Rеginald GRAY; Jammie Hill; Marcus Holmes, Plaintiffs-Appellees v. Roy Patton, Jr.; Tom Skundrich, Jr., Plaintiffs James Tichenor; Carl Tucker, Plaintiffs-Appellees Rick Hendricks, Plaintiff Bobby Brown; Michael Jost; Rich Mitchell, Plaintiffs-Appellees Mike Sheffer, Plaintiff John Waweru, Plaintiff-Appellee Kevin Pour; Jamie Tenison; Seid Huskic; Bob Candella; Michael Light; Mike Sanders; Bob Arbutti; Ken Stibor; Gary Austin; Don Blackmon; Robert Hansen; Bob O‘Keefe; Luther McLain; Bob Lee Baker; Dave King, Plaintiffs v. FEDEX GROUND PACKAGE SYSTEM, INC., Defendant-Appellаnt
No. 14-3232
United States Court of Appeals, Eighth Circuit
August 21, 2015
799 F.3d 995
John Edward Toma, Jr., argued, Gulf Breeze, FL (Stacy Ann Burrows, Catherine R. McLeod, Kansas City, MO, on the brief), for Plaintiffs-Appellees.
Before GRUENDER, MELLOY, and BENTON, Circuit Judges.
Across the country, FedEx drivers have sued to prove that they are employees, not
But here we need not answer that question. Here the district court granted partial summary judgment to plaintiffs, finding no gеnuine dispute that they were FedEx employees, even though under Missouri law employment status is an issue of fact. The question for us is thus only whether a reasonable jury could disagree and conclude that plaintiffs were independent contractors. We hold that it could, and we therefore reverse and remand.
I.
FedEx Ground Package System, Inc., contracts with operators to take packages from its terminals and then, in the familiar white trucks and vans, deliver those packages to homes and businesses. FedEx divides the country into thousands of territories, each assigned to an operator who makes deliveries there. Plaintiffs in this appeal are all former operators who allege that they should have been treated as employees. They claim that FedEx defrauded them as to their employment status, thereby denying them benefits such as overtime pay аnd workers’ compensation.
Plaintiffs entered into substantively identical operating contracts with FedEx, contracts that had several important features. Operators were not required to drive personally. Rather, they could hire others, subject to FedEx‘s qualifications, to drive for them. The operators also received a proprietary interest in servicing their territories, an interest that they could sell to others, again subject to FedEx‘s approval. FedEx could not fire the operators at will during their contract terms of one, two, or three years, but it could fire them for cause, and it could choose not to renew their contracts for any reason. Operators provided their own vehicles. FedEx paid them based on (among other things) the numbers of packages and stops serviced. And FedEx managers
Notwithstanding that label, plaintiffs produce a host of allegations that they say shows that they were employees. FedEx required that operators’ vehicles meet certain specifications; that the vehicles bear FedEx‘s logo; and that the vehicles be painted not just white, but “FedEx White.” Operators could not make personal use of their vehicles without covering up the FedEx logo. They had to provide proof of inspection and maintenance. Drivers had to wear a FedEx uniform, and FedEx even required that their personal appearances be up to “reasonable standards of good order.” Drivers were subject to background, credit, and drug checks. They had to use FedEx package scanners. And, plaintiffs say, FedEx really did control how drivers delivered packages, down to hours worked.
For the most part, plaintiffs’ stories are similar. Bobby Brown operated with FedEx Ground from its inception in 2000 until 2006, working one territory until 2003 and another from 2003 until 2006. At one point, Brown had another driver covering his first territory for him. He eventually bought an interest in a new territory from another operator. In 2006, he sold his interest in the second territory.
Reginald Gray bought his territory and a van from another operator in 2002. He formed a limited liability company and paid another plaintiff, Marcus Holmes, to drive a second van. Later he had another plaintiff, Jammie Hill, drive. He used other drivers as needed. Gray sold his territory to another operator in 2006.
Michael Jost operated with FedEx Ground from its inception until 2003. He claims that FedEx forced him to sell his territory, which he did, for about $25,000.
