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Herrera v. South Valley Floors, Inc.

United States District Court, D. Utah, Central Division

March 27, 2019

MARCELINO HERRERA and MARVELL QUINONES, Plaintiffs,
v.
SOUTH VALLEY FLOORS, INC., a Utah corporation; RYAN MAXWELL, an individual; and SHANNON MAXWELL, an individual, Defendants. SOUTH VALLEY FLOORS, INC., a Utah corporation; RYAN MAXWELL, an individual; and SHANNON MAXWELL, an individual, Counterclaim Plaintiffs,
v.
MARCELINO HERRERA, an individual, Counterclaim Defendant.

          ORDER AND MEMORANDUM DECISION

          TENA CAMPBELL U.S. DISTRICT COURT JUDGE

         Plaintiffs Marcelino Herrera and Marvel Quinones worked on carpet installation projects that Defendant South Valley Floors, Inc. arranged for its customers. Defendants Ryan Maxwell and Shannon Maxwell are the principals of South Valley Floors.

         After a dispute arose about pay, Mr. Herrera and Mr. Quinones filed this suit for unpaid overtime, unpaid minimum wages, and retaliation in violation of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 207 and 216. They also filed supplemental state law claims of unjust enrichment and intentional infliction of emotional distress.

         The parties filed cross-motions for summary judgment focusing primarily on the issue of whether the Plaintiffs were “employees” under FLSA (a threshold requirement for FLSA protection). For the reasons set forth below, the court finds that neither Mr. Herrera nor Mr. Quinones has met his burden to establish that he was an employee of the Defendants. Accordingly, the Defendants' request for judgment on the Plaintiffs' FLSA and related state law claims is GRANTED.

         PROCEDURAL BACKGROUND

         The Defendants filed a motion for summary judgment in which they asserted, among other things, that the FLSA claims must be dismissed because the Plaintiffs were not “employees” under the FLSA and so the statute does not apply. Plaintiffs filed a cross-motion for summary judgment and an opposition brief, in which they presented evidence that they were indeed employees as defined by FLSA.

         The court heard oral argument on the motions. The court initially determined that genuine disputes of material fact existed on the question of whether each of the Plaintiffs was an employee under FLSA. Because the issue is a question of law for the court, Dole v. Snell, 875 F.2d 802, 805 (10th Cir. 1989), the court could not let the Plaintiffs' FLSA claims proceed to a jury. Rather, the court had to resolve those factual disputes.

In deciding whether an individual is an employee or an independent contractor under the FLSA, a district court acting as a trier of fact must first make findings of historical facts surrounding the individual's work. Second, drawing inferences from the findings of historical facts, the court must make factual findings with respect to the [factors courts typically analyze when making a decision on this threshold issue.] Finally, employing the findings with respect to [those] factors, the court must decide, as a matter of law, whether the individual is an “employee” under the FLSA.

Baker v. Flint Eng'g & Constr. Co., 137 F.3d 1436, 1440 (10th Cir. 1998) (emphasis added).

         Resolution of those factual disputes could not be accomplished without live testimony to clarify the facts and assess witness credibility. To that end, the court held an evidentiary hearing limited to the issue of whether Mr. Herrera and Mr. Quinones were employees of South Valley Floors.[1]

         Now, having reviewed the record created at the evidentiary hearing, case law, and the parties' motions, the court finds that neither Mr. Herrera nor Mr. Quinones has satisfied his burden to show that he was an employee of South Valley Floors.

         FACTS

         SVF's Business

         South Valley Floors (SVF) sells flooring materials such as carpet and tile. SVF gets multiple orders each week in which the customer does not request installation. But at the customer's request, SVF installs the flooring materials. For those customers, SVF schedules the installation job with the customer and then schedules the job with an installer such as Mr. Herrera.

         Shannon Maxwell is the President of SVF and manages the business's affairs. She does not go to the installation job sites. Ryan Maxwell, Ms. Maxwell's husband, goes to the installation sites to measure the amount of flooring needed for the job. Occasionally he travels to sites when a customer calls or raises an issue or concern. He does not tell the installers how to install the flooring.

         Mr. Herrera's Tenure at SVF and Other Flooring Companies

         SVF did not train Mr. Herrera how to install carpet or any other flooring materials. Mr. Herrera learned how to install carpet when he was in California from 1998 to 2000.

         Beginning in December 2010, Mr. Herrera began doing installation projects for SVF. Mr. Herrera said “I used to work for Blyle [sic] but [Ryan Maxwell] told me he was going to give me more work so I started working for him.” (Tr. of Aug. 30, 2018 Evid. Hr'g at 86 (“Tr.”), ECF No. 100.)

         On average, Mr. Herrera performed between three to five installation jobs per week for SVF during the time he worked exclusively for SVF. But he did not start out working that often for SVF. Beginning in 2011, his work with SVF was slow. But as 2013 neared, the amount of work he did for SVF gradually increased, and, beginning in 2014, he spent essentially all of his time installing flooring for SVF customers.

