United States District Court, D. Nevada
PHILIP M. PRO, District Judge.
Presently before the Court is Defendants Las Vegas Land Contracting LLC d/b/a Dunhill Homes ("Dunhill"); Burke Construction Group, Inc. ("Burke"); Richmond American Homes of Nevada, Inc. ("Richmond American"); Harmony Homes, Inc. ("Harmony"); Desert Wind Homes of Nevada II, Inc. d/b/a Russell Rogers Development ("Desert Wind"); KB Home Las Vegas, Inc. and KB Home Nevada, Inc.'s (together, "KB Homes") (collectively, the "General Contractor Defendants") Motion for Summary Judgment (Doc. #76), filed on March 21, 2013. Plaintiffs filed a Response (Doc. #85) on April 29, 2013. The General Contractor Defendants filed a Reply (Doc. #88) on May 6, 2013.
Also before the Court is Plaintiffs' Motion for Summary Judgment as to General Contractor Defendants (Doc. #77), filed on March 21, 2013. The General Contractor Defendants filed a Response (Doc. #84) on April 29, 2013. Plaintiffs filed a Reply (Doc. #90) on May 16, 2013.
The parties are familiar with the facts of this case, and the Court will not repeat them here except where necessary. Named Plaintiffs Oscar Almaraz ("Almaraz"), Ismael Perez Cruz ("Perez Cruz"), and Efren Gonzalez are drywall laborers who brought this action on behalf of themselves and other similarly situated current and former employees of Defendant Vision Drywall & Paint, LLC ("Vision") for alleged Fair Labor Standards Act ("FLSA") and Nevada state law wage and hour violations. Twenty-four other employees filed opt-in consents with the Court. (Notice of Filing Opt-In Consent Forms (Doc. ##9, 15, 37, 38, 39, & 63).) One of the named Plaintiffs, Efren Gonzalez, and four of the opt-in Plaintiffs subsequently were dismissed from the case, resulting in a total opt-in class of twenty-two Plaintiffs. (Order (Doc. #70); Order (Doc. #73).)
The General Contractor Defendants are various general contractors who subcontracted with Vision for drywall installation and finishing services. (Compl. at ¶¶ 19-25; Answer at ¶¶ 19-25; Pls.' Mot. for Summ. J. as to General Contractor Defs. (Doc. #77) ["Pls.' MSJ as to General Contractor Defs."], Exs. A, G, Q, V, Z, CC.) Plaintiffs allege that they worked on the General Contractor Defendants' projects and that the General Contractor Defendants, along with Vision, were Plaintiffs' joint employers. (Compl. at ¶¶ 43, 45, 47, 49, 51, 53, 55.) Specifically, Plaintiffs allege the General Contractor Defendants "oversaw Plaintiffs' work on jobsites, established Plaintiffs' production schedules, and monitored Plaintiffs' daily work progress." (Id.)
Plaintiffs further allege that while employed by Vision to work on the General Contractor Defendants' projects, Plaintiffs were not paid the minimum wage, were not paid overtime, and were promised a certain rate of pay but were paid another. (Id. at ¶¶ 3, 5, 8, 10, 56-59, 63-65, 68-101.) Plaintiffs also allege there were various irregularities with respect to Vision's payroll practices, including Vision's failure to record Plaintiffs' hours and to issue paychecks made out to the appropriate employees in the appropriate amounts. (Id. at ¶¶ 6-7, 11.)
Almaraz and Perez Cruz testified that while employed by Vision, they worked on various General Contractor Defendants' projects including Foxborough, Tiara, Glengarry, Perry Plaza, Meyers, Vista Villa, and Monticello. (General Contractor Defs.' Mot. Summ. J. (Doc. #76) ["Defs.' MSJ"], Ex. B at 105-06, Ex. C at 73-74.) However, Almaraz and Perez Cruz were unable to recall all of the projects that they worked on during their employment at Vision. (Defs.' MSJ, Ex. B at 102, 114, Ex. C at 71-73, 93.) Almaraz and Perez Cruz also were unable to recall when or for how long they worked on particular projects. (Defs.' MSJ, Ex. B at 113, 133-34, 140-41, 143, Ex. C at 66-67, 71-76, 80-81.) They testified it was common to work on different projects within the same week, and sometimes even within the same day. (Defs.' MSJ, Ex. B at 106-7, 113, Ex. C at 73-74.) According to the General Contractor Defendants, none of them was the general contractor for the Meyers, Vista Villa, or Monticello projects. (Defs.' MSJ, Ex. N at ¶ 4, Ex. O at ¶ 5, Ex. P at ¶ 5, Ex. Q at ¶ 5, Ex. R at ¶ 5, Ex. S at ¶ 5.)
In their depositions, some of the opt-in Plaintiffs also were unable to identify which General Contractor Defendant was associated with particular projects on which Plaintiffs worked. (Defs.' MSJ, Ex. E at 62-63, Ex. F at 61-62, Ex. G at 51-52, Ex. H at 47, 79.) However, Plaintiffs submit a spreadsheet and attach time sheets showing that certain Plaintiffs worked on certain General Contractor Defendants' projects. (Resp. to Defs.' Mot. for Summ. J. (Doc. #85) ["Resp. to Defs.' MSJ"], Ex. A; Pls.' MSJ as to General Contractor Defs., Ex. J, Exs. K-P at Resp. to Interrog. 2.)
