Plaintiffs Jamie Martin and Daneisha Singleton bring this action on behalf of themselves and similarly situated persons, alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et. seq. (“FLSA”), and the New York Labor Law, N.Y. Lab. Law § 650, et. seq. (“NYLL”). Plaintiffs served as field agents securing low-income customers to acquire wireless telephones of defendant Sprint/United Management Company (“Sprint”) pursuant to a federal subsidy program. They claim that they were misclassified as independent contractors, as opposed to as employees. Plaintiffs claim that, as a result, they were denied statutorily required minimum wage and overtime compensation. Plaintiffs claim that Sprint and co-defendants Credico (USA), LLC (“Credico”) and Wallace Morgan, Inc. (‘Wallace Morgan”) are jointly responsible for this willful misclas-sification. Plaintiffs further claim that defendants failed to provide them with required wage notices and statements.
Pending now are the parties’ cross-motions for summary judgment. These motions raise three issues: (1) whether plaintiffs were employees rather than independent contractors under the FLSA and NYLL; (2) if so, whether Sprint and Credico were joint employers (with Wallace Morgan) of plaintiffs, such that they can be held liable for the alleged FLSA and NYLL violations; and (3) whether, even if plaintiffs are employees, they are exempt from FLSA and NYLL requirements as outside salespeople.
For the reasons that follow, the Court holds for defendants on the latter two issues. Specifically, the Court holds that, even assuming arguendo that plaintiffs were employees rather than independent contractors, (1) Credico and Sprint cannot be held liable as plaintiffs’ joint employers, and (2) the outside sales exemptions to the FLSA and NYLL apply. These rulings preclude liability altogether for Sprint and Credico, and they preclude liability for Wallace Morgan on plaintiffs’ minimum-wage and overtime claims. Accordingly, the Court grants defendants’ motions for summary judgment and denies plaintiffs’ motion for partial summary judgment. As to the sole remaining claims—plaintiffs’ wage-notice claims under the NYLL against Wallace Morgan—the Court, as explained below, commissions letter-memo-randa from plaintiffs and Wallace Morgan as to the effect of the Court’s rulings on these claims.
I. Background
A. Factual Background
1. The Lifeline Program
The federal government’s Lifeline Program was founded in the 1980s with the
Lifeline Program services are available only to persons who meet certain qualifications, including having an income below applicable guidelines. JSF ¶¶ 35, 37. To be eligible for Lifeline Program services, applicants must also certify that they will not exceed the maximum of one Lifeline Program-enrolled mobile phone per household. Id, ¶ 35.
Telecommunications carriers are not required to charge consumers for Lifeline Program services, see PI. 56.1 ¶ 4, but they may charge qualified low-income customers for additional, services, see Sprint Counter 56.1 ¶ 4. For example, while Lifeline Program enrollees may receive a free wireless phone and a free preset amount of minutes and messages, PI. 56.1 ¶ 6, enroll-ees may also purchase additional minutes and messages above this preset amount, Credico Counter 56.1 ¶ 6.
2. The Parties
Sprint is a telecommunications carrier that offers Lifeline Program, products and/or services through Assurance Wireless, a brand that Sprint acquired in 2009. Id. ¶¶ 7, 35-37, 52, Sprint’s receipt of subsidies from USAC is conditioned on Sprint’s compliance with the applicable program regulations. Sprint Counter 56.1 ¶ 3. Sprint is also required to “[publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service.” See 47 C.F.R. § 54.405(b).
To promote and market Lifeline services, Sprint contracts with third-party Outreach Agencies (“OAs”). PI. 56,1 ¶ 14. Sprint also uses the National Lifeline Accountability Database (“NLAD”), which detects duplicate applications' to make sure that qualified applicants do not receive more than one Lifeline Program benefit, either through the same or multiple providers. Sprint 56.1 ¶¶ 9-10.
Credico is an OA that has contracted directly with Sprint since September 2012. PL 56.1 ¶¶ 16,18. Credico outsources sales and marketing services for its clients, which include other telecommunications carriers besides. Sprint, to independént sales offices (“ISOs”).
Wallace Morgan is an ISO with whom Credico has subcontracted, with Sprint’s consent, to collect applications for Sprint’s Assurance Wireless Program. PL 56.1 ¶ 22. Credico assigned an “Account Manager” to Sprint to serve as a main point of contact between Sprint and Wallace Morgan. Id. ¶¶ 23-24. Wallace Morgan and Credico
Plaintiffs are field agents who were hired by Wallace Morgan to solicit and collect applications for wireless phones and services from individuals seeking to enroll in the Lifeline Program through Sprint’s Assurance Wireless brand. JSF ¶ 52. Martin held the title of “account executive” front approximately March 29, 2015, and “corporate trainer” from approximately mid-April 2015, through May 7, 2015. Id. ¶2. Singleton held the title of “account executive” from approximately April 3, 2015, through mid-April 2015, and “corporate trainer” from approximately - mid-April 2015 through May 7,- 2015, id. ¶-4.
3. The Responsibilities of Field Agents
As noted, field agents on the Assurance Wireless campaign solicited and collected applications from potentially qualifying Lifeline Program applicants. JSF ¶ 52 (“Plaintiffs understood their job duty to be collecting applications from potentially qualified individuals who wanted to enroll in the- Lifeline Assistance Program through Assurance.”). Field agents may work on only one campaign at a time. PI. 56.1 ¶176.
As set forth in Sprint’s OA Agreement, field agents were required to “inform and educate potential customers about Assurance Wireless, determine and advise on an individual’s qualification for the program and engage the eligible customers in the аpplication process for Assurance Wireless.” PL 56.1 ¶ 59. Field agents distributed Sprint-provided materials, visiting “targeted community locations and attending public or private community events.” Id.
In initially addressing potential applicants for phones pursuant to the Lifeline Program, field agents were required, as set forth in the Sprint SOPs, to begin-by “utilizing] an approved pitch that meets [Assurance Wireless] standards and clearly indicates only qualified applicants may receive ... lifeline services.” PL 56.1 ¶ 60. One such pitch, for example, could be: “Would you like to find out if you qualify
Sprint’s SOPs address the remainder of the interaction between field agents and potential applicants. For example, the SOPs state that field agents “must ask potential applicants if they currently have a lifeline phone with [Assurance Wireless] or any other carrier” and “if they have applied with [Assurance Wireless] or any lifeline carrier recently.” Id. ¶ 62; Sprint Counter 56.1 ¶ 62. Plaintiffs and Sprint dispute whether Sprint’s SOPs rigidly choreographed the steps for these interactions (along the lines of “first do this, next this”) or instead offered more relaxed training guidelines without any such temporal dimension. See PI. 56.1 ¶¶ 62-66; Sprint Counter 111162-66. But the parties do not appear to dispute that the SOPs discussed ways in which field agents were to speak with potential applicants to explain the program and to assess the applicant’s eligibility before submitting applications via a tablet. PL 56.1 ¶ 65; Sprint Counter 56.1 ¶ 65.
Using their Credico-provided tablet, field agents uploaded completed Lifetime Program applications to a third-party vendor called Solix so that the applications could be either approved or denied. JSF. ¶ 60; see also PI. Counter to Sprint 56.1 1Í 167 (noting ambiguity about whether it was actually Solix that determined whether an applicant met the regulatory qualifications but admitting that Solix conveyed information about whether applications had been approved or denied).
If an applicant qualified for a phone, he or she would have no contract or other agreement requiring activation of that phone or participation in the Lifeline Program. PI. 56.1 ¶87. There was never an exchange of money between field agents and potentially qualified applications. PI. 56.1 ¶ 112. Field agents would inform qualified customers about add-ons permitting them to purchase additional minutes. Sprint 56.1 ¶ 169.
4. The Schedules of Field Agents
Plaintiffs reported to work at Wallace Morgan’s office. Credico 56.1 ¶ 100. Wallace Morgan operated its own office space located at 40 Exchange Place in New York City. Credico 56.1 ¶49. Plaintiffs did not report to or work in any Sprint facility, Sprint 56.1 ¶ 119, or any Credico office, Credico 56.1 ¶ 101.
Wallace Morgan required field agents to sign in upon arrival. PI. 56.1 ¶67. Field agents working on the Assurance Wireless campaign could then pick up from the Wallace Morgan office a tablet provided by Credico. Field agents used these tablets in the field to review Lifeline Assistance Program applications. JSF ¶¶ 57-58.
Wallace Morgan also offered “atmosphere” meetings, which could be held in the morning and/or at night, at the Wallace Morgan office. JSF ¶¶ 67-68. At these meetings, Wallace Morgan agents received guidance as to how to solicit Assurance Wireless applications. See Sprint 56.1 ¶ 138 (“ ‘Atmosphere’ meetings were meetings in which Wallace Morgan agents gathered to receive sales tips from others at Wallace Morgan.”); PI. Counter to Sprint 56.1
When heading out into the field with their tablets, field agents were not provided transportation to a particular territory; field agents paid for their own transportation. Wallace Morgan 56.1 ¶60; Credico 56.1 ¶ 117. Plaintiffs spent the.majority of their time working in the field. Sprint 56.1 ¶ 170. Wallace Morgan informed .field agents of their daily sales locations. Credi-co 56.1 ¶ 110. As noted, these locations had to be within broader territories approved by Sprint, which included the Bronx, Queens, and Manhattan. PI. 56.1 ¶¶ 20, 93.
Upon their return to the Wallace Morgan office at the end of work, field agents would report their application numbers and return their tablet. JSF ¶¶ 70-71. Wallace Morgan tracked the number of Lifeline Assistance Program applications that field agents obtained each day. Id. ¶ 69.
The parties dispute the rigidity of field agents’ schedules. It is undisputed that Wallace Morgan provided a “suggested daily schedule” to field agents. JSF ¶ 66. In claiming that field agents’ schedules were more regimented, plaintiffs point to a Wallace Morgan' “Leadership Guide” document, which states that field agеnts must “[b]e in early every day,” ■ “[h]ave 100% attendance,” “be in every day (including Saturday)” and “[c]all people at night and on weekends.” PI. 56.1 ¶ 67. In claiming that field agents’ schedules were more malleable, Credico points to Singleton’s testimony that her work hours varied and that Saturday work was not required. Credico Counter 56.1 ¶ 67. Credico also points to Singleton’s testimony that some agents lacked a morning schedule, worked only certain days of the week, and “could have walked in any time and taken a tablet [computer].” Id.
