Sixth Circuit Affirms FLSA Jury Verdict Against Independent Contractor Ultrasound Technician

This morning, the Sixth Circuit Court of Appeals affirmed a jury verdict rejecting the FLSA overtime and retaliation claims brought by a former ultrasound technician against the employer medical center.   Werner v. Bell Family Medical Center, No. 12-6059 (6^th Cir. 6-27-13).   In that case, the plaintiff was hired as an independent contractor and paid $40/hour regardless of the number of procedures he performed.  He was fired after filed a complaint with the DOL, and later in court, claiming unpaid overtime, and then, retaliation under the FLSA.  The court denied summary judgment and the jury ruled against him on his FLSA claims, but awarded him $15,000 on his defamation claim. The Sixth Circuit concluded that the trial court was permitted to submit the question of his employment status to the jury (instead of deciding the issue as a matter of law) when there was a material factual dispute as to several factors in the economic realities test and the plaintiff had requested a jury trial.  The Court also found that it was irrelevant whether ultrasound technicians qualify for an exemption under the FLSA if the plaintiff were not an employee in the first place. Moreover, the anti-retaliation provisions do not protect independent contractors.   Sufficient evidence had been presented to justify the jury’s verdict that the plaintiff was an independent contractor and not an employee.

The Court agreed that the plaintiff’s employment status would be resolved by the economic realities test.  Although this is typically resolved by a court as a matter of law, there were factual disputes as to a number of the six factors:

(1) the permanency of the employment relationship; (2) the degree of skill required for rendering services; (3) the worker’s investment in equipment or materials for the task; (4) the worker’s opportunity for profit or loss, depending upon skill; (5) the degree of the alleged employer’s right to control the manner in which the work is performed; and (6) whether the service rendered is an integral part of the alleged employer’s business.

There was a dispute, for instance, in the second factor about the degree of skill required when he was the only employee who had specialized training and who was qualified to perform the tests, even though he could not perform the test without a physician’s order.  While he never performed a test without being requested, that is true of every employee and independent contractor in considering the fifth factor. There was no suggestion “that Defendants told him how to perform ultrasounds, critiqued their quality, or made recommendations on his work. Defendants told him to complete an ultrasound for a particular patient, but there is no question that he retained discretion to decide how best to do it. As for the sixth factor, while his services were extremely profitable, the defendant was a full-service family medical practice, not an independent diagnostic facility, and most patients did not require an ultrasound.  He was paid substantially more than the market rate for similar technicians in the region and his successor was classified as employees and paid substantially less than him as well.  The DOL concluded in its investigation that he was an employee.   

While an individual’s employment status should usually be resolved by the trial court as a matter of law, “material factual disputes regarding employment status may require resolution by a factfinder in close cases.”  In any event, the plaintiff waived a bench trial on the issue of his employment status by requesting a jury trial.  Because reasonable minds could differ on how to resolve the competing factual inferences in this case, the jury verdict must be upheld.

 NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.