Rapczynski et al v. Directv, Inc. et al

BRIEF IN OPPOSITION re MOTION for Summary Judgment as to Plaintiff Antonio Purificato, 75 MOTION for Summary Judgment as to Plaintiff Stephen Rydzanich, 73 MOTION for Summary Judgment as to Plaintiff Andrew James

M.D. Pa.January 3, 2017

i IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA GARY RAPCZYNSKI, et al. v. DIRECTV, LLC, et al. : : : : : : : 3:14-cv-02441-RDM PLAINTIFFS’ COMBINED OPPOSITION TO DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT Todd C. Werts Pro Hac Vice LEAR WERTS LLP 2003 W. Broadway, Suite 107 Columbia, MO 65203 Telephone: 573-875-1991 Facsimile: 573-875-1985 Email: werts@learwerts.com George A. Hanson Pro Hac Vice STUEVE SIEGEL HANSON, LLP 460 Nichols Road, Suite 200 Kansas City, Missouri 64112 Telephone: 816-714-7100 sdf 816-714-7100 Facsimile: 816-714-7101 Email: hanson@stuevesiegel.com Peter Winebrake R. Andrew Santillo WINEBRAKE & SANTILLO, LLC 715 Twining Road, Suite 211 Dresher, Pennsylvania 19025 Phone: 215-884-2491 Facsimile: 215-884-2492 E-mail: pwinebrake@winebrakelaw.com E-mail: asantillo@winebrakelaw.com Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 1 of 75 ii TABLE OF CONTENTS INTRODUCTION............................................................................................................................. 1 ARGUMENT ..................................................................................................................................... 3 I. A Jury Must Decide, As a Matter of Economic Reality, Whether Defendants Were Plaintiffs’ Employer Under the FLSA ............... 3 A. “Employment” is defined expansively ........................................................ 3 B. Applying the economic realities test to the facts in dispute here ...................................................................................................... 4 1. Dispute of fact: Whether Defendants exerted significant control over Plaintiffs’ work by assigning their daily schedule, requiring check-in upon arrival and completion, and mandating particular methods and standards of installation .............................................................. 7 2. Dispute of fact: Whether Plaintiffs exercised managerial skill that translated to a meaningful opportunity for profit or loss ........................................................... 11 3. Dispute of fact: Whether Plaintiffs invested in tools and supplies was incidental compared to Defendants’ investment in the overall operation .............................................. 14 4. Dispute of fact: Whether Plaintiff’s work required a special skill or just compliance with DIRECTV’s exacting performance requirements ............................................ 16 5. Dispute of fact: Whether Plaintiffs had long-term, consistent work relationships with DIRECTV ........................... 18 6. Dispute of fact: Whether Plaintiffs were an integral part of DIRECTV’s business ............................................................... 19 Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 2 of 75 iii C. Where independent entities share control of the same employees, they constitute joint employers .............................. 20 1. Dispute of fact: Whether Defendants had the authority over the hiring and firing of Plaintiffs ...................... 25 2. Dispute of fact: Whether Defendants had authority to promulgate work rules and schedule work assignments; set conditions of employment; and set the method of compensation ..................................................... 27 3. Dispute of fact: Whether Defendants were involved in the day-to-day supervision of Plaintiffs ................................. 30 4. Dispute of fact: Whether DIRECTV maintained any personnel records related to Plaintiffs ................................ 32 D. The out-of-circuit cases cited by Defendants are unavailing .......... 34 II. DIRECTV cannot disavow its status as an employer and then seek to avoid liability because it had no “knowledge” of Plaintiffs’ work hours ........................................................................................................................ 36 III. There is ample evidence that Plaintiffs routinely worked over 40 hours a week and were not paid for all of their work—the extent of their damages is a fact question for trial........................................... 38 IV. Defendants’ minimum wage argument fails to account for the impermissible deductions and unreimbursed business expenses Plaintiffs incurred .......................................................................................................... 44 V. Defendants’ § 207(i) arguments depend on facts that are genuinely in dispute ........................................................................................................................... 46 A. Plaintiffs did not work in a retail establishment and DIRECTV urges a standard for applying § 207(i) that is in conflict with the standard adopted by the Third Circuit ............. 48 B. Plaintiffs did not receive more than 50% of their pay in the form of commissions ................................................................................ 52 Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 3 of 75 iv VI. Defendants are not entitled to judgment as a matter of law on their statute of limitations defense; there is ample evidence from which a reasonable jury could conclude that their violations were willful ....................................................................................................................... 55 A. As an inquiry into mental state, willfulness is quintessentially a fact question reserved for the jury ......................................................... 56 B. There is ample evidence creating a genuine issue for trial as to the willfulness of Defendants’ conduct, in particular their creation of a fissured employment scheme designed to create plausible deniability ...................................................................... 56 C. DIRECTV’s history of litigation alleging and finding FLSA violations is also additional evidence of its willfulness ..................... 59 VII. The existence of a contract is irrelevant to a PWPCL claim asserting improper wage deductions ........................................................................................ 59 CONCLUSION ................................................................................................................................ 64 Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 4 of 75 v TABLE OF AUTHORITIES CASES Adami v. Cardo Windows, Inc., 2014 WL 2586933 (D.N.J. June 10, 2014) A.H. Phillips, Inc. v. Walling, 324 U.S. 490 (1945) Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) Anderson v. Warden of Berks County Prison, 602 F. App’x 892 (3d Cir. Feb. 25, 2015) Baker v. Flint Eng’g & Const. Co., 137 F.3d 1436 (10th Cir. 1998) Bankston v. State of Ill., 60 F.3d 1249 (7th Cir. 1995) Barfield v. New York City Health and Hospitals Corp., 537 F.3d 132 at 135 (2nd Cir. 2008) Birdwell v. City of Gadsden, 970 F.2d 802 (11th Cir. 1992) Brennan v. Yellowstone Park Lines, Inc., 478 F.2d 285 (10th Cir. 1973) Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir. 1988) Chao v. A-One Medical Services, 346 F.3d 908 (9th Cir. 2003) DiSantis v. Morgan Props. Payroll Servs., Inc., 2010 WL 3606267 (E.D. Pa. Sept. 16, 2010) Dole v. Snell, 875 F.2d 802 (10th Cir. 2004) Donovan v. DialAmerica Mktg., Inc., 757 F.2d 1376 (3d Cir. 1985) Drummond v. Herr Foods Inc., 2014 WL 5343642 (E.D. Pa. Oct. 21, 2014) Falk v. Brennan, 414 U.S. 190 (1973) Fowler v. Land Mgmt. Groupe, Inc., 978 F.2d 158 (4th Cir. 1992) Galloway v. George Junior Republic, 2013 U.S. Dist. LEXIS 134014 (W.D. Pa. Sept. 19, 2013) Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 5 of 75 vi Gusdonovich v. Bus. Info. Co., 705 F. Supp. 262 (W.D. Pa. 1985) Haskins v. VIP Wireless LLC 300, 2010 U.S. Dist. LEXIS 106205 (W.D. Pa. October 5, 2010) Hein v. PNC Fin. Servs. Grp., Inc., 511 F. Supp. 2d 563 (E.D. Pa. 2007) Hertz v. Woodbury Cnty., Iowa, 566 F.3d 775 (8th Cir. 2009) Hilvey v. Allis-Chalmers Energy, Inc., 2013 U.S. Dist. LEXIS 80800 (W.D. Pa. June 10, 2013) Homemakers Home & Health Care Services, Inc. v. Carden, 538 F.2d 98 (6th Cir. 1976) Hrycay v. Monaco Coach Corp., 2008 WL 4966042 (E.D. Pa. Nov. 20, 2008) Huntley v. Bonner’s, Inc., 2003 WL 24133000 (W.D. Wash. Aug. 14, 2003) Idaho Sheet Metal Works v. Wirtz, 383 U.S. 190 (1966) In re Enter. Rent-A-Car Wage & Hour Empl. Practices Litig., 683 F.3d 462 (3d Cir. 2012) Jones v. Tucker Communs. Inc., 2013 U.S. Dist. LEXIS 163509 (M.D. Ga. Nov. 18, 2013) Keeton v. Time Warner Cable, Inc., 2011 WL 2618926 (S.D. Ohio July 1, 2011) Keller v. Miri Microsystems LLC, 781 F.3d 799 (6th Cir. 2015) Kiss v. Kmart Corp., 2001 WL 568974 (E.D. Pa. May 22, 2001) Lang v. DIRECTV, 801 F. Supp. 2d 532 (E.D. La. 2011) Liger v. New Orleans Hornets, 565 F. Supp. 2d 680 (E.D. La. 2008) Lugo v. Farmers Pride, Inc., 967 A.2d 963 (Pa. Super. 2009) Martin v. Cooper Elec. Supply Co., 940 F.2d 896 (3d Cir. 1991) Martin v. Selker Bros., Inc., 949 F.2d 1286 (3rd Cir. 1991) Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 6 of 75 vii Matrai v. DIRECTV, LLC, 168 F. Supp. 3d 1347 (D. Kan. 2016) McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988) Mitchell v. Bekins Van & Storage Co., 352 U.S. 1027 (1957) Moser v. Papadopoulos, 2011 U.S. Dist. LEXIS 64716 (E.D. Pa. June 15, 2011) NLRB v. Browning–Ferris Indus. of Pa., 691 F.2d 1117 (3d Cir. 1982) Parker v. NutriSystem, Inc., 620 F.3d 274 (3d Cir. 2010) Pennington v. Integrity Commc’ns Inc., 2014 WL 2106301 (E.D. Mo. 2014) Perez v. DIRECTV, 2015 WL 3451268 (W.D. Wash. May 29, 2015) Pugh v. Holmes, 405 A.2d 897 (Pa. 1979) Reich v. Monfort, Inc., 144 F.3d 1329 (10th Cir. 1998) Ressler v. Jones Motor Co., Inc., 487 A.2d 424 (Pa. Super. 1985) Robicheaux v. Radcliff Material, Inc., 697 F.2d 662 (5th Cir. 1983) Safarian v. Am. DG Energy Inc., 2015 WL 4430837 (3d Cir. July 21, 2015) Scantland v. Jeffry Knight, Inc., 721 F.3d 1308 (11th Cir. 2013) Schultz v. Capital Int'l Sec., Inc., 466 F.3d 298 (4th Cir. 2006) Soles v. Zartman Construction, Inc., 2014 U.S. Dist. LEXIS 98181 (M.D. Pa. July 18, 2014) Solis v. A-1 Mortg. Corp., 934 F. Supp. 2d 778 (W.D. Pa. 2013) Solis v. Cascom, Inc., 2011 WL 10501391 (S.D. Ohio Sept. 21, 2011) Story Parchment Co. v. Paterson Parchment Co., 282 U.S. 555 (1931) Turner v. Mercy Health System, 2010 Phila. Ct. Com. Pl. LEXIS 146 (Pa. C.C.P., Phila. Cty. Mar. 10, 2010) Watson v. Prestige Delivery Systems, Inc., 27 Pa. D. & C. 5th 449 (Pa. C.C.P., Allegheny Cty. Feb. 7, 2013) Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 7 of 75 viii Whitaker v. Pac. Enterprises Oil Co. (USA), 956 F.2d 1170 (10th Cir. 1992) Wilks v. Pep Boys, 278 F. App’x 488 (6th Cir. 2008) Wink v. Ott, 2012 U.S. Dist. LEXIS 70386 (M.D. Pa. May 12, 2012) United States v. Rosenwasser, 323 U.S. 360 (1945) Usery v. Pilgrim Equip. Co., 527 F.2d 1308 (5th Cir. 1976) Verma v. 3001 Castor, Inc., 2014 WL 2957453 (E.D. Pa. June 30, 2014) Yi v. Sterling Collision Centers, 480 F.3d 505 (7th Cir. 2007) STATUTES 29 U.S.C. § 203(d) 29 U.S.C. § 203(g) 29 U.S.C. § 203(r) 29 U.S.C. § 207(i) 29 U.S.C. § 213(a)(2) 29 U.S.C. § 255(a) 34 Pa. Code § 9.1 43 P.S. §§ 260.1 et seq. 43 P.S. § 260.7 REGULATIONS 29 C.F.R. § 531.35 29 C.F.R. § 779.322 29 C.F.R. § 779.330 29 C.F.R. § 791.2 Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 8 of 75 1 INTRODUCTION Defendants, who deny that they “employ” Plaintiffs at all, did nothing to ensure that Plaintiffs were paid in accord with the requirements of the FLSA or Pennsylvania law. Among other statutory benefits denied to them, Plaintiffs were not paid for all their work, were subject to unlawful deductions from the pay that they did receive, and were not properly paid overtime. And while Defendants claim that Plaintiffs are not entitled to those statutory protections by virtue of denying that they were Plaintiffs’ “employers;” it is the economic reality of the relationship—rather than the label applied to it—that is the test of employment. See In re Enter. Rent-A-Car Wage & Hour Empl. Practices Litig., 683 F.3d 462, 467 (3d Cir. 2012). As shown below, Plaintiffs will offer at trial significant, material facts that, when taken together, establish that the “real economic relationship” between each Defendant on the one hand and each Plaintiff on the other is an employer-employee relationship, as defined by the FLSA and Pennsylvania law. See Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 301 (1985). Defendants deny the need for a trial, having filed three summary judgment motions premised on a total of 146 alleged undisputed material facts; the sheer quantum of which makes it nearly inevitable that there will be disputes as to the evidence Defendants have presented. And sure enough, Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 9 of 75 2 after carefully reviewing Defendants’ citations, Plaintiffs have genuinely disputed 70 of those facts. Beyond those disputes, Plaintiffs have been required to supplement the record with an additional 114 facts that Defendants did not include. The inexorable conclusion is that, on each of the points raised by Defendants, the parties have genuine disputes that preclude summary judgment. For example, Defendants contend they did nothing to control Plaintiffs’ day-to-day activities or manage their work; but Plaintiffs have provided evidence of how DIRECTV told them when, where, and how to perform their work and then scores that performance against metrics it established. Defendants assert that they had nothing to do with whether Plaintiffs would be hired or fired; but Plaintiffs have shown that DIRECTV set the standards for whether they would be hired, MasTec advised the subcontracting companies on those decisions, and Defendants ultimately retained the right to effectively end their employment. And Defendants argue it had no reason to know when Plaintiffs were working; but Plaintiffs provided evidence that DIRECTV and MasTec managers monitored them in the field and flagged them on reports if they were running late. The facts are equally in dispute on each element of Defendants’ purported defense under the retail commission exemption found in § 207(i). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 10 of 75 3 Indeed, even the legal landscape presented by the parties is in dispute. DIRECTV relies on the Eastern District of Arkansas’ Roslov decision, whereas Plaintiffs note that a court in the Western District of Washington reached the opposite result in Perez. In the end, on the record before this Court—and in light of controlling Third Circuit precedent—there are disputes of fact on each of the issues raised by Defendants. Thus, their motions for summary judgment must be denied. ARGUMENT I. A Jury Must Decide, As a Matter of Economic Reality, Whether Defendants Were Plaintiffs’ Employer Under the FLSA. A. “Employment” is defined expansively. Under the FLSA, an “employer” includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d) (emphasis added). To “employ” is “to suffer or permit to work.” 29 U.S.C. § 203(g). This is “the broadest definition [of ‘employ’] that has ever been included in any one act.” United States v. Rosenwasser, 323 U.S. 360, 363 n.3 (1945). “Ultimate control is not necessarily required to find an employer- employee relationship under the FLSA, and even ‘indirect’ control may be sufficient. In other words, the alleged employer must exercise ‘significant Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 11 of 75 4 control.’” See In re Enter. Rent-A-Car Wage & Hour Empl. Practices Litig., 683 F.3d 462, 468 (3d Cir. 2012). B. Applying the economic realities test to the facts in dispute here. Following the Supreme Court’s guidance, courts in the Third Circuit focus “on the economic realities,” to determine “whether the individuals are dependent on the business to which they render service.” Martin v. Selker Bros., Inc., 949 F.2d 1286, 1293 (3rd Cir. 1991) (internal quotations and citations omitted). In addressing the question, this Court is not in uncharted territory. DIRECTV peppers its moving papers with citation to the recent Roslov order from the Eastern District of Arkansas finding that the plaintiffs in that case were, as a matter of law, independent contractors. But it notably omits any reference to an earlier decision from the Western District of Washington finding just the opposite; that DIRECTV’s relationship with the technicians of its contractual partners is one of an employer. See Perez v. DIRECTV, 2015 WL 3451268, *18 (W.D. Wash. May 29, 2015) (granting U.S. Department of Labor’s motion for summary judgment). In addition to those competing decisions, several other courts have taken up the question of whether DIRECTV is an employer under the FLSA of technicians working through its contractual partners and have found disputed Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 12 of 75 5 facts on that question precluded summary judgment. See Lang v. DIRECTV, 801 F. Supp. 2d 532, 534 (E.D. La. 2011) (denying defendants’ motion for summary judgment, finding substantial evidence showing that DIRECTV extensively controls each technician’s appearance, job assignments, scope of work, performance standards, and compensation); Field v. DIRECTV, Case No. 2:14-cv-04227 (E.D. Pa. June 20, 2016) (attached as Ex. 46); Thompson v. Bruister & Associates, et al., Case No. 3:07-cv-00412 (M.D. Tenn. April 23, 2015) (attached as Ex. 47 at p. 5) (“Motion for Summary Judgment as to the Joint Employer Issue [among others] are all DENIED because of the existence of numerous issues of material facts.”). Indeed, in a case DIRECTV cites on other grounds, a District of Kansas court found that fact questions precluded summary judgment on the question of employment. See Matrai v. DIRECTV, LLC, 168 F. Supp. 3d 1347, 1357 (D. Kan. 2016). Of course, notwithstanding these prior decisions, the record in this case must be reviewed on its own merits. In doing so, the Third Circuit has found the following factors to be relevant considerations in determining employee status, particularly where, as was the case for Plaintiffs James and Purificato, the workers have been misclassified as independent contractors. These include: (1) the degree of the alleged employer's right to control the manner in which the work is to be performed; (2) the alleged employee's opportunity Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 13 of 75 6 for profit or loss depending upon his managerial skill; (3) the alleged employee's investment in equipment or materials required for his task, or his employment of helpers; (4) whether the service rendered requires a special skill; (5) the degree of permanence of the working relationship; and (6) whether the service rendered is an integral part of the alleged employer's business. See Safarian v. Am. DG Energy Inc., No. 14-2734, 2015 WL 4430837 at *2 (3d Cir. July 21, 2015) (reversing district court’s conclusion, based on how plaintiff structured his relationship with defendant, that plaintiff was an independent contractor; holding district court must reason through these six economic realities factors); see also Martin, 949 F.2d 1286 (analyzing factors, affirming conclusion that gas station operators were employees rather than independent contractors and thus were entitled to FLSA protections).1 While courts focus their inquiry on these six factors, “[i]t is a well- established principle that the determination of the employment relationship does not depend on isolated factors but rather upon the circumstances of the 1 In Martin, 949 F.2d at 1294, the defendant gasoline distributor owned twenty stations, eight of which it classified as “independent contractor stations,” run by operators who were paid a commission on the gas and kerosene they sold. Defendant set the hours of operation of each station and set the price of gas, which operators had no investment in. Operators hired mechanics and workers and paid them. The Secretary of Labor sued defendant for FLSA violations. The district court concluded operators were employees rather than independent contractors and thus were entitled to FLSA protections. Following a plenary review, the Third Circuit affirmed. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 14 of 75 7 whole activity.” Martin, 949 F.2d at 1293 (internal quotation omitted). “[N]either the presence nor the absence of any particular factor is dispositive[.]” Id. Consideration of the evidence here leads to only one conclusion: a reasonable jury could find for Plaintiffs on each of the relevant factors: 1. Dispute of fact: Whether Defendants exerted significant control over Plaintiffs’ work by assigning their daily schedule, requiring check-in upon arrival and completion, and mandating particular methods and standards of installation. In support of the first—and in many ways paramount—factor of the extent of control over Plaintiffs work, Defendants merely argue that Mr. James did not have to personally meet with anyone regarding his work performance and Plaintiff Purificato performed his work without “direct” supervision. See Doc. 73-1 at 16; Doc. 74-1 at 16. But as detailed in Plaintiffs’ responses to the statement of facts, there is significant evidence of the extent of control Defendants exerted over Plaintiffs’ work. Plaintiff James testified that DIRECTV was who he “had to answer to. They’re the ones that [he got] work orders from.” James Resp. DSOF 35 (citing Ex. 36 James Dep. 171:8–14, 191:5–7). His work orders “came through a chain from DIRECTV” with a preassigned time window. Id. (172:2–21; 85:21– 86:6, 91:25–92:19). Mr. James also testified that, once he arrived at a Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 15 of 75 8 customer’s location, DIRECTV required him to report himself as “on site” via a handheld computer. Id. (87:11–24). If he encountered any issues, DIRECTV protocol dictated that he contact both DIRECTV and the HSP. Id. (88:6–15). Mr. James also contacted DIRECTV directly to troubleshoot any installation- related issues. Id. (89:2–8). Upon his completion of a work order, DIRECTV required Plaintiff to report himself as “off site” and close out the job. Id. (90:2- 21). As a result of the control exercised over his day to day activities, Mr. James testified that he believed he was employed by DIRECTV. Id. (171:8–14, 191:5–7). Similarly, Mr. Purificato testified that each work order he received came preassigned by DIRECTV with his technician identification number and a time frame for completion. See Purificato Resp. DSOF 26 (citing Ex. 35 Purificato Dep. 36:25–37:5, 60:2–12, 76:24–77:18, 101:1–19, 132:6–12, 164:17–165:5). The work orders always looked the same, with “a DIRECTV or MasTec logo on them.” Id. (60:2–12). Further, absent direct contact with DIRECTV or MasTec, neither Mr. Purificato nor his supervisors at the subcontracting company could modify or reassign a work order. Id. (126:10–22). Mr. Purificato also testified that he had to contact someone from DIRECTV “[e]very day … to call in to open or close a job, [or] put [himself] onsite.” Purificato Resp. DSOF 21 (citing Ex. 35 Purificato Dep. 73:21–74:22). He explained that, it was “[e]very Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 16 of 75 9 day. Every job. Every work order.” Id. (120:9–11). If there was a discrepancy on a work order, Mr. Purificato had to contact DIRECTV to fix it. Id. (73:21– 74:22). If he was running late, he would “call DIRECTV or MasTec.” Id. (78:3– 22). In addition, neither Plaintiff had the discretion to go home early or take a day off to attend to personal or other non-DIRECTV matters; they would have to obtain advance permission—from DIRECTV—before missing work just like a typical employee. See Add’l Facts ¶¶ 62-63. As to Defendants’ argument, made elsewhere in their briefs, that they do not exert control over subcontractor technicians beyond issuing technical guidelines for installing its satellite systems, the Plaintiffs have marshalled a starkly different record. DIRECTV’s mandatory requirements for how Plaintiffs were to conduct themselves as a DIRECTV installer went well beyond mere technical guidance; they dictated how Plaintiffs were to perform effectively every aspect of their job, to how they were to conduct the installation, how they were to interact with DIRECTV’s customer, when they were to call into DIRECTV, and how they were to clean up after themselves. See Add’l Facts ¶ 40, 66, 71, 73. DIRECTV also passed down ongoing communications to Plaintiffs on DIRECTV’s policies and procedures. Id. at ¶ 42. And it developed and provided mandatory ongoing training, which it Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 17 of 75 10 required of subcontractor technicians like Plaintiffs. See James Resp. DSOF ¶¶ 35-36; Purificato Resp. DSOF ¶ 26; Rydzanich Resp. DSOF ¶¶ 15, 35; Add’l Facts ¶¶ 68-69. DIRECTV required all technicians, including Plaintiffs, to wear a DIRECTV uniform, drive a DIRECTV-branded vehicle, and display DIRECTV- marked credentials. Add’l Facts ¶ 43. Defendants’ personnel extensively monitored Plaintiffs’ work, both in person and through comprehensive performance metrics. See Purificato Resp. DSOF ¶ 37; Add’l Facts ¶¶ 37, 49, 56, 59. Plaintiffs were required to communicate directly with DIRECTV— expected to check in at the beginning and end of each job. See Purificato Resp. DSOF ¶ 32; Add’l Facts ¶¶ 35, 41, 52, 86, 88. Indeed, Defendants employed a network of supervisors whose sole function was to interact with subcontracting companies; the goal of course being to manage the work of so- called “independent contractor” technicians like Plaintiffs. See James Resp. DSOF ¶ 35; Add’l Facts ¶¶ 23-26. In Martin, the Third Circuit affirmed that defendant had pervasive control over day-to-day operations where it required operators to make daily Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 18 of 75 11 sales reports and regularly visited the stations. See Martin, 949 F.2d at 1294.2 Given that Plaintiffs have come forward with similar (indeed, much more extensive) evidence of Defendants’ control and oversight of their work, in light of the Third Circuit’s guidance, summary judgment is not proper on the question of employment. 2. Dispute of fact: Whether Plaintiffs exercised managerial skill that translated to a meaningful opportunity for profit or loss. Defendants argue that Plaintiffs made more money by working more efficiently and accepting more work orders. See Doc. 73-1 at 17; Doc. 74-1 at 16. Thus, so the argument goes, Plaintiffs had an opportunity for profit or loss. But another court considering the same argument Defendants make here found that an incentive to be industrious is not equivalent to an actual opportunity for profit: As previously indicated, these individuals are paid on a piecework basis, by the cake. Thus, it is true that the more cakes a decorator can do, the more the decorator will make. But toiling for money on a 2 See also Verma v. 3001 Castor, Inc., 2014 WL 2957453, *6 (E.D. Pa. June 30, 2014) (presence of club-imposed written and unwritten guidelines for dancers' conduct indicates control and weighs in favor of employee status, collecting cases, concluding where dancers’ control over their schedules is “minimal compared to all of the elements of the work that [d]efendant controlled,” the factor of control weighed “overwhelmingly in favor of a finding that the dancers were employees, not independent contractors.”). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 19 of 75 12 piecework basis is more like wages than an opportunity for "profit." Dole v. Snell, 875 F.2d 802, 809 (10th Cir. 2004). Indeed, the question is not simply whether the purported independent contractors can make more money from the toil of their labor, but rather from their “managerial skills.” See Martin, 949 F.2d at 1294. On that score, Defendants offer no evidence at all. What evidence is before the Court came when Mr. Purificato was asked whether there were strategies that could maximize his profit. His answer reveals that Defendants cannot plausibly maintain that they satisfy this prong of the Martin test on undisputed evidence: Q. Were there any strategies you could engage in to maximize your profits? A. Not really. If there was a no line of sight, you lost. And then it was hard to recover from there. Q. Did satellites have varying techniques in how they would install? A. No, they basically install the same way. Q. Were there any techniques satellite technicians would use to try to finish jobs faster? A. If they did, they cut corners, and then they probably weren't going to get paid for that. There's a certain way you have that you had to do the job. If you tried to cut any corners on that, then you weren't going to get paid. Add’l Facts ¶ 70 (citing Ex. 35 Purificato Dep. 139:15–140:3). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 20 of 75 13 Like other workers considered to be employees, Plaintiffs exercised no managerial skill that would translate into an opportunity for profit or loss. They worked full time installing DIRECTV systems and their livelihood thus depended on DIRECTV continuing to assign work to them—something DIRECTV could cease to do in its sole discretion. See Rydzanich Resp. DSOF ¶ 15; Add’l Facts ¶¶ 30-32. Plaintiffs did not set the profit margins for their work and, in fact, were compelled to complete tasks for which they were not paid at all. See James Resp. DSOF ¶ 50; Add’l Facts ¶¶ 103-104. Plaintiffs’ work orders were assigned by DIRECTV, (see James Resp. DSOF ¶¶ 13-14, 35, 43, 45; Purificato Resp. DSOF ¶ 26; Rydzanich Resp. DSOF ¶ 11, 13, 15, 18, 34, 37; Add’l Facts ¶¶ 35-38) and they were paid a set amount only for work orders that closed. See Add’l Facts ¶ 45. And Plaintiffs were prohibited from installing for DIRECTV’s competitors. See Add’l Facts ¶¶ 7, 8, 10.b, 12. The managerial skill exercised over the installation work was the province of Defendants, which carefully tracked and managed nearly every aspect of the work performed by Plaintiffs. Defendants meticulously tracked the performance of that work to ensure that it was meeting DIRECTV’s business objectives. DIRECTV established performance metrics and conducted extensive customer surveys—all of which were the same for DIRECTV’s acknowledged W-2 technicians as they were for the contractor technicians— Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 21 of 75 14 and issued reports tracking each technicians’ performance on those metrics. See Add’l Facts ¶¶ 19, 54-57, 65, 87. In sum, in the face of Defendants’ limited evidence on this factor, there is ample evidence that Plaintiffs earnings did not depend on their judgment or initiative, but on Defendants’ need for their work. See Donovan v. DialAmerica Mktg., Inc., 757 F.2d 1376, 1385-86 (3d Cir. 1985) (holding that workers were employees under the FLSA because they “were not in a position to offer their services to many different businesses and organizations,” “worked on a continuous basis with DialAmerica and were able to work only when and if DialAmerica was in need of their services,” and, consequently, “were economically dependent on DialAmerica”). Thus, at a minimum, there are disputes of fact on this prong of the test and it cannot support summary judgment in favor of Defendants. 3. Dispute of fact: Whether Plaintiffs invested in tools and supplies was incidental compared to Defendants’ investment in the overall operation. The investment factor considers the extent of capital investment in the overall enterprise, not incidental expenditures. See Martin, 949 F.2d at 1294 (although defendant required “independent contractor” station operators to obtain an inventory of supplies and equipment, operators had no capital investment in the defendant’s gasoline they sold; defendant had complete Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 22 of 75 15 investment). Said another way, this factor requires a comparison of “the worker’s individual investment to the employer’s investment in the overall operation.” Baker v. Flint Eng’g & Const. Co., 137 F.3d 1436, 1442 (10th Cir. 1998). On that score, Plaintiffs have presented significant contravening evidence cutting against Defendants’ position. DIRECTV owned the systems Plaintiffs were installing and Plaintiffs were required to only use those tools and supplies specifically approved by DIRECTV. See Add’l Facts ¶¶ 73, 76-77. And any “investment” made by Plaintiffs is infinitesimal in comparison to the millions of dollars that DIRECTV has invested acquiring a distribution network, developing and maintaining extensive computerized- and personnel- assisted management of that network, leasing and staffing warehouses across the country for the distribution of its equipment. See Add’l Facts ¶¶ 22, 76. Given that there is competing evidence on the extent of investment made by the parties in the overall operation within which Plaintiffs worked, at best for Defendants, there are fact questions on this factor. Cf. Robicheaux v. Radcliff Material, Inc., 697 F.2d 662, 667 (5th Cir. 1983) (holding that workers were employees because “the fact that [workers] provided their own insurance coverage, listed themselves as self-employed on their tax returns, and had their own business cards and letterheads, does not tip the balance in favor of independent contractor status where, as here, the economic realities Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 23 of 75 16 of the situation indicate that the employee depended upon the employer for his livelihood”). 4. Dispute of fact: Whether Plaintiff’s work required a special skill or just compliance with DIRECTV’s exacting performance requirements. DIRECTV cites to Plaintiffs’ testimony where they indicated that they had to undergo training to perform the work and that it generally required a certain skill to perform. See Doc. 73-1 at 16; Doc. 74-1 at 15. As an initial matter, both Mr. James and Mr. Purificato testified that satellite installation was not a special skill in the sense of a trade that a craftsman hones over years and carries with him from job to job. When asked whether satellite installation was a specialized skill, Mr. James testified that it was only “somewhat” so. See James Resp. DSOF 29 (citing Ex. 36 James Dep. 69:22–24). Mr. Purificato was more unequivocal; he testified that “it didn’t make a difference if you were good at it or not.” Purificato Resp. DSOF 20 (citing Ex. 35 Purificato Dep. 67:17–68:10). Contrary to Defendants’ characterization of this testimony, Plaintiffs have presented evidence that they were not engaged to be creative or to exercise independent judgment in fulfilling DIRECTV work orders; they were required to follow DIRECTV’s exacting specifications and were evaluated on how well they met that charge. See Add’l Facts ¶¶ 40, 53, 66, 71. To be sure, Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 24 of 75 17 like any technical job in a factory setting or the field, Plaintiffs were required to perform their work for Defendants with requisite skill. But all the skills Plaintiffs needed—indeed the training classes they were testifying about— were provided to them by DIRECTV through its comprehensive, mandatory training program. See James Resp. DSOF ¶¶ 35-36; Purificato Resp. DSOF ¶ 26; Rydzanich Resp. DSOF ¶¶ 15, 35; Add’l Facts ¶¶ 68-69. “Routine work which requires industry and efficiency is not indicative of independence and nonemployee status.” Martin, 949 F.2d at 1295, quoting Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1314 (5th Cir. 1976). To the extent the installation of DIRECTV’s satellite television systems required any “special skills,” these skills were the product of mandatory and ongoing training. The Third Circuit has held that the use of special skills is not itself indicative of independent contractor status if workers do not use those skills in any independent way. See Martin, 949 F.2d at 1295 (citing Brock v. Superior Care, Inc., 840 F.2d 1054, 1060 (2d Cir. 1988)). Because Plaintiffs were not engaged to bring their own unique skills to the job, but rather expected to perform the work in a manner that was dictated by DIRECTV, there are at least disputes of fact on this factor. See Perez v. DIRECTV, 2015 WL 3451268 at *15 (finding, on the same facts, “the Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 25 of 75 18 work to be skillfully performed by well-trained Installers, but piece-work requiring no initiative, judgment or foresight for its success, nonetheless”). 5. Dispute of fact: Whether Plaintiffs had long-term, consistent work relationships with DIRECTV. DIRECTV notes that neither Plaintiffs’ relationship with DIRECTV was permanent. See Doc. 73-1 at 17; Doc. 74-1 at 17. And of course that is true, but the standard is not whether the job is permanent—very few jobs are—but rather the degree of permanence. See Donovan v. DialAmerica Mktg., Inc., 757 F.2d 1376, 1385 (3d Cir. 1985) (where workers “did not transfer their services from place to place, as do independent contractors” but instead “worked continuously for the defendant, and many did so for long periods of time . . . the permanence-of-working-relationship factor indicates that the [workers] were ‘employees’ of the defendant.”); Verma, 2014 WL 2957453, *9 (“The more permanent the relationship, the more likely it is that a court will find a worker to be an employee.”) Unlike traditional subcontractors, Plaintiffs did not perform work for DIRECTV on a sporadic basis, rather they worked full time for DIRECTV. See James Resp. DSOF ¶ 35; Purificato Resp. DSOF ¶ 26; Add’l Facts ¶¶ 79-81, 106. And although the subcontracting entities through which they worked varied, their relationship with DIRECTV remained consistent. See Add’l Facts ¶¶ 10- Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 26 of 75 19 28. At a minimum, these facts establish the existence of fact questions on whether this degree of permanence is indicative of an employment relationship. 6. Dispute of fact: Whether Plaintiffs were an integral part of DIRECTV’s business. As to the sixth factor, Defendants argue in something of a non sequitur that because Plaintiffs were free to perform “unrelated work” for others, their work was not integral to Defendants’ business. See Doc. 73-1 at 17; Doc. 74-1 at 17. Of course, on that factor, Plaintiffs have presented significant evidence. DIRECTV is in the business of providing satellite television service to its customers. See James Resp. DSOF ¶¶1-2, 5; Purificato Resp. DSOF ¶¶ 1-2; Rydzanich Resp. DSOF ¶¶ 1-2. Integral to this business is the technician who actually performs the work. See Add’l Facts ¶¶ 82-85 . See Martin v. Selker Bros., 949 F.2d 1286, 1295 (3rd Cir. 1991) (finding factor weighed in plaintiffs’ favor where the primary business and economic purpose of the stations was to transact sales of gasoline, sale of gasoline was integral part of defendant’s business, and operators’ work was an “essential part” of that business). Indeed, Plaintiffs were typically the only “representative of DIRECTV that ha[d] personal contact with its customers,” all while displaying DIRECTV Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 27 of 75 20 credentials, a DIRECTV uniform, and driving a DIRECTV-branded vehicle. See Add’l Facts ¶ 43. See Safarian, 2015 WL 4430837 at *1 (finding employment where defendant referred to plaintiff, an engineer who serviced and installed defendant’s machines, “a face of the company” and its “boots on the ground”). Plaintiffs were part of DIRECTV’s network of installation technicians fulfilling the day-to-day needs of DIRECTV’s customers. The evidence Plaintiffs have presented on this factor establishes questions of fact on the overall inquiry of whether their work was so integral to DIRECTV’s business that, as a matter of economic reality, they were employees of the company for purposes of the FLSA. C. Where independent entities share control of the same employees, they constitute joint employers. Closely related to the question of whether Plaintiffs James and Purificato were “employees” under the FLSA—rather than independent contractors as they were classified—is the question of whether DIRECTV and/or MasTec jointly employed them. And whether DIRECTV jointly employed Mr. Rydzanich, who was an acknowledged W-2 employee of MasTec (and formerly of its predecessor Halsted) but who—like Mr. James and Mr. Purificato—was not considered as an employee by DIRECTV. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 28 of 75 21 As an initial matter, under the FLSA, an employee can have more than one employer, each of whom is individually responsible for complying with the Act. See Falk v. Brennan, 414 U.S. 190, 195 (1973); 29 C.F.R. § 791.2(a); see also Gusdonovich v. Bus. Info. Co., 705 F. Supp. 262, 268 (W.D. Pa. 1985) (The “Act contemplates the possibility of several simultaneous ‘employers,’ any one of which may be liable as an employer under the Act.”). Liability as a joint employer may arise “‘where two or more employers exert significant control over the same employees.’” Enterprise, 683 F.3d at 468, quoting NLRB v. Browning–Ferris Indus. of Pa., 691 F.2d 1117, 1124 (3d Cir. 1982). In other words, where “independent legal entities” have “chosen to handle jointly ... important aspects of their employer-employee relationship,” and “from the evidence it can be shown that they share or co-determine those matters governing essential terms and conditions of employment[,] they constitute ‘joint employers’” under the FLSA. Browning–Ferris, 691 F.2d at 1123, 1124. This basic tenet is confirmed by the Department of Labor (DOL’s) definition of joint employment, which contemplates joint employment in situations, like we have here, where companies are working hand-in-hand to directly, or indirectly, control the work of alleged employees: Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 29 of 75 22 Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as: (1) Where there is an arrangement between the employers to share the employee’s services, as, for example, to interchange employees; or (2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or (3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer. 29 C.F.R. § 791.2(b) (citations omitted); see also Enterprise, 683 F.3d at 467 (quoting 29 C.F.R. § 791.2). Because the DOL’s regulations “constitute the agency’s body of experience and informed judgment about the statute,” the court should “give them considerable weight.” Hein v. PNC Fin. Servs. Grp., Inc., 511 F. Supp. 2d 563, 570 (E.D. Pa. 2007) (quotations and citations omitted). The arrangement between DIRECTV and MasTec (and its other HSPs) is consistent with the Third Circuit’s definition of joint employment, as well as the federal regulation’s description. DIRECTV and the HSPs are separate corporate entities. James Resp. DSOF ¶ 9; Add’l Facts ¶ 2. But through detailed contractual arrangements, DIRECTV exercised a high degree of control over Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 30 of 75 23 MasTec and the other HSPs, and they shared control over much of their workforce, including Plaintiffs. Add’l Facts ¶¶ 3-10. Plaintiffs’ work simultaneously benefitted both DIRECTV and the HSPs. Add’l Facts ¶¶ 2, 82- 85. The fortunes of these companies—and Plaintiffs—are married together: MasTec (or the other HSPs) and the subcontractors it utilizes are not free to perform installation services for other television providers without DIRECTV’s permission. See Add’l Facts ¶¶ 7, 10, 12. And the Plaintiffs, for their part, exclusively installed DIRECTV systems and not the systems of DIRECTV’s competitors. See Add’l Facts ¶¶ 79-80. This renders MasTec and the other HSPs—and Plaintiffs who are the ones installing DIRECTV’s systems— economically dependent on DIRECTV. See Schultz v. Capital Int'l Sec., Inc., 466 F.3d 298, 306 (4th Cir. 2006) (noting that the factual situation “fit squarely within the third example of joint employment in the regulation” where a Saudi Prince had engaged defendant security company to provide security detail, and Prince exercised high degree of control over defendant’s agents). Given these facts, a reasonable jury could conclude that the employment arrangement here is “one employment” under the FLSA. 29 C.F.R. § 791.2(a) (if the facts establish that the employee is employed jointly by two or more employers, i.e., that employment by one employer is not completely disassociated from employment by the other employer(s), all of the Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 31 of 75 24 employee's work for all of the joint employers during the workweek is considered as one employment for purposes of the [FLSA]”) (emphasis added)). “[A]ll joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the [FLSA], including the overtime provisions.” 29 C.F.R. § 791.2(a). Alternatively, in addition to the Department of Labor’s joint employment test, the Third Circuit has recognized that joint employment liability will also be found to exist “based on a consideration of the total employment situation and the economic realities of the work relationship.” Enterprise, 683 F.3d at 469. In considering the joint employment question, the Third Circuit set out four factors for the Court to review: “does the alleged employer have (1) authority to hire and fire employees; (2) authority to promulgate work rules and assignments, and set conditions of employment, including compensation, benefits, and hours; (3) day-to-day supervision, including employee discipline; and (4) control of employee records, including payroll, insurance, taxes, and the like.” Id. The Third Circuit “emphasize[d], however, that these factors do not constitute an exhaustive list of all potentially relevant facts, and should not be blindly applied.” Id. (emphasis in original) (internal quotations omitted). That said, as show below, a review of the record evidence under the Enterprise test—indeed under any application Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 32 of 75 25 the economic reality—reveals that a reasonable jury could find that Defendants jointly employed Plaintiffs. 1. Dispute of fact: Whether Defendants had the authority over the hiring and firing of Plaintiffs. The first factor courts typically consider in the context of joint- employment allegations is the “authority” of the putative employers to “hire and fire the relevant employees.” Enterprise, 683 F.3d at 469. Defendants argue that they did not “play any role” in hiring Plaintiffs James and Purificato; both were hired through the subcontracting companies. See Doc. 73-1 at 18; Doc. 74-1 at 17-18. And DIRECTV likewise did not hire Mr. Rydzanich. See Doc. 75-1 at 14. But in accord with the definition at 29 U.S.C. § 203(d), this factor looks not to “direct” or “ultimate” authority, but to whether a putative employer’s authority, even if “indirect,” was “significant.” Enterprise, 683 F.3d at 468. Here, DIRECTV set the prerequisites for hiring Plaintiffs. See Add’l Facts ¶¶ 10.d, 13-14, 33-34. Specifically, DIRECTV authorized subcontracting principals to hire Plaintiffs to perform DIRECTV work only if they met DIRECTV’s non-discretionary pre-hire conditions, including that Plaintiffs (1) complete the SBCA Certified Installer Training, (2) pass a criminal background check, (3) pass a drug screen, and (4) submit to a motor vehicle record review. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 33 of 75 26 Id. DIRECTV required Plaintiffs to submit to its chosen vendor—a company called Sterling—for the background check, drug screen, and review of their driving record. See Add’l Facts ¶¶ 10.d, 11, 13-14. With respect to firing, DIRECTV’s authority was categorical. DIRECTV had the authority to unilaterally prohibit Plaintiffs or any other subcontractor technician from continuing to receive work orders, effectively ending their employment. See Rydzanich Resp. DSOF ¶ 15; Add’l Facts ¶¶ 30-32. And DIRECTV supervisors advised the principals of the subcontracting companies on both hiring and firing decisions, all of which were aimed to serve the business needs of DIRECTV. See Add’l Facts ¶¶ 31-33. In Perez v. Lantern Light, Judge Martinez concluded that DIRECTV’s power to hire and fire favored joint employment because, although “[the subcontracting entity] had the authority to hire and fire its employee[s],” DIRECTV “unquestionably play[ed] a role in hiring and firing” through mandated eligibility requirements, certification requirements, and exclusivity provisions. Perez, 2015 WL 3451268 at *5-7; see also Solis v. A-1 Mortg. Corp., 934 F. Supp. 2d 778, 791 and 795 (W.D. Pa. 2013) (accepting that defendant himself “did not have the ultimate authority to make hiring decisions,” but nevertheless concluding that ‘[t]he role he played in the hiring process . . . was significant”; holding this degree of control “tips in favor of finding that Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 34 of 75 27 [defendant] is a joint employer”). There are at least questions of material fact on this factor of the joint employment inquiry. 2. Dispute of fact: Whether Defendants had authority to promulgate work rules and schedule work assignments; set conditions of employment; and set the method of compensation. Another factor commonly considered is “the alleged employer's authority to promulgate work rules and assignments and to set the employees’ conditions of employment: compensation, benefits, and work schedules, including the rate and method of payment.” Enterprise, 683 F.3d at 469. As noted above in the discussion on the first Martin factor—the right to control Plaintiffs’ work—there is ample evidence establishing questions of fact on this element. See Add’l Facts ¶ 40 (describing DIRECTV’s mandatory rules on technical, operational, and customer interactions); 62-63, 106 (describing DIRECTV’s control over Plaintiffs’’ schedules; and 38 (describing DIRECTV’s control over Plaintiffs’ individual work assignments). Defendants seek to side-step this evidence by pointing to several of cases involving cable installers that draw a distinction between “quality control” and other forms of control that can be exercised over an employee. As Defendants note, this is an argument that the Roslov court also adopted. But it is hard to envision what forms of control a defendant could exercise over an Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 35 of 75 28 employee that would not fall under the auspices of what Defendants deem “quality control.” Here, it is undisputed that Defendants controlled not only the technical specifications of the installations (the ‘how’), but also ‘who’ could install, ‘when’ they would install, and ‘where’ they would install. See Add’l Facts ¶¶ 10.d, 11, 13-14, 37-38, 40, 62-63, 106. Defendants ask this Court to ignore these indicia of control in the name of “quality control.” When it comes to supervising their workforce, all businesses—like Defendants did here—tell their employee what to do, how to do it, and whether they did it correctly. And of course, one of the primary reasons these business provide that guidance to their employees is that they want to control the quality of the product or service that they are ultimately delivering to their customers. Under the definition of “employer,” Defendants’ position that its “control” is somehow less direct because it is “quality control” is untenable. See 29 U.S.C. § 203(d) (employer includes those acting both directly and indirectly in the interests of an employer); see also Perez v. Lantern Light, 2015 U.S. Dist. LEXIS 69933 at *31 (W.D. Wash. May 29, 2015) (specifically rejecting DIRECTV’s quality control argument). As to authority over the rate and method Plaintiffs’ pay, Defendants maintain that because Plaintiffs were paid by the subcontractors (or by Halsted and then MasTec in the case of Mr. Rydzanich), they have no evidence Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 36 of 75 29 that DIRECTV exercised authority over their pay. And while it is true that DIRECTV did not cut checks to Plaintiffs—rather it offloaded that responsibility—as a matter of economic reality, DIRECTV set the method of payment. It dictated that it would only pay a set piece rate for closed line items. See Add’l Facts ¶¶ 45-48. That is the method by which DIRECTV paid the subcontractors. Id. The subcontractors, in turn, used that method to pay Plaintiffs. See James Resp. DSOF ¶ 26, Purificato Resp. DSOF ¶ 29; Add’l Facts ¶¶ 45. Plaintiffs’ compensation method was thus set by—and ultimately funded by—DIRECTV.3 In addition, DIRECTV issued chargebacks to the HSPs (who passed them on to the subcontracting companies) when it received customer complaints or the work was not performed to DIRECTV’s satisfaction; and those chargebacks were passed on to Plaintiffs. See Purificato Resp. DSOF ¶ 21; Rydzanich Resp. DSOF ¶ 15; Add’l Facts ¶¶ 46. And David Baker, DIRECTV’s Vice President of Field Services testified that the company 3 In Barfield v. New York City Health and Hospitals Corp., a nursing assistant worked exclusively at a hospital but was directly employed and paid by a referral agency; the hospital reimbursed the agency for the nurse’s work, and the agency paid the nurse. 537 F.3d 132 at 135. 144-45 (2nd Cir. 2008). The Second Circuit ruled that Barfield still “exerted some control over [the nursing assistant’s] pay” because “the hourly rate Bellevue paid the referral agencies effectively set a cap on the hourly rate that the agencies would pay” the nursing assistant. Id. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 37 of 75 30 understood that rate decreases to the contractual partners had the practical effect of a pay decrease to the contractor technicians. See; Add’l Facts ¶ 48. In Enterprise, the holding company did not jointly employ the plaintiff assistant managers because, as to this second factor, it had “no authority to promulgate work rules or assignments[.]” 683 F.3d at 471. Here, DIRECTV promulgated mandatory rules governing the technical specifications of the work, as well as the appearance and “branding” of the technicians and Defendants together retained ultimate control over assignments and scheduling. The Court should conclude that this factor on the whole, tips toward the existence of an employment relationship in light of the significant control exercised by Defendants, and that Defendants summary judgment motion should be denied as a result. 