Martin estimated that, as an' account executive at Wallace Morgan, she worked from 8 a.m. to 7 p.m. six days per week. Credico 56.1 ¶ 130. Martin' testified that Saturdays were optional “[b]ut according to everybody else, if you wanted to move ahead, you would make' Saturday.” Id:, PI. Counter to Credico 56.1 ¶ 130. Martin estimated that, as a corporate trainer at Wallace Morgan, she worked from 7:30 a.m. to 7 p.m. six days per week. Credico 56.1 ¶ 132.
Singleton estimated that, as an account executive at Wallace Morgan, she worked from 7 a.m. to 5 p.m. or 6 p.m. six days per week. Id. ¶ 129. Singleton estimated that, as a corporate trainer at Wallace Morgan, she worked from 7 a.m. to 7 p.m. six days per week, unless she had something to do and only worked five days. Id. ¶ 131. Plaintiffs confirmed in their depositions that they never communicated with anyone at Credico about their work at Wallace Morgan or their work hours." Id. ¶ 99.
Opt-in plaintiffs in this action testified as to their schedules, which varied significantly. For example, opt-in plaintiff David Gillens estimated that, as a field agent at Wallace Morgan, he worked from 6 a.m. to 9 p.m. or 10 p.m., Monday through Saturday, resulting in approximately 90-96 hours per week, id. ¶ 135(i), whereas opt-in plaintiff Sandra Mills estimated that she worked from 8:30 a.m. to 7 p.m., Monday through Friday, resulting in'approximately 52.5 hours per week, id. ¶ l35(o).
5. The Hiring of Field Agents
Wallace Morgan conducted field agents’ interviews, including of plaintiffs, and made hiring decisions. JSF ¶¶ 46^47. In arranging their job interviews, prospective Wallace Morgan field agents corresponded only with Wallace Morgan. Credico 56.1
Some agents working for Wallace Morgan, including plaintiffs, signed “Independent Sales Representative Agreements.” Id. ¶¶ 48-50. These stated that plaintiffs could provide similаr or other services to companies that, like Wallace Morgan, were engaged in direct sales and marketing, as long as this other work did not interfere with ongoing work performed for Wallace Morgan. Id. ¶ 61.
Sprint’s SOPs required that OAs like Wallace Morgan complete background checks for field agents collecting Lifeline Program applications on the Assurance Wireless campaign. PL 56.1 ¶ 32; Sprint Counter 56.1 ¶ 32. ■
Credico also required that field agents comply with Sprint’s SOPs by completing a background check, signing a “zero-tolerance fraud letter,” and taking Sprint’s “Cyber Scholar” test. Credico 56.1 ¶ 33.
6. The Training of Field Agents
Wallace Morgan offered training to field agents. JSF ¶ 43. The parties do not appear to dispute that field agents were also required to complete online training provided by Sprint. PI. 56.1' ¶ 34; see Sprint Counter 56.1 ¶ 34 (identifying plaintiffs’ factual statement as “disputed” but acknowledging that “field agents who marketed and promoted the Assurance Wireless campaign were required to complete a one-time‘‘initial' training’”). In this training, field agents received “an explanation of the terms of the Assurance Wireless service” as well as “the Application processing and collection process, eligibility verification process and related Assurance Wireless sales guidelines.” Sprint Counter 56.1 ¶¶ 92-93.
Splint’s online ‘ training also addressed what field agents are “expected to know” and discussed “how to present yourself and act” as a field agent. Sprint Counter 56.1 ¶ 36. In a slide entitled “How should you look,” Sprint instructed that field agents “must represent Assurance Wireless in an appropriate manner at all times,” that “uniforms must be clean and neat,” that “[n]ame badges including the agent’s name and company must be worn and clearly visible at all times,” that “Assurance Wireless provided t-shirts must be worn at all times while working events,”
In compliance with Sprint’s OA Agreement with Credico, Credico was responsible for ensuring that each field agent
All AW agents need to use this pitch starting immediately. Please communicate this to everyone tonight, and ensure everyone is using it in the field.... Opening Pitch: so that everyone is on the same page—You can say ‘free’ and/or ‘lifeline’ so long as it is in the same sentence as “qualify for and Assurance Wireless.”
Credico Counter 56.1 ¶ 41.
Documents prepared by Credico set forth certain policies and rules for field agents. For example, one such document listed “Agent Compliance Rules,” including rules requiring wearing ID badges visibly in the field and forbidding wearing shorts in the field. PI. 56.1 ¶ 51. There is testimony that the document was created after Sprint asked Credico to address ongoing compliance issues, and that the document was “heavily based on suggestions from Sprint.” Credico Counter 56.1 ¶51.^ different Credico document, entitled “Territory Management,” stated that, “[i]n the event that an agent sells in territory that is assigned to another office, the office forfeits all office profit for sales submitted and payable.” Id. ¶ 52. Another “Business Trip” document created by Credico addressed situations in which an ISO and its field agents collected Lifeline Program applications outside of a normal approved territory. PL 56.1 ¶ 53.
Credico also created and implemented a “Compliance Improvement Plan” to enforce compliance with Assurance Wireless program rules. PL 56.1 ¶ 151; but see Credico Counter 56.1 ¶ 151 (acknowledging creation of the Compliance Improvement Plan, but claiming to. have done so at Sprint’s request, in cooperation with Sprint, and in a manner heavily based on Sprint’s suggestions). Credico also conducted audits to ensure compliance with Sprint SOPs. Pl. 56.1 ¶ 150; Credico Counter 56.1 ¶ 150.
Notwithstanding the online training, plaintiffs did not identify any Sprint personnel as having (1) any knowledge as to, or (2) any supervision or other form of direction over, plaintiffs’ duties or training. Sprint 56.1 ¶¶ 175-76. Plaintiffs also did not identify anyone from Credico as their manager or supervisor. Credico 56.1 ¶ 104. Martin and Singleton identified Wallace Morgan supervisors Stuart Guarney, Nilda Ortega, Jose Gutierrez, and Smith as their managers. Sprint 56.1 ¶ 178. Plaintiffs identified only Wallace Morgan supervisors as having knowledge about their job duties, id. ¶ 179, they did not identify anyone from Credico as having such knowledge, Credico 56.1 ¶ 106, and they testified that they never spoke with anyone at Sprint about-their jobs, duties, or schedule, Sprint 56.1 ¶ 180.
7. The Classification and Compensation of Field Agents
Until September or October 2015, all field agents at Wallace Morgan were classified as independent contractors. PL 56.1 ¶ 78.
Sprint and Credico both assert that they were not responsible for the independent contractor classification. Sprint Counter 56.1 ¶ 78 (“Sprint did not instruct Wallace Morgan to classify agents on the Assurance Wireless campaign in any particular way.”); Credico Counter. 56.1 ¶ 78 (“Credi-co had no involvement with the classification of Wallace Morgan Field Agents.”).
In either September or October 2015, Wallace Morgan field agents were reclassified as exempt employees pursuant to the FLSA and NYLL’s outside sales exemptions. PI. 56.1 ¶ 80. Plaintiffs assert that this change was made based in part on Credico’s recommendation, citing evidence that Credico in 2016 changed its subcontractor agreement to ensure that ISOs like Wallace Morgan classified all agents as employees. Id. ¶81. Credico asserts that this evidence is “misleading and incomplete” and that Thomas “Tommy” Smith, the head of Wallace Morgan, was the only person that decided to reclassify field agents. Credico Counter 56.1 ¶80. Sprint and Credico both assert that the reclassification decision was ultimately Wallace Morgan’s, not Sprint’s or Credico’s. Sprint Counter 56.1 ¶ 80 (“The record confirms that Sprint was not involved in any respect in that decision or decision-making process.”); Credico Counter 56.1 ¶80 (“Wallace Morgan made the decision to reclassify •
While working at Wallace Morgan during the periods of time in which they were classified as independent contractors and outside sales employees, plaintiffs were not guaranteed' minimum wage and overtime payments. They were instead paid on a commission basis for approved Assurance Wireless applications.
Martin earned a total of $980 during her employment, which averages to $196 per week, and Singleton earned a total of $1,300 during her employment, which averages to $260 per week. PL 56.1 ¶ 83.
The OA Agreement between Sprint and Credico set forth the compensation that Credico would receive per approved application. PL 56;1 ¶ 84; Sprint Counter 56.1 ¶ 84. Sprint “retained] the right to change ... the pay structure with over a month of written notice.” Sprint Counter 56.1 ¶ 84 (internal quotation marks omitted). Sprint’s online training for field agents did not provide any information as to field agents’ compensation or classification. Sprint 56.1 ¶ 93.
Commission schedules created by Credi-co and referenced in Credico’s subcontractor agreement with Wallace Morgan state that field agents “shall be paid” at certain rates per approved application. First Srey Deck, Ex. 7, 36-37. However, in testimony,
8. The Termination of Field Agents
Sprint and Credico both had the authority to require that a field agent suspected of fraud or failure to abide by the Standard Operating Procedures no longer work on the Assurance Wireless campaign. Id. ¶¶ 73-74.
Plaintiffs assert that Sprint and Credico had the power to direct an ISO to have field agents pulled from the field. PI. 56.1 ¶ 170 (citing Credico emails pulling agents from field). Credico acknowledges this capability but claims that this capability was exercised only for limited reasons, such as during an investigation of fraud or compliance issues. Credico 56.1 ¶ 170. Sprint points out that the evidence cited by plaintiffs establishes only that Credico, and not Sprint, had the power to have agents pulled from the field. Sprint Counter 56.1 ¶ 170.
The parties dispute whether Credico had the power to terminate field agents. It is undisputed that Credico had the power to require that any field agent suspected of engaging in fraud or failure to abide by the SOPs no longer work on the Assurance Wireless campaign. JSF ¶74. But plaintiffs also contend that “Credico has the authority to fire or suspend any Field Agent.” PI. 56.1 ¶ 183. In support, plaintiffs cite an email from Credico to Wallace Morgan owner Tommy Smith, asking Smith to “suspend” certain agents from going into the field pending an investigation, and an email from a Credico Account Manager stating: “starting this week ... any rep that has not had their audit will have their code shut off come this Monday.” PI. 56.1 ¶ 183. Credico claims that only Wallace Morgan could terminate its engagement with field agents and that Credico’s authority in this area did not extend beyond, as noted, requiring that field agents not work on the Assurance Wireless campaign. Credico Counter 56.1 ¶ 183.
