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Was maintenance man employee or independent contractor? Autonomy, equipment, contracts all raise issues

By Ronald Miller, J.D.

Finding genuine disputes of fact material to the determination of a plaintiff’s employment status, the Seventh Circuit reversed a district court’s grant of summary judgment finding that the plaintiff was an independent contractor, rather than an employee. First, the appeals court found disputed facts as to the nature and degree of control the putative employer exercised over the manner in which the putative employee performed his work. Additionally, there was a factual dispute as to the origins of the tools, materials, and equipment that the plaintiff required to perform his work. Finally, the appeals court found unanswered questions as to how long and to what extent the parties’ contracts actually governed their relationship (Simpkins v. DuPage Housing Authority, June 20, 2018, Bauer, W.).

Independent contractor agreement. The plaintiff began working for the DuPage Housing Authority (DHA) in November 2009. He entered into an agreement with DHA entitled “Independent Contractor Agreement,” with an expected completion date of June 2011. The contract stated that his duties were to complete the rehabilitation of vacant properties to make them suitable for new occupants. In that role, he performed carpentry, maintenance, and handyman work.

In 2011, the rehab work slowed down and the plaintiff began working primarily for a townhouse community for which DHA served as on-site management. He performed much of the same work, but eventually focused specifically on maintenance work. The property manager, and maintenance supervisor, gave the plaintiff his list of job duties and prioritized the order in which he needed to complete those tasks.

In May 2012, the plaintiff and DHA entered into another “Independent Contractor Agreement.” The employee continued to work until May 2015. From November 2009 through May 2015, the employee worked full-time and exclusively for DHA. Pursuant to DHA’s instructions, he reported his hours by submitting invoices, and he was paid bi-weekly via a paper check. DHA issued the employee 1099-Misc tax forms to file his taxes. The plaintiff was aware that DHA considered him an independent contractor, and repeatedly requested, to no avail, that his supervisors convert him to a regular employee. DHA did not provide him with pension, insurance, or other similar fringe benefits.

Lawsuit. In May 2015, the plaintiff was injured in an automobile accident, after which his relationship with DHA ended. He filed suit in October 2015, alleging that DHA had repeatedly failed to pay him overtime, and that DHA was required to provide him with certain disability benefits. The plaintiff asserted various claims, including violations of the FLSA, the Illinois Minimum Wage Law (IMWL), the Illinois Employee Classification Act (IECA), the Illinois Prevailing Wage Act, and the FMLA.

The parties filed cross-motions for summary judgment. Finding that the plaintiff was not an employee, but rather an independent contractor, the district court granted the employer’s motion for summary judgment as to the federal claims and relinquished jurisdiction over the state law claims.

Disputed factual issues. The Seventh Circuit observed that its task was to determine whether the district court was correct in concluding that there were no disputes of fact material to the determination of the plaintiff’s employment status, and that DHA was entitled to judgment as a matter of law. Here, the appeals court found that the record was replete with factual disputes that were material to a determination of the true relationship between the plaintiff and DHA.

Nature and degree of control. The first factor analyzed by the district court was the nature and degree of control the putative employer exercised over the manner in which the putative employee performed his work. The appeals court found that the record presented numerous competing facts. For example, DHA assigned the employee to work specifically at the townhouse location and set his schedule. While the plaintiff stated that he regularly worked from 8:30 a.m. to 4:30 p.m., the parties disputed whether he was required to work those set hours. Additionally, DHA assigned the plaintiff specific projects and dictated the order in which he was to complete them, but asserted that he had autonomy to determine the manner in which those tasks were completed after they were assigned. However, the extent and effect of that autonomy remained in dispute.

The appeals court also found disputes in the record when it came to the plaintiff’s investment in the tools, equipment, and materials required to perform his work. The plaintiff alleged that DHA purchased nearly everything that he required. However, that allegation was contradicted by the plaintiff’s tax returns, in which he itemized certain purchases of materials. Thus, there was a factual dispute as to the origins of the tools, materials, and equipment the plaintiff regularly used on the job.

Another factor considered was whether specialized skill was required to complete the work. On this point, the district court correctly found competing facts. While the employee testified that he never held any specialized licenses and performed only rudimentary tasks that did not require special skill, DHA pointed out that he had already acquired certain carpentry skills that he needed to perform the rehab work.

Contractual relationship. Finally, the appeals court turned to factual ambiguities regarding the existence and nature of the parties’ contracts. The contracts were labeled “Independent Contractor Agreements,” and the plaintiff’s compliance with certain material terms indicated his understanding that he was, in fact, an independent contractor. However, there were unanswered questions of how long and to what extent the contracts actually governed the parties’ relationship. Thus, the appeals court found that there were material issues of fact as to the nature of the contracts that must be resolved before the court could determine the impact they had on the overall economic reality.

Because those factual disputes were not appropriate for resolution at the summary judgment stage, the district court erred in concluding that the plaintiff was not an employee under the FLSA, as a matter of law. Accordingly, the district court’s judgment was vacated.