To determine whether a person is an employee or independent contractor for purposes of the Fair Labor Standards Act (“FLSA”), courts examine several factors to determine the “economic reality” of the relationship between the alleged employee and employer. Merely putting an independent contractor label on the alleged employee or entering a contract that controls the relationship does not exempt a person from the requirements of the FLSA. The court’s determination instead is governed by whether that relationship demonstrates economic dependence. Peter Mavrick is a South Florida employment attorney who represents the interests of business and their owners in labor and employment litigation, including lawsuits seeking overtime wages and minimum wages.
The Eleventh Circuit Court of Appeals (“Eleventh Circuit”), i.e., the appellate court governing federal labor and employment lawsuits in the State of Florida, recently ruled in favor of an employer who properly classified a worker as an independent contractor instead of as an employee. The Eleventh Circuit held that the employer owed the worker no overtime wages because he was an independent contractor. In J. L. Nieman v. National Claims Adjusters, Inc., et al., Case No.: 3:17-cv-01430-HES-JRK (11th Cir. 2019), insurance adjustor J. L. Nieman (“Nieman”) sued National Claims Adjusters, Inc.’s (“National”) and David Ierulli’s (collectively “NCAI”) for failure to pay wages and for retaliatory discharge under the FLSA.
Neiman did not state many facts in his complaint that would support his claim for employee status. The allegations in his complaint suggested that nothing prevented Neiman from working for other insurance companies, and he did in fact do so during his relationship with NCAI. Neiman’s allegations did not allege that NCAI controlled the number of hours he worked, supervised him, or paid for his professional licensing. Also, Neiman alleged that his belief that his temporary role with NCAI might have “potentially” become a permanent one did not suggest economic dependence. The district court granted NCAI’s motion to dismiss and found such factors to be indicative of the lack of an employment relationship. Nieman’s appeal followed.