Cromwell v. Driftwood Electrical Contractors, Inc. , 348 F. App'x 57 ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 12, 2009
No. 09-60212 Charles R. Fulbruge III
Summary Calendar Clerk
FRED CROMWELL; JEFF BANKSTON,
Plaintiffs-Appellants
v.
DRIFTWOOD ELECTRICAL CONTRACTORS, INC; AT&T
COMMUNICATIONS-EAST, INC; BELLSOUTH TELECOMMUNICATIONS
INC,
Defendants-Appellees
Appeal from the United States District Court
for the Southern District of Mississippi
No. 1:07-cv-00996-hso-jmr
Before BENAVIDES, PRADO and SOUTHWICK, Circuit Judges.
PER CURIAM:*
The plaintiffs-appellants, Fred Cromwell and Jeff Bankston, filed this Fair
Labor Standards Act (“FLSA”) suit against defendants-appellees Driftwood
Electrical Contractors, Inc., AT&T Communications, Inc., and BellSouth
Telecommunications, Inc., alleging that they were not paid for overtime spent
restoring damaged telecommunications lines along the Mississippi Gulf Coast
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 09-60212
in the wake of Hurricane Katrina. The district court granted summary
judgment against Cromwell and Bankston on the ground that they were
independent contractors, not employees, and therefore exempt from the overtime
provisions of the FLSA. Cromwell and Bankston appealed.
Cromwell and Bankston provided cable splicing services for Driftwood for
approximately eleven months, and were required to work twelve-hour days,
thirteen days on and one day off. They were paid a fixed hourly wage for their
work. BellSouth was Driftwood’s customer on the restoration project. AT&T
appears to have had nothing to do with the facts of this case. Cromwell and
Bankston reported to BellSouth’s location every morning to receive their
assignments, unless they had not completed their jobs from the prior workday,
in which case they were permitted to check in by phone. Cromwell and
Bankston were given prints describing the type of work that needed to be
performed for each assignment and were instructed by BellSouth supervisors to
follow certain general specifications. Driftwood and BellSouth representatives
checked on the progress of work, but did not train Cromwell and Benson or
control the details of how they performed their assigned jobs.
Cromwell and Bankston provided their own trucks, testing equipment,
connection equipment, insulation equipment, and hand tools, totaling over
$50,000 for Cromwell and approximately $16,000 for Bankston, while BellSouth
supplied materials such as closures and cables. Cromwell and Bankston were
responsible for their own vehicle liability insurance and employment taxes, but
Driftwood provided workers’ compensation insurance and liability insurance for
Cromwell and Bankston’s work.
To determine if a worker qualifies as an employee under the FLSA, 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.
Hopkins v. Cornerstone Am., 545 F.3d 338, 343 (5th Cir. 2008). To aid in that
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No. 09-60212
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 single factor is determinative. Id. The ultimate conclusion
that an individual is an employee within the meaning of the FLSA is a legal, and
not a factual, determination. Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042,
1045 (5th Cir. 1987); see also Beliz v. W.H. McLeod & Sons Packing Co., 765 F.2d
1317, 1327 & n.24 (5th Cir. 1985) (citing and reconciling cases). Therefore, “we
review the determination that [plaintiffs] were not employees as we review any
determination of law,” which is de novo. Donovan v. American Airlines, Inc., 686
F.2d 267, 270 n.4 (5th Cir. 1982). Because there are no disputes of material fact,
we also conclude that the district court was correct to resolve the matter on
summary judgment.
The defendants-appellees argue that the facts of this case are similar to
those in Carrell v. Sunland Const., Inc., in which we held that a group of welders
were independent contractors under the FLSA. 998 F.2d 330 (5th Cir. 1993).
In Carrell, we noted that several facts weighed in favor of employee status,
including that the defendant dictated the welders’ schedule, paid them a fixed
hourly rate, and assigned them to specific work crews. Id. at 334. However, we
held that the welders were independent contractors because the welders’
relationship with the defendant was on a project-by-project basis; the welders
worked from job to job and from company to company; the average number of
weeks that each welder worked for the defendant each year was relatively low,
ranging from three to sixteen weeks; the welders worked while aware that the
defendant classified them as independent contractors, and many of them
classified themselves as self-employed; the welders were highly skilled; the
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No. 09-60212
defendant had no control over the methods or details of the welding work; the
welders performed only welding services; the welders supplied their own welding
equipment; and the welders’ investments in their welding machines, trucks, and
tools averaged $15,000 per welder. Id.In Carrell, we distinguished our prior decision in Robicheaux v. Radcliff
Material, Inc., 697 F.2d 662 (5th Cir. 1983), in which we held that a group of
welders were employees under the FLSA, on the grounds that the welders in
Robicheaux worked a substantial period of time exclusively with the defendant
in that case, ranging from ten months to three years; the welding in Robicheaux
required only “moderate” skill; the defendant in Robicheaux told the welders how
long a welding assignment should take; the welders in Robicheaux spent only
fifty percent of their time welding, and the remaining time cleaning and
performing semi-skilled mechanical work; and the defendant in Robicheaux
provided the welders with “steady reliable work over a substantial period of
time.” Carrell, 998 F.2d at 334 (citing Robicheaux, 697 F.2d at 667). The
welders in Robicheaux had signed a contract with the defendant in that case
describing themselves as independent contractors; furnished their own welding
equipment, in which they had invested from five to seven thousand dollars each;
provided their own insurance and workers’ compensation coverage; invoiced the
defendant on their own business letterheads, filed federal income tax returns on
IRS forms as self-employed individuals, and received a higher hourly wage than
did other welders employed by the defendant who did not furnish their own
equipment and who were considered by the company to be employees.
