Martin Walsh v. Alpha & Omega USA, Inc.
39f4th1078
8th Cir.2022Background
- Travelon (Alpha & Omega USA, Inc.), founded and owned by Viktor Cernatinskij, arranges non‑emergency medical transportation (STS) in the Minneapolis–St. Paul area and provides vans, tablets, and dispatch services via the MediRoutes app (which includes GPS tracking).
- Travelon classifies drivers as independent contractors; customers pay Travelon, which pays drivers the trip fares, and drivers then pay Travelon weekly fees (dispatch fee, commissions, insurance, lease/maintenance, tablet rental, etc.).
- Dispatch assigns trips through the app, monitors availability and GPS, and operates primarily during daytime business hours; drivers can set and change schedules, and Travelon does not dispatch overnight.
- The DOL’s Wage & Hour Division concluded the drivers were employees; the Secretary sued on behalf of 21 drivers alleging FLSA violations (minimum wage, overtime, recordkeeping). The district court granted summary judgment for the Secretary and awarded damages.
- The Eighth Circuit applied the six‑factor economic‑realities test and held genuine disputes remain on key factors (control; opportunity for profit/loss; whether drivers are integral), reversed the district court’s summary judgment, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Employment status under the FLSA (economic‑realities test) | Drivers are employees because Travelon controls assignments, hours, tracking, and recordkeeping | Drivers are independent contractors: they set schedules, can decline trips, can use personal vehicles/work independently, and Travelon is an intermediary/platform | Reversed summary judgment — genuine disputes of material fact preclude deciding employment status as a matter of law; remand |
| Control factor | Travelon assigns trips, pressures acceptance, regulates service times, monitors GPS, requires logs/break permission | Drivers could decline assignments, set preferred hours, and dispatch respected preferred schedules | Genuine dispute on control; credibility/weighting issues for the trier of fact |
| Opportunity for profit/loss | Travelon sets rates and limits drivers’ profit opportunities | Drivers can combine multiple passengers, use personal vehicles/tablets, and potentially work independently to increase profit | Genuine dispute; factual resolution required |
| Integral‑to‑business factor | Travelon markets/ registers as an STS provider and customers depend on its drivers | Travelon argues it is an intermediary/technology/leasing business and earns revenue from driver fees rather than passenger fares | Genuine dispute whether drivers are integral; cannot be resolved on summary judgment |
Key Cases Cited
- Karlson v. Action Process Serv. & Priv. Investigations, LLC, 860 F.3d 1089 (8th Cir. 2017) (articulates the six‑factor economic‑realities test for FLSA employee status)
- Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992) (FLSA definitions extend beyond traditional agency principles)
- Razak v. Uber Techs., Inc., 951 F.3d 137 (3d Cir. 2020) (control and platform/technology company arguments can create genuine issues of fact)
- Gray v. FedEx Ground Package Sys., Inc., 799 F.3d 995 (8th Cir. 2015) (summary judgment standard requires viewing facts in light most favorable to nonmoving party)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (credibility determinations and weighing evidence are jury functions at summary judgment stage)
- Vandewarker v. Cont'l Res., Inc., 917 F.3d 626 (8th Cir. 2019) (de novo review of summary judgment and applicable standards)
- Acosta v. Paragon Contractors Corp., 884 F.3d 1225 (10th Cir. 2018) (discusses "integral to the business" factor under the economic‑realities test)
- Verma v. 3001 Castor, Inc., 937 F.3d 221 (3d Cir. 2019) (considers managerial skill and opportunities for profit/loss under the economic‑realities analysis)