3. Dispute of fact: Whether Defendants were involved in the day-to-day supervision of Plaintiffs. The third factor for consideration is “the alleged employer's involvement in day-to-day employee supervision, including employee discipline.” Enterprise, 683 F.3d at 469. On that score, as described above, Defendants maintained pervasive control over—and supervision of— Plaintiffs’ day-to-day work activities. See Add’l Facts ¶¶ 24-26, 50, 52 (describing Defendants’ force of field supervisors to oversee Plaintiffs’ work), Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 38 of 75 31 ¶¶ 86-88 (describing Defendants’ policies and procedures for monitoring when and where technicians like Plaintiffs were performing their work), ¶¶ 54-56 (describing Defendants’ system of gathering and circulating weekly reports showing how Plaintiffs performed on its performance metrics). In addition, Plaintiffs were required to be able to communicate directly with DIRECTV. See Add’l Facts ¶¶ 41. DIRECTV also maintained ongoing written communication with Plaintiffs by distributing Blast Facts, which contained updates on DIRECTV’s policies and procedures. See Add’l Facts ¶¶ 42. Plaintiffs were required to check-in with DIRECTV when they arrived on site at a customer’s location. See James Resp. DSOF ¶¶ 13, 35; Purificato Resp. DSOF ¶ 11; Rydzanich Resp. DSOF ¶ 11; Add’l Facts ¶¶ 86-88. And when the installation was completed, DIRECTV used post-installation customer surveys to rate Plaintiffs’ work. See Add’l Facts ¶¶ 56. DirectSat and MasTec personnel conducted on-site inspections and audits of the technical proficiency of Plaintiffs’ work. See Add’l Facts ¶ 71. Courts have found that conduct “consistent with a supervisory role” . . . “weighs in favor of the determination that defendant was an employer” where defendant “regularly interacted” with workers to assist with work-related problems and “had at least some influence over the decision to discipline employees” A-1 Mortg., 934 F. Supp. 2d at 796; see also Martin, 949 F.2d at Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 39 of 75 32 1294 (finding “pervasive ... control over the day-to-day operations” where, among other factors, the alleged employers regularly visited their “independent contractor” gas stations for the purpose of overseeing them). The facts here tip this consideration decidedly toward the existence of an employment relationship. In sum, as outlined above, Plaintiffs have presented significant evidence that DIRECTV exercised substantial control of their day-to-day work. And Plaintiffs have disputed DIRECTV’s characterization of the record on that score. See James Resp. DSOF ¶¶ 12, 16, 22–23, 28, 33–33, 35, 44, 46, 48; Purificato Resp. DSOF ¶¶ 19–21, 24, 31–32, 34–35; Rydzanich Resp. DSOF ¶¶ 4, 9, 11–12, 14–15, 18, 20–22, 26–29, 33–35, 37–39, 41–43. As a result there are disputes of fact on this issue—indeed, it is the central dispute in this litigation—and given those disputes, it cannot be resolved on summary judgment. 4. Dispute of fact: Whether DIRECTV maintained any personnel records related to Plaintiffs. The last factor directs the Court to consider on the joint employment inquiry is the putative employer’s maintenance and control of employee records, including payroll, insurance, taxes, and the like[.]” See Bonnette, 704 F.2d at 1470. Defendants argue that DIRECTV did not keep any personnel Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 40 of 75 33 records of any type on Plaintiffs. See Doc. 73-1 at 19; Doc. 74-1 at 18-19; 75-1 at 16. But that fact is disputed. DIRECTV maintains extensive records on Plaintiffs in its Siebel system, including records of Plaintiffs’ schedules and requested days off, records of the trainings and certifications completed by Plaintiffs, and numerous metrics tracking Plaintiffs’ work performance. See Add’l Facts ¶ 61, 64-65. DIRECTV also maintains records of Plaintiffs’ background check and drug screens as well as Plaintiffs’ scores on customer satisfaction surveys. See Add’l Facts ¶¶ 60. Again, DIRECTV points to the Roslov court fining that “identification numbers, names and status information” was not sufficient to satisfy this factor. But there is significantly more evidence of recordkeeping than that listed by the Roslov court in the record here. And again, the Perez Court found that recordkeeping favored a finding of employment because DIRECTV’s records—specifically including work order information—were not related merely to “quality control” but were, “for all intents and purposes, payroll information” of the sort kept by employers. 2015 WL 3451268, at *9-12. Far from eschewing any control over Plaintiffs’ records, DIRECTV dictated what records needed to be kept and either maintained that information in its own computer system or required its contractual partners to keep records subject to inspection. The record evidence on this factor supports determining that Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 41 of 75 34 DIRECTV is an employer or, at a minimum, precludes summary judgment in DIRECTV’s favor on that score. D. The out-of-circuit cases cited by Defendants are unavailing. While Defendants acknowledge the Third Circuit’s standard, rather than apply it to the facts here, they offer citations to out-of-district FLSA cases in which courts that were not applying Martin or Enterprise or granted summary judgment for defendants on the employment question. Indeed, although the Third Circuit fashioned four factors to “generally serve as the starting point for a district court’s analysis,” the Court made a point to “emphasize, however, that these factors do not constitute an exhaustive list of all potentially relevant facts, and should not be ‘blindly applied.’” Id. at 469 (emphasis in original). These are not simply empty words. As if contemplating the type of analysis reflexively applied by the cable cases Defendants advance here, the Third Circuit warned that “district courts should not be confined to ‘narrow legalistic definitions’ and must instead consider all the relevant evidence, including evidence that does not fall neatly within one of the above factors.” Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 42 of 75 35 Id. at 469.4 The Third Circuit simply does not condone the type of blind application engaged in by the Thornton, Zampos, Valdez, Lawrence, Jacobson and Bennett courts. Beyond that, Defendants fail to alert the Court to other cable installer cases that reached different outcomes on the same question.5 So as the Third Circuit has instructed, the facts of this case must be viewed “upon the circumstances of the whole activity.” Martin, 949 F.2d at 1293. 4 Citing Zheng v. Liberty Apparel Co., 355 F.3d at 71; Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947) (explaining that whether an employment relationship exists under the FLSA “does not depend on . . . isolated factors but rather upon the circumstances of the whole activity”); 29 C.F.R. § 791.2(a) (determination “depends upon all the facts in the particular case”). 5 See Keller v. Miri Microsystems LLC, 781 F.3d 799, 816 (6th Cir. 2015) (reviewing factors, reversing the district court’s summary judgment order finding that cable installers were not employees under the FLSA); Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1319 (11th Cir. 2013) (same); Keeton v. Time Warner Cable, Inc., 2011 WL 2618926 at *10 (S.D. Ohio July 1, 2011) (denying Time Warner’s motion for summary judgment “[b]ecause a reasonable fact-finder could conclude that the Plaintiffs were either employed by Time Warner or that Time Warner jointly employed the Plaintiffs”); Solis v. Cascom, Inc., 2011 WL 10501391 at *7 (S.D. Ohio Sept. 21, 2011) (following bench trial, finding that installers were employees rather than independent contractors, distinguish other cable cases on basis that defendant Cascom “forbade its installers from employing their own helpers, asserted control by requiring installers to wear Cascom’s logo, and provided training for unskilled installers. Finally, the installers often remained employed with Cascom for substantial periods of time. Simply stated, in this case the factors of control, required skills, and permanence of relationship weigh more heavily toward employee status than in Amerilink and Mid–Atlantic.”); See also Pennington v. Integrity Commc’ns Inc., 2014 WL 2106301 at *4 (E.D. Mo. 2014) (collecting cases, denying cross motions for summary judgment on employment). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 43 of 75 36 Based on the record evidence outlined above, it is clear that a reasonable jury could conclude that, despite the labels applied to them, Plaintiffs were jointly employed by DIRECTV and MasTec. As a result, Defendants motions for summary judgment on the employment issue must be denied. II. DIRECTV cannot disavow its status as an employer and then seek to avoid liability because it had no “knowledge” of Plaintiffs’ work hours. DIRECTV next argues that Plaintiffs claims fail as a matter of law because they cannot show that DIRECTV knew or should have known of their unpaid overtime work. The premise of this argument, however, is flawed. Indeed, the cases DIRECTV cites in support of this point are readily distinguishable: they are all unsuccessful suits by acknowledged employees to recover for unauthorized or unreported off-the-clock work. See, e.g., Whitaker v. Pac. Enterprises Oil Co. (USA), 956 F.2d 1170 (10th Cir. 1992) (affirming summary judgment for defendant where plaintiff reported and was paid for 279 hours of overtime, he claimed an additional 638 hours of overtime which he did not report but recorded privately on his personal calendar; plaintiff offered no evidence that defendant was aware of this extra work); Hertz v. Woodbury Cnty., Iowa, 566 F.3d 775, 782 (8th Cir. 2009) (affirming jury verdict where County had an established procedure for overtime claims that Plaintiffs regularly used and Plaintiffs failed to adhere to this procedure). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 44 of 75 37 Plaintiffs do not dispute the legal principal at play in these cases: acknowledged employers, who track, record, and pay a premium for overtime, should only be found to violate the FLSA when they failed to pay for additional overtime about which they knew or should have known. But these cases are completely different from Plaintiffs’. DIRECTV disavows its status as an employer. Because it denies that it is Plaintiffs’ employer under the FLSA, it did not track and record Plaintiffs’ work hours. DIRECTV offers no authority, and Plaintiffs can find none, that would graft the burden of proof necessary to establish an off-the-clock violation in the face of compliant payroll policies onto a claim that workers were erroneously classified as outside of the coverage from the very provisions of the Act.6 Plaintiffs’ burden under the FLSA is to prove that they “performed work for which [they were] not properly compensated. The remedial nature of this statute and the great public policy which it embodies, however, militate against making that burden an impossible hurdle for the employee.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 686–87 (1946). After all, “it is the 6 And though MasTec did employ Mr. Rydzanich, it was also aware that it required him to perform significant work tasks that were not covered by the piece rate pay system and, thus, went entirely uncompensated. So while that particular Defendant did not misclassify him as an independent contractor, it was on notice of the FLSA violations at issue. See Rydzanich Resp. DSOF ¶¶ 26- 29; Add’l Facts ¶¶ 103-105. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 45 of 75 38 employer who has the duty under § 11(c) of the Act to keep proper records of wages, hours and other conditions and practices of employment and who is in position to know and to produce the most probative facts concerning the nature and amount of work performed.” Id. at 687. That said, as a factual matter, DIRECTV did have notice of the when Plaintiffs were working. DIRECTV kept records of Plaintiffs’ work schedule and required all subcontractor technicians to be set on a typically six-day work schedule. See Add’l Facts ¶¶ 104, 106. DIRECTV’s Siebel system, while not the same as a timeclock, did track Plaintiffs’ job status from beginning to end. See James Resp. DSOF ¶ 13; Purificato Resp. DSOF ¶ 11; Rydzanich DSOF ¶ 11; Add’l Facts ¶¶ 86-88. And DIRECTV even generated and circulated daily reports to management of when Plaintiffs arrived on site at the customer’s location, both in the morning and evening. See Add’l Facts ¶¶ 87-88. So even were it a valid defense in these circumstances, DIRECTV’s claim that it did not know that Plaintiffs were working overtime without proper pay is not plausible and is certainly not undisputed. III. There is ample evidence that Plaintiffs routinely worked over 40 hours a week and were not paid for all of their work—the extent of their damages is a fact question for trial. Defendants conflate Plaintiffs’ burden to prove a violation of the FLSA with their burden to prove the extent of their damages. Defendants’ Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 46 of 75 39 ‘sufficiency of the evidence’ argument should be rejected because (1) the evidence Defendants characterize as insufficient presupposes liability and relates only to the extent of Plaintiffs’ damages; (2) damages are not an appropriate subject for summary judgment here; and (3) any uncertainty in the record regarding the amount of overtime worked and for how many weeks is the result of Defendants’ recordkeeping violations, and its own failure to meet its discovery obligations to produce in usable format the closest thing available to time records in this case: DIRECTV’s Siebel data. Defendants argue that inconsistencies in the evidence relating to proof of the amount and extent of damages entitle Defendants to judgment as a matter of law. For this, there is no authority. “[R]ecovery will not be precluded simply because there is some uncertainty as to the precise amount of damages incurred. . . . [M]ere uncertainty as to the amount of damages will not bar recovery where it is clear that damages were the certain result of the defendant’s conduct.” Hrycay v. Monaco Coach Corp., 2008 WL 4966042 at *3- 4 (E.D. Pa. Nov. 20, 2008), quoting Pugh v. Holmes, 486 Pa. 272, 297, 405 A.2d 897 (Pa. 1979). Where, as here, an employer has not maintained appropriate time records, “[t]he burden of any consequent imprecision [in an employee’s calculation of damages] must be borne by th[e] employer.” Martin, 949 F.2d at Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 47 of 75 40 1297. Indeed, nearly seventy years ago, the United States Supreme Court considered and rejected the very argument that Defendants now advance: The employer cannot be heard to complain that the damages lack the exactness and precision of measurement that would be possible had he kept records in accordance with the requirements of . . . the Act. . . . .