406 F.Supp.3d 256
E.D.N.Y2018Background
- Plaintiffs (112 total; 19 bellwethers) are Routeholders and Helpers who performed pick-up, delivery, and return services for Kinray under Independent Contractor (IC) Agreements; agreements labeled them independent contractors.
- Routeholders signed multi-year IC Agreements permitting work for others on their face; Helpers were not parties to those agreements and were engaged by Routeholders.
- Plaintiffs allege Kinray exercised extra-contractual control (scheduling, manifests, discipline, vehicle requirements) making them employees under the FLSA and NYLL.
- Defendants contend Plaintiffs were independent contractors who made substantial investments, bore vehicle and operating costs, could profit or suffer loss, and whose work was not integral to Kinray’s core business.
- Plaintiff Fernandez asserts retaliation after Kinray cancelled his IC contract shortly after this lawsuit was filed.
- Defendants moved for summary judgment; the court denied the motion in full, finding triable issues of fact on classification and retaliation and rejecting Defendants’ invocation of the local driver exemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether Plaintiffs are employees or independent contractors under the FLSA/NYLL | Plaintiffs say Kinray exercised sufficient control (scheduling, manifests, discipline, vehicle rules) so economic reality supports employee status | Kinray points to written IC Agreements, driver investments, profit/loss opportunity, and interchangeable delivery work to argue independent-contractor status | Denied summary judgment; court found disputed facts about control create triable issues under the economic-reality test |
| 2. Applicability of the FLSA local-driver exemption (29 U.S.C. § 213(b)(11)) | Plaintiffs: exemption does not apply because no Department of Labor finding/petition was obtained | Kinray: pay structure is substantially identical to approved plans; exemption should apply | Exemption rejected at summary judgment because statutory/regulatory procedure requires a DOL petition and finding, which did not occur |
| 3. Fernandez’s retaliation claim under FLSA/NYLL | Fernandez: cancellation of his IC agreement shortly after filing this suit shows retaliatory motive | Kinray: cancellations were part of a broader business migration to a freight broker—legitimate, non-retaliatory reason; also contests employee status | Denied summary judgment; prima facie case met and temporal proximity plus lack of non-retaliatory proof create triable issue |
| 4. Whether summary judgment was appropriate overall | Plaintiffs: factual disputes on control and causation preclude summary judgment | Kinray: says material facts undisputed and entitle it to judgment as a matter of law | Court denied summary judgment in its entirety due to material disputed facts, particularly on control and retaliation |
Key Cases Cited
- Cheeks v. Freeport Pancake House, 796 F.3d 199 (2d Cir. 2015) (FLSA is remedial and interpreted broadly)
- Barfield v. N.Y. City Health & Hosp. Corp., 537 F.3d 132 (2d Cir. 2008) (adopts the economic-reality test for FLSA employer status)
- Saleem v. Corp. Transp. Grp., Ltd., 854 F.3d 131 (2d Cir. 2017) (economic-reality factors applied to transportation drivers)
- United States v. Silk, 331 U.S. 704 (U.S. 1947) (economic-reality approach to employment status)
- Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217 (2d Cir. 2002) (FLSA exemptions construed narrowly; employer bears burden)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden-shifting principles)