The parties also dispute whether Sprint had the power to terminate field agents. It is, again, undisputed that Sprint had the power to require that any field agent suspected of engaging in fraud or failure to abide by the SOPs no longer work on the Assurance Wireless campaign. JSF ¶73. But plaintiffs also claim, citing Sprint’s SOPs, that “Sprint may terminate a Field Agent if they fail to meet the performance requirements set forth in the Sprint SOPs.” PI. 56.1 ¶ 50. The SOPs state that Sprint “will periodically review each OA back office operations and sales event locations for compliance with the requirements and standards within the Master Agreement and these SOPs,” First Srey Deck, Ex. 6, at SPRMAR-000025,
In a similar vein, the parties dispute the reasons why Sprint could require the removal of a field agent. Plaintiffs contend that Sprint “has the authority to remove a
As to Sprint’s process of evaluating field agents, the parties do not dispute that Sprint conducted “mystery shops,” under which a “Sprint employee will represent himself as a potentially qualifying applicant and observe whether the Field Agent is performing his/her job in compliance with Sprint’s SOPs,” enabling Sprint to evalute “what the Field Agent says, their appearance, their knowledge of Assurancе Wireless products and services, and whether' they present the proper marketing materials and attestations.” PI. 56.1 ¶ 144; see Sprint Counter 56.1 ¶ 144; Credico Counter 56.1 ¶ 144,
The parties also do not dispute that both Martin and Singleton were ultimately terminated by Walláce Morgan. JSF ¶ 72. Singleton testified that “[Wallace Morgan owner] Tommy Smith told [her] [she] was fired,” and that she never received a termination letter from Credico. Williams Decl., Ex. 20 at 107. Martin testified that that Smith directed another Wallace Morgan employee to terminate her. Williams Decl., Ex. 19 at 102. Plaintiffs do not dispute that no one from Sprint was present when Singleton and Martin were fired, and neither Singleton nor Martin ever discussed their terminations with anyone from Sprint. Sprint 56.1 ¶¶ 145-47.
In 2016, after plaintiffs initiated this action, Wallace Morgan stopped performing marketing services. Williams Deck, Ex. 1, at 56, Smith testified that it did so in part “[b]ecause the class action lawsuit ’ meant that, legally, the lawyers for Martin and Singleton were able to email texts and communicate aggressively with every representative of Wallace Morgan, and that email suggested that we were paying improperly, which decimated my sales force.” Id
B. Procedural History
On July 7, 2015, plaintiffs filed the initial complaint in this action, bringing claims against “Assurance Wireless LLC” and Wallace Morgan. Dkt. 1. On September 1, 2015, and September 14, 2015, respectively, Wallace Morgan and Sprint filed answers, Dkts. 31, 35, with Sprint’s asserting that it had been incorrectly sued under the name Assurance Wireless LLC.
On October 13, 2015, plaintiffs filed their First Amended Complaint (“FAC”), bringing
On October 23, 2015, plaintiffs filed a motion for conditional collective certification, Dkt. 52, as well as a supporting memorandum of law, Dkt. 53, and supporting declarations, Dkts. 54-64.
On October 27, 2015, answers to the FAC were filed by Sprint, Dkt. 66, and Wallace Morgan, Dkt. 67.
On November 13, 2015, Sprint filed a memorandum of law in opposition to the motion for conditional certification, Dkt. 70, as well as supporting declarations, Dkts. 71-72. The same day, Wallace Morgan filed a memorandum of law opposing the same motion. Dkt. 73.
On November 19, 2015, plaintiffs filed a reply in further support of the motion for conditional certification, Dkt. 77, and a supporting declaration, Dkt. 78.
On January 4, 2016/the Court conditionally certified a collective consisting of “all Wallace Morgan employees who gathered applications for enrollment in the Lifeline Program through Assurance Wireless at any point during the three years preceding the issuance of a Court-approved- Notice.” Dkt. 86. The Court declined > to certify a broader collective defined to include either “all Agents nationwide” or “all those -employed by Credico.” Id.
On February 12, 2016, plaintiffs filed a motion for leave to amend the -FAC to add Credico (USA) LLC as a' defendant, Dkt. 107, as well as a supporting memorandum of law, Dkt. 108, and a declaration. Dkt. 109. On February 25, 2016, Sprint filed a memorandum of law in opposition to this motion, Dkt, 120, and a supporting declaration, Dkt. 119. On March 4, 2016, plaintiffs filed a reply, Dkt. 127, .and another supporting declaration, Dkt. 128. On May 12, 2016, the Court granted plaintiffs’ motion to amend the FAC. Dkt. 145.
On May 16, 2016, plaintiffs filed their Second Amended Complaint (“SAC”), bringing claims against Credico as well as Sprint and Wallace Morgan. Dkt. 146. On June 2, June 24, and July 11, 2016, respectively, Sprint, Wallace Morgan, and Credi-co filed answers to the SAC. Dkts. 149, 158,167.
On June 20, 2016, Wallace Morgan filed an answer to the SAC. Dkt. 158.
On June 24, 2016, the parties.in this case and in the related case Vasto v. Credico (USA) LLC, No. 15 Civ. 9298 (PAE), filed a letter addressing overlap between their FLSA collectives. Dkt. 163. The Vasto plaintiffs alleged that, while working as field agents at a Credico ÍSO called Cro-mex Inc. (“Cromex”), they had been misclassified as independent contractors and subjected to FLSA and NYLL violations. No. .15 Civ. 9298, Dkt. 1. The Vasto plaintiffs brought claims against Credico, Cro-mex, Credico’s president Jesse Young, and Cromex’s owner Meixi Xu. Id.
On September 8, 2016, the Court issued an order declining to consolidate this action with Vasto but directing counsel in the two cases “to communicate and coordinate their efforts so as to avoid duplicative discovery.” Dkt. 185 at 2. The Court also held that, to avoid overlap between the 'two cases, while the Martin collective would remain as previously delineated, the Vasto collective would be limited to “[a]ll individuals who performed face-to-face marketing work for any U.S. subcontractor of Credico (USA) LLC, except Wallace Morgan, from June 16, 2013 to the present and who have been classified as independent contractors.” Id.
On December 5, 2016, plaintiffs filed a motion for class certification under Rule 23, Dkt. 197, as well as a supporting memorandum of law, Dkt. 198, and a supporting declaration, Dkt. 199.
On April 7, 2017, the parties filed their joint statement of undisputed facts. Dkt. 259.
On April 21, 2017, plaintiffs filed a motion for partial summary judgment, Dkt. 263, as well as a supporting memorandum of law, Dkt. 264; plaintiffs’ 56.1 statement, Dkt. 265; and the declaration of Rachhana Srey, Dkt. 266.
On May 12, 2017, Sprint filed a cross-motion for summary judgment and opposition to plaintiffs’ motion for partial summary judgment, Dkt. 271, as well as a supporting memorandum of law, Dkt. 272; Sprint’s 56.1 statement, Dkt. 273; Sprint’s counter-statement tо plaintiffs’ 56.1 statement, Dkt. 279 (“Sprint Counter 56.1”); and the declaration of Nicole A. Eichber-ger. Dkt. 276. The same day, Credico filed a cross-motion for summary judgment and opposition to plaintiffs’ motion, Dkt. 274, as well as a supporting memorandum of law, Dkt. 278; Credico’s 56.1 statement, Dkt. 280; and Credico’s counter-statement to plaintiffs’ 56.1 statement, Dkt. 281. The same day, Wallace Morgan filed a cross-motion for summary judgment and opposition to plaintiffs’ motion. Dkt. 282. On May 18, 2017, after notification of a technical error, Wallace Morgan re-filed its cross motion and opposition, Dkt. 289, as well as a supporting memorandum of law, Dkt. 290, and the declaration of Joseph F. Tremiti, Dkt. 291. On May 19, 2017, Wallace Morgan re-filed its 56.1 statement. Dkt. 293.
On May 13, 2017, Credico filed the declaration of Greta B. Williams in support of its cross-motion for summary judgment and in opposition to plaintiffs’ motion for partial summary judgment. Dkt. 283.
On June 3, 2017, plaintiffs filed a memorandum of law in opposition to defendants’ cross motions for summary judgment and reply in support of plaintiffs’ motion, Dkt. 305; a counter-statement to Sprint’s 56.1 statement, Dkt. 301; a counter-statement to Credico’s 56.1 statement, Dkt. 302; a counter-statement to Wallace Morgan’s 56.1 statement, Dkt. 300; and an affidavit and a declaration from Rachhana Srey. Dkts. 303-04.
On June 23, 2017, Sprint filed a reply memorandum of law, Dkt. 311, as well as the supporting declaration of Elise M. Bloom, Dkt. 312, and a reply 56.1 statement, Dkt. 313. The same day, Credico, Dkt. 314, and Wallace Morgan, Dkt. 315, filed reply memoranda.
On July 6, 2017, the Court held argument on the cross-motions for summary judgment.
II, Applicable Legal Standards for a Motion for Summary Judgment
To prevail on a motion for summary judgment, the movant must “show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant bears the burden of demonstrating the absence of a question of material fact. In making this determination, the Court must view all facts “in the light most favorable” to the non-moving party. Holcomb v. Iona Coll.,
If the movant meets its burden, “the nonmoving party must come forward with admissible evidence sufficient to raise a genuine issue of fact for trial in order to avoid summary judgment.” Jaramillo v. Weyerhaeuser Co.,
“Only disputes over facts that might affect the outcome of the suit under the governing law” will preclude a grаnt of summary judgment. Anderson v. Liberty Lobby, Inc.,
III. Discussion
The parties’ cross-motions for summary judgment raise three issues: (1) whether Sprint and Credico can be held liable as joint employers, (2)'whether the outside sales exemption to the FLSA and NYLL applies, and (3) whether plaintiffs were employees or independent contractors.
A. Joint Employer
Sprint and Credico seek summary judgment on the' ground that the evidence would not permit a finding that they were “joint employers” of' plaintiffs. In other words, they argue, even assuming plaintiffs were employees, they were employees only of Wallace Morgan, and only Wallace Morgan can be held liable for any FLSA and NYLL violations.
The FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Supreme Court has emphasized that this is an expansive definition with “striking breadth.” Nationwide Mut. Ins. Co. v. Darden,
“[Wlhether an employer-employee relationship exists for purposes of the FLSA should be grounded in ‘economic reality rather than technical concepts.’” Barfield v. New York City Health & Hospitals Corp.,
“When it comes to ‘employer’ status under the FLSA, control is key.” Lopez v. Acme Am. Envtl. Co., Inc., No. 12 Civ. 511 (WHP),
• The formal control test inquires “‘whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.’ ” Carter,
Formal control does not require continuous monitoring of employees, looking over their shoulders at all times,, or any sort of absolute control of one’s employees. Control may be restricted, or exercised only occasionally, without removing the employment' relationship from the protections of the FLSA, since such limitations on control do not 'diminish the significance of its existence.
Hart v. Rick’s Cabaret Int'l Inc.,
As to the functional control test, the Second Circuit has identified a number of factors pertinent to determining whether a person or entity, even if lacking formal control, exercised “functional control” over an employee. In Zheng v. Liberty Apparel Co. Inc.,
(1). whether [the alleged employers’] premises and equipment were used for the plaintiffs’ work; (2) whether- the [subcontractors] had a business that could or did shift as a unit from one putative joint employer to another;' (3) the extent to which plaintiffs performed a discrete line job that was integral to [the alleged employers’] process of production; (4) whether responsibility under the contracts could pass from one subcontractor to another without material changes; (5) the degree to which [the alleged employers] or their agents supervised plaintiffs’ work; and (6) whether plaintiffs worked exclusively or predominantly for [the alleged employers].
Id.; accord Barfield v. N.Y.C. Health & Hosp. Corp.,
Under NYLL, the standard for employer status is nearly identical to that of the FLSA. Compare 29 U.S.C. § 203(d) (“‘Employer’ includes any person acting directly or indirectly in the interest of an employer in relation to an employee ....”), with NYLL § 190(3) (“ ‘Employer’ includes any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service.”). Accordingly, courts in this District regularly apply the same tests to determine whether entities were joint employers under NYLL and the FLSA. See Spicer v. Pier Sixty LLC,
For the reasons that follow, the Court finds that, as a matter of law, neither
1. Sprint
On the undisputed facts, Sprint satisfies neither the formal or functional control tests for joint employer status.
a. Formal Control
i. Hiring and Firing
The Court first assesses whether plaintiffs have adduced evidence sufficient to support a determination that Sprint hired or fired field agents.
This case bears a considerable resemblance to Jean-Louis v. Metro. Cable Communications, Inc.,
In terms of hiring, the undisputed evidence shows that Time Warner does not receive applications from putative Metro technicians; interviéw or review applicants; inform applicants that they have been hired; or provide new hires with employment forms. It is further undisputed that none of the Plaintiffs met or communicated with any • Time Warner employee prior to being hired as a Metro technician.... In short, Metro, not Time Warner, has the power to hire Metro technicians.
Id. at 123. The district court reached this conclusion notwithstanding the fact • that “Time Warner require[d] Metro to conduct criminal background checks of applicants.” Id.
Here, the record is similarly clear that Wallace Morgan, not Sprint; had the power to hire field agents. Wallace Morgan scheduled and conducted interviews, made hiring decisions, and extended offers of employment. JSF ¶¶ 46—47; Credico 56.1 ¶¶ 65-66, 68, 70. That' Sprint required agents hired by Wallace Morgan to complete background checks before being assigned to. the Assurance Wireless campaign, Sprint Counter 56.1 ¶49, does not demonstrate Sprint’s control over the hir: ing process. Cf. Inclan v. New York Hosp. Grp., Inc.,
The record is similarly clear that Wallace Morgan, not Sprint, had the power to fire field agents. The parties do not dispute that Martin and Singleton were informed, of their termination by a Wallace Morgan employee, that no one from Sprint was present at the time, and that neither Martin or Singleton ever discussed the termination with anyone from Sprint. See Sprint 56.1 ¶¶ 145-147; PI. Counter to Sprint 56.1 ¶¶ 145-157.
The district court drew a similar distinction in Godlewska v. HDA, in which home healthcare attendants employed by a not-for-profit contractor brought FLSA claims against the contractor as well as a city agency that engaged the contractor to administer home attendant services to city residents.
The same distinction also carried the day in Lawrence v. Adderley Industries, Inc.,
Here, tellingly, plaintiffs do not point to any evidence that Sprint had the power to terminate a field agent’s employment at Wallace Morgan or ability to work on any
Accordingly, the Court finds that the first formal control factor does not support a finding that Sprint jointly employed Wallace Morgan field agents.
ii. Work Schedules and Conditions
The Court next assesses whether plaintiffs have adduced evidence sufficient to support a finding that Sprint supervised and controlled plaintiffs’ work schedules or conditions of employment.
As to plaintiffs’ work schedules, the' record is clear that Wallace Morgаn dictated these. Field agents reported to work at Wallace Morgan’s office and never to any Sprint facility. Sprint 56.1 ¶¶ 115, 119. Field agents attended atmosphere meetings at Wallace Morgan’s office, JSF ¶ 67, and were informed of the start time of these meetings by their Wallace Morgan supervisors, Credico 56.1 ¶ 126. Wallace Morgan supervisors assigned field agents to territories in which to collect applications each day, albeit within the general regions of New York City that had been approved by Sprint for Assurance Wireless application collection. Sprint 56.1 ¶ 116; PL Counter to Sprint 56.1 ¶ 116. When plaintiffs were to call in sick or be absent from work, they would contact their supervisors at Wallace Morgan. Sprint 56.1 ¶ 118. When asked who managed their work and had knowledge of their duties and responsibilities, plaintiffs identified only Wallace Morgan employees. Id. ¶¶ 178-179. Both Martin and Singleton testified that they never spoke to anyone at Sprint about their jobs with Wallace Morgan, their duties, or their work hours. Id. ¶ 180; see Jean-Louis,
In claiming that Sprint controlled their schedules, plaintiffs stress that Sprint employees have attended meetings at Wallace Morgan, and that Sprint has the power to have agents pulled from certain areas in the event of overproduction. See PI. Opp. Br. at 32. But the formal control factor requires greater involvement on the putative joint employer’s part. For example, .in Jean-Louis, the district court found that Time Warner did not control Metro technicians’ schedules where, even though Time Warner gave Metro certain time windows during which Metro should perform certain jobs, it was “Metro, not Time Warner, [that] decide[d] which technicians -will work on which job and whether a technician will work on any jobs in that period at all.”
“the degree to which defendants supervise the plaintiffs’ work ... can be misinterpreted to encompass run-of-the-mill subcontracting relationships .... Although ... a defendant’s extensive supervision of a plaintiffs work is indicative of an employment relationship ... such extensive supervision weighs in favor of joint employment only if it demonstrates effective control of the terms and conditions of the plaintiffs employment.”
Id. (quoting Zheng,
Nor have plaintiffs adduced evidence sufficient to show that Sprint supervised or controlled Wallace Morgan' field agents’ work conditions. Plaintiffs emphasize (1) Sprint’s SOPs, which address methods for collecting applications, territories of collection, and appropriate attire, PI. Br. at 41, (2) Sprint’s requirement of “auditing” field agents, including through mystery shops, and of tracking application numbers, and (3) Sprint’s requirement of certain online training and testing, as well as Sprint’s attendance at certain Wallace Morgan, meetings and Sprint’s role in notifying field agents of changes to the SOPs. See PI. Br. at 41-42; PI. Opp. Br. at 22-23.
Sprint’s SOPs do not give rise to an employer-employee relationship. Plaintiffs cite no case demonstrating that such general conduct standards suffice to establish such a relationship. Courts have widely held that “[e]xercising quality control by having strict standards and monitoring compliance with those standards does not constitute supervising and controlling employees’ work conditions.” Godlewska,
The Second Circuit’s recent decision in Saleem v. Corporate Transportation Group, Ltd.,
That Sprint may have conducted or directed evaluations of field agents, monitoring their productivity and compliance, does not establish control, as such quality control efforts differ from day-to-day control. Again, JeanrrLowis is instructive. Plaintiffs there presented extensive evidence of monitoring by Time Warner, including:
that sixteen full-time Time Warner personnel conduct 8,00-900. random quality control assessments per week on, what amounts to some 4% of all jobs; that Time Warner contracts to obtain real-time feedback regarding Metro installations directly from Time Warner customers; that Time Warner uses its assessments and the ECHO results to compile extensive and detailed data regarding these assessments; and that Time Warner provides this data to Metro and discusses it with Metro in monthly meetings.
Evidence that Sprint plаyed, a -limited role in training Wallace Morgan field agents—by requiring initial training and testing, attending meetings where application soliciting strategies were discussed, and communicating SOP updates—also does not establish Sprint’s control over the conditions of their employment. In Jean-Lows, the district court found insufficient evidence that “Time Warner personnel were present at, participated in, and provided materials for some training sessions regarding customer care and new equipment” and that Time Warner “sent Metro ‘Tech Tips’ and other training communications that Metro distributed to technicians.”
Here, it was Wallace Morgan that trained field agents, JSF ¶ 63, gave field agents their work assignments, Sprint 56.1 ¶ 116, and managed and supervised field agents, id. ¶¶ 178-179. While Sprint may have had a degree of influence over field agents’ work, it is not enough to show meaningful control by Sprint over plaintiffs’ work schedules or conditions of employment.
iii. The Rate and Methods of Payment
The Court inquires next whether Sprint set plaintiffs’ rate and method of payment. At the outset, no evidence was adduced that Sprint prohibited or discouraged Wallace Morgan from assigning its employees to work as field agents on the Assurance Wireless¡ campaign. Sprint prohibited Wallace Morgan from subcontracting
Plaintiffs rely on Barfield v. New York City Health and Hospitals Corp.,
The facts of Jacobson v. Comcast Corp. more closely track those here. There, a district court in Maryland rejected technicians’ argument “that Comcast had control over them wages because it paid ... contractors on a per service basis and the contractors, in turn, paid their technicians on a per service basis.”
Comcast does not issue the technicians’ pay checks, pay stubs, or W-2s, nor do the technicians submit pay records or timesheets to Comcast.... To find that th[e] arrangement [to pay contractors on a per service basis] places Comcast in control of [the technicians’] wages would dramatically expand the FLSA to subsume traditional independent contractor relationships.... The [Contractors], not Comcast, determine whether to pay their employees on a per service or salary basis, and at what rate.
