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JULIANNE EISENBERG, Plaintiff-Appellant, v. ADVANCE RELOCATION & STORAGE, INC., ADVANCE RELOCATION & STORAGE OF CONNECTICUT, INC., WHEATON WORLD WIDE MOVING, B. NILSSON MOVING AND STORAGE, INC., AND MOLLOY BROTHERS MOVING AND STORAGE COMPANY, Defendant-Appellees.
Docket No. 00-
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
237 F.3d 111; 2000 U.S. App. LEXIS 33954; 84 Fair Empl. Prac. Cas. (BNA) 1210; 79 Empl. Prac. Dec. (CCH) P40,
September 13, 2000, Argued December 26, 2000, Decided
SUBSEQUENT HISTORY: [**1] As Amended January 10, 2001. As Amended March 8,
PRIOR HISTORY: Appeal from a judgment of the United States District Court for the Southern District of New York (William C. Conner, Judge) granting defendants' motion for summary judgment and dismissing the complaint on the ground that plaintiff was not an "employee" within the meaning of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e- 2, et seq. ("Title VII") and New York Human Rights Law, Exec. Law §§ 290, et seq. ("NYHRL"). We hold that, in determining whether a worker is an employee within the meaning of Title VII and the NYHRL, courts ordinarily should place particular weight on the extent to which the hiring party controls the manner and means by which the worker completes her assigned tasks, rather than on how she is treated for tax purposes or whether she receives benefits.
DISPOSITION: REVERSED judgment of the District Court, and REMANDED cause to the District Court for further proceedings consistent with the opinion.
CASE SUMMARY
PROCEDURAL POSTURE: Plaintiff appealed from the judgment of the United States District Court for the Southern District of New York, which granted defendants' motion for summary judgment and dismissed plaintiff's complaint on the ground that plaintiff was not an "employee" within the meaning of Title VII of the Civil Rights Act of 1964, 42 U.S.C.S. § 2000e-2 et seq., and New York Human Rights Law, N.Y. Exec. Law § 290 et seq.
OVERVIEW: Plaintiff alleged that she was subjected to a hostile work environment while working for defendants, that her termination was discriminatory, and that defendants retaliated against her for complaining about the violation of her right to be free of sexual harassment, in violation of Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C.S. § 2000e-2 et seq., and New York Human Rights Law (NYHRL), N.Y. Exec. Law § 290 et seq. The district court granted defendants' motion for summary judgment, holding that plaintiff was not an "employee," and was not protected under Title VII or the NYHRL. Plaintiff appealed, and judgment was reversed and remanded because it was error to not place particular weight on the extent to which defendant controlled the manner and means by which plaintiff completed her assigned tasks, rather than on how plaintiff was treated for tax purposes or whether she received benefits. Plaintiff was an unskilled laborer paid on an hourly basis. She did not use her own truck or tools, and she was not hired for any particular project. Finally, plaintiff did not appear to have had any substantial discretion over how to complete her assigned tasks.
OUTCOME: Judgment reversed and remanded. In determining whether a worker is an employee within the meaning of Title VII of the Civil Rights Act of 1964 and the New York Human Rights Law, courts ordinarily should place particular weight on the extent to which the hiring party controls the manner and means by which the worker completes her assigned tasks, rather than on how she is treated for tax purposes or whether she receives benefits.
CORE TERMS: independent contractors, warehouse, hiring, hired, skill, common law, right to control, tax treatment, intellectual property, anti-discrimination, assigned tasks, accomplished, truck, tax purposes, collecting, employment contract's, work-for-hire, balancing, creator, crew, sexual harassment, remaining factors, de novo, specialized, enumerated, exemption, weighing, storage, hourly, waive
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Business & Corporate Law > Agency Relationships > Agents Distinguished > Independent Contractors, Masters & Servants > Independent Contractors Governments > Courts > Common Law Labor & Employment Law > Discrimination > Title VII of the Civil Rights Act of 1964 > Coverage & Definitions > Employees HN1 (^) Title VII of the Civil Rights Act of 1964, 42 U.S.C.S. § 2000e-2 et seq., and the New
York Human Rights Law, N.Y. Exec. Law § 290 et seq., cover "employees," not independent contractors. For the purposes of these statutes, a decision on whether a worker is an "employee," or whether he or she is merely an independent contractor, requires the application of the common law of agency. In turn, whether a hired person is an employee under the common law of agency depends largely on the thirteen Reid factors.
