Ethelberth v. Choice Security Co.
91 F. Supp. 3d 339
E.D.N.Y2015Background
- Plaintiff Onyenaemeka Ethelberth worked for Choice Security from Dec. 2007–June 2010 as an unarmed security guard at SCA (school construction) sites (generally ≤40 hrs/wk) and non‑SCA sites (evenings/weekends, producing most alleged overtime). Choice paid via Paychex and issued W‑2s for SCA work; Defendants issued 1099s for some non‑SCA work.
- Choice’s president George Omogun signed tax returns and paychecks, set compensation, had hiring/firing authority, controlled bank accounts, and directed operations; operations manager Onah handled day‑to‑day guard assignments.
- Plaintiff alleges unpaid overtime (FLSA and NYLL), underpayment at prevailing wage rates for SCA work, breach of contract, and unjust enrichment. Defendants argue some work was independent‑contractor work, Omogun not individually liable, lack of FLSA coverage, statute‑of‑limitations bar, and failure to exhaust NY administrative remedies for prevailing‑wage claim.
- On cross‑motions for summary judgment, the court found as a matter of law that Ethelberth was an employee (not an independent contractor) for all Choice work and that Omogun may be liable as an employer; genuine issues remain on FLSA enterprise coverage and willfulness; NYLL overtime claim (state law) for overtime granted to plaintiff; prevailing‑wage (NYLL §220) claim dismissed for failure to exhaust administrative remedies.
- The court dismissed plaintiff’s breach‑of‑contract claim (not pled as third‑party beneficiary to public contract) and left unjust enrichment (limited to straight‑time prevailing‑wage dispute) for trial due to factual disputes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Employee v. independent contractor for non‑SCA (overtime) | Ethelberth contends all work was as Choice employee | Choice asserts non‑SCA work was independent‑contractor work (1099s issued) | All economic‑reality factors favor employee status; court holds plaintiff was employee for all work |
| Individual liability of Omogun under FLSA/NYLL | Omogun exercised operational control and set pay | Defendants say Onah ran day‑to‑day and Omogun lacked operational control | Omogun exercised sufficient control (hire/fire, set pay, bank access); may be liable as employer |
| FLSA coverage — individual and enterprise | Plaintiff seeks individual or enterprise coverage to invoke FLSA overtime | Defendants deny individual coverage; dispute whether Choice handled goods moving in interstate commerce for enterprise coverage | Individual coverage denied (no evidence of interstate activity by plaintiff); enterprise coverage is a genuine dispute of material fact — denied to both parties on summary judgment |
| Willfulness / FLSA statute of limitations | Plaintiff argues Defendants acted willfully (extends SOL to 3 yrs) | Defendants argue 2‑yr SOL applies | Willfulness is fact‑dependent; material disputes exist — issue for jury; summary judgment denied to both on SOL |
| NYLL overtime (state Minimum Wage Act) | Plaintiff seeks overtime under NYLL §650 et seq. | Defendants do not contest employee status under NY law | Court grants summary judgment to plaintiff on NYLL overtime liability |
| Prevailing‑wage straight time (NYLL §220) & exhaustion | Plaintiff claims prevailing wage owed at SCA sites | Defendants argue plaintiff failed to exhaust administrative remedies under NYLL §220 | Plaintiff failed to prove administrative exhaustion; §220 claim (Count Two) dismissed |
| Breach of contract & unjust enrichment (state common law) | Plaintiff seeks straight‑time prevailing wages and equitable restitution | Defendants say common‑law claims are duplicative of statutory claims | Breach of contract dismissed (no third‑party beneficiary pleading); unjust enrichment (limited to straight‑time prevailing‑wage period) survives factual dispute — denied summary judgment to both |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard requires genuine dispute of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (party opposing summary judgment must identify specific facts showing genuine dispute)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment appropriate when record could not lead a reasonable jury to find for nonmovant)
- Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir.) (use of economic‑reality test to distinguish employees from independent contractors)
- Ansoumana v. Gristede’s Operating Corp., 255 F. Supp. 2d 184 (S.D.N.Y.) (factors supporting employment relationship—hiring, firing, payment weigh for employee finding)
- Irizarry v. Catsimatidis, 722 F.3d 99 (2d Cir.) (individual employer liability requires operational control; endorses Carter factors)
- Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir.) (four‑factor framework for individual employer liability)
- Herman v. RSR Security Services, 172 F.3d 132 (2d Cir.) (financial control and paycheck authority support individual liability)
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (willfulness standard for FLSA SOL — employer acted knowingly or with reckless disregard)
- D'Amico v. City of New York, 132 F.3d 145 (2d Cir.) (nonmovant cannot rely on conclusory allegations at summary judgment)