Robicheaux, 697 F.2d at 665.
The facts of this case lie somewhere between those of Carrell and
Robicheaux. Similar to the facts in Carrell, the plaintiffs in this suit are highly
skilled and perform only services requiring the use of those skills, the defendants
here did not control the details of how the plaintiffs performed their assigned
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No. 09-60212
jobs, and the plaintiffs provided their own trucks, equipment, and tools, in which
they had invested substantial sums. However, there are some significant
dissimilarities between the facts in the instant case and the facts in Carrell,
such that the facts of this case are not as readily distinguishable from those in
Robicheaux. The plaintiffs in this case worked full-time exclusively for the
defendants for approximately eleven months, within the time range that the
Robicheaux welders had worked for the defendant in that case. The plaintiffs
in this case did not have the same temporary, project-by-project, on-again-off-
again relationship with their purported employers as the plaintiffs in Carrell did
with their purported employer. The defendants-appellees argue that Cromwell
and Bankston’s work—restoring damaged telecommunications lines along the
Mississippi Gulf Coast in the wake of Hurricane Katrina—was by nature
temporary, but “courts must make allowances for those operational
characteristics that are unique or intrinsic to the particular business or industry,
and to the workers they employ.” Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042,
1054 (5th Cir. 1987) (“[W]hen an industry is seasonal, the proper test for
determining permanency of the relationship is not whether the alleged
employees returned from season to season, but whether the alleged employees
worked for the entire operative period of a particular season.”). Thus, the
temporary nature of the emergency restoration work does not weigh against
employee status.
It is common in FLSA cases that “there are facts pointing in both
directions” regarding the issue of employee status, see Herman v. Express
Sixty-Minutes Delivery Serv., Inc., 161 F.3d 299, 305 (1998) (quoting Carrell, 998
F.2d at 334), but the facts in this case truly appear to be nearly in equipoise.
However, on balance, we believe that, as a matter of economic reality, Cromwell
and Bankston were economically dependant upon Driftwood and BellSouth, and
were not in business for themselves. The facts of this case simply appear closer
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No. 09-60212
to those in Robicheaux than in Carrell. The most significant difference between
the facts in those cases, in terms of the economic reality of whether the plaintiffs
were economically dependant upon the alleged employer, was that the
Robicheaux welders worked on a steady and reliable basis over a substantial
period of time exclusively with the defendant, ranging from ten months to three
years, whereas the Carrell welders had a project-by-project, on-again-off-again
relationship with the defendant, with the average number of weeks that each
welder worked for the defendant each year being relatively low, ranging from
three to sixteen weeks. Similar to the Robicheaux welders, Cromwell and
Bankston worked on a steady and reliable basis over a substantial period of
time—approximately eleven months—exclusively for their purported employers.
The permanency and extent of this relationship, coupled with Driftwood and
BellSouth’s complete control over Cromwell and Bankston’s schedule and pay,
had the effect of severely limiting any opportunity for profit or loss by Cromwell
and Bankston. Although it does not appear that Cromwell and Bankston were
actually prohibited from taking other jobs while working for Driftwood and
BellSouth, as a practical matter the work schedule establish by Driftwood and
BellSouth precluded significant extra work. Also, the fact that Driftwood and
BellSouth provided Cromwell and Bankston with their work assignments limited
the need for Cromwell and Bankston to demonstrate initiative in performing
their jobs. See Carrell, 998 F.2d at 333 (“As for the initiative required, a
Welder’s success depended on his ability to find consistent work by moving from
job to job and from company to company. But once on a job, a Welder’s initiative
was limited to decisions regarding his welding equipment and the details of his
welding work.”). Although there are facts that clearly weigh in favor of
independent contractor status, notably that Cromwell and Bankston controlled
the details of how they performed their work, were not closely supervised,
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No. 09-60212
invested a relatively substantial amount in their trucks, equipment, and tools,1
and used a high level of skill in performing their work, these facts are not
sufficient to establish, as a matter of economic reality, that Cromwell and
Bankston were in business for themselves during the relevant time period. The
judgment of the district court is VACATED, and this case is REMANDED to the
district court for proceedings consistent with this opinion.
1
Cromwell and Bankston argue that, under Fifth Circuit law, the value of their tools
and equipment should be ignored in assessing whether they were employees or independent
contractors when they performed the Katrina repair work at issue in this case because the
tools and equipment were purchased for prior cable-splicing jobs. However, the case cited by
Cromwell and Bankston stands for the proposition that equipment initially purchased for
personal use but later used for work should not be considered a work investment, not that
work-related investments may only be considered investments for the specific job for which
they were purchased and not for subsequent jobs in which they are used. See Brock, 814 F.2d
at 1051 (“One operator testified that he used a computer to assist him while working at the
stand, but this involved no investment because he originally had purchased the home
computer for school work.”); see also Herman, 161 F.3d at 304 (“Although the driver's
investment of a vehicle is no small matter, that investment is somewhat diluted when one
considers that the vehicle is also used by most drivers for personal purposes.”). Cromwell and
Bankston’s tools and equipment are appropriately considered to be investments in this case.
7