Business & Corporate Law > Agency Relationships > Agents Distinguished > Independent Contractors, Masters & Servants > General Overview Copyright Law > Ownership Interests > Works Made for Hire HN2 (^) In determining agency, the Reid factors are as follows: (1) the hiring party's right to control the
manner and means by which the product is accomplished; (2) the skill required; (3) the source of the instrumentalities and tools; (4) the location of the work; (5) the duration of the relationship between the parties; (6) whether the hiring party has the right to assign additional projects to the hired party; (7) the extent of the hired party's discretion over when and how long to work; (8) the method of payment; (9) the hired party's role in hiring and paying assistants; (10) whether the work is part of the regular business of the hiring party; (11) whether the hiring party is in business; (12) the provision of employee benefits; and (13) the tax treatment of the hired party.
Business & Corporate Law > Agency Relationships > Agents Distinguished > Independent Contractors, Masters & Servants > General Overview Labor & Employment Law > Employment Relationships > Independent Contractors HN3 (^) In balancing the Reid factors, a court must disregard those factors that, in light of the facts of a
particular case, are (1) irrelevant or (2) of "indeterminate" weight; that is, those factors that are essentially in equipoise and thus do not meaningfully cut in favor of either the conclusion that the worker is an employee or the conclusion that he or she is an independent contractor.
COUNSEL: DANIEL J. SCHNEIDER, Newburgh, NY, for Plaintiff-Appellant.
VINCENT TOOMEY, Lake Success, NY, for Defendants-Appellees.
BARBARA L. SLOAN, Equal Employment Opportunity Commission, Office of General Counsel, Washington, DC, for Amicus [**2] Curiae Equal Employment Opportunity Commission.
JUDGES: Before: CABRANES and PARKER, Circuit Judges, and CEDARBAUM, District Judge. *.
- The Honorable Miriam Goldman Cedarbaum, of the United States District Court for the Southern District of New York, sitting by designation.
OPINION BY: JOSE A. CABRANES
OPINION
[*112] JOSE A. CABRANES, Circuit Judge:
We consider the question of whether the plaintiff-appellant is an "employee" within the meaning of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-2, et seq. ("Title VII"), and New York Human Rights Law, Exec. Law §§ 290, et seq. ("NYHRL"). We hold that, in determining whether a worker is an employee within the meaning of Title VII and the NYHRL, courts ordinarily should place particular weight on the extent to which the hiring party controls the manner and means by which the worker completes her assigned tasks, rather than on how she is treated for tax purposes or whether she receives benefits. Accordingly, we reverse the judgment of the District Court and remand for further proceedings. I.
Unless otherwise noted, the following facts are not disputed. In July 1998, Julianne Eisenberg [*3] ran into an old acquaintance, Peter White, who was accompanied by another man, Mike Ewing. Both men worked at Advance Relocation & Storage, Inc. ("Advance"), a Danbury, Connecticut warehouse-White was involved in Advance's hiring process, and Ewing was the warehouse manager. The men discussed with Eisenberg the possibility of her working on a "permanent full-time" basis at Advance. They did not inquire into any [113] special skills that Eisenberg may have had, and they did not ask about her prior work experiences. Instead, Eisenberg believed, the men were interested in her working at the warehouse because White knew that she was strong, having played football with her, and that she had been doing carpentry work" for many years.