Richard Mitchell operated from 2002 until 2004. He serviced his territory through a company he created. In the last few months of his tenure, he paid a replacement driver. He sold his territory for $2,500.
James Tichenor operated from 2004 to 2006. He serviced his territory through a limited liability company. He sold his territory for $23,500.
Carl Tucker operated from 2003 to 2006. Like Reginald Gray, he paid Jammie Hill to drive for him. He sometimes paid other drivers as well. He sold his territory.
John Waweru operated from 2001 to 2003. He paid plaintiff Marcus Holmes to drive for him for three or four months. Waweru sold his territory as well.
Marcus Holmes, as already mentioned, began his relationship with FedEx by driving for other plaintiffs. He then became an operator himself in 2003 when he took оver another operator‘s territory. Holmes sometimes paid temporary drivers to drive for him. He sold his territory and a vehicle for about $40,000.
Finally, Jammie Hill also began his relationship with FedEx by driving for other plaintiffs. He became an operator in 2004. He sometimes used temporary drivers, one of which he hired to work Fridays and Saturdays. Whether Hill sold his route is unclear from his deposition testimony.
In 2006, this suit was brought in the United States District Court for the Eastern District оf Missouri. The suit was then transferred to a multi-district litigation proceeding in the United States Dis-
For our purposes, the case proceeded in Missouri as follows. FedEx and plaintiffs cross-moved for summary judgment on employment status, and the court granted partial summary judgment to the plaintiffs, ruling that they were employees as a matter of Missouri law. The nine plaintiffs here then won at trial. A jury, instructed that the plaintiffs were employеes, found that FedEx had defrauded them, denying them each tens of thousands of dollars in benefits by treating them as independent contractors. FedEx now appeals the grant of partial summary judgment on employment status as well as an evidentiary ruling from the trial. It does not attempt to appeal the partial denial of its own motion for summary judgment or otherwise argue that plaintiffs were independent contractors as a matter оf law.
II.
We review grants of summary judgment de novo, viewing the facts in the light most favorable to the nonmoving party. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir.2011) (en banc). Summary judgment is proper only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Because Missouri law governs this diversity suit, “we are bound by the decisions of the Supreme Court of Missouri.” United Fire & Cas. Co. v. Titan Contractors Serv., Inc., 751 F.3d 880, 883 (8th Cir.2014) (quoting Dannix Painting, LLC v. Sherwin-Williams Co., 732 F.3d 902, 905 (8th Cir.2013)). If that court “has not addressed an issue” of state law, we predict how it “would rule, and we follow decisions from the intermediate state courts when they are the best evidence of Missouri law.” Id. (quoting Dannix, 732 F.3d at 905).
In Missouri, in contrast to the law of some other states, employment status is a question of fact. Compare Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853, 857 (8th Cir.2010), with, e.g., Fesler v. Whelen Eng‘g Co., 688 F.3d 439, 442 (8th Cir.2012) (applying Iowa law). In other words, a court applying Missouri law may decide the employment statuses of FedEx operators on summary judgment only “when the material facts are undisputed and ‘only one reasonable conclusion can be drawn’ from those facts.” Huggins, 592 F.3d at 857 (emphasis added) (quoting Johnson v. Bi-State Dev. Agency, 793 S.W.2d 864, 867 (Mo.1990)); see Benham v. McCoy, 213 S.W.2d 914, 919 (Mo.1948).
1. The Extent of Control
Here the extent of control under the contracts does not, as a matter of law, weigh in favor of employee status. It is true that, under the contracts, FedEx could control many aspects of operators’ work, including even the shadе of paint on the vehicles and the appearances of drivers.3 Yet we cannot say that every reasonable jury would find that this factor favors employee status.
First, much of plaintiffs’ argument applies only to drivers, not necessarily to operators. Nothing in the contracts required operators to drive personally. So the idea that FedEx could control days and hours of work and even “the types of shoes and сolor socks” that operators could wear is simply wrong. Under the contracts, operators had to make their drivers meet certain standards. They did not have to meet the standards themselves unless they were driving.