[H]ere we are assuming that the employee has proved that he has performed work and has not been paid in accordance with the statute. The damage is therefore certain. The uncertainty lies only in the amount of damages arising from the statutory violation by the employer. In such a case ‘it would be a perversion of fundamental principles of justice to deny all relief to the injured person, and thereby relieve the wrongdoer from making any amend for his acts.’ Mt. Clemens, 328 U.S. at 688, quoting Story Parchment Co. v. Paterson Parchment Co., 282 U.S. 555, 563 (1931). Put another way, to secure judgment—or in this case, avoid summary judgment—Plaintiffs’ primary burden is to prove the existence of damages, not the precise amount of those damages. Defendants’ citation to DiSantis v. Morgan Props. Payroll Servs., Inc., 2010 WL 3606267 (E.D. Pa. Sept. 16, 2010), is inapposite. In that case, the plaintiff had been terminated by her employer for poor job performance and failure to follow company policy. Id. at *4. Among other claims, she alleged that she was not compensated for overtime hours she had worked. Id. at 12. Her employer produced time-keeping records. The plaintiff asserted that these records were incomplete or inaccurate, but failed to specify why or how. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 48 of 75 41 Id. at 13. Importantly, and unlike Plaintiffs here, DiSantis never provided any estimate of her uncompensated hours. Id. at *39-41. In support of her FLSA claim she relied “solely on vague, conclusory, and speculative testimony to support her claims that she ‘often worked more than 40 hours in weeks of her employment’ . . . .” Id. The DiSantis court concluded, on the facts, that Plaintiff’s testimony was, as a matter of law, insufficient to create a triable issue of fact in regard to whether she in fact worked overtime for which she was not compensated. Id. at 15. Here, Defendants catalogue certain supposed inconsistencies in the evidence regarding the extent of Plaintiffs’ damages. But this is not an off-the- clock case where an employer produces time records, the accuracy of which are disputed. In an off-the-clock case like DiSantis, the question of liability is inextricably tied to the question of how many hours the employee worked but that were not memorialized in the time records. Here, on the other hand, it is undisputed that Defendants did not keep time records on Plaintiffs, entirely disavowed them as employees, and never paid them for certain work tasks. See Add’l Facts ¶ 103. So Plaintiffs establish the existence of their damage by virtue of Defendants misclassifying them as independent contractors and not paying them for all their work and earned overtime, despite working more than 40 Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 49 of 75 42 hours in almost every week. See Amaya v. Tile & Granite Corp., 2012 WL 130425 at *3 (S.D.N.Y. Jan. 17, 2012) (finding after bench trial that the plaintiffs’ testimony that he worked “more than 40 hours almost every week” sufficient to satisfy his burden of proof). The question then turns to the extent of those damages. Plaintiffs recognize that their evidence on this point is imperfect—because of Defendants’ recordkeeping violation—and reasonable jurors could differ in their answer to the quantum of each Plaintiffs’ damages. Of course, Plaintiffs have not moved for summary judgment. So while Plaintiffs recognize the maxim that the quantum of damage is a quintessential fact question, Defendants have not. See Kiss v. Kmart Corp., 2001 WL 568974 at *3 (E.D. Pa. May 22, 2001) (explaining that questions of causation and extent of damages are “quintessential questions of fact that the jury was best suited to answer.”). At root, Defendants accuse Plaintiffs of being inconsistent in their estimates of the amount of damages they seek and ask the Court to make a credibility determination in order to grant summary judgment. But it is well- established that the Court should not make credibility determinations at the summary judgment stage. See Anderson v. Warden of Berks County Prison, 602 F. App’x 892, 895 (3d Cir. Feb. 25, 2015) (reversing trial court’s grant of summary judgment in a prisoner’s retaliation claim when there was evidence, Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 50 of 75 43 albeit subject to credibility attack at trial, advanced in support of that claim). And even if the Court were to weigh the credibility of each Plaintiffs’ statements on their estimates of unpaid work, the estimates Defendants’ complain about are actually consistent and, if anything, reflect an appropriate effort to fashion a reasonable request for relief that will ultimately be presented to the jury. Plaintiffs’ estimates and approximations are simply that; their best recollection of when they worked for Defendants and how much they worked. Defendants attack Plaintiffs for uncertainty that is the inevitable result of Defendants’ employment model, which purports to treat Plaintiffs as independent contractors and disclaims the record-keeping obligations that would attach to an employer. And as explained in Plaintiffs’ interrogatory responses, Defendants maintain Siebel computer data that will assist Plaintiffs in quantifying the extent of their work each day. See James Resp. DSOF ¶ 13; Purificato Resp. DSOF ¶ 11; Rydzanich DSOF ¶ 11; Add’l Facts ¶¶ 86-88. Despite the fact that this is a problem of Defendants’ own making, any lingering uncertainty does not entitle Defendants to judgment as a matter of law because there is no suggestion that Plaintiffs were not damaged. See Story Parchment, 282 U.S. 555, 564 (1931) (“[W]hen, from the nature of the case, the amount of the damages cannot be estimated with certainty, or only a part Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 51 of 75 44 of them can be so estimated, we can see no objection to placing before the jury all the facts and circumstances of the case, having any tendency to show damages, or their probable amount; so as to enable them to make the most intelligible and probable estimate which the nature of the case will permit.”); see also Hrycay, 2008 WL 4966042 at *3-4 (finding there was sufficient evidence of damages for which defendant was responsible and, “although Plaintiffs did not establish their precise amount, the jury was entitled to consider ‘all the facts and circumstances of the case, having any tendency to show damages, or their probable amount; so as to enable them to make the most intelligible and probable estimate which the nature of the case will permit.’” (citing Story Parchment Co., 282 U.S. at 564)). Defendants are not entitled to summary judgment on this basis. IV. Defendants’ minimum wage argument fails to account for the impermissible deductions and unreimbursed business expenses Plaintiffs incurred. Defendants argue, based on the estimates of the average pay that Plaintiffs received and the average number of hours that they worked, that the resulting average wage was in excess of the minimum wage and, thus, Plaintiffs do not have a minimum wage claim. As an initial matter, whether Defendants have met their FLSA obligations entails a week-by-week analysis. In the absence of appropriate records, Plaintiffs are entitled to rely on their Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 52 of 75 45 best estimates. See Mt. Clemens, 328 U.S. at 688.. But that relaxed burden does not inure to the benefit of Defendants. So the evidence of average wages divided by average hours is insufficient for Defendants to establish as a matter of law that they met their obligations under the minimum wage provisions of the FLSA. Even were Defendants permitted to retroactively rely on generalized evidence of Plaintiffs’ pay and hours, the figures Defendants quote do not take into account the net pay Plaintiffs received after being subjected to chargebacks and unreimbursed business expenses. See Rydzanich Resp. DSOF 27; Add’l Facts ¶ 46. “The wage requirements of the [FLSA] will not be met where the employee ‘kicks-back’ directly or indirectly to the employer or to another person for the employer’s benefit the whole or part of the wage delivered to the employee.” 29 C.F.R. § 531.35. So Defendants are not permitted to count wages as being paid if they have been deducted by unreimbursed business expenses: For example, if it is a requirement of the employer that the employee must provide tools of the trade which will be used in or are specifically required for the performance of the employer's particular work, there would be a violation of the Act in any workweek when the cost of such tools purchased by the employee cuts into the minimum or overtime wages required to be paid him under the Act. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 53 of 75 46 Id. In the face of evidence that their wages were routinely reduced by unreimbursed business expenses, Defendants’ failure to even attempt to account for those deductions from Plaintiffs’ pay when calculating their effective wage rate means it cannot be said that there are no questions of fact on whether there were certain weeks in which their pay fell below the minimum wage. That question, like the other questions related to Plaintiffs’ damages, should be left to the jury. V. Defendants’ § 207(i) arguments depend on facts that are genuinely in dispute. The FLSA provides a narrow exemption to the overtime requirements for certain employees working in retail or service establishments. See 29 U.S.C. § 207(i). For Defendants to succeed on their 7(i) defense, they will have to carry the burden of proving that the pay systems at issue satisfy the narrowly-construed requirements of the retail commission exemption. See Parker v. NutriSystem, Inc., 620 F.3d 274, 277 (3d Cir. 2010) (“The employer has the burden of demonstrating that it is eligible for the retail commission exception.”); Birdwell v. City of Gadsden, 970 F.2d 802, 805 (11th Cir. 1992) (“Exemptions from the overtime provisions of section 207 are to be narrowly construed against the employer.”). An employer seeking to apply an exemption to the FLSA must prove that the employee comes “plainly and Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 54 of 75 47 unmistakably” within the exemption’s terms and spirit. See Drummond v. Herr Foods Inc., 2014 WL 5343642 at *5 (E.D. Pa. Oct. 21, 2014) (internal quotation and citation omitted) (a court must construe exemptions narrowly and against the employer; employer must prove that employee and employer fit plainly and unmistakably within exemption’s terms). To meet their burden on the retail commission exemption, Defendants must prove three elements: (1) the sites from which Plaintiffs worked qualify as retail establishments; (2) Plaintiffs were paid at least 1.5 times the minimum wage for all hours of work performed; and (3) Plaintiffs received at least fifty percent of their income in the form of commissions. See Adami v. Cardo Windows, Inc., 2014 WL 2586933 at *5 (D.N.J. June 10, 2014). “[I]f the record is unclear as to some exemption requirement, the employer will be held not to have satisfied its burden.” Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir. 1991), citing Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190, 206 (1966). Because Defendants have not carried their burden on any these elements on undisputed facts, summary judgment on this defense should be denied. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 55 of 75 48 A. Plaintiffs did not work in a retail establishment and DIRECTV urges a standard for applying § 207(i) that is in conflict with the standard adopted by the Third Circuit. One the first element—whether Plaintiff worked in a retail establishment—DIRECTV points to the Matrai case, where a District of Kansas court found that DIRECTV had met the requirement of proving the technicians worked in retail establishments by looking to the overall nature of DIRECTV’s enterprise. But the under the FLSA, an “enterprise” describes the overall business of an employer. See 29 U.S.C. § 203(r). Whereas an “establishment” is a component part of an enterprise, the physical sites of the enterprise’s work. See Mitchell v. Bekins Van & Storage Co., 352 U.S. 1027, 1027 (1957).7 And the distinction is not merely academic. The only evidence Defendants have come forward with on the alleged retail nature of Plaintiffs’ work was presented at an enterprise-wide level. But that approach is reversible error. See Brennan v. Yellowstone Park Lines, Inc., 478 F.2d 285, 7 The Matrai decision, and the Alvarado case from the Seventh Circuit on which it is based, both argue that evidence of the retail nature of the defendants’ “establishment” should not be required as that requirement is a vestige from a line of cases dealing with the “retail or service establishment” exemption originally set out in 29 U.S.C. § 213(a)(2), which has since been repealed. But as a court in this Circuit has noted, when Congress repealed § 213(a)(2), it “specifically provided that where the phrase ‘retail or service establishment’ was used in other provisions of the act, such as § 207(i), or in the Department of Labor regulations interpreting that phrase, the former definition was to be used.” Haskins v. VIP Wireless LLC 300, 2010 U.S. Dist. LEXIS 106205, *7 (W.D. Pa. October 5, 2010). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 56 of 75 49 289-90 (10th Cir. 1973) (reversing summary judgment to employer when “establishment” was evaluated at the enterprise level rather than at the level of the employer’s multiple, distinct locations). Thus, there is absolutely no evidence directed to the required inquiry at hand. So for that reason alone summary judgment cannot be issued on the § 207(i) defense on the record presented to the Court here. Even were Defendants to have presented record evidence on the appropriate standard, that evidence would not prove the defense as matter of law. The first element of the § 207(i) defense itself has three requirements. First, the establishments where the employees work must have a retail concept. See A.H. Phillips, Inc. v. Walling, 324 U.S. 490 (1945). Second, the work performed at the establishments must be recognized as retail within Defendants’ own industry. See 29 C.F.R. § 779.322. And third, 75 per centum of the dollar volume of the retail goods or services of the establishments must not be for resale. See Liger v. New Orleans Hornets, 565 F. Supp. 2d 680, 689 (E.D. La. 2008) (following the DOL’s “excellent guidance” in 29 C.F.R. part 779). To satisfy the initial prong of the retail establishment test on summary judgment, Defendants must show that there is no dispute of material fact on each of these sub-factors. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 57 of 75 50 On the second element—that the establishments are recognized as retail within the particular industry—there is, at a minimum, a dispute of fact. The Supreme Court has held that the question of whether a particular service may be considered retail is influenced by industry usage but not controlled by it. See Idaho Sheet Metal Works v. Wirtz, 383 U.S. 190, 204 (1966). Here, Defendants offered the testimony of Steven Hill to support the contention that delivering, installing and servicing satellite equipment is “recognized as retail in the cable and satellite television industry.” See, e.g., Purificato DSOF ¶ 1. In contrast to DIRECTV’s industry advocate, the highest ranking officers of both Multiband and DirectSat, whose businesses are dedicated to installing and servicing DIRECTV’s systems, unequivocally testified that they do not consider their companies to be retail businesses. See, e.g., Purificato DSOF ¶ 1; Add’l Facts ¶ 92. Contradictory testimony among industry insiders on whether the work performed by the technicians from their establishments is recognized as retail within their industry presents a quintessential question of fact for the jury to resolve. See Homemakers Home & Health Care Services, Inc. v. Carden, 538 F.2d 98, 107 (6th Cir. 1976) (the issue of ‘recognition as retail’ [is] a question of fact”). The final requirement necessary for Defendants to show that the technicians worked in retail establishments is that 75% of the dollar volume Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 58 of 75 51 of the retail goods or services of the establishment must not be for resale. See 29 C.F.R. § 779.330. Again, on this score Defendants have only provided information about DIRECTV’s enterprise as a whole. The appropriate inquiry, however, is what percentage of the revenue of the relevant establishments comes from the sales of goods and services. As with the other prongs of this test, on this question, Defendants have failed to provide the Court with a factual record. This omission is fatal to Defendants’ purported § 207(i) defense on summary judgment. See Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir. 1991) (“if the record is unclear as to some exemption requirement, the employer will be held not to have satisfied its burden”). At a minimum, there are questions of fact on this issue. The principal activity of the technicians was to complete installations. See Add’l Facts ¶ 83. DIRECTV provided this service free of charge to the customer. See Add’l Facts ¶ 98. Cf. Jones v. Tucker Communs. Inc., 2013 U.S. Dist. LEXIS 163509 at *17, n.7 (M.D. Ga. Nov. 18, 2013) (cited by Defendants) (describing separate installation charge paid by the customer). So the vast majority of the work performed by the technicians did not generate revenue for DIRECTV. Indeed, DIRECTV’s Senior Vice President of Field Services testified that the establishments where the technicians work are cost centers to DIRECTV. See Add’l Facts ¶ 101. So at best, Defendants face questions of fact Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 59 of 75 52 on this prong of the test. More likely, Defendants will be unable to demonstrate that 75% of the revenue for the technicians’ establishments comes from the end customer. In either case, summary judgment should be denied. B. Plaintiffs did not receive more than 50% of their pay in the form of commissions. Just as it cannot prove the parties fit “plainly and unmistakably” into the spirit of the Act’s definition of a retail establishment, DIRECTV cannot establish any evidence, let alone credible evidence, that plaintiffs were paid “a bona fide commission rate.” Defendants’ reliance on cases from the Seventh and Eleventh Circuits is of little value to this Court, where controlling Third Circuit precedent recently delivered in Parker and interpreted by courts within this Circuit, speaks directly to the issues. See Parker v. NutriSystem, Inc., 620 F.3d 274 (3d Cir. 2010) (holding employer’s compensation plan can constitute a bona fide commission rate, even when employees are paid a flat- rate fee, where those payments are proportional to cost to the consumer and compensation was based on them completing sales). In Parker, the Third Circuit found it significant that NutriSystem's compensation plan “base[d] compensation on sales.” 620 F.3d at 283 (quoting Yi v. Sterling Collision Centers, 480 F.3d 505, 510 (7th Cir. 2007)). Under that Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 60 of 75 53 plan, a flat rate fee was not paid unless a sales associate completed a sale. The amount of the payment was based on the value NutriSystem was receiving from the sales associates’ work. This plan created an incentive for sales associates to be actively making outgoing calls and to work less desirable hours, thus allowing NutriSystem to operate at peak efficiency around the clock. Parker, 620 F.3d at 283-284. The simple fact here is that Plaintiffs did not sell the installation they were paid to perform. See Add’l Facts ¶ 93-96. Indeed, Plaintiffs’ job was to install and service DIRECTV satellite systems. Plaintiffs’ piece-rate pay covered certain work Plaintiffs performed (i.e., the basic installation of a DIRECTV system). See Add’l Facts ¶ 103. Plaintiffs were not in the business of making sales; and the piece rate payments made to Plaintiffs were not based on any sales by Plaintiffs. See Purificato Resp. DSOF ¶ 29; Add’l Facts ¶ 93-94, 103. Accordingly, under Parker, those piece rate payments were not a bona fide commission as required to meet the § 207(i) exemption. See also Adami v. Cardo Windows, Inc., 2014 WL 2586933 at *5-6 (D.N.J. June 10, 2014) (holding flat-rate payments to plaintiff window installers were not commissions under 207(i) where plaintiffs had no role in selling windows and sales ability was irrelevant to compensation). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 61 of 75 54 Beyond that, in Parker, the Third Circuit unequivocally states: “We conclude that when the flat-rate payments made to an employee based on that employee’s sales are proportionally related to the charges passed on to the consumer, the payments can be considered a bona fide commission rate for the purposes of § 7(i).” Parker, 620 F.3d at 283. Not only were Plaintiffs not selling installation services, Plaintiffs’ compensation was not proportionally related to charges passed on to the consumer: DIRECTV installations are free to the consumer. See Add’l Facts ¶ 98_. Because the customer pays nothing for the service Plaintiffs provided, Defendants cannot establish that such payments are proportional to the amount charged to the customer for the installation, which is free. So as a matter of law, Plaintiffs’ piece rate compensation was not a bona fide commission.8 See Parker, 620 F.3d at 283; compare Wilks v. Pep Boys, 278 F. App’x 488, 489 (6th Cir. 2008) (affirming district court’s denial of summary judgment to the employer under § 207(i) when the employer failed to show “some proportionality between the compensation to the employees and the amount charged to the customer”); Adami, 2014 WL 2586933 at *5-6 (finding 8 Even were Defendants somehow able to establish the required proportional relationship between what DIRECTV’s customers “paid” for the installation service and the pay that Plaintiffs received, they have not provided the Court with any evidence supporting that alleged proportional relationship. So at best, this leaves open a question of fact to be resolved at trial. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 62 of 75 55 flat-rate compensation not commission under § 207(i) where record did not establish that payments made to Plaintiffs were proportional to the charges passed on to customers and suggested instead that defendant paid installers on a piece-rate basis with no connection to the cost to the consumer); Huntley v. Bonner’s, Inc., 2003 WL 24133000 at *3 (W.D. Wash. Aug. 14, 2003) (noting that a compensation system must pay the employee a “‘a certain proportion’ of the charge to the customer” to be a commission). One thing is clear: the exemption claimed here does not fall plainly and unmistakably under the statute’s terms. DIRECTV has not met its burden. VI. Defendants are not entitled to judgment as a matter of law on their statute of limitations defense; there is ample evidence from which a reasonable jury could conclude that their violations were willful. An FLSA claim must be brought “within two years,” “except that a [claim] arising out of a willful violation may be commenced within three years after the cause of action accrued.” See 29 U.S.C. § 255(a). An FLSA violation is willful if “the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited.” See McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). This standard requires more than mere negligence or a good-faith but erroneous assumption that a pay plan complied with the FLSA. McLaughlin, 486 U.S. at 135. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 63 of 75 56 A. As an inquiry into mental state, willfulness is quintessentially a fact question reserved for the jury. As a threshold matter, courts routinely hold that the question of whether a violation is willful is generally one of fact for a jury. See Bankston v. State of Ill., 60 F.3d 1249, 1253 (7th Cir. 1995) (“It is the jury’s province to decide which limitations period, two or three years, applies in light of the plaintiffs’ evidence that the defendants acted willfully.”); Fowler v. Land Mgmt. Groupe, Inc., 978 F.2d 158, 162-63 (4th Cir. 1992) (holding in the context of the FLSA, “there is no reason issues of willfulness should be treated any different from other factual determinations relating to application of a statute of limitations that are routinely submitted to the jury”). Regardless, there are significant facts in the record subject to interpretation that precludes summary judgment for Defendants on their culpability. B. There is ample evidence creating a genuine issue for trial as to the willfulness of Defendants’ conduct, in particular their creation of a fissured employment scheme designed to create plausible deniability. As discussed above with respect to their position on the so called “notice” defense, DIRECTV contends that it is not liable under the FLSA because it had no knowledge of Plaintiff Rydzanich’s hours or wages. But the same evidence Plaintiff has marshalled in favor of their claim that Defendants jointly employed them is also proper fodder for the jury to consider in Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 64 of 75 57 evaluating Defendants’ mental state, and whether it was willful in failing to ensure Plaintiff was compensated in accord with the Act. That is because this retention of control (while purporting to delegate it away) reveals DIRECTV’s culpable state of mind. In other words, DIRECTV’s attempt to manufacture plausible deniability is, itself, evidence of willfulness. Evidence of a comparable caliber has, in other cases, resulted in summary judgment in plaintiffs’ favor on the question of willfulness. In Chao v. A-One Medical Services, 346 F.3d 908, 919 (9th Cir. 2003), the Ninth Circuit affirmed summary judgment in favor of the plaintiff on the issue of willfulness. There, the employer operated two separate companies that were, in economic reality, a single enterprise. Id. at 918. The defendant scheduled part of each employee’s weekly hours into the two different companies so that the employee would not aggregate up to 40 hours of work in any one week for a single company. Id. The court affirmed the willfulness ruling, in part, because there was evidence that the separate companies were maintained in order to avoid compliance with the FLSA. Id. at 919. While Plaintiffs are alleging a different violation here, Chao is instructive because Plaintiffs will argue that DIRECTV’s HSP Network was structurally designed to avoid FLSA liability. If the jury agrees, then per the holding in Chao, Defendants’ violation was willful. See also Martin v. Selker Bros., Inc., 949 F.2d 1286, 1296 (3d Cir. 1991) Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 65 of 75 58 (holding employer’s use of improperly classified “independent contractors” demonstrated a willful violation of the FLSA). DIRECTV also alleges in its statement of fact that it included a provision in its HSP agreement with Halsted and MasTec that that they must comply with the FLSA. See, e.g., Rydzanich Resp. DSOF ¶ 9. But a review of the HSP agreement reveals that the only law DIRECTV specifically asked its contractors to comply with was the Occupational Health and Safety Act, not the FLSA. See Rydzanich Resp. DSOF 9. In fact, it is particularly troubling that DIRECTV would represent that it previously required its contractors to comply with the FLSA when just last year it agreed, as part of a consent decree with the Department of Labor after losing summary judgment in the Perez case, to specifically amend its contracts to include compliance with the FLSA as a term moving forward. Id. In short, if the jury finds DIRECTV to be the joint employer of Plaintiffs and that it has violated the FLSA, then the other evidence Plaintiffs will adduce supports a finding that DIRECTV set up its business structure with a reckless indifference to whether it complied with the FLSA. As the Courts held in Chao and Martin, that evidence is sufficient to support a willfulness finding. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 66 of 75 59 C. DIRECTV’s history of litigation alleging and finding FLSA violations is also additional evidence of its willfulness. Another way to demonstrate that an employer’s violation of the FLSA is willful is by showing that the employer had notice of potential violations by virtue of its previous history of litigation or investigations. See Reich v. Monfort, Inc., 144 F.3d 1329, 1334 (10th Cir. 1998). Here, there is a body of evidence that DIRECTV has had many more than one or two prior run-ins with alleged FLSA violations. In addition to cases brought by the Department of Labor or undersigned counsel, DIRECTV had been named as a defendant in at least 20 different lawsuits alleging wage and hour violations involving technicians working within its provider network. See Ex. 49 DIRECTV’s Answer to Global 30(b)(6) Topic 4. This evidence, coupled with the other evidence of DIRECTV’s approach to FLSA compliance as demonstrated by its actions, is more than sufficient to prevent DIRECTV’s motion for summary judgment on the issue. VII. The existence of a contract is irrelevant to a PWPCL claim asserting improper wage deductions. Plaintiffs PWPCL claim consists entirely of the assertion that DIRECTV made improper pay deductions from their weekly compensation. See Am. Cpl. (Doc. 18) at Count III. In a sweeping one-page argument, DIRECTV asserts that Plaintiffs’ PWPCL claims should fail because (i) as a matter of law, all PWPCL Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 67 of 75 60 claims must be predicated on a contractual right to wages and (ii) no contract exists between the Plaintiffs and DIRECTV requiring the payment of wages. See Doc. 73-1 at 34-35; Doc. 74-1 at 33-34; Doc. 75-1 at 33-34. As discussed below, these arguments fail for various independent reasons. DIRECTV’s entire PWPCL argument is predicated on the proposition that workers’ PWPCL rights always are defined by and limited to their contractual rights. As discussed below, this proposition is incorrect both as a general matter and, more specifically, in the context of a PWPCL wage deduction case. First, the PWPCL’s text contains no language requiring—or even suggesting—that wages owed must be based on a contract or agreement. See generally 43 P.S. §§ 260.1 et seq. Second, the PWPCL’s text flatly contradicts a rule that wages owed must be based on a formal contract. In particular, the PWPCL states: “No provision of this act shall in any way be contravened or set aside by private agreement.” 43 P.S. § 260.7. As Judge Wettick has observed, this provision reaches “any contractual provisions that interfere with enforcement of the legislation” and prevent courts from enforcing written agreements “that make it more difficult for workers to enforce their statutory rights.” Watson v. Prestige Delivery Systems, Inc., 27 Pa. D. & C. 5th 449, 456 (Pa. C.C.P., Allegheny Cty. Feb. 7, Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 68 of 75 61 2013) (emphasis supplied). This statutory mandate—that PWPCL rights cannot “be contravened or set aside by private agreement”—cannot be reconciled with the false argument that workers’ PWPCL rights are defined exclusively by private agreements. Indeed, the whole point of PWPCL § 260.7 is to create a rule that prohibits private agreements from dictating the parameters of a worker’s PWPCL rights. Third, the caselaw contradicts any bright-line rule that PWPCL claims cannot extend beyond a contract between the worker and the company. In Lugo v. Farmers Pride, Inc., 967 A.2d 963 (Pa. Super. 2009), the Superior Court held that a class of poultry workers could assert PWPCL claims that were predicated entirely on the employer’s violation of statutory minimum wage and overtime laws. Id. at 969. The Lugo decision contains no indication or suggestion that these at-will poultry workers had any employment contract or any contractual basis for their PWPCL claims. Id. Thus, as Judge Rufe has observed: “Lugo adopts a broader interpretation of the WPCL as a vehicle for employees to recover unpaid wages, regardless of the source of their employer’s obligation to pay the wages.” Moser v. Papadopoulos, 2011 U.S. Dist. LEXIS 64716, *12 (E.D. Pa. June 15, 2011). Other judges agree. See Galloway v. George Junior Republic, 2013 U.S. Dist. LEXIS 134014, *43-44 (W.D. Pa. Sept. 19, 2013) (Mitchell, M.J.); Hilvey v. Allis-Chalmers Energy, Inc., 2013 Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 69 of 75 62 U.S. Dist. LEXIS 80800, *8-9 (W.D. Pa. June 10, 2013) (Fischer, J.); Turner v. Mercy Health System, 2010 Phila. Ct. Com. Pl. LEXIS 146, *13-14 (Pa. C.C.P., Phila. Cty. Mar. 10, 2010) (Fox, J.).9 Fourth, the PWPCL’s wage deduction regulation – which forms the sole basis for Plaintiffs’ claim—contradicts any rule that PWPCL claims require a contract or agreement between the plaintiff and defendant. At almost every turn, the regulation requires particular categories of deductions to be “authorized in writing” in order to be legal. See 34 Pa. Code §§ 9.1(2)-(7), (10)- (13). Thus, with respect to these deductions, a PWPCL violation arises if the deductions are not authorized in writing, a reality that cannot be reconciled with the false argument that PWPCL wrongful deduction claims must be predicated on the existence of contract. Indeed, the regulatory language commands the opposite: it is the absence of an agreement that triggers the PWPCL violation.10 Id. 9 Judges Jones and Kane have refused to dismiss PWPCL claims based on the argument that PWPCL claims must have a contractual basis. In so doing, both Judges recognized that the law is unsettled. See Soles v. Zartman Construction, Inc., 2014 U.S. Dist. LEXIS 98181, *23-25 (M.D. Pa. July 18, 2014); Wink v. Ott, 2012 U.S. Dist. LEXIS 70386, *14-15 (M.D. Pa. May 12, 2012). 10 As such, it is unsurprising that, in a recent decision addressing class certification of various PWPCL deduction claims, the existence of a contract or agreement pertaining to the deductions did not even enter into Judge Brody’s analysis. See Verma v. 3001 Castor, Inc., 2016 U.S. Dist. LEXIS 164026 (E.D. Pa. Nov. 29, 2016). Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 70 of 75 63 Fifth, the PWPCL’s wage deduction regulation contains other requirements that further contradict any notion that PWPCL claims must be defined by contract. Most significantly, even if an agreement is reached between the plaintiff and defendant regarding a particular deduction, the PWPCL is still violated if the deduction is not “for the convenience of employees.” Id. at § 9.1. This requirement exists because the regulators “would not have intended to give employers a free pass as long as the job- seeking worker would sign a piece of paper authorizing a deduction.” Watson, 27 Pa. D. & C. 5th at 465. Sixth, even though Plaintiff’s PWPCL claim is expressly based on Ressler v. Jones Motor Co., Inc., 487 A.2d 424, 427-29 (Pa. Super. 1985), see Am. Cpl. (Doc. 18) at ¶ 69, Defendants entirely ignore the decision and the rule it creates. Ressler explains that, in order to be permissible, wage deductions must either (i) fall within one of 12 categories of authorized deductions described at 34 Pa. Code § 9.1(1)-(12) or (ii) be covered by the “catch-all” provision described at 34 Pa. Code § 9.1(13). See Ressler, 487 A.2d at 427-28. Moreover, the catch-all provision is very narrow. Under that provision, a deduction “is unlawful absent a showing of Department of Labor & Industry approval and written authorizations by employees.” Id. at 429. Ressler’s rule cannot be reconciled with the argument that PWPCL wage deduction claim Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 71 of 75 64 must, in every case, stem from a contract. In fact, like the deduction regulation itself, Ressler says the opposite: it is the absence of an agreement that triggers the violation. In sum, Defendants’ assertion that Plaintiffs cannot bring a PWPCL claim in the absence of a contract between them and Defendants cannot be reconciled with statutory text, regulatory text, or existing case law. CONCLUSION The Court should deny in toto Defendants’ three Motions for Summary Judgment. Defendants do not and cannot establish that they are entitled to judgment as a matter of law as to any of the seven grounds they assert. On the employment question, Defendants effectively ignore binding Third Circuit precedent in favor or advancing a rigid application of a test that they argue demonstrates they did not directly control Plaintiffs’ work. Setting aside the evidence of direct control Plaintiffs have marshalled, the appropriate question under the FLSA is whether Defendants acted “directly or indirectly in the interests of an employer”—an inquiry that must be answered by looking to the economic reality of the parties’ relationship, not an application of inflexible factors from out-of-circuit cases. Next Defendants argue that they had no knowledge of Plaintiffs’ work hours, so cannot be held liable. Again, the Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 72 of 75 65 facts suggest otherwise, but to the extent that Defendants did not have reason to know that Plaintiffs were working over 40 hours a week, that knowledge is not a prerequisite for imposing liability in a misclassification case like this one where Defendants eschew any responsibility to properly track or pay for those hours in the first place. Third, because there is no dispute that Plaintiffs performed work for which they were not properly compensated, the extent and amount of unpaid overtime—i.e., damages—involves factual disputes and credibility determinations not appropriate for summary judgment. Fourth, Defendants’ arguments on Plaintiff’s alternative minimum wage claim seeks to take advantage of an inapplicable standard and fails to account for all relevant evidence. Fifth, Defendants failed to provide evidence on the correct question and cannot meet their burden to prove that the FLSA’s narrow exemption to the overtime requirement for the retail commission employees applies to Plaintiffs and, in any case, Plaintiffs were not paid a bona fide commission rate under controlling Third Circuit precedent. Sixth, Defendants’ own willful blindness, coupled with DIRECTV’s history of wage and hour litigation, are sufficient facts upon which a jury could find a willful violation. And finally, Plaintiffs may enforce their right to those wages under the PWPCL even in the absence of a contract; indeed, given the nature of their unlawful deductions theory, the statute would be toothless under any other interpretation. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 73 of 75 66 For each of these reasons, and those more fully discuss above, Plaintiffs respectfully request that the Court enter an Order denying Defendants’ Motions for Summary Judgment. Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 74 of 75 67 RESPECTFULLY SUBMITTED this 3rd day of January, 2017. STUEVE SIEGEL HANSON LLP George A. Hanson (ECF User) Crystal R. Cook (ECF User) 460 Nichols Road, Suite 200 Kansas City, Missouri 64112 (816) 714-7100 WINEBRAKE & SANTILLO, LLC Peter Winebrake (ECF User) R. Andrew Santillo (ECF User) Mark J. Gottesfeld (ECF User) 715 Twining Road, Suite 211 Dresher, PA 19025 (215) 884-2491 LEAR WERTS LLP /s/ Todd C. Werts Todd C. Werts (ECF User) 2003 W. Broadway, Ste. 107 Columbia, MO 65203 (573) 875-1993 Attorneys for Plaintiffs CERTIFICATE OF SERVICE The undersigned certifies that the above and foregoing was filed with the Court’s CM/ECF system on January 3, 2017. That system will serve copies on all those seeking notice. /s/ Todd C. Werts Case 3:14-cv-02441-RDM Document 89 Filed 01/03/17 Page 75 of 75