Marcus Werner v. Bell Family Medical Center, Inc.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 13a0611n.06

No. 12-6059

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

FILED

Jun 27, 2013

MARCUS WERNER, ) DEBORAH S. HUNT, Clerk

)

Plaintiff-Appellant, )

)

v. ) ON APPEAL FROM THE UNITED

) STATES DISTRICT COURT FOR THE

BELL FAMILY MEDICAL CENTER, INC.; ) MIDDLE DISTRICT OF TENNESSEE

MIDDLE TN MEDICAL ASSOCIATES, )

PLLC; NII SABAN QUAO, M.D., P.C.; )

ARIKANA CHIHOMBORI, M.D., )

)

Defendants-Appellees. )

Before: CLAY and COOK, Circuit Judges; OLIVER, District Judge*

COOK, Circuit Judge. Between 2005 and 2009, Plaintiff Marcus Werner worked as a

certified ultrasound technician for defendants Bell Family Medical Center, Middle Tennessee

Medical Associates, and Dr. Nii Saban Quao, P.C. (collectively, “medical centers”). The defendant

medical centers classified him as an independent contractor and paid his requested hourly rate of

$40, regardless of the frequency of ultrasound orders. In June 2009, after filing a wage complaint

with the U.S. Department of Labor, Werner filed this lawsuit in state court seeking unpaid overtime

wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and Tennessee law.

The medical centers fired him and removed the case to federal court. Werner amended his complaint

*

The Honorable Solomon Oliver, Jr., Chief Judge, United States District Court for the

Northern District of Ohio, sitting by designation.

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Werner v. Bell Family Med. Ctr. et al.

to join one of the medical centers’ owners as a defendant and to include retaliation and defamation

claims.

After the district court denied his motion for summary judgment, the case proceeded to a jury

trial. The jury returned a verdict for the medical centers on the FLSA claims, and Werner moved

for judgment as a matter of law or a new trial.1 His post-trial motion renewed an argument

previously denied by the district court and squarely rejected by the jury: that his position, as the

medical centers’ certified ultrasound technician, qualifies for FLSA protections as an “employee”

instead of an independent contractor. Finding ample record support for the jury’s conclusion, the

district court denied the motion, and Werner appeals. We AFFIRM the district court’s judgment.

I.

We review the district court’s denial of judgment as a matter of law under Rule 50(b) de

novo and the denial of a new trial under Rule 59 for abuse of discretion. Balsley v. LFP, Inc., 691

F.3d 747, 757, 761 (6th Cir. 2012). When reviewing a district court’s denial of a motion for

judgment as a matter of law, we “apply[] the same deferential standard as the district court: ‘The

motion may be granted only if in viewing the evidence in the light most favorable to the non-moving

party, there is no genuine issue of material fact for the jury, and reasonable minds could come to but

one conclusion, in favor of the moving party.’” Radvansky v. City of Olmsted Falls, 496 F.3d 609,

1

The jury did award Werner $15,000 on his defamation claim, and the district court entered

judgment on this claim. Neither party challenges that judgment.

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614 (6th Cir. 2007) (citations omitted). In other words, when reviewing a Rule 50(b) motion, we

have no authority to reweigh the evidence or make credibility determinations, so as to substitute our

judgment for that of the jury. E.g., Williams v. Nashville Network, 132 F.3d 1123, 1131 (6th Cir.

1997). Yet, our review of a district court’s denial of a motion for a new trial differs somewhat. The

district court “must compare the opposing proofs and weigh the evidence,” Duncan v. Duncan, 377

F.2d 49, 52 (6th Cir. 1967), and we will “reverse [the district court’s] decision only if we have ‘a

definite and firm conviction that the trial court committed a clear error of judgment,’” Barnes v.

Owens-Corning Fiberglas Corp., 201 F.3d 815, 820 (6th Cir. 2000) (quoting Logan v. Dayton

Hudson Corp., 865 F.2d 789, 790 (6th Cir. 1989)). Further, “new trials are not to be granted on the

grounds that the verdict was against the weight of the evidence ‘unless that verdict was

unreasonable.’” Barnes, 201 F.3d at 820–21 (quoting Holmes v. City of Massillon, 78 F.3d 1041,

1047 (6th Cir. 1996)).

This appeal hinges on whether Werner qualifies as an “employee” under the FLSA. The

FLSA broadly defines “employee” as “any individual employed by an employer,” 29 U.S.C.