Plaintiffs brought suit against Defendants, alleging collective action claims under the FLSA, 29 U.S.C. §§ 206 and 207, for failure to pay minimum wages and overtime wages (counts one and two). (Compl. at 11-13.) Plaintiffs also alleged Nevada state law class action claims to recover wages, overtime wages, and waiting time penalties, and for breach of contract (counts three through six). (Id. at 13-18.) On March 5, 2012, the Court dismissed Plaintiffs' state law class action claims without prejudice to pursue the claims in state court. (Order (Doc. #23) at 2.) On June 22, 2012, the Court conditionally certified the action as a representative collective action for the FLSA claims. (Order (Doc. #41).)
Plaintiffs now move for summary judgment on the issue of whether Vision and the General Contractor Defendants are Plaintiffs' joint employers. The General Contractor Defendants oppose Plaintiffs' Motion and countermove for summary judgment on the same issue. The General Contractor Defendants also move to dismiss from this case opt-in Plaintiffs Jaime Magallanes-Munoz and Francisco Cervantes for failure to properly file consent forms.
Summary judgment is appropriate if the pleadings, the discovery and disclosure materials on file, and any affidavits "show 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), (c). A fact is "material" if it might affect the outcome of a suit, as determined by the governing substantive law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). An issue is "genuine" if sufficient evidence exists such that a reasonable fact finder could find for the non-moving party. Villiarimo v. Aloha Island Air, Inc. , 281 F.3d 1054, 1061 (9th Cir. 2002). Initially, the moving party bears the burden of proving there is no genuine issue of material fact. Leisek v. Brightwood Corp. , 278 F.3d 895, 898 (9th Cir. 2002). After the moving party meets its burden, the burden shifts to the non-moving party to produce evidence that a genuine issue of material fact remains for trial. Id . The Court views all evidence in the light most favorable to the non-moving party. Id.
A. Joint Employer
Plaintiffs move for summary judgment on the issue of whether Vision and the General Contractor Defendants are Plaintiffs' joint employers. Plaintiffs argue the General Contractor Defendants are Plaintiffs' joint employers as a matter of law under the factors set forth in Bonnette v. California Health and Welfare Agency , 704 F.2d 1465, 1470 (9th Cir. 1983), abrogated on other grounds by Garcia v. San Antonio Metro. Transit Auth. , 469 U.S. 528, 539 (1985), and in Torres-Lopez v. May , 111 F.3d 633, 639-40 (9th Cir. 1997). The General Contractor Defendants oppose Plaintiffs' Motion and countermove for summary judgment on the same issue. The General Contractor Defendants argue the Torres-Lopez factors do not apply in this case. They further argue Plaintiffs have failed to present evidence establishing the General Contractor Defendants were Plaintiffs' joint employers under the Bonnette or the Torres-Lopez factors.
The FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). Under the FLSA, two or more employers may employ a person jointly. Bonnette , 704 F.2d at 1469; 29 C.F.R. § 791.2(a). Each joint employer is individually responsible for complying with the FLSA with respect to the entire employment. Bonnette , 704 F.2d at 1469 (citing 29 C.F.R. § 791.2(a)).
The Court applies an "economic reality" test to determine whether a joint employment relationship exists. Torres-Lopez , 111 F.3d at 639 (quoting Bonnette , 704 F.2d at 1470). Under this test, the Court considers "whether the alleged employer (1) had the power to hire and fire employees, (2) supervised and controlled employee work schedules or conditions of payment, (3) determined the rate and method of payment, and (4) maintained employment records.'" Moreau v. Air France , 356 F.3d 942, 946-47 (9th Cir. 2004) (quoting Bonnette , 704 F.2d at 1470) (collectively, the "Bonnette factors"). The economic reality test is not mechanical and the Bonnette factors are not necessarily the only factors the Court should consider. Id . Ultimately, the determination is "based upon the circumstances of the whole activity." Bonnette , 704 F.2d at 1470 (quotation omitted).
Other factors courts have considered in evaluating whether a joint employment relationship exists include, but are not limited to:
(1) whether the work was a specialty job on the production line; (2) whether responsibility under the contracts between a labor contractor and an employer pass from one labor contractor to another without material changes; (3) whether the premises and equipment of the employer are used for the work, (considering the alleged employee's investment in equipment or materials required for his task, or his employment of helpers); (4) whether the employees had a business organization that could or did shift as a unit from one [worksite] to another; (5) whether the work was piecework and not work that required initiative, judgment or foresight (considering whether the service rendered requires a special skill); (6) whether the employee had an opportunity for profit or loss depending upon [the alleged employee's] managerial skill; (7) whether there was permanence [in] the working relationship; and (8) whether the service rendered is an integral part of the alleged employer's business.
