Time Warner Cable Inc. contracts with Metropolitan Cable Communications Inc., commonly known as Metro Cable, and other cable installers to install cable services. Time Warner provides Metro with work orders identifying customers, but it is Metro that controls the job assignments and working conditions of its installers. Seven current or former technicians brought a lawsuit under the Fair Labor Standards Act against Metro and Time Warner alleging that they were not paid required overtime pay. Time Warner moved for summary judgment, arguing that it was not the plaintiffs' employer for FLSA purposes.
The U.S. District Court for the Southern District of New York granted summary judgment to Time Warner and dismissed the action. The court considered the factors necessary to determine if an employment relationship existed between Time Warner and Metro's employees, specifically, Time Warner's power to hire or fire, supervision/control of work schedules/conditions, determination of pay rate/method, and keeping of employment records. The court found that: Metro hires technicians; Time Warner never fired or requested that Metro fire any technician; Metro supervised and controlled the technicians' work schedules; Time Warner did not determine the rate and method of technician's pay; and Time Warner did not maintain records on hours worked by Metro's employees.
The court also considered whether Time Warner exercised functional control over technicians as a matter of "economic reality." Therefore, Time Warner could not be held liable for any failure to pay Metro's employees required overtime pay. Eneque v. Metropolitan Cable Communications Inc., Case No. 09-6831, Southern District of New York (Sept. 30, 2011).
IMPACT: Employers are advised to consider carefully whether an "employment relationship" could arise with employees of its contractors. Significant liability could arise in the event of such a finding.
James E. Hall, Mark T. Kobata and Marty Denis are partners in the law firm of Barlow, Kobata & Denis, with offices in Los Angeles and Chicago. To comment, email firstname.lastname@example.org.
Workforce Management, December 2011, p. 8 -- Subscribe Now!
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.