Second, and more important, the contracts gave not just restrictions but privileges as well. Operators did not need to deliver packages themselves; they could, subject to FedEx‘s qualifications, hire others to do it fоr them. Employees usually do not hire other people to do their jobs. See Skidmore v. Haggard, 341 Mo. 837, 110 S.W.2d 726, 727-28, 731, 733 (1937) (upholding a verdict that a newspaper route operator was an independent contractor where, among other things, he “had the right to accomplish [delivery] by substituting ... other drivers and did do so“). Nor are employees usually able to buy and sell their jobs. See id. at 731 (explaining that the sale of a newspaper route was “surely ... inconsistent with the relаtion of master and servant“). Yet the
Finally, some aspects of the contracts could suggest that plaintiffs were either employees or independent contractors, depending on one‘s point of view. Consider FedEx‘s ability to supervise its operators by sending managers to ride in the operators’ vehicles up to four times a year. Plaintiffs see this as evidence of FedEx‘s control. Yet employees are often subject to supervision daily — whenever managers decide to supervise them — not just four times a year. A reasonable jury сould as easily say that being subject to supervision only four times a year is evidence of independence.
We need not decide whether this factor (or any factor) suggests that plaintiffs were independent contractors as a matter of law. Rather, we simply conclude that a reasonable jury could decide that this factor weighs for independent-contractor rather than employee status.
2. Actual Control
For similar reasons, we conclude that the actual extent of FedEx‘s control also suggests at least a genuine dispute. Again, there remains evidence that FedEx controlled the order and timing of deliveries and demanded compliance with a host of details. But there is also evidence that FedEx exercised different levels of control over each plaintiff. Considered individually, plaintiffs do not show, as a matter of law, that FedEx actually controlled them. Several plaintiffs serviced their territories through companies they had formed. Six paid others to drive for them. And all nine, except perhaps Jammie Hill, sold their territories, some for thousands or tens of thousands of dollars. On this record, a reasonable jury could conclude that FedEx‘s lack of actual control over plaintiffs suggests that they were independent contractors. See generally Skidmore, 110 S.W.2d 726.
3. Employment Duration
“Independent сontractors are typically hired to complete a specific task....” Howard v. City of Kansas City, 332 S.W.3d 772, 781 (Mo.2011). Here plaintiffs contracted for terms of one, two, or three years. Even the plaintiff who operated for the shortest time period, Robert Mitchell, operated for a year and nine months. The Missouri Court of Appeals has concluded that a relationship of about a year and a half supports a finding of employment. Nunn, 151 S.W.3d at 401-02. Though there are independent contractors who have worked for longer, a year and nine months, or more, spent on the ongoing task of delivering packages suggests that plaintiffs were employees.
4. Right to Discharge
“The ability to discharge a worker at-will suggests that the worker is an employee....” Kirksville Publ‘g Co. v. Div. of Emp‘t Sec., 950 S.W.2d 891, 899 (Mo.Ct.App.1997) (considering the Internal Revenue Service‘s twenty-factor test for employment status). Inversely, an inability to discharge a worker at will suggests that the worker is an indeрendent contractor. See id. While its operating agreements were in effect, FedEx could terminate its relationships with plaintiffs essentially only for cause. And the Missouri Court of Appeals has found that a less restrictive requirement, a provision requiring only thirty days’ notice before an otherwise at-will dismissal, supported independent-contractor status. See id. On its face, then,
Nonetheless, the district court focused on FedEx‘s ability to let plaintiffs’ contracts lapse for any reason. But plaintiffs were only rarely subject to the risk of being non-renewed without cause — once a year at most. We cannot say, as a matter of law, that this meant FedEx could effectively fire plaintiffs at will. Accordingly, a reasonable jury could find that this factor favors independent-contractor status.
5. Method of Payment
In the abstraсt, the methods of paying employees and independent contractors are distinct. “Independent contractors ... are paid a fixed sum on a by-the-job basis,” and employees are paid a salary, usually hourly or annual. Howard, 332 S.W.3d at 781-82. Here, however, there was a hybrid method under which FedEx paid plaintiffs based on stops made, packages handled, and other factors. In similar circumstances, the Missouri Court of Appeals has cоncluded that the method-of-payment factor “definitely falls in favor of finding an independent contractor relationship,” where, among other things, a trucker was paid “based on the mileage and weight of his hauls.” Nunn, 151 S.W.3d at 391, 401. Given the hybrid payment scheme here and the view of the Missouri Court of Appeals, a reasonable jury could find that this factor favors independent-contractor status.
