OPINION
Plaintiffs, a group of cable technicians, have brought suit seeking overtime wage payments under the Fair Labor Standard Act (“FLSA”), 29 U.S.C. § 201,
et seq.,
against Comcast, and companies that con
Comcast has filed a motion for summary judgment. Broadly stated, the issue presented is whether a company (or other private venture) may, consistently with the remedial goals of the FLSA, contract with third parties who employ workers vital to the accomplishment of the company’s business purposes in a manner providing the company with strict quality control over the performance of those workers without becoming liable for wages due the workers under the FLSA. Reasonable people may disagree about the answer to this question. My view is that the answer is “yes,” provided that the fees paid by the company to the direct employers of the workers are sufficient to pay the workers the wages they are due. Here, Plaintiffs have not alleged that the fees paid by Comcast to the Installation Companies were not sufficient to cover the FLSA wages plaintiffs claim. Therefore, I will grant Comcast’s motion for summary judgment.
I. 1
Comcast sells its services on a subscription basis, necessitating the installation of equipment in a customer’s home to establish a connection with the Comcast network. (Pl.’s Mem. at 2; App. A, Comcast 10052791.) To provide these installation services, Comcast contracts with Installation Companies which, in turn, hire technicians to perform installations. (Id.) The terms of the contracts between Comcast and the Installation Companies expressly provide that the technicians are independent contractors of Comcast. (Def.’s Mem. at 7; Ex. D-l, Conn-X Agreement at ¶ 15(a); Ex. D-2, Procom Agreement at ¶ 1(e).)
The Installation Companies and Com-cast have a close business relationship. Procom was founded by a former Comcast Senior Vice President with a $500,000 advance from Comcast. (Pl.’s Mem. at 41; Ex. 4, Donahue Dep. at 180.) The Installation Companies perform all, or the vast majority of their work for Comcast. (PL’s Mem. at 3; Ex. 1, Schreyer Deck at ¶ 8.) All technicians are issued identification numbers by Comcast. (Id. at 4; Ex. 2, Selvyn Dep. at Ex. 2 thereto.) Comcast refers to its Installation Companies as “business partners.” (Id. at 4; Ex. 2, Selvyn Dep. at 235-37.) All the equipment installed in customers’ homes belongs to Comcast. However, the Installation Companies and the technicians own the necessary tools and equipment.
Plaintiffs contend that Comcast has the authority to prohibit the hiring of a prospective technician in its “sole and absolute discretion.”
(Id.
at 14; Ex. 1, Schreyer Deck at ¶ 19.) Andre Selvyn, Comcast’s Manager of Business Partner Operations, sent an email in March 2009 to an Installation Company, informing them that “effectively [sic] immediately, all new hires from your firms who will be representing Com-cast must be approved by me. Please be sure to contact me before bringing on any new techs.”
(Id.
at 14; Ex. 4, Donahue Dep. at Ex. 16 thereto.) Short of absolute authority over hiring, Comcast also requires all prospective technicians to pass a
The Plaintiffs assert that Comcast exercises direct and indirect control over cable technicians once they are hired. Comcast requires Installation Companies to hire technicians as W2 employees, rather than 1099 independent contractors. (Id. at 5; Ex. 2, Selvyn Dep. at Ex. 2 thereto.) The contracts between Comcast and the Installation Companies specify the nature of the services they are to provide, and establish policies and procedures to which technicians must adhere. (Id. at 15; Ex. 5, Conn-X agreement.) Technicians are issued Comcast ID badges. (Id. at 15; Ex. 2, Selvyn Dep. at 168.) By forwarding batches of service calls to the Installation Companies, Comcast directs technicians to specific work sites and details the time-frame in which jobs must be completed. (Id. at 23-24; Ex. 2, Selvyn Dep. at 88.) At times, Comcast contacts technicians directly to point them to particular jobs. (Id. at 27; Ex. 17 Waters Dep. at 62; Ex. 21, J. Jacobson Dep. at 66.)
Comcast also maintains strict supervision over the Installation Companies and the technicians. (Id. at 5; Ex. 1, Schreyer Decl. at ¶ 14.). Comcast utilizes a program called “Cable Data” which permits it to exercise real time monitoring of a technician’s work. (Id. at 7; Ex. 2, Selvyn Dep. at 108-23.) For example, Selvyn informed Installers via email:
I just ran a quick summary and below are the top 20 techs with craftsmanship issues last week.. As discussed previously, the goal for this month is 14% SCOI; 2 at the end of the month, we’ll take a hard look at any tech above that threshold and decide whether or not their performance warrants continued representation of Comcast.
(Id. at 20; Ex. 5, Crouse Dep. at Ex. 11 thereto.) Comcast is able to monitor individual technicians to determine where they are, how long they are on site, and what equipment is being utilized. (Id. at 21; Ex. 21, J. Jacobson Dep. at 72.) Comcast retains records of technicians’ arrival and departure times (Id. at 35; Ex. 4, Donahue Dep. at 190-91).
