Martin v. Selker Bros., Inc. - 949 F.2d 1286 (3d Cir. 1991)

Rule:

Determination of the employment relationship does not depend on isolated factors but rather upon the "circumstances of the whole activity." Courts have developed several criteria to assist them in determining the existence of an employment relationship under the Fair Labor Standards Act, 29 U.S.C.S. §§ 201-219. Although neither the presence nor the absence of any particular factor is dispositive, there are six factors to determine whether a worker is an "employee": 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 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. 

Facts:

Selker Brothers was a distributor of oil and gasoline who ran numerous gas stations. Plaintiff Secretary of the U.S. Department of Labor brought an action under the Fair Labor Standards Act, 29 U.S.C.S. §§ 201-219 (FLSA), based on Selker Brothers’ alleged violations of the minimum wage, overtime, record keeping and anti-retaliation provisions. The district court found that the operators were employees, rather than independent contractors, and that Selker Brothers "willfully" violated the FLSA and awarded liquidated damages.

Issue:

Were the operators employees?

Answer:

Yes.

Conclusion:

The court affirmed, with a slight adjustment of damages. The district court correctly concluded that the operators were employees based on Selker Brothers’ control over the operators, the minimal opportunity for profit or loss, the operator's insignificant investment, the routine work., the permanence of the relationship, and the integral economic relationship. Evidence of Selker Brothers’ indifference toward the requirements of the FLSA showed that his conduct was "willful." Approximate damages were proper based on Selker Brothers’ failure to keep adequate records, and non-testifying employees were also entitled to back wages. Selker Brothers’ lack of good faith warranted liquidated damages.