Id. (emphasis added); see also Lawrence v. Adderley,
Here, it is undisputed that Wallace Morgan provided plaintiffs with their paychecks and IRS Form 1099s. See PL Counter to Sprint 56.1 ¶ 109. Smith, Wallace Morgan’ owner, testified that “[I]fs me that dеcides what my guys get paid.” Eich-berger Decl., Ex. E, at 206. And although Smith referenced a recommendation from Credico as to field agents’ compensation rate, Smith did not testify that he received any such recommendation from Sprint. Id.
. iv. Records
The Court turns last to whether Sprint maintained plaintiffs’ employment records.
Plaintiffs noté that Sprint had access to a database with information regarding the identities and work locations of field agents, and that Sprint tracked the customer applications that field agents submitted each day. See PI. Br. at 44. But plaintiffs do not dispute the centrally relevant fact: that Sprint “does not maintain traditional personnel records or records of the hours Field Agents work.” PI. Opp. Br. at 35; cf. Barfield,
Accordingly, this final factor does not weigh in favor of a finding of formal control.
None of the four factors favors a finding that Sprint had formal control over plaintiffs. The Court therefore inquires next to the factors bearing on whether Sprint exercised functional control - over plaintiffs.
b. Functional Control
i. Premises and Equipment’
“[W]hether a putative joint employer’s premises and equipment are used by its putative joint employees... is. relevant because the shared use of premises and equipment may support the inference that a putative joint employer has functional control over the plaintiffs’ work.” Zheng,
Here, the record is clear that field agents never used Sprint’s premises. Field agents always reported to work at Wallace Morgan and attended meetings in the Wallace Morgan office. Sprint 56.1 ¶¶ 115,119; JSF ¶ 67. Plaintiffs did not report to or work in any Sprint facility. Sprint 56.1 ¶ 119.
Plaintiffs concede that “Field Agents did not perform work at any of Sprint’s places of business,” but they argue that this factor nonetheless “tilt[s]... slightly in Plaintiffs’ favor” because Sprint “did supply the equipment and Lifeline marketing materials that Field Agents were required to use
In fact, Sprint’s role as a supplier of equipment appears to have been quite limited. Sprint did provide certain marketing materials about the Lifeline Assistance Program to Credico to provide to Wallace Morgan. JSF ¶¶ 63-64. Field agents also “wore either a name tag or an Assurance Wireless t-shirt.” Sprint. Br. at 29, The record does not, however, ■ identify these marketing materials as required equipment for field agents. See JSF ¶ 65 (“Wallace Morgan agents may use the marketing materials ...,”) (emphasis added). And field agents picked up their tablets— the equipment used to upload Lifetime Program applications—from Wallace Morgan, and this equipment was supplied not by Sprint but by Credico. JSF ¶¶ 57-58. Wallace Morgan was financially responsible for any damage or loss of the tablets. Credico 56.1 ¶ 168. Wallace Morgan field agents were responsible for their own transportation; they did not, for example, travel throughout the field in Sprint-provided vehicles. Wallace Morgan 56.1 ¶ 60; Credico 56.1 ¶ 117.
In Jean-Louis, the court found that this factor weighed against a finding of joint employer status despite the fact that the plaintiff technicians visited Time Warner facilities annually to receive Time Warner identification' badges and received from Time Warner a piece of equipment called a “lock box key” “which provided access to cable connections in the field.
, Here, similarly, the fact that Sprint provided limited pieces of equipment is outweighed by the fact that field agents never visited Sprint facilitiеs, never used Sprint-provided transportation, and received their tablets from Wallace Morgan and Credico.
Accordingly, the first functional control factor is not satisfied.
ii. Whether Immediate Employer’s Business Shifts as Unit
The next functional control factor inquires whether Wallace Morgan “had a business that could or did shift as a unit from one putative joint employer to another.” Jean-Louis,
: Here, Wallace Morgan’s Subcontractor Agreement with Credico stated that Wallace Morgan was “under no exclusive arrangement with Credico USA and may provide similar services to other companies or individuals, provided that such other activity does not interfere with the completion of an ongoing project with Credico USA.” First Srey Decl., . Ex.„ 7, at WM000034. Plaintiffs dispute that Wallace Morgan actually provided similar services to other companies or individuals, PI. Counter to Credico 56.1 ¶ 50, but the test here turns on Wallace Morgan’s capability—whether it “could shift as a unit from one putative joint employer to another.” Jean-Louis,
Moreover, as plaintiffs concede, Wallace Morgan worked on Credico campaigns other than Sprint’s. PI. Counter to Sprint 56:1 ¶55 (‘Wallace Morgan contracted with Credico to provide services for three companies: Sprint/Assurance Wireless; Direct Energy; and Verizon.”). While plaintiffs stress that field agents “may only work on one campaign at a time,” id., the relevant question as to this factor is Wallace Morgan’s ability to serve other clients.
Wallace Morgan offered marketing and promotional services for other companies and was under no obligation to offer these services to Sprint alone even only for Credico clients. Accordingly, this factor, too, weighs against a finding of functional control.
iii. Whether Plaintiffs Have Discrete Line Jobs
The third functional control factor “examines the extent to which Plaintiff performed a discrete line job that was integral to the purported joint employer’s process of production. Hugee,
[o]n one end of the spectrum lies piecework on a producer’s premises that requires minimal training or equipment, and ... [o]n the other end of the spectrum lies work that is not part of an integrated' production unit, that is not performed on. a predictable schedule, and that requires specialized skills or expensive technology.
Hugee,
Here, this factor does not signal joint employment. To be sure, field agents’ work is obviously important, and arguably integral, to this aspect of Sprint’s business: field agents solicit Lifeline Program applications, and successful applications yield subsidies for Sprint. But plaintiffs’ manufacturing analogy—they call field agents “the first step in the production line,” PI. Opp. Br. at 42—is strained, as, in fact, plaintiffs admit, see id. (acknowledging that the analogy is “imperfect”). The marketing and outreach services that the field agents provide for Sprint are ultimately just that, services. Cf. Hugee,
Moreover, even where the work performed by a subcontractor’s staff has been closely akin to a line job, the Second Circuit has- “resisted] the temptation to say that any work on a- so-called production line—no matter what product is being manufactured—should attract heightened scrutiny.” Zheng,
Accordingly, the third functional control factor does not favor joint employer status,
iv. Whether the Contractors Are Fungible
The fourth factor examines “whether responsibility under the contracts could pass from one subcontractor to another without material changes.” Zheng,
“[T]he Second Circuit has stated that if the fourth factor ‘weighted] in favor of joint employment when a general contractor uses numerous subcontractors who compete for work and have different employees,’ the fourth factor ‘would classify nearly all subcontracting relationships as joint employment relationships—a result that finds no support either, in the law or in our country’s practices.’ ” Jean-Louis,
This factor is inconclusive. Favoring defendants, it is undisputed that Sprint does not hire field agents; Sprint contracts with OAs, which contract with ISOs, which hire field agents. In finding against joint employment, the court in Jeaiv-Loids noted that, because “the undisputed evidence shows that, rather than hiring technicians, Time Warner hires contractors who hire technicians, all the evidence suggests that when an Installation Company dissolves, technicians wishing to continue working on behalf of Time Warner are required to apply and be hired for a position from another Installation Company.” Id. (internal quotation marks and alterations omitted).
The fourth functional control factor therefore is inconclusive. Unlike the preceding factors, it does not favor a grant of summary judgment to Sprint.
v.Supervision
The fifth functional control factor assesses “the degree to which [Sprint] dr [its] agents supervised plaintiffs’ work.” Zheng,
vi.Exclusive or Predominant Work
The sixth functional control factor assesses “whether plaintiffs worked exclusively or predominantly for [Sprint].” Zheng,
vii.Overall Assessment
Considering the six factors together, only the sixth factor favors plaintiffs’ claim of functional control, whereas four (the first, second; third, arid fifth) favor Sprint’s contrary claim. And even if the Court were to treat the fourth factor as favoring plaintiffs rather than being inconclusive, the balance of factors would still weigh strongly against finding Sprint’s -functional control. See Godlewska,
Accordingly, the Court finds that Sprint neither formally nor functionally controlled Wallace Morgan field agents. Sprint therefore cannot be held liable for the claimed FLSA and NYLL violations as a joint employer.
2. Credico
The Court also finds that Credico neither formally nor functionally controlled plaintiffs,
a. Formal Control
i. Hiring and Firing
As to the first formal control factor, the record reflects that Wallace Morgan alone‘hired and fired field agents. See supra Section III(A)(l)(a)(i).
With respect to the power to hire field agents, plaintiffs argue that Credico hired Wallace Morgan’s owner, Smith, and that “Credico’s power to hire Thomas Smith is indicative of joint employment.” PI. B’r. at 46. Plaintiffs, however, have not adduced evidence establishing that Credico ever hired Smith. Plaintiffs posit that Credico “hired Tommy Smith to provide it with Field Agents who would collect applications for the Assurance Wireless campaign,” PI. Br. at 46 n.9, but they have not cited any case authority to the effect that entry into a subcontracting agreement constitutes a “hiring” of the subcontractor’s owner.
Beyond the fact of a subcontracting agreement between Credico and Wallace Morgan, plaintiffs have adduced no evidence that Credico “hired” Smith. There is no evidence of any employment agreement between Credico and Smith. To be sure, the record does reflect that Credico “works with outside ‘Consultants,’ who' are current or former ISO owners,” that “Consultants work with ISO Owners," and that “Thomas Smith has been [a] Consultant.” JSF ¶¶ 26-27, 30. But plaintiffs have not pointed to evidence connecting Smith’s consulting work for Credico to his operation of Wallace Morgan. There is no evidence that Smith’s consulting services for Credico involved the operation of Wallace Morgan generally or the management— including hiring and firing—of its field agents specifically.
The two cases on which plaintiffs rely in arguing that Credico’s relationship with Smith established Credico’s power to hire and fire the field agents employed by Wallace Morgan are inapposite. The issue in each was instead whether an individual executive of a corporation could be held liable as a joint employer of certain of its employees. In Herman v. RSR Security Services Ltd., the Second Circuit held that a 50% owner of a security guard company was individually liable alongside the company as a joint employer of security guards.
