Kenneth Church v. Home Fashions International

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2322
KENNETH E. CHURCH; KEN E. CHURCH ENTERPRISES, LLC,
Plaintiffs - Appellees,
v.
HOME FASHIONS INTERNATIONAL, LLC,
Defendant - Appellant.
Appeal from the United States District Court for the Western
District of North Carolina, at Statesville. David C. Keesler,
Magistrate Judge. (5:10-cv-00133-DCK)
Submitted: June 27, 2013 Decided: July 8, 2013
Before MOTZ, DUNCAN, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Nicholas Stevens, STARR, GERN, DAVISON & RUBIN, P.C., Roseland,
New Jersey, for Appellant. Paul E. Culpepper, YOUNG, MORPHIS,
BACH & TAYLOR, L.L.P., Hickory, North Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Home Fashions International, LLC (“HFI”), appeals the
magistrate judge’s grant of partial summary judgment to Kenneth
E. Church on his claim seeking unpaid wages and commissions
under the North Carolina Wage and Hour Act (“NCWHA”), N.C. Gen.
Stat. § 95-25.22 (2011). HFI also challenges the damages award.
We affirm.
We review de novo an order granting summary judgment.
Robinson v. Clipse, 602 F.3d 605, 607 (4th Cir. 2010). Summary
judgment shall be granted when “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). “At the summary
judgment stage, facts must be viewed in the light most favorable
to the nonmoving party only if there is a genuine dispute as to
those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007)
(internal quotation marks omitted).
Summary judgment should be granted unless a reasonable
jury could return a verdict for the nonmoving party on the
evidence presented. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249-50 (1986). An otherwise properly supported motion for
summary judgment will not be defeated by the existence of any
factual dispute; only disputes over facts that might affect the
outcome of the suit under governing law will properly preclude
summary judgment. Id. at 248-49. “Conclusory or speculative
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allegations do not suffice, nor does a mere scintilla of
evidence in support of” the nonmoving party’s case. Thompson v.
Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir. 2002)
(internal quotation marks omitted).
HFI first contends that Church was not entitled to
raise claims under N.C. Gen. Stat. § 95-25.22 because he was not
an HFI “employee,” but, instead, was hired as an independent
contractor. N.C. Gen. Stat. § 95-25.2(4). In North Carolina,
[a]n independent contractor is defined . . . as one
who exercises an independent employment and contracts
to do certain work according to his own judgment and
method, without being subject to his employer except
as to the result of his work. Where the party for
whom the work is being done retains the right to
control and direct the manner in which the details of
the work are to be executed, however, it is
universally held that the relationship of employer and
employee is created.
Youngblood v. N. State Ford Truck Sales, 364 S.E.2d 433, 437
(N.C. 1988) (internal citations omitted). Circumstances
suggestive of an individual’s status as an independent
contractor include whether
[t]he person employed (a) is engaged in an independent
business, calling, or occupation; (b) is to have the
independent use of his special skill, knowledge, or
training in the execution of the work; (c) is doing a
specified piece of work at a fixed price or for a lump
sum or upon a quantitative basis; (d) is not subject
to discharge because he adopts one method of doing the
work rather than another; (e) is not in the regular
employ of the other contracting party; (f) is free to
use such assistants as he may think proper; (g) has
full control over such assistants; and (h) selects his
own time.
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McCown v. Hines, 537 S.E.2d 242, 244 (N.C. Ct. App. 2000).
Although no single factor is controlling, nor must all factors
be present or in agreement, there are “four principal factors
generally recognized as demonstrating the right to control
details of the work: (1) method of payment; (2) the furnishing
of equipment; (3) direct evidence of exercise of control; and
(4) the right to fire.” Youngblood, 364 S.E.2d at 439.
After a careful review of the record, we conclude that
the magistrate judge accurately determined that Church was HFI’s
employee during the period in question. First, HFI has not
produced any authority to support its contention that Church’s
act of assigning his right to payment under his employment
agreement with HFI categorically precludes Church’s recovery
under the NCWHA. Further, consideration of the factors outlined
in McCown clearly indicates that Church was HFI’s employee.
Church worked exclusively for HFI on a regular basis for
eighteen months and did not hold himself out as a contractor or
independent businessman. See Youngblood, 364 S.E.2d at 439
(fact that plaintiff did not hold himself out as contractor or
engage in other contract work indicated that he was an
employee). During that time, HFI paid Church a guaranteed
$11,000 per month, regardless of the work he completed, plus
commission on his sales, thus also suggesting his employee
status. See Capps v. Se. Cable, 715 S.E.2d 227, 234 (N.C. Ct.