Soon after her conversation with White and Ewing, Eisenberg reported for work at Advance. There, she and her co-workers were responsible for loading and unloading furniture from trucks at the warehouse and at residences. They were paid on an hourly basis, and were required to punch in and out. Eisenberg and her co-workers were occasionally sent home early if there was little to do, and they were sometimes asked to work on the weekend.
At the warehouse, "Pete was [**4] [the] boss"--he gave Eisenberg "orders," and if he was not going to be at the warehouse on a particular day, he told her on the prior day "where..
. to go and what.. to do." At job sites, an Advance representative--White, Ewing, or someone else--"would direct the crew as to what objects each [crew member, including Eisenberg,] was to move.
Eisenberg claims that during much of the time that she worked at Advance, she was sexually harassed. She asserts that on September 16, 1998, she complained about this alleged sexual harassment to Joan Isaacson, the Advance office manager; Eisenberg also alleges that she told Isaacson that she had seen several Advance employees using cocaine in the warehouse.
The warehouse was closed by management the next day. Eisenberg then met again with Isaacson, at which point Isaacson allegedly told her that she would receive a job when the warehouse re-opened, and would be contacted and told when to return to work. Isaacson then assertedly advised Eisenberg that she would not receive a job at Advance if, based on her allegations of sexual harassment, she sought legal counsel or filed a complaint. Undeterred, Eisenberg hired an attorney and initiated [**5] this action. She claims that she has not been called by Issacson or anyone else at Advance regarding a position at the firm.
Eisenberg's complaint alleges that she was subjected to a hostile work environment at Advance, that her termination from the firm was discriminatory, and that defendants retaliated against her for complaining about the violation of her right to be free of sexual harassment--all in violation of Title VII and the NYHRL. Following discovery, defendants moved for summary judgment, and the District Court granted their motion, holding that Eisenberg was not an Advance "employee," and thus could not invoke the protections of Title VII or the NYHRL. See Eisenberg v. Advance Relocation and Storage, Inc.,^ 82 F. Supp. 2d 241 (S.D.N.Y. 2000). Judgment was entered accordingly, and this timely appeal followed. II. A.
HN1 (^) Title VII and the NYHRL cover "employees," not independent contractors. See O'Connor
v. Davis, 126 F.3d 112, 115 (2d Cir. 1997) (Title VII); Scott v. Massachusetts Mut. Life Ins. Co., 86 N.Y.2d 429, 633 N.Y.S.2d 754, 756, 657 N.E.2d 769 (1995) (the NYHRL). For the purposes of these statutes, a [*6] decision on whether a worker is an "employee"--or whether he or she is merely an independent contractor--requires the application of the common law of agency. See O'Connor, 126 F.3d at 115 (Title VII); Tagare v. Nynex Network Sys. Co., 994 F. Supp. 149, 159 (S.D.N.Y. 1997) (the NYHRL) (collecting New York cases). In turn, whether a hired person is an employee under the common law of agency depends largely on the thirteen factors articulated by the Supreme Court in Community for Creative Non-Violence v. Reid, 490 U.S. 730, [114] 104 L. Ed. 2d 811, 109 S. Ct. 2166 (1989). 1 See O'Connor, 126 F.3d at 115; Tagare, 994 F. Supp. at 159 (noting that the factors consulted to determine whether a hired party is an employee under the NYHRL "largely mirror those weighed in Title VII claims") (collecting cases). These so-called "Reid factors," which are culled from the federal common law of agency, see Reid, 490 U.S. at 740-41, are as follows:
HN2 (^) [1] the hiring party's right to control the manner and means by which the product is accomplished... [;] [2] the skill required; [3] the [**7] source of the instrumentalities and tools; [4] the location of the work; [5] the duration of the relationship between the parties; [6] whether the hiring party has the right to assign additional projects to the hired party; [7] the extent of the hired party's discretion over when and how long to work; [8] the method of payment; [9] the hired party's role in hiring and paying assistants; [10] whether the work is part of the regular business of the hiring party; [11] whether the hiring party is in business; [12] the provision of employee benefits; and [13] the tax treatment of the hired party. Id. at 751-52 (footnotes omitted).