Notably, other than highlighting Credi-co’s ties to Smith, plaintiffs do not present other evidence establishing Credico’s control over .the field-agent hiring process. Credico employees did hot correspond with prospective field agents in setting up their interviews, Credico 56.1 ¶ 65', did not conduct any' interviews of prospective field agents, id. ¶¶ 66-67, did" not determine which specific field agents would be hired, id. ¶69, and did not personally extend offers to field agents, id. ¶70; see also supra Section III(A)(l)(a)(i). And, for the same reasons discussed above as to Sprint, the Court rejects plaintiffs’ claim that Credico’s power to have a Wallace Morgan field agent removed from working on the campaign of a Credico’s client such as Sprint, see JSF ¶ 74; PI. 56.1 ¶ 183; Credi-co Counter 56.1 ¶ 183, meant that Credico had the power to fire such a field agent. See supra Section III(A)(l)(a)(i).
Accordingly, the first formal control factor does not, favor a finding of joint employer status. .
ii. Work Schedules and Conditions
As to the second formal control factor, as reviewed-above, the record- reflects that plaintiffs’ work schedules or conditions of employment were controlled by Wallace Morgan..See supra Section III(A)(l)(a)(ii). Plaintiffs never communicated with anyone at Credico about their work' or their work hours. Credico 56.1 ¶ 99. ,
Plaintiffs’ argument as to this factor focuses on the field agents’ work -conditions rather than on their schedules. See PI. Br. at 47. Plaintiffs argue that Credico supervised and controlled their work conditions because Credico enforced Sprint’s SOPs and created a “Compliance Improvement Plan,” designed to “measure and enforce the Assurance Program Rules.” First Srey Deck, Ex. 17; see PL Br. at 47. Plaintiffs also note that Credico employees attended certain atmosphere meetings, conducted audits, and intervened when certain “high-level escalations” occurred with field agents, such as when "an “agent shot a dog in the field,” PI. 56.1, ¶ 157; Credico Counter 56.1 ¶ 157; Second Srey Deck, Ex. 112 at 85; see PI. Br. at 47. But, as reviewed above, such “quality control” monitoring and enforcement does not constitute supervision and control of work conditions for purposes of this formal control factor. See supra Section III(A)(l)(a)(ii) (citing, e.g., Godlewska,
Accordingly, this second formal control factor also is not satisfied as to Credico.
iii. Rate and Methods of Payment
Plaintiffs argue that Credico controlled field agents’ rate and methods of payment because (1) Wallace Morgan reclassified field agents from independent contractors to outside sales employees on Credico’s advice,, and (2) Credico, created, “Commission Schedules” and “Office Payment Summaries” and sent these documents to Wallace Morgan, and the documents stated that Wallace Morgan must
As to the first point, plaintiffs have not come forward with evidence that the decision how to classify workers was made by anyone other than Wallace Morgan. Smith testified that, in fall 2015, Credico “made a recommendation ... that [Wallace Morgan] agents be classified as employees,” but Smith clarified thаt he alone made the ultimate decision regarding classification, Second Srey Decl., Ex. Ill at 199; see also id. (“I’m the only person that would decide that .... ”), much as he alone had made such decisions before Credico’s recommendation, id. at 203 (“It was all my decision.”). Moreover, Smith testified, to his knowledge, Credico was not aware how Wallace Morgan classified its employees:
Q. So is it your testimony that Credico was not aware of whether Wallace Morgan was classifying its field agents as an independent contractor or an employee?
A. Yes
Id. at 202. And while Credico’s recommendation may have influenced Wallace Morgan’s classification decision, that does not establish control by Credico over that decision. As noted, “the test is whether a putative joint employer determines pay rates, not whether it affects them.” Jean-Louis,
In contrast, Credico’s Commission Schedules and Office Payment Summaries provide stronger support for plaintiffs as to this factor. The Commission Schedules state that “Commissions shall be paid as follows” and then set out specific amounts for an ISO and for the ISO’s representatives. For example, Credico’s August 23, 2013, Commission schedule stated:
Commissions shall be paid as follows:
[[Image here]]
Second Srey Deck, Ex. 95. Credico also presented Office Payment Summaries to Wallace Morgan, listing field agents’ names and amounts of pay for each. Second Sréy Deck, Ex. 98. Plaintiffs also point to a Credico document that states .that “[o]ffices must pay agent commission following the established rates on the commission policy; no deviation on commission should be made.” Second Srey Deck, Ex. 92 at CREDICO-MAR-00014970.
Defendants counter by citing testimony by Smith as well as Credico employees to the effect that, in practice and as understood by Credico and the ISOs, “[t]he rate specified in the commission schedules is merely a suggestion, and the subcontractor owners are free to distribute their payments as they see fit.” Credico Counter 56.1 ¶ 192, Smith testified that he could and did decide payment rates without restriction from Credico, and that he paid agents at rates that went above those set forth in the Credico documents. Williams Deck, Ex. 1 at 87 (“I can pay the [field agents] whatever way I want and whatever amount I wish.”).
There is thus a factual dispute on this issue. It goes to the heart of this formal control factor. If Credico’s Commission Report rates were mandatory, then Credi-co exercised control over field agents’ rate of payment. If, however, these rates were merely suggestions, and if both Credico and Wallace Morgan understood that Wallace Morgan was free to set pay rates without pushback from Credico, then such control did not clearly rest in Credico’s hands. On summary judgment, the Court cannot resolve that dispute. For purposes of each side’s cross-motion on the joint employment issue, the Court must assume,
As to Qredico’s motion, however, the fact that the third factor is construed against it does not preclude a finding that Credico did not exercise formal control over plaintiffs. Where the formal control factors considered as a whole clearly disfavor a finding of such control,, the Court may so find. In Godlewska, for example, the district court held that the first, second, and fourth formal control factors weighed against formal control while the third factor was inconclusive.
[T]he [formal control] test is not satisfied because the [defendant] did not have the power to hire and fire, did not supervise and control plaintiffs’ schedules and conditions of employment, and did not maintain employment records. In light of my finding that the first, second, and fourth [formal control] factors are not satisfied, the record’s ineonclusiveness as to the third [formal control] factor is immaterial.
Id. The Court accordingly—having held that the first and second factors disfavor formal control—turns to the fourth factor. Should that factor, too, not be satisfied, that Credico may have determined the pay rates and methods of Wallace Morgan field agents would not preclude entry of summary judgment. See id.
iv. Records
Plaintiffs argue that Credico maintained employment records because it (1) tracked each field agent’s pay, and (2) required certain training and maintained records of field agents’ training. PL Br. at 49. The parties do not dispute that Credico maintains a file containing each agent’s name, photograph, independent sales representative agreement, and background check results. PI. 56.1 ¶¶ 219-220; Credico Counter 56.1 ¶¶ 219-220.
However, Credico, like Sprint, “never ‘maintained employment records on the matter most relevant to overtime obligations under the FLSA: the hours worked’ by individual [field agents].” Jean-Louis,
Moreover, Sprint’s SOPs required Cred-ico to keep records of information such as background check results and training records “for auditing and compliance reasons.” First Srey Deck, Ex. 6 at SPRMAR-000030. Where a putative joint employer’s activities with respect to employment records constitutes “only an extension of... quality control procedures,” this formal control factor is not satisfied. Godlewska,
Accordingly, the fourth formal control factor does not favor joint employer status. Because the first and second factors are likewise unsatisfied, Credico did not exercise formal control of Wallace Morgan field
b. Functional Control
i.Premises and Equipment
As to whether plaintiffs used Credico’s premises, the record is clear that plaintiffs never reported to or worked at any Credico office. Credico 56.1 ¶ 101. Neither Singleton nor Martin could name a single person who worked at Credico’s office. Id. ¶ 103. Singleton also testified that she did not even know where Credico’s office was located. Id. ¶ 102.
As to whether Credico’s equipment was used by plaintiffs, it is undisputed .that Credico supplied certain. equipment—the tablets that plaintiffs used to collect applications—and that plaintiffs picked up these tablets at the Wallace Morgan office before heading out into the field each day. JSF ¶¶ 57-58.
This functional control factor is therefore inconclusive. The lack of use of premises weighs against a finding of functional control, but the use of Credico equipment weighs in favor.
ii.Whether Immediate Employer’s Business Shifts as Unit
Wallace Morgan had a business that could or did shift as a unit from one putative joint employer to another. This factor therefore does not favor a finding of functional control. See supra Section IH(A)(l)(b)(ii).
iii.Whether Plaintiffs Have Discrete Line Jobs
Given the nature of plaintiffs’ work, as providers of a service rather than as discrete line job workers, the third functional control factor also does not favor a finding of functional control, notwithstanding the importance of field agents generally to Credico’s operations. See supra Section IH(A)(l)(b)(iii),
iv.Whether the Contractors Are Fungible
Because plaintiffs have identified some evidence that could support an inference that fiеld agents “would continue' [providing outreach services for Credico] if [Cred-ico] severed its relationship with [Wallace Morgan],” Jean-Louis,
v.Supervision
As addressed in connection with the second formal control factor, plaintiffs have not adduced evidence- sufficient to support a finding that Credico played a significant role in supervising plaintiffs; rather, Wallace Morgan controlled plaintiffs’ day-today schedules and work conditions. See supra Section III<A)(2)(a)(ii).
vi.Exclusive or Predominant Work
During the relevant time period, plaintiffs only worked on Sprint’s Assurance Wireless campaign,. as subcontracted through Credico. This factor therefore favors a finding of functional control. See supra Section III(A)(l)(b)(vi).
vii.Overall Assessment
Ultimately, after analyzing the relevant functional control factors, the Court finds that, “on balance,” Godlewska,
Accordingly; although the joint employer question as to Credico presents a closer question than as to Sprint, the Court finds that Credico, too, neither formally nor functionally controlled Wallace Morgan field agents. It therefore cannot be held liable for the claimed FLSA and NYLL violations as a joint, employer.
B. The Outside Sales Exception
The next issue raised by the cross-motions is whether, even if plaintiffs were employees rather than independent. contractors, the outside sales exception to the FLSA and NYLL apply.
1. Applicable Legal Standards
The FLSA’s minimum wage and maximum hour requirements for the payment of employees do not apply to “an employee etaployed ... in the capacity of an outside salesman.” 29 U.S.C. § 213(a)(1). The NYLL incorporates this “outside sales” exception. See NYLL § 651 (“ ‘Employee’ includes any individual employed or permitted to work by an employer in any occupation, but shall not include any individual who is employed or рermitted to work ... as an outside salesman[.]”); see also Kinney v. Artist & Brand Agency LLC, No. 13 Civ. 8864 (LAK) (DF),
“ ‘An employee employed in the capacity of an outside salesman’ is an employee (1) whose ‘primary duty* is ‘making sales,’ or ‘obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer,’ ” and (2) “ ‘[w]ho is customarily and regularly engaged away from the employer’s place or places of business in performing such primary, duty.’.” Kinney,
“Primary duty” refers to “the principal, main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700(a).