Comcast also has the authority to “deauthorize” a specific technician, which Plaintiffs contend amounts to the practical ability to fire. Deauthorization strips technicians of their status as an “authorized contractor,” thereby prohibiting them from performing any work on behalf of Comcast. (Id. at 16; Ex. 14, Sadik Dep. at 13.) While Comcast notes that a deauthorized technician is not prohibited from continuing to work for an Installation Company in a position unassociated with Comcast, Plaintiffs contend that because the Installers only perform work for Com-cast, deauthorization is tantamount to termination. (Id. at 16; Ex. 1, Schreyer Decl. at ¶ 9; Ex. 3, S. Jacobson Dep. at 143.)
Comcast does not pay technicians directly, but instead pays the Installation Companies for each service completed by their technicians.
(Id.
at 32; Ex. A.) The Installation Companies are then free to pay their technicians in whatever manner they see fit.
(Id.
at 32; Ex. 2, Selvyn Dep. at 235.) Plaintiffs contend that because Comcast pays per each completed service, Comcast exercises practical control over whether or not an individual technician will be paid for their work.
(Id.
at 34; Ex. 16, Roberts Dep. at 91 (explaining to a cable technician that if “Comcast says it’s not
II.
The FLSA provides for a broad definition of employer and employee.
See Bonnette v. Cal. Health and Welfare Agency,
Under the FLSA, an individual may be the employee of more than one employer at a given time.
Schultz v. Capital Int’l Sec. Inc.,
1) Where there is an arrangement between the employers to share the employee’s services, as, for example, to interchange employees; or
2) Where one employer is acting directly or indirectly in the interests of the other employer (or employers) in relation to the employee; or
3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.
29 C.F.R. § 791.2(b). If a joint employment relationship exists, all joint employers are jointly and individually liable for FLSA violations. See 29 C.F.R. § 791.2(a).
To determine whether an entity is a joint employer, a court must take into account the “real economic relationship” between the employee, employer, and putative joint employer.
Schultz v. Capital Int’l Sec. Inc.,
There is no mechanical test to evaluate the “economic reality” between employees and putative joint employers. Courts have largely applied some variation of the following four factors:
1) Authority to hire and fire employees;
2) Authority to supervise and control work schedules or employment conditions;
3) Authority to determine the rate and method of payment; and
4) Maintenance of employment records.
Bonnette,
III.
A.
Comcast unquestionably plays a role in hiring and firing technicians. It requires that each technician pass a criminal background check and a drug test. Likewise, it reserves to itself the power to “deauthorize” technicians who install its equipment. Under the deauthorization process if Comcast receives information that a technician is performing installation work that does not meet standards set by Comcast, Comcast may advise the Installation Company that the technician no longer is authorized to perform installation work on behalf of Comcast. Because the Installation Companies have virtually no positions for a technician to fill other than performing installation work for Comcast, deauthorization in effect constitutes “firing.”
It is only in the context of quality control, however, that Comcast exercises pow
B.
Under
Bonnette,
supervision and control is probative of an employment relationship only when the oversight demonstrates effective control over the schedule and conditions of employment.
See Rutherford, Food Corp. v. McComb,
A high level of supervision and control is not an automatic trigger for joint employment. The nature of the control distinguishes employment and contractor
In contrast to these cases, the court in
Torres-Lopez v. May,
In the instant case, Comcast maintains specific standards to which the Installation Companies and technicians must adhere, and regularly monitors the technicians to ensure that their performance satisfies Comcast’s expectations. To that end, Comcast regularly monitors the location of technicians, specifies the time at which they are supposed to arrive at appointments, and regularly evaluates completed work to ensure that it meets standards. (Pl.’s Mem. at 21-27; Ex. 21, J. Jacobson Dep. at 72-73.) Comcast also occasionally contacts individual technicians to adjust their installation routines. (Pl.’s Mem. at 27; Ex. 17, Waters Dep. at 62; Ex. 21, Jacobson Dep. at 66.) However, Comcast is not responsible for the day-to-day management of the technicians. Comcast has no role in developing the Installation Company’s human resource policies and does not dictate the technicians’ working conditions, or determine the conditions upon which the technicians’ would receive payment. These determinations are made by the Installation Companies.
(See, e.g.,
Pl.’s Mem. at 32; Ex. 2, Selvyn Dep. at 235);
see also Moreau v. Air France,
It is also significant that the control Comcast does exercise is in part designed to protect Comcast customers.
See Moreau,
C.
Plaintiffs next contend that Comcast exercises control over the Installation Companies’ pay structure. However, Com-cast’s involvement in the pay structure of the Installation Companies is typical of any client/independent contractor relationship. Comcast does not issue the technicians’ pay checks, pay stubs, or W-2s, nor do the technicians submit pay records or timesheets to Comcast. (Def.’s Mem. at 9-10; Ex. G, Calhoun Dep. at 84-85; Ex. D, Dyer Dep. at 39-40; Ex. H, Chappell Dep. at 37.) Plaintiffs have provided no evidence indicating that Comcast tells the Installation Companies how to pay its employees. Instead, Plaintiffs claim Comcast has control over their wages simply because Comcast pays the Installation Companies on a per service basis, and the Installation Companies pay technicians on a per services basis. To find that this arrangement places Comcast in control of Plaintiffs’ wages would dramatically expand the FLSA to subsume traditional independent contractor relationships.