- - - - - Footnotes - - - - - - - - - - - - - - - 1 Other relevant factors may also be considered, see, e.g., Frankel v. Bally, Inc., 987 F.2d 86, 90 (2d Cir. 1993) (describing Reid's "agency test" as "offer[ing] a non-exhaustive list of factors to be considered"), so long as they
- - - - - Footnotes - - - - - - - - - - - - - - - 2 Although Frankel was an Americans with Disabilities Act ("ADA") case, we have observed that "the definition of 'employee' under the ADA parallels that under Title VII and was intended to be given the same meaning." Castellano v. City of New York, 142 F.3d 58, 69 (2d Cir. 1998) (internal quotation marks omitted). - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - B.
HN6 (^) The District Court's determination as to "the presence or absence" of each Reid factor is
a finding of fact which we review for clear error. Aymes, 980 F.2d at 860-61. [**12] HN The District Court's "ultimate determination" as to whether a worker is an employee or an independent contractor--that is, the District Court's balancing of the Reid factors--is a question of law which we review de novo. Id. at 861.
At oral argument, the parties informed us that they do not object to the District Court's factual findings. Rather, the parties dispute only the conclusions that the District Court drew from the facts that it found, and its ultimate balancing of the Reid factors. Accordingly, our review of the District Court's judgment is both limited and de novo. C.
The District Court did not place the "greatest emphasis" on the first Reid factor, as required. Rather, it noted that in Aymes v. Bonelli, a work-for-hire copyright case, 3 we "relied heavily" on two of the Reid factors--namely, the "employee benefits" factor (number 12) and the "tax treatment" factor (number 13). See Eisenberg, 82 F. Supp. 2d at 246. Taking a perceived cue from Aymes's emphasis on these factors, the District Court held that Eisenberg, who did not receive benefits and was not treated as an employee for tax purposes, was [**13] an independent contractor. We disagree.
- - - - - Footnotes - - - - - - - - - - - - - - - 3 In such cases, an individual creates a copyrightable work for a firm, and no contract allocates the respective intellectual property rights of the creator and the firm. When one party claims the copyright in the work, the court must determine with reference to the common law of agency whether the creator was a firm employee (in which case the copyright usually belongs to the firm) or whether the creator was an independent contractor (in which case the copyright usually belongs to the individual creator). See generally 17 U.S.C. § 201(b); Aymes , 980 F.2d at 860. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
Aymes does indeed emphasize the presumptive significance of five of the Reid factors, including those related to benefits [116] and tax treatment. However, we have never applied this weighing of the Reid factors outside of the copyright context, and we decline to do so here because of an important difference between the work-for-hire doctrine and anti- discrimination [*14] law.
Were Reid's benefits and tax treatment factors accorded extra weight, as they were in Aymes, a firm and its workers could all but agree for themselves, simply by adjusting the structure of workers' compensation packages, whether the workers will be regarded as independent contractors or employees. For example, workers who would otherwise be characterized as employees could accept a relatively larger salary in exchange for foregoing benefits and not having tax payments deducted from their wages. As the District Court's decision makes clear, in most such cases the employment contract's no-benefits and no- taxdeduction clauses would be decisive, and the workers would be regarded as independent contractors. Cf. J. Huizinga Cartage Co. v. NLRB, 941 F.2d 616, 620 (7th Cir. 1991) ("If an employer could confer independent contractor status through the absence of payroll
deductions there would be few employees falling under the protection of the [National Labor Relations] Act." (emphasis added)).