“A sale ‘includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.’ ” Flood v. Just Energy Mktg. Corp., No. 15 Civ. 2012 (KBF),
“Courts also consider whether the employee bears indicia of an outside salesperson.” Flood,
2. Discussion
For the reasons that follow, the Court holds that plaintiffs fall under the outside sales exemption because (1) the field agents’ primary duty was sales, (2) the field agents customarily and regularly engaged in that primary duty away from Wallace Morgan’s place of business, and (3) the field agents bore the indicia of outside salespeople.
a. Sales as Primary Duty
There is no material dispute of fact as to field agents’ primary duty. The field agents solicited and collected applications for wireless phones and services from individuals seeking to enroll in the Lifeline Program through Sprint’s Assurance Wireless brand. JSF ¶ 52.
This work involved the following: field agents approached potential Assurance Wireless applicants, engaged them with a “pitch” about Assurance Wireless, provided informаtion regarding Lifeline Program services, asked questions, and uploaded applications via tablet. PI. 56.1 ¶ 60; Sprint 56.1¶ 164; PI. Counter to Sprint 56.1 ¶ 164; Credico 56.1 ¶ 148; PI. Counter to Credico ¶ 148.
As noted, a potential recipient of Lifeline Program services may receive only one Lifeline Program enrolled mobile phone per household. JSF ¶ 35. Sprint’s SOPs therefore required field agents to “ask potential applicants if they currently have a lifeline phone with [Assurance Wireless] or any other carrier” and “if they have applied with [Assurance Wireless] or any lifeline carrier recently.” PI. 56.1¶ 62; Sprint Counter 56.1 ¶ 62.
Plaintiffs were incented to collect as many successful applications as possible, and to encourage their targets to enroll in the Lifeline Program through Sprint as opposed to through some other telecommunications carrier, because plaintiffs were paid on a commission basis for approved applications, PI. 56.1 ¶ 82; Credico Counter 56.1 ¶82, and were also paid a commission if an applicant switched over to Assurance Wireless from a competing Lifeline Program service provider, Credico 56.1¶ 184.
The parties dispute, however, whether this work is properly characterized as sales. This question, one of applying law to fact, is for the Court. See Flood,
Plaintiffs make two principal arguments why their work as field agents seeking to induce applicants to enroll in the Lifeline Program via Sprint’s particular brand of products and services did not constitute sales. First, they note, the field agents did not obtain a binding commitment from the potential applicant. As plaintiffs note, there was never a contract between Sprint and a qualified applicant, and at the point the field agent engaged with the applicant, defendants had not extended a binding offer to the applicant to provide him or her with a phone nor yet made a decision whether the applicant was eligible under the Lifeline Program to receive one. See PI. Br. at 30-31, 35. Second, plaintiffs note, the products and services that the field agents promoted to applicants were ultimately provided free of charge to qualifying applicants. Standard talk minutes and text messages on the phones provided were free, and while an enrollee could later purchase additionаl minutes or messages,
Plaintiffs’ first argument fails because an employee need not have created binding sales or orders to be considered an outside salesperson. “There is nothing in the FLSA or the NYLL that limits the definition of an outside salesperson to someone who has the unfettered discretion to finalize a binding sale.” Flood,
Judge Forrest’s decision in Flood v. Just Energy Marketing Corp. is instructive. There, the plaintiff brought FLSA and NYLL claims on behalf of himself and other door-to-door workers who solicited new accounts for Just Energy Marketing Corp., Just Energy New York Corp., and Just Energy Group, Inc. (collectively, “Just Energy”), companies which marketed and sold gas and electricity.
Here, as in Flood, plaintiffs’ efforts were plainly directed towards the consummation of a sale. Field agents’ job involved persuading potentially qualifying customers to fill out an application for Lifeline Program services and to induce current Lifeline Program enrollees to switch to Sprint’s Assurance Wireless brand from other Lifeline Program service providers that competed with Sprint.. If the customer was found qualified, he or. she would receive products and services from Sprint, and the field agent would receive a commission. See Sydney v. Time Warner Entertainment-Advance/Newhouse P’ship, No. 13 Civ. 286 (FJS),
Plaintiffs’ second argument is based on the fact that the qualifying applicants did not themselves pay money to Sprint for its products and services. Instead, as beneficiaries of the Lifeline Program, they received Sprint’s products and services gratis. But Sprint was otherwise compensated for its each consummated sale: It was paid subsidies by the federal government— through USAC—for providing these products and services pursuant to the Lifeline Program. The field agents’ classification as exempt outside salespeople is not precluded by the fact that a third party, the government, paid the agents’ principal, Sprint. For purposes of the outside sales exemption, there is no requirement that payment to outside salespeople come directly from the customer. See Christopher
Accordingly, the Court finds that the field agents’ primary duty while working at Wallace Morgan was sales.
b. Away From Employer’s Place or Places of Business
It is undisputed that the field agents spent the majority of their work hours performing their duties in the field, away from the Wallace Morgan office. Sprint 56.1 ¶¶170; PI. Counter to Sprint 170. Accordingly, as plaintiffs concede, see PI. Br. at 29 n.2, plaintiffs meet the outside sales exemption’s requirement that they be “ ‘customarily and regularly engaged away from [Wallace Morgan’s] place or places of business in performing [their] primary duty.’ ” Kinney,
c. Indicia of Outside Salesperson
The field agents also bore many indicia of outside salespeople. They independently solicited new business in the form of new applications for Lifeline Program services through Assurance Wireless. They received a commission-based salary. Sprint 56.1 ¶¶ 173-74. The field agents “worked away from the office, with minimal supervision, and they were rewarded.for their efforts with incentive -compensation.” Christopher,
These characteristics of the field agents’ work resemble the circumstances of Chenensky v. New York Life Insurance Co., in which the district court found that the outside sales exemption applied where the plaintiff “solicited new business, presented available prоducts to prospects, obtained a commitment to purchase, and ultimately received a commission-based salary.”
Similarly, in Nielsen v. Devry Inc., a district court in Michigan held j;hat the outside sales exemption applied to “field representatives” employed by Devry, Inc., “a for-profit company that provides career-oriented, technology-based higher education at more than 25 campuses nationwide.”
To be sure, compared to some outside salespeople, the work of Wallace Morgan field agents was not inherently “unsuitable to an hourly wage,” see PI. Opp. Br. at 52: Inasmuch as the field agents had to report to the Wallace Morgan office at the beginning and end of each workday to receive and return their tablets, JSF ¶¶ 58, 70-71, an hourly wage arrangement was presumably administratively feasible. The presence of ample other “hallmark activities”
Accordingly,-the Court holds that, even if plaintiffs were employees of Wallace Morgan, they were exempt under the FLSA and NYLL as outside salespeople.
C. Employees vs. Independent Contractors
The third and .final issue raised by the cross-motions for summary judgment is whether plaintiffs were properly classified as independent contractors rather than employees under the FLSA and NYLL.
Were the Court to have occasion to reach this issue, -the well-established 'standards under the FLSA and NYLL would govern.
The FLSA defines an “employee” as “any individual employed by an employer”; it defines “employ” as “to suffer or permit to work” 29 U.S.C. §§ 203(e)(1), 203(g). “The definition is,necessarily a broad one in accordance with the remedial purpose of the Act.” Brock v. Superior Care,
The Second Circuit has adopted an “economic realities” tеst to determine, under the FLSA, whether an individual is an employee or an independent contractor. The factors considered include:
(1) the degree of control exercised by the employer over the workers, (2) the workers5 opportunity for profit or loss' and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship, and (5) the extent to which the work is an integral part of the employer’s business.
Brock,
The NYLL’s definition of “employee” is nearly identical. Compare 29 U.S.C.A § 203(e)(1) (“[T]he term, ‘employee’ means any individual employed by an employer.”), with NYLL § 190(2) (“ ‘Employee’ means any person employed for hire by an employer in any employment”). “Employer” is also defined similarly in the two statutes. Compare 29 U.S.C. § 203(d) (“ ‘Employer’ includes any person acting directly or indirectly in the interest of an-employer in relation to an employee ....”), with NYLL § 190(3) (“ ‘Employer’ includes any person, corporation, limited liability company, or association employing any individual
“A determination of whether a worker qualifies as an employee under the NYLL depends upon factors such as whether he or she ‘(1) worked at his [or her] own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer’s payroll, and (5) was on a fixed schedule.’ ” Thomas v. TXX Servs., Inc.,
Although FLSA and NYLL labor law analyses are separate, “[t]here is general support for giving FLSA and the New York Labor Law consistent interpretations.” Topo v. Dhir, No. 01 Civ. 10881 (PKC),
Here, in light of the preceding rulings, there does not appear to be any occasion, under either statute, to examine whether plaintiffs, as field agents, were employees or independent contractors. The Court’s ruling that the “outside sales exemption” applies precludes plaintiffs’ minimum wage and overtime claims. And plaintiffs’ claims against Sprint and Credico are separately interred by the Court’s ruling that, even if plaintiffs were employees of Wallace Morgan, neither Sprint nor Credico was a joint employer.
There is, however, one open question, which is whether plaintiffs’ wage notice claims under the NYLL against Wallace Morgan remain viable in light of the finding that the outside sales exemption applies. The SAC asserts claims under two NYLL wage-notice provisions. SAC ¶¶ 199-206. First, under the NYLL, “[e]very employer” is required to provide each employee “at the time of hire” with written notice that includes her rate of pay, the basis for that pay rate, the regular pay day designated by the employer, and other related information. NYLL § 195(l)(a). Second, under the NYLL, employers also are required to provide notice “with every payment of wages” that includes the dates of work covered by that payment, rates of pay, and deductions, among other information. NYLL § 195(3).