Torres-Lopez , 111 F.3d at 640 (internal quotations omitted) (collectively, the "Torres-Lopez factors"); see also Moreau , 356 F.3d at 947-48, 951-52 (applying the Torres-Lopez factors in addition to the Bonnette factors in determining whether a joint employment relationship existed under the Family Medical Leave Act); Zheng v. Liberty Apparel Co. , 355 F.3d 61, 72 (2d Cir. 2003) (listing similar factors). Both direct and indirect control may demonstrate joint employment. Torres-Lopez , 111 F.3d at 643.
Under the FLSA, the definition of "employer" is given an "expansive interpretation." Torres-Lopez , 111 F.3d at 639. Whether a party is an employer for purposes of the FLSA is a question of law for the Court, assuming the underlying facts are not disputed. See Bonnette , 704 F.2d at 1469. The Court may find no joint employment even if some factors weigh in favor of finding a joint employment relationship. Zheng , 355 F.3d at 76-77.
Here, the General Contractor Defendants argue there is no binding authority requiring the Court to apply the Torres-Lopez factors in addition to the Bonnette factors because in Torres-Lopez, the Ninth Circuit was considering joint employment under the Migrant and Seasonal Agricultural Worker Protection Act. The Court need not reach the issue of whether the Torres-Lopez factors apply in addition to the Bonnette factors in this case. Even if the Court applies the expanded Torres-Lopez factors, the General Contractor Defendants are not joint employers under the totality of the circumstances and the economic reality of the situation.
1. Bonnette Factors
a. Power to Hire and Fire Employees
Plaintiffs argue the General Contractor Defendants had the power to hire and fire them under various clauses in the subcontract agreements between Vision and the General Contractor Defendants. Specifically, Plaintiffs argue the provisions of the subcontract agreements that allow certain General Contractor Defendants to reduce or cancel Vision's scope of work or to take over Vision's work give the General Contractor Defendants the power to hire and fire Plaintiffs because the General Contractor Defendants could reduce or eliminate Vision's employees from projects. They further argue the General Contractor Defendants' ability to eject Plaintiffs from a project due to a safety or other violation "is the functional equivalent of firing a worker from a project." (Pls.' MSJ as to General Contractor Defs. at 6.)
The General Contractor Defendants argue the provisions of the subcontract agreements which permit them to reduce or cancel Vision's scope of work do not give them the authority to hire or fire individual employees, such as Plaintiffs. The General Contractor Defendants argue that at most, these provisions permit them to alter Vision's scope of work in accordance with project demands. They further argue that basic principles of construction management dictate that if Vision were unable to perform under a subcontract, and a General Contractor Defendant was forced to hire employees to complete Vision's work, there is no requirement that it employ Vision employees.
Regarding Plaintiffs' argument they could be expelled from a job site for safety violations, the General Contractor Defendants respond that expulsion from a particular job site is not tantamount to termination because the individual still would remain a Vision employee. The General Contractor Defendants also argue that they had no disciplinary procedures in place with respect to subcontractors' employees and that it was up to the individual subcontractors to maintain safety policies and procedures. Finally, the General Contractor Defendants argue that limited oversight of workplace safety is insufficient to establish joint employment.
Plaintiffs do not point to any evidence in the record indicating the General Contractor Defendants actually hired or fired Plaintiffs. The General Contractor Defendants state in their declarations they did not have the power to hire or fire Plaintiffs. (Defs.' MSJ, Ex. N at ¶ 5, Ex. O at ¶ 6, Ex. P at ¶ 6, Ex. Q at ¶ 6, Ex. R at ¶ 6, Ex. S at ¶ 6.) Various Plaintiffs testified in their depositions that the General Contractor Defendants did not have discussions with them regarding hiring or firing. (Defs.' MSJ, Ex. B at 152, Ex. D at 91, Ex. G at 57, Ex. M at 83-84.) Some Plaintiffs also testified they did not recall ever speaking with one of the General Contractor Defendants' supervisors or employees, with the exception of one Plaintiff who recalled discussing safety issues with one of the General Contractor Defendants' employees. (Defs.' MSJ, Ex. C at 107; Ex. E at 86; Ex. F at 68; Ex. G at 57; Ex. H at 72; Ex. I at 68-69; Ex. J at 75; Ex. L at 70-71; Ex. M at 82-83.)
Moreover, Plaintiffs do not point to any evidence in the record indicating the General Contractor Defendants disciplined Plaintiffs or had disciplinary procedures in place for Vision's employees. However, there is evidence indicating that if an employee committed a serious safety violation, the employee would be asked to leave a project site. Defendant Burke's Rule 30(b)(6) witness testified that Burke did not have disciplinary procedures in place for subcontractors' employees, but if a subcontractor's employee commits a safety violation "placing himself or anybody else in imminent danger, he's asked to leave." (Pls.' MSJ as to General Contractor Defs., Ex. B at 42.) If imminent danger is not involved, the representative testified that someone from Burke would go directly to the subcontractor's foreman or supervisor and advise them to take action. (Id.) He further testified that "[w]hen Burke supervision was not on-site, [subcontractors] could not be onsite." (Id. at 26.) ...