In the copyright context, such a result presents no difficulty. By contract, a worker and a firm may agree that the worker will or will not have intellectual property [15] rights to items that she makes while working for the firm. See 17 U.S.C. § 201(b) ("In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright."). Such agreements are controlling regardless of whether, in their absence, a worker would be characterized as an employee or an independent contractor. Indeed, in copyright work-for-hire cases, the question of whether a worker is an employee or an independent contractor arises only after the court has determined that the parties did not agree on the allocation of intellectual property rights. See, e.g. Aymes, 980 F.2d at 860 ("It is undisputed that [the worker] and [the firm] never signed a written agreement assigning ownership rights.... We must therefore consider whether the program was a work prepared by [the worker] as an employee within the scope of his employment." (emphasis added)). We interpret Aymes as standing for the proposition that [16] a worker and a firm can enter into a contract that explicitly delineates who holds intellectual property rights to worker-created items, see 17 U.S.C. § 201(b), and concomitantly a worker and a firm may by contract arrange the incidents of their particular relationship-whether benefits will be provided, how workers will be treated for tax purposes, etc.--in a way that substantially determines who holds the intellectual property rights to worker-created items.
While the rights to intellectual property can depend on contractual terms, see id., the right to be treated in a non-discriminatory manner does not depend on the terms of any particular contract. Rather, these "public law" rights were vested in workers as a class by Congress, and they are not subject to waiver or sale by individuals. See Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 737-38, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981) (describing Title VII as creating "nonwaivable, public law right[s]"); Alexander v. Gardner-Denver Co., 415 U.S. 36, 51, 39 L. Ed. 2d 147, 94 S. Ct. 1011 (1974) ("There can be no prospective waiver of an employee's [*17] rights under Title VII.... Title VII's strictures are absolute and represent a congressional command that each employee. be free from discriminatory practices.... Waiver of these rights would defeat the paramount congressional purpose behind Title VII."). Accordingly, [117] a firm cannot buy from a worker an exemption from the substantive protections of the anti-discrimination laws because workers do not have such an exemption to sell, and any contractual term that purports to confer such an exemption is invalid. Cf Cole v. Burns Int'l Sec. Servs., 323 U.S. App. D.C. 133, 105 F.3d 1465, 1482 (D.C. Cir. 1997) ("Clearly, it would be unlawful for an employer to condition employment on an employee's agreement to give up the right to be free from racial or gender discrimination. Any such condition of employment would violate Title VII[.]" (internal citations omitted)); Kendall v. Watkins, 998 F.2d 848, 851 (10th Cir.
- (explaining that an employee may not waive Title VII rights that have not yet accrued); EEOC v. Townley Eng'g & Mfg. Co., 859 F.2d 610, 616 (9th Cir. 1988) (similar). See generally McClure v. Salvation Army, 460 F.2d 553, 557 (5th Cir. 1972) [**18] (" HN Employment contracts cannot be used to waive protections granted to employees by an Act of Congress." (citing J.I. Case Co. v. NLRB, 321 U.S. 332, 337, 88 L. Ed. 762, 64 S. Ct. 576 (1944))).
If Aymes's weighing of the Reid factors applied in the context of the anti-discrimination laws, workers and firms would be able to devise compensation packages that included a nobenefits clause and a no-tax-deductions clause, thereby all but insuring that workers are characterized as independent contractors, and permitting them to opt out of the anti- discrimination laws. See ante [at 16]. But the core, substantive protections of the
White gave Eisenberg "orders" on a daily basis; if he was not going to be at the warehouse on a particular [**22] day, he told her on the prior day "where... to go and what... to do." Moreover, at job sites, an Advance representative--White, Ewing, or someone else-- "would direct the crew as to what objects each [crew member, including Eisenberg] was to move."
