Hill v. Total Event Solutions, Inc.Hill v. Total Event Solutions, Inc.
Mary S. McElroy, United States District Judge.
Before the Court is the plaintiff, Jeanine Hill’s, Motion to Dismiss Defendants’ Counterclaim. (ECF No. 19.) Ms. Hill seeks to bring this suit as part of a class of promotional workers. She alleges that the defendants, Total Event Solutions, Inc. (“TES”), and its owner, Alison Murphy (jointly “Defendants”), violated the Fair Labor Standards Act (“FLSA”) and the wage laws of several states by misclassifying her as an independent contractor and failing to pay her earned wages, including overtime. (ECF No. 16.) The defendants counterclaimed for contractual indemnification related to the costs of litigation. (ECF No. 18.) For the following reasons, the Plaintiff’s Motion is GRANTED. (ECF No. 19.)
I. BACKGROUND
TES is a Rhode Island home-based event staffing service created by Alison Murphy as a part-time, semi-seasonal business. (ECF No. 20 at 1.) TES connects
Contractor agrees to indemnify and hold harmless Company and its officers, directors, agents and employees from and against all claims, demands, liabilities, damages, losses, allegations, causes of action and lawsuits (including the payment of reasonable attorneys’ fees) (except those resulting from the sole negligence of Agency) caused by, arising out of, or resulting from any . . . services provided by Contractor hereunder or in connection with this Agreement and/or failure of Contractor or those acting under it to conform to the statutes, ordinances, regulations or other requirements of any governmental authority in connection with Contractor’s performance of the services set forth and/or contingent to this Agreement.
(ECF No. 20 at 2–3.) The Defendants, relying on the ICA, argue that they are entitled to contractual indemnification for the costs arising from this litigation. (ECF No. 18.)
II. STANDARD OF REVIEW
As in a motion to dismiss a complaint, when considering a motion to dismiss a counterclaim under
A. The Applicability of the Indemnity Clause to Costs Arising from this Case
The Court must first determine whether the indemnity clause in the ICA plausibly covers Ms. Hill’s instant suit alleging independent contractor misclassification, failure to pay overtime, and failure to timely pay wages under the FLSA and Rhode Island and New York state law. Under Rhode Island law “indemnification provisions are to be strictly construed against the party asserting a right of indemnification.” Sansone v. Morton Mach. Works, Inc., 957 A.2d 386, 393 (R.I. 2008); see Gordon v. Campanella Corp., 311 A.2d 844, 849–50 (R.I. 1973); Caruso v. Omni Hotels Mgmt. Corp., 61 F.4th 215, 220 (1st Cir. 2023).
The Defendants argue that Ms. Hill’s claims fall within the scope of the indemnity clause because they “arise” or “result” from the services provided to them. (ECF No. 20 at 4.) Several courts have interpreted similar indemnity provisions in wage and hour suits where defendants argued that an indemnity provision covered the litigation because it arose out of the services provided by the plaintiffs. For example, in Casias v. Distribution Mgmt. Corp., the court interpreted an indemnity provision seeking to indemnify the drafter “from and against any claims, damages, losses or expenses, including reasonable attorneys’ fees caused directly or indirectly by or arising out of the performance or failure of performance of this Agreement . . . .” No. 1:11-CV-00874 MV/RHS, 2012 WL 4511376, at *5 (D.N.M. Sept. 28, 2012). Construing the indemnification clause narrowly, the court found that the clause only
Likewise, in Fernandez v. Kinray, Inc., relying on the persuasive authority of other courts’ interpretations of indemnity claims, the court also found that it was the actions of defendants that were at issue in a wage and hour suit where the provision required plaintiffs to indemnify for costs “arising as a result of . . . the performance of services under the Agreement.” See No. 13CV4938ARRSMG, 2014 WL 12778829, at *4 (E.D.N.Y. Feb. 5, 2014) (collecting cases).
The Defendants respond by arguing that Spellman v. American Eagle Express, Inc., 680 F. Supp. 2d 188, 189 (D.D.C. 2010), is the more applicable case. (ECF No. 20 at 4.) In that case, the district court found it plausible that “Plaintiffs . . . agreed to indemnify Defendant for any ‘action’ against Defendant ‘arising out of or in connection with’ Plaintiffs’ ‘obligations under this Agreement[,]’” which included working for “a liquidated fee amount.” Spellman, 680 F. Supp. 2d at 189, 191. However, since Spellman, several courts have distinguished or expressly refused to follow its reasoning, including the Casias court.
The Casias court noted that even if Spellman were not distinguishable based on the language of the indemnity provisions at issue, that court was “forced to engage in mental gymnastics to characterize the loss as one arising from the plaintiffs’ purported contractual obligation to work for a liquidated fee, when in fact the loss much more directly arose out of the defendant’s alleged violation of its statutory obligations under the FLSA.” Casias, 2012 WL 4511376, at *7. Thus, it was the
This Court agrees that the actions at issue, namely the classification of Ms. Hill as an independent contractor, are those of the Defendants, not Ms. Hill. Therefore, the indemnity clause in the ICA does not cover Ms. Hill’s suit and the Defendants’ counterclaim must be dismissed.
B. FLSA Public Policy Limits on Indemnification in Wage Suits
Ms. Hill also argues that the FLSA, as a matter of public policy, “does not permit employers to seek indemnification from workers pursuing wage or independent contract misclassification claims.” (ECF No. 19 at 6.) Although the Court recognizes the substantial public policy interests at issue for a plaintiff’s ability to bring claims under the FLSA, the Court has already concluded that the Defendants’ Counterclaim fails to state a claim upon which relief can be granted on the ground that the harm alleged does not fall within the scope of the indemnity provision. The Court therefore need not—and does not—decide whether the indemnity provision violates public policy at this time.
For the foregoing reasons, the Plaintiff’s Motion is GRANTED and the Defendants’ indemnity counterclaim for costs arising from this litigation is DISMISSED with prejudice. (ECF No. 19.)
IT IS SO ORDERED.
_________________________________
Mary S. McElroy
United States District Judge
July 21, 2026