderson, 477 U.S. at 247). “The moving party may meet its burden to demonstrate the absence of a genuine issue of material fact by pointing out that the record contains no support for the non-moving party's claim.” Stahl v. Novartis Pharm. Corp., 283 F.3d 254, 263 (5th Cir. 2002). Thereafter, if the non-movant is unable to identify anything in the record to support its claim, summary judgment is appropriate. Id. “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3).

         In evaluating a motion for summary judgment, courts “may not make credibility determinations or weigh the evidence” and “must resolve all ambiguities and draw all permissible inferences in favor of the non-moving party.” Total E & P USA Inc. v. Kerr- McGee Oil and Gas Corp., 719 F.3d 424, 434 (5th Cir. 2013) (citations omitted). While courts will “resolve factual controversies in favor of the nonmoving party, ” an actual controversy exists only “when both parties have submitted evidence of contradictory facts.” Little v. Liquid Air. Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). To rebut a properly supported motion for summary judgment, the opposing party must show, with “significant probative evidence, ” that a genuine issue of material fact exists. Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000) (emphasis added). “‘If the evidence is merely colorable, or is not significantly probative,' summary judgment is appropriate.” Cutting Underwater Tech. USA, Inc. v. Eni U.S. Operating Co., 671 F.3d 512, 517 (5th Cir. 2012) (quoting Anderson, 477 U.S. at 248).

         Relatedly, there can be no genuine dispute as to a material fact when a party fails “to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322-23. This is true “since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 323.

         FLSA determinations of employment status are “‘very fact dependent.'” Parrish, 917 F.3d at 380 (quoting Carrell v. Sunland Constr., Inc., 998 F.2d 330, 334 (5th Cir. 1993)). A summary judgment “on FLSA employee status can be granted when ‘there are facts pointing in both directions,' Carrell, 998 F.2d at 334, so long as they do not generate a genuine dispute of material fact.” Parish, 917 F.3d at 380.

         B. FLSA

         Plaintiffs seek damages for unpaid compensation under the FLSA. They have named McCue, Jenkins, and Satellite Country as Defendants because they were allegedly “employers” under the FLSA. Defendants move the Court for summary judgment, contending that Plaintiffs cannot establish that any of the three Defendants is an employer under the FLSA.

         The FLSA mandates that “no employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). An “‘[e]mployer' includes any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d).

The definition of employee under the FLSA is particularly broad. See Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 . . . (1992) (noting that the FLSA “stretches the meaning of ‘employee' to cover some parties who might not qualify as such under a strict application of traditional agency law principles”). To determine if a worker qualifies as an employee, we focus on whether, as a matter of economic reality, the worker is economically dependent upon the alleged employer or is instead in business for himself. Herman v. Express Sixty-Minutes Delivery Serv., Inc., 161 F.3d 299, 303 (5th Cir. 1998). To aid us in this inquiry, we consider five non-exhaustive factors: (1) the degree of control exercised by the alleged employer; (2) the extent of the relative investments of the worker and the alleged employer; (3) the degree to which the worker's opportunity for profit or loss is determined by the alleged employer; (4) the skill and initiative required in performing the job; and (5) the permanency of the relationship. Id. No ...

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