As to the second factor, Eisenberg's job at Advance--loading and unloading trucks--was not one that required relatively specialized skills. Other courts have held that the level of skill associated with being an architect, computer programmer, graphic artist, photographer, or treasurer suggests that workers who perform these jobs are independent contractors. See id. at 862 (collecting cases); Keller v. Niskayuna Consol. Fire Dist. 1, 51 F. Supp. 2d 223, 228 (N.D.N.Y. 1999). In terms of the level of skill that it required, Eisenberg's moving work was not analogous to any of these jobs. Indeed, in this case White and Ewing all but offered Eisenberg a job without first asking her about moving-related work that she had done in the past, or about relevant skills that she might have developed over the years. See ante at [112-13]. That White seemed to view Eisenberg as qualified for the job solely [**23] on the basis of her football and carpentry abilities, see id. , only emphasizes the point: While simple moving of the sort Eisenberg performed certainly requires skills--strength, for example, and agility--it does not demand specialized skills of the sort typically acquired through experience and/or education. 5 See Aymes, 980 F.2d at 862 (holding that the "level of skill" involved in a computer programmer's work suggested that he was an independent contractor because "his programming demanded that he use skills developed while a graduate student... and through his [work] experience").
- - - - - Footnotes - - - - - - - - - - - - - - - 5 Of course, some moving jobs may well require specialized skills. See, e.g., Lanigan Storage & Van Co. v. United States, 389 F.2d 337, 341 (6th Cir. 1968). Our point here is only that the particular moving work that Eisenberg performed did not require such skills. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
As to the third and fourth factors, the District Court found that "Advance supplied all of the [**24] [necessary] instrumentalities," including "trucks and other supplies," and that "the majority of plaintiff's work took place at Advance's warehouse or on Advance's trucks." Each of these findings suggests that Eisenberg was an Advance employee.
As to the sixth factor, the District Court found that Eisenberg "was not hired for a specific move or project." Instead, the District Court found that Eisenberg was assigned to numerous moves or projects," and was required "to perform work on [*119] Advance's trucks and in its warehouse, on whatever moves or projects Advance undertook while she was there." This finding bolsters the conclusion that Eisenberg was an employee. See id. 980 F.2d at 863 HN9^ ("Independent contractors are typically hired only for particular projects...
As to the eighth factor, the District Court found that Eisenberg was paid on an hourly basis. HN10 (^) Compensation primarily or exclusively on the basis of time worked (rather than on the
basis of projects completed) suggests that a worker is an employee. See id. As to the ninth and tenth factors, the District Court found that Advance is "in the business of moving and storage" so that Eisenberg's work was "in the regular business [**25] of Advance," and that, "obviously, Advance is a business." Each of these findings favors characterizing Eisenberg as an employee. See id.
The weighing of these factors, which is a question of law reviewed de novo, see id. at 860- 61 , demonstrates that the scale tips decisively toward the conclusion that Eisenberg was an employee. Eisenberg was an unskilled laborer paid on an hourly basis whose job required
her to perform the very tasks--moving and storage--that were at the heart of Advance's business. She did not use her own truck or tools, and she was not hired for any particular project. Most importantly, Advance exerted close, pervasive control over Eisenberg--she does not appear to have had any substantial discretion over how to complete her assigned tasks. Indeed, the only evidence that suggests that Eisenberg was an independent contractor was Advance's tax treatment of her services and its decision not to provide her with certain benefits. These facts, which have little to do with the day-to-day reality of Eisenberg's relationship to Advance, cannot counter-balance, much less outweigh, the combined weight of the remainder of the evidence. Therefore, we conclude that [**26] Eisenberg was an "employee" within the meaning of Title VII and the NYHRL. III.
For the reasons stated above, we hold that in determining whether a worker is a covered employee within the meaning of Title VII and the NYHRL, special weight should ordinarily be placed on the extent to which the hiring party controls the "manner and means" by which the worker completes her assigned tasks, rather than on how she is treated for tax purposes or whether she receives benefits. Accordingly, we REVERSE the judgment of the District Court, and REMAND the cause to the District Court for further proceedings consistent with this opinion.