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App. 2011) (payment based on time is a strong indication of
employee status while payment based on completed projects
indicates independent contractor status; payment on a piece-work
or commission basis is consistent with either).
Moreover, HFI provided Church with an office and
reimbursed his various business-related expenses, some of which
had to be pre-approved by HFI. See Youngblood, 364 S.E.2d at
438 (“[W]hen valuable equipment is furnished to the worker, the
relationship is almost invariably that of employer and
employee.”). Similarly, Church was not entitled to hire
assistants without the consent of HFI, and Church never became
responsible for compensating the sales representatives he hired.
See Lloyd v. Jenkins Context Co., 266 S.E.2d 35, 37 (N.C. Ct.
App. 1980) (individual’s ability to hire assistants only upon
approval of employer indicates employer-employee relationship).
Most importantly, however, is the fact that HFI
assigned Church an ever-evolving and diverse range of
responsibilities during his first eighteen months with the
company. Consistent with the broad terms of his employment
agreement, Church, at the direction of and in collaboration with
HFI executives, assisted in almost every aspect of HFI’s attempt
to expand into furniture manufacturing. See Johnson v. News &
Observer Publ’g Co., 604 S.E.2d 344, 347 (N.C. Ct. App. 2004)
(finding that plaintiff was not engaged in “independent
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business, calling, or occupation” where he performed function
that was integral to the primary objective of employer’s
business). Consequently, Church was clearly subject to HFI’s
control and was not entitled to independently employ his own
judgment regarding how best to achieve HFI’s goals. Cf. McCown,
537 S.E.2d at 244 (individual was independent contractor where
he rarely consulted with employer on how job was to be
accomplished and chose the manner and means of performing his
tasks, subject only to the specifications of his employer).
Under such circumstances, the labels the parties used
in Church’s employment agreement and the manner in which HFI
regarded Church for tax purposes are of little consequence. See
Capps, 715 S.E.2d at 231 (facts that individual was treated as
independent contractor for tax purposes, was told he was a
subcontractor, and had to carry his own workers compensation
insurance did not control his employment status because they
simply indicated employer’s preference regarding the
characterization of the relationship); Lloyd, 266 S.E.2d at 37(evidence regarding the employment relationship that in fact
existed controls, not the parties’ intentions or the labels they
ascribe to themselves). Accordingly, we conclude that Church
was correctly regarded as an “employee” under N.C. Gen. Stat.
§ 95-25.22.
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We also find no merit in HFI’s contention that its
obligations to Church under the terms of his employment
agreement were settled by accord and satisfaction. Although HFI
did not raise this specific issue below, the magistrate judge
properly found that there is no evidence that the parties
reached an arrangement regarding Church’s compensation that may
have satisfied or supplanted their original agreement. See
Moore v. Frazier, 305 S.E.2d 562, 564 (N.C. Ct. App. 1983)
(“Establishing an accord and satisfaction defense . . . requires
evidence . . . that shows the unequivocal intent of one party to
make and the other party to accept a lesser payment in
satisfaction . . . of a larger claim.” (internal quotation marks
omitted)).
Last, HFI alleges several errors in the magistrate
judge’s calculation of Church’s damages. Although HFI did not
specifically assert its arguments below, we find no error.
Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc.,
618 F.3d 417, 427 (4th Cir. 2010) (“A court’s calculation of
damages is a finding of fact and therefore is reviewable only
for clear error, but to the extent those calculations were
influenced by legal error, review is de novo.” (internal
quotation marks omitted)). The magistrate judge properly
awarded Church the six months of unpaid wages he was due under
the terms of his employment agreement with HFI and there is no
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indication that the award of liquidated damages, under N.C. Gen
Stat. § 95-25.22(a1), constituted an abuse of discretion. See
Kornegay v. Aspen Asset Grp., LLC, 693 S.E.2d 723, 742 (N.C. Ct.
App. 2010) (trial court has discretion to award liquidated
damages even where evidence suggests employer’s good faith
violation of NCWHA).
Accordingly, we affirm the grant of summary judgment
to Church and the denial of HFI’s motion for reconsideration.
We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
AFFIRMED
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