6. Furnishing Equipment
Workers who provide their own equipment are morе likely to be independent contractors; workers for whom equipment is provided are more likely to be employees. Skidmore, 110 S.W.2d at 730; see Nunn, 151 S.W.3d at 401-02. Here, plaintiffs, not FedEx, provided their own vehicles and dollies. See Nunn, 151 S.W.3d at 391, 401-02 (finding that this factor favored independent-contractor status where a trucker provided the majority of his equipment, including his truck). Yet FedEx also required uniforms and scanners, items that it offered for sale to plaintiffs. And, of course, FedEx provided the entire underlying distribution network. Because plaintiffs did provide a key instrumentality, the vehicles, a reasonable jury could find that this factor weighs for independent-contractor status.
7. The Extent to Which the Work Is the Regular Business of the Employer
FedEx‘s business is delivering packages, and there would be no business without operators like plaintiffs. This factor undisputedly favors employee status. See Burgess v. NaCom Cable Co., 923 S.W.2d 450, 454 (Mo.Ct.App.1996) (finding employment where, among other things, employer “would have no business purpose if the work of the [employees] did not occur“).
8. The Label Used in the Employment Contracts
The contracts label the plaintiffs as independent contractors. This factor undisputedly favors independent-contractor status. See Nunn, 151 S.W.3d at 402 (considering a contractual designation that a worker was an independent contractor).
In sum, then, only two factors, (3) employment duration and (7) FedEx being a delivery business, support a finding that plaintiffs were employees as a matter of law. The remaining six factors suggest a genuine dispute. These include the two most important factors, (2) actual control and (1) the right to control. See Shell Oil Co., 922 S.W.2d at 764. At least one factor, (8) the contract label, undisputedly suggests that plaintiffs were independent contractors. On this record, the district
This conclusion is consistent with Huggins, a decision in which we considered the employment status of a different kind of FedEx Ground operator. 592 F.3d at 857-61. The district court there had ruled that the operator was an independent contractor as a matter of law. Id. at 857. We reversed, holding that “the evidence — including the terms of the written agreement, [plaintiff‘s] declaration, and the documents showing that FedEx tested [the operator] and checked into his background before he was hired — would support a reаsonable inference and thus a jury finding that FedEx ... was his employer.” Id. at 861. But we also explained that there was “certainly record evidence tending to show that [the operator] was an independent contractor.” Id. Ultimately, all we held was that summary judgment was improper where the evidence was mixed. Id. We similarly hold that summary judgment was improper here.
Finally, we reject plaintiffs’ comparisons to their favored cases — cases in different procedural or legal posturеs. We are not, for example, reviewing whether substantial evidence supports a trial court‘s determination after a bench trial. See, e.g., Estrada, 64 Cal.Rptr.3d at 331, 336. However, this appeal is similar to a recent one from the Eleventh Circuit. See Carlson, 787 F.3d 1313. Relying on factors similar to the eight here, our sister circuit reviewed a grant of summary judgment to FedEx under Florida law, which also treats employment status as a question of fact. Id. at 1317-19; see Nunn, 151 S.W.3d at 400. The Eleventh Circuit concluded thаt “there are facts that support FedEx‘s position and there are facts that support the Florida drivers’ position. Given the summary judgment posture of the case, we do not think it is appropriate for us to figure out what weight to give these conflicting facts....” Carlson, 787 F.3d at 1326. Similarly, we think the district court here erred in granting summary judgment to plaintiffs.
III.
Again, we do not hold that plaintiffs were independent contractors. That issue is not before us. We merely hold that on this rеcord, where plaintiffs could hire others to do their jobs and where they sold their jobs to others, there remains a genuine dispute as to whether plaintiffs were employees or independent contractors. That issue should have been submitted to the jury. We thus do not reach FedEx‘s evidentiary argument regarding the trial. We reverse the grant of summary judgment and remand for further proceedings.4