Summary
The United States Court of Appeals for the Eleventh Circuit reviewed whether insurance claims adjusters assigned by One Call Claims, LLC to Texas Windstorm Insurance Association were employees or independent contractors under the Fair Labor Standards Act. Applying the economic-reality test and the six Scantland factors, the court concluded that a reasonable jury could find the workers economically dependent on the companies and therefore covered employees. The court reversed the district court’s grant of summary judgment for the defendants.
Topics
Practice areas
Questions Presented
- Whether the workers were employees or independent contractors under the FLSA's economic-reality test.
- Whether the district court properly granted summary judgment to the companies on the workers' claim for unpaid overtime wages.
Holdings
- FLSA employee status is determined by the economic reality of the relationship and whether the worker is economically dependent on the alleged employer, not by the label used in the contract or by the parties.
- Viewing the evidence and reasonable inferences in the workers' favor, a jury could reasonably find that the workers were economically dependent employees rather than independent contractors.
- Summary judgment for the companies was improper because a jury could reasonably conclude that the workers were FLSA employees.
Key quotations
“When we review the conditions of employment to determine employee status, we consider all the relevant circumstances with an eye toward the economic reality of the relationship and whether the workers are economically dependent on the employer.” (2)
“True to the name, we care about reality, not possibility.” (10)
“Even aside from the factors, our bottom-line inquiry into employee status is whether a worker is economically dependent on the putative employer under the totality of the circumstances.” (24)
Factual background
One Call Claims assigned Galarza, Wimberly, and Carpenter to adjust insurance claims for the Texas Windstorm Insurance Association after Hurricane Harvey. The workers performed claims-adjusting services for approximately one and a half to two years, generally worked regimented schedules, were paid fixed non-negotiable day rates, and did not work for other insurers during the assignment. The companies provided substantial work equipment and controlled or allegedly controlled aspects of the workers' schedules, tasks, approvals, and remote-work practices, although the workers also bore various professional and personal expenses and possessed state licenses and prior experience.
Procedural history
Galarza filed an action alleging that he and the other workers were employees rather than independent contractors and were entitled to overtime pay for weeks in which they worked more than forty hours. The parties filed cross-motions for summary judgment. The district court concluded that the workers were independent contractors and granted summary judgment to the companies. The Eleventh Circuit reversed and remanded, holding that a jury could reasonably find that the workers were FLSA employees.
Remand instructions
Remand for further proceedings consistent with the opinion; the workers' FLSA employee-status claim must not be resolved in the companies' favor on summary judgment.