See Herman,
D.
Plaintiffs also contend that Comcast’s record retention is indicative of Joint Employment. Comcast does maintain some records, including (1) arrival and departure data for each cable technician, (Pl.’s Mem. at 36; Ex. 5, Crouse Dep. at 23-24), (2) lists of cable technicians and their employment status, reasons underlying any terminations, and information on the vehicles they drive,
(id.
at 37; App. A, Com-cast 00008026-00008028), and (3) drug testing and criminal background information on all cable technicians.
(Id.
at 38; App. A, Comcast 00000060-00000065.) While the retention of these records might on the surface seem to evidence an employment relationship, upon closer scrutiny the retention of the records is only an extension of Comcast’s control procedures. “It is only good business sense for Com-cast ... to attempt to insure that [technicians] are fit” to enter customer’s homes.
Herman,
TV.
For these reasons, I find that the four
Bonnebte
factors do not dictate that Com-
The first factor is whether Com-cast’s premises or equipment are used for Plaintiffs work. Plaintiff does provide technicians with “star keys,” a specialized tool required to unlock Comcast boxes. (Pl.’s Mem. at 40; Ex. 4, Donahue Dep. at 87-90.) This key, however, is the only piece of equipment that Comcast supplies. It does not provide technicians with uniforms, vehicles, or other tools. (Def.’s Mem. at 23-26; Ex. D, Abbott Decl. at ¶ 31.) Moreover, each Installation Company has premises out of which the technicians work.
The second
Zheng
factor is whether Plaintiffs are part of a business organization that can shift as a unit from one putative joint employer to another. This factor is relevant “because a subcontractor that seeks business from a variety of contractors is less likely to be part of a subterfuge arraignment than a subcontractor that serves a single client.”
Zheng,
Finally,
Zheng
asks that a court inquire whether the contract responsibilities of the direct employer can be transferred to the putative joint employer without material changes. In
Rutherford Food Corp. v. McComb,
In the instant case Plaintiffs have introduced Comcast emails in which Comcast employees discussed the possibility of the dissolution of an Installation Company. (Pl.’s Mem. at 46; App. A, Comcast 10052909.) Plaintiffs contend that these emails reveal a situation analogous to the turnover of subcontractors in
Rutherford.
However, unlike the subcontractors in
Rutherford,
the Installation Companies are “going concern[s] with a location, facilities, equipment, employees, supervisors and owners.”
Zhao,
In sum, although the issue is not free from doubts, I conclude that Comcast is not Plaintiffs joint employer within the
ORDER
For the reasons stated in the accompanying Opinion, it is, this 28th day of September 2010
ORDERED
1. Comcast Corporation’s motion for summary judgment is granted; and
2. Judgment is entered in favor of Comcast against plaintiffs.
Notes
. The facts, as I state them, are either undisputed or set forth in the light most favorable to the plaintiffs.
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
. SCOI is "Service Call on Install,” a metrics tool used by Comcast to measure the performanee of cable technicians. (Id. at 19; Ex. 1 Schreyer Aff. at ¶ 13.)
. The purpose of the FLSA has been said to be "humanitarian.”
See Tenn. Coal, Iron & R. Co. v. Muscoda Local No. 123,
. In
Schultz
the Fourth Circuit found it was unnecessary to apply the
Bonnette
and
Zheng
factors because the record established that relationship among the various defendants fell directly within the third example of joint employment provided in 29 C.F.R. § 791.2(a).
Here, I do not believe that record can be fairly read as establishing that Comcast controls the Installation Companies or that Comcast and the Installation Companies are "under common control.” All the record establishes is that Comcast and the Installation Companies have contracts with one another calling for the performance of work which is done by the technicians. Therefore, this is an appropriate case for me to weigh the Bonnette and Zheng factors, as the Fourth Circuit instructs I should do where an employment relationship falls outside the regulatory examples.
. There may be one exception to this general observation. As indicated in Section I, supra, Andre Selvyn, Comcast's Manager of Business Partner Operations, sent an email to an Installation Company stating that "all new hires from your firm who would be representing Comcast must be approved by me.” (Pl.’s Mem. at 14; Ex. 4, Donahue Dep. at Ex. 16 thereto). In a subsequent email to Selvyn, a representative from the Installation Company indicated that they "would like to know if we could have [name redacted] approved for hire ... we’re waiting on your approval.” (Id. at 15; App. A, Comcast 10019108). This email exchange, however, is limited to technicians employed at a single Installation Company. If Plaintiffs wish to press this point further, they may file a motion to reconsider the Opinion as to that Installation Company.
. Courts evaluating franchise relationship for joint employment have routinely concluded that a franchisor’s expansive control over a franchisee does not create a joint employment relationship.
See Singh v. 7-Eleven, Inc.,