Plaintiffs’ and Wallace Morgan’s submissions on the cross-motions for summary judgment do not squarely address whether
Accordingly, for the time being, the Court leaves open the question whether summary judgment is merited in favor of Wallace Morgan on plaintiffs’ NYLL wage-notice claims. To enable a resolution of that claims, the Court instead commissions limited briefing from the affected parties (plaintiffs and Walláce Morgan) on these questions: (1) Under the NYLL, where the outside sales exemption applies, is an employer nevertheless bound to comply with the statute’s wage-notice provisions (§§ 195(l)(a) and (3))? And, (2) if so, how do the parties wish to proceed with respect to these claims? (E. g., do plaintiffs wish to pursue these claims? With the federal claims now eliminated, ought the Court exercise supplemental jurisdiction over these state-law claims?). The Court directs plaintiffs to file a letter-memorandum as to these points within two weeks. Wallace Morgan’s letter-memorandum in response is due one week later.
CONCLUSION
For the foregoing reasons, the Court (1) denies plaintiffs’ motion for partial summary judgment and (2) grants’ defendants’ cross-motions for summary judgment. The effect of this ruling is to grant summary judgment for Sprint and Credico on all claims against them, and to grant summary judgment for Wallace Morgan on all claims against it, save for plaintiffs’ wage-notice claims under the NYLL, as to which the Court commissions supplemental briefing. As discussed here, plaintiffs’ letter-memorandum as to the NYLL wage-notice claims is due two weeks from the date of this decision, and Wallace Morgan’s letter-memorandum as to those claims is due one week thereafter.
The Clerk of Court is respectfully directed to terminate the motions pending at Dkts. 197, 232, 234, 238, 240, 263, 271, 274, and 289.
SO ORDERED.
Notes
. The Court draws its account of the underlying facts of this case from the parties’ submissions in support of and in opposition to this motion, including: plaintiffs' memorandum of law in support of the motion for partial summary judgment, Dkt. 264 (“PI. Br.”); plaintiffs’ Local Rule 56.1 statement, Dkt. 265 ("PI. 56.1”); the declaration of Rachhana Srey in support of plaintiffs’ motion for partial summary judgment, Dkt. 266 ("First Srey Deck”); Sprint’s memorandum of law in support of its cross-motion for summary judgment and in opposition to plaintiffs’ motion for partial summary judgment, Dkt. 272 ("Sprint Br.”); Sprint’s Local Rule 56.1 statement, Dkt. 273 ("Sprint 56.1 ”); Sprint’s counter-statement to plaintiffs’ Local Rule 56.1 statement, Dkt. 279 (“Sprint Counter 56.1”); the declaration of Nicole A. Eichberger in support of Sprint’s cross-motion for summary judgment and in opposition to plaintiffs' motion for partial summary judgment, Dkt. 276 ("Eichberger Decl.”); Credico’s memorandum of law in support of its .cross-motion for summaty judgment and in opposition to plaintiffs’ motion for partial summary judgment, Dkt. 278 ("Credico Br.”); Credico’s Local Rule 56.1 statement, Dkt. 280 ("Credico 56.1”); Credi-co’s counter-statement to plaintiffs' Local Rule 56.1 statement, Dkt. 281 ("Credico Counter 56.1’’); the declaration of Greta B. Williams in support of Credico’s motion for summary judgment and in opposition to plaintiffs’ motion for partial summary judgment, Dkt. 283 ("Williams Decl.”); Wallace Morgan’s memorandum of law in support of its cross-motion for summary judgment and in opposition to plaintiffs’ motion for partial summary judgment, Dkt. 290 ("Wallace Morgan Br."); the declaration of Joseph F. Tremi-ti in support of Wallace Morgan’s cross-motion for summary judgment and in opposition to plaintiffs’ motion for partial summary judgment, Dkt. 291 ("Tremiti Decl.”); Wallace Morgan’s Local Rule 56.1 statement, Dkt. 293 ("Wallace Morgan 56.1”); plaintiffs' memorandum of law in opposition to defendants’ cross motions for summary judgment and reply in support of plaintiffs' motion for partial summary judgment, Dkt. 305 ("PI. Opp. Br.”); plaintiffs’ counter-statement to Sprint’s Local Rule 56.1 statement, Dkt. 301 ("PI. Counter to Sprint 56.1”); plaintiffs’ counter-statement to Credico’s Local Rule 56.1 statement, Dkt. 302 ("PI. Counter to Credico 56.1”); plaintiffs’ counter-statement to Wallace Morgan’s Local Rule 56.1 statement, Dkt. 300 ("Pi. Counter to Wallace Morgan 56.1"); the affidavit of Rachhana Srey in opposition to defendants’ cross-motions for summary judgment, Dkt. 303 ("Srey Aff.”); the declaration of Rachhana Srey in opposition to defendants’ cross-motions for summary judgmént, Dkt. 304' ("Second Srey Decl.”); Sprint's reply memorandum of law in support of its cross-motion for summary judgment, Dkt. 311 (“Sprint Rep. Br.”); the declaration of Elise M. Bloom in support of Sprint’s cross-motion for summary judgment, Dkt. 312 ("Bloom Decl.”); Sprint’s reply Local Rule 56.1 statement, Dkt. 313 ("Sprint Rep. 56.1”); Credi-co’s reply memorandum of law in support of its cross-motion for summary judgment, Dkt. 314 (“Credico Rep. Br.”); Wallace Morgan’s reply memorandum of law in support of its cross-motion for summary judgment, Dkt. 315 ("Wallace Morgan Rep. Br.”); and the parties’ joint statement of undisputed facts, Dkt. 259 ("JSF”).
Plaintiffs object to the declaration of Vincent Buongiovanni in support of Sprint’s cross-motion for summary judgment and in opposition to plaintiffs’ motion for partial summary judgment, Dkt. 277 ("Buongiovanni Decl.”), as inadmissible under Federal Rule of Civil Procedure 26, see Pi. Counter to Sprint's 56.1 at 2. This dispute is moot, because the Court did not rely on that declaration in reaching its decision on the cross-motions for summary judgment.
Citations to a party’s Rule 56.1 statement incorporate by reference the documents cited therein. Where facts stated in a party's Rule 56.1 statement are supported by testimonial or documentary evidence, and denied by a conclusory statement by the other party without citation to conflicting testimonial or documentary evidence, the Court finds such facts true. See S.D.N.Y. Local Rule 56.1(c) ("Each numbered paragraph in the statement of material facts set forth in the statement required to be served by the moving patty will be deemed to be admitted for purposes of the motion unless specifically controverted by a correspondingly numbered paragraph in the statement required to be served by the opposing party.”); id. at 56.1(d) ("Each statement by the movant or opponent... controverting any statement of material fact[ ] must be followed by citation to evidence which would be admissible, set forth as required by Fed. R. Civ. P. 56(c).”).
The parties’ counter-statements of facts mark certain statements as "disputed” but, instead of identifying an actual factual inconsistency, often only offer additional context or dispute the relevance of the underlying facts. Where these counter-statements do not identify a true factual dispute, the Court treats the statement as undisputed.
. Credico’s other clients include, but are not limited to, Verizon, Direct Energy, and AT&T. Credico 36.1 ¶ 4,
. The subcontractor . agreement between Credico and Wallace Morgan stated, inter alia, that Wallace Morgan must (1) comply “with all applicable federal, state, county, and local laws, ordinances, regulations and codes”; (2) “comply and have its own employees comply with the Credico USA Code of Business Ethics and Conduct," as well 'as "any Credico USA Client Dress Code, Conduct Policy, and Operational Requirements”; (3) "[a]dher[e] to any Client pre-conditions to performing Services, such as drug testing and background checks with authorized providers and compliance with Client branding”; (4) "[t]rain[] its employees in accordance with Credico USA's -Client requirements which may include, but is not limited to, attending class periodically”; and (5) "[s]olicit[] business on behalf of Credico USA Clients regarding their products or services ... using the techniques and information as set out in Credico USA Clients’ Training Guides.” Cred-ico 56.1 ¶¶ 52-55,
. Field agents cannot work on the Assurance Wireless campaign withоut an Agent ID, Id. ¶ 181.
. Sprint did not issue or assign any tablets, but it did provide certain marketing materials about the Lifetime Assistance Program to Credico to provide to Wallace Morgan. JSF ¶¶ 63-64.
. -Sprint's SOPs provided that "exemptions may be obtained ... for pennission to dress in professional attire instead of wearing [Assurance Wireless] t-shirts.” PI. 56.1 ¶ 49,
. Smith testified he did not pay all field agents exclusively on commission, and that some agents were paid on a guarantee basis, meaning "they would malte a minimum amount each week no matter how many sales they did or how much time they worked.” Credico Counter 56.1 ¶ 82
. These are weeldy averages, not the amounts paid each week. As Credico emphasizes, the undisputed evidence does not establish that plaintiffs had uniform daily or weekly schedules. Credico Counter 56.1 ¶ 83.
. Under the OA Agreement, should an audit identify a breach of the SOPs, “Sprint requires Wallace Morgan to promptly develop a corrective action plan and submit it to Sprint for review and approval.” PI. 56.1 ¶ 139. Sprint may suspend Wallace Morgan’s activities until the correction is made if the breach cannot be corrected in a timely manner. Id.
. Credico identifies this factual allegation as "[disputed in part as misleading’’ because ”[t]he ‘mystery shop’ assessments do not involve an evaluation of Field Agent job performance” but instead focus on compliance with Sprint SOPs, Credico Counter 56,1 ¶ 144, The Court treats Credico as having admitted the factual allegation in Paragraph 144 of plaintiffs' 56.1 statement because Cred-ico’s Counter 56.1 Statement does not identify a true factual dispute, Plaintiffs' statement directly states that, during mystery shops, mystery shoppers "observe whether the Field Agent is performing his/her job in compliance with Sprint's SOPs." PI. 56.1 ¶ 144 (emphasis added). While other portions of Plaintiff’s 56.1 statement do assert more broadly that "Sprint,.. monitors Plaintiffs’ job performance” through the mystery shops, see PI. 56.1 ¶ 143, Paragraph 144 does not contain such an assertion,
. The Circuit has held that, “if plaintiffs can prove that, as a historical matter, a contracting device has developed in response to and as a means to avoid applicable labor laws, the prevalence of that device may, in particular circumstances, be attributable to widespread evasion of labor laws.” Id. at 73-74. Plaintiffs have not made any such showing in this case.
. To the extent plaintiffs imply that that Smith's consulting' work for Credico made him a Credico employee, there is testimony to the contrary: .Credico employee Ilina Kravtchenko testified that consultants "are not employees of Credico. They’re Usually ISO owners,” Williams Decl., Ex, 8, at 235.