         Based on a review of the SVF's check ledger (Ex. A), it appears that when he began at SVF, he was paid sporadically during 2011 and 2012. Typically, SVF issued checks of varying amounts approximately two to three times a month during 2011.

         In 2012, he worked three jobs for SVF totaling $968. In 2013, the amount of work increased, although checks were issued on an inconsistent basis, and the amounts varied.[2] But in 2014, 2015, and 2016, the number, dates, and check amounts increased to a point that it appears he was working almost exclusively for SVF.[3] In all, SVF paid Mr. Herrera approximately $320, 000 before he quit in June 2016.

         During the years he worked for SVF, he did work for other flooring companies. In 2012 and 2013, Mr. Herrera worked for Bleyl and Sons, which, apart from SVF, formed a significant portion of his income during that time. In 2013, he had constant work, splitting his time between SVF and Bleyl. But in 2014, as his worked increased up at SVF, his work at Bleyl slowed and eventually he focused on SVF. He did one small job for Bleyl in 2015. After he left SVF in June 2016, his work became more regular at Bleyl. (Ex. C.)

         Apart from Bleyl and SVF, Mr. Herrera worked periodically for other flooring companies. In 2016, he did some small jobs for Garden Gate Wholesale Flooring, Inc. (Ex. D.) In the summer of 2016, he completed three jobs for Western Wholesale Flooring, Inc., earning $5, 200. (Ex. E.) He worked on a few jobs for Po Boyz Karpet, Inc. in 2013, 2016, and 2017. (Ex. F.) And in July 2016, he did two installation jobs for Pro Floors of Utah. (Ex. G.) But otherwise, SVF was the main source of income for Mr. Herrera.

         Mr. Quinones' Involvement

         Marvell Quinones, who is Mr. Herrera's neighbor, never contacted SVF to ask if it had any work available and never submitted an application for employment to SVF. SVF did not offer employment to Mr. Quinones and nobody from SVF told Mr. Quinones he was “hired.”

         Instead, Mr. Herrera recruited Mr. Quinones to work with him at SVF job sites because he needed Mr. Quinones' help and Mr. Quinones needed work. He did not obtain permission from the Maxwells to bring Mr. Quinones to SVF job sites. Mr. Herrera briefly introduced Mr. Quinones to Mr. Maxwell and told him that Mr. Quinones would be working alongside him. Mr. Maxwell did not object. SVF never prohibited Mr. Herrera from bringing other installers with him to job sites.

         Mr. Quinones performed work at SVF job sites with Mr. Herrera from March 2016 to June 4, 2016. Mr. Herrera taught Mr. Quinones how to install carpet. He traveled to the SVF job sites with Mr. Herrera, and he never performed flooring installation work without Mr. Herrera. According to Mr. Quinones, “I was just there to do the jobs that-to help [Mr. Herrera] with the jobs they gave to him.” (Tr. at 62.)

         Mr. Herrera considered Mr. Quinones to be his employee. At the completion of each installation project, Mr. Herrera paid Mr. Quinones $100 in cash per day of work.

         Assignment of Jobs

         During the time Mr. Herrera installed flooring for SVF, SVF relied on approximately twenty-five to thirty flooring installers, of which ten to fifteen were carpet installers. SVF never told Mr. Herrera or other installers that they were prohibited from working elsewhere.

         SVF paid its installers a varying piece rate on a per-project basis. This is an industry standard. During its busy season, SVF had five to six carpet installers out on installation jobs on a daily basis.

         After an SVF customer purchased flooring and asked that it be installed, Ms. Maxwell would begin texting or calling her list of carpet installers at three o'clock in the afternoon to see who was available to do the job. “I would schedule it with the customer and then I would schedule it with the installer the night before.” (Tr. at 131.) If an installer said no, she would drop down the list. “We would be calling … whoever to fill that job.” (Id. at 138.) “[T]hat's why you have 25 installers.” (Id.)

         Based on customers' installation completion deadlines, Ms. Maxwell tried to meet those deadlines based on her knowledge of how much each installer could handle on any given day. Occasionally, SVF installers needed an additional day.

         The flooring industry standard is to treat carpet installers as independent contractors. According to Ms. Maxwell, “installers will come in and ask do you have any work? And because we have to play that game of the night before, I will take installers, you know, whatever I can get.” (Id. at 143.) When asked whether it would have been “a bit easier if you had your own captive crew, ” she responded, “Yes, but installers don't want that. They want to be able to float and make their own hours ….” (Id. at 143-44.)

         Mr. Herrera was on that list of installers. Although SVF added him to that list in 2010, he left and came back “quite a few times over the years.” (Id. at 158.) He floated between flooring companies. But, as described above, beginning in 2014, he spent the vast majority of his time with SVF. According to Mr. Herrera, he ...


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