§ 203(e)(1), and “employ” as “to suffer or permit to work,” id. § 203(g). In order to give full effect

to this remedial legislation, we employ the “economic reality” test on a case-by-case basis, Ellington

v. City of East Cleveland, 689 F.3d 549, 555 (6th Cir. 2012), asking “whether the putative employee

is economically dependent upon the principal or is instead in business for himself,” Lilley v. BTM

Corp., 958 F.2d 746, 750 (6th Cir. 1992). Though not “a precise test susceptible to formulaic

application,” Ellington, 689 F.3d at 555, the “economic reality” test encompasses the following non-

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exhaustive considerations: (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, Donovan v. Brandel, 736 F.2d 1114,

1117 & n.5 (6th Cir. 1984).

II.

Werner argues that the district court should not have submitted this issue to the jury.

Indeed, our cases recognize that courts usually should resolve the issue of FLSA-employment status

as a matter of law. E.g., Fegley v. Higgins, 19 F.3d 1126, 1132 (6th Cir. 1994); Donovan, 736 F.2d

at 1116. Yet, in view of the fact-intensive nature of the “economic reality” test discussed above, we

have not demanded rigid adherence to this practice. Rather, we have recognized that material factual

disputes regarding employment status may require resolution by a factfinder in close cases. Imars

v. Contractors Mfg. Servs., Inc., No. 97-3543, 1998 WL 598778, at *6–7 (6th Cir. Aug. 24, 1998)

(per curiam) (vacating summary judgment to the employer on FLSA claim, finding “mixed results”

under the “economic reality” test, and remanding for a trial); see also Troyer v. T.John.E. Prods.,

Inc., No. 12-1065, 2013 WL 1955892, at *2–3 (6th Cir. May 14, 2013) (affirming the district court’s

denial of a new trial, following a jury verdict classifying plaintiffs as independent contractors under

the FLSA); Lilley, 958 F.2d at 750 n.1 (acknowledging, in the ADEA context, that a factfinder

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should resolve the issue of employment status when genuine disputes of fact inhibit a

straightforward application of the “economic reality” test).

These cases sensibly acknowledge that courts eschew summary judgment when presented

with genuine disputes of fact, and we do not view them as conflicting with our FLSA precedents

properly treating employment status as a question of law.2 To the extent that Werner argues that the

district court, and not the jury, should have resolved any factual disputes, he waived this stance in

requesting a jury trial. (See R. 104, Joint Proposed Pretrial Order at 1 (“Jury Demand”); R. 152,

Mem. Op. & Order at 2 (noting that both parties requested a jury trial).) And in the absence of

objection to the legal instructions provided to the jury, we limit our review to whether the jury could

2

Werner’s appellate brief offers little resistance to Imars and none to Lilley, notwithstanding

the district court’s reliance on these decisions. See Werner v. Bell Family Med. Ctr., Inc., No. 3:09

C 0701, 2012 WL 3284789, at *2–3 (M.D. Tenn. Aug. 10, 2012). Instead, he endorses several

aspects of our non-precedential decision in Imars despite the fact that it remanded for a trial on the

issue of FLSA employment status. (Appellant’s Br. at 25–28.) His reply brief glosses over this

aspect of Imars, suggesting that the court must have meant that the issue should be tried to the court

and not a jury. (Appellant’s Reply Br. at 4.) Imars did not so specify, and as noted above, Werner

waived the option of a bench trial by requesting a jury trial.

Werner also invokes the Supreme Court’s decision in Icicle Seafoods, Inc. v. Worthington,

475 U.S. 709 (1986), but that case involved a different FLSA classification (“seaman,” under 29

U.S.C. § 213), and more importantly, the Court did not address whether a jury could make findings

of fact related to genuinely disputed FLSA claims. Rather, it vacated the appellate court’s decision,

which substituted its findings of fact for those found by the district court following a bench trial.

Icicle Seafoods, 475 U.S. at 714 (criticizing the appellate court for “engag[ing] in such factfinding”

instead of reviewing the district court’s findings under the clearly erroneous standard). By limiting

our review to the findings of fact of the parties’ chosen factfinder—here, a jury—we avoid

this pitfall.

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reasonably conclude on the evidence presented that Werner worked as an independent contractor.

See Troyer, 2013 WL 1955892, at *1–2; Radvansky, 496 F.3d at 614.

III.

Werner denies that this case raised genuine disputes of fact and asserts that the undisputed

evidence compelled the conclusion that he was an “employee.” Cf. Castillo v. Givens, 704 F.2d 181,

185 & n.9, 188 (5th Cir. 1983) (finding that the district court erred in submitting the issue to the jury

because the undisputed facts established employment status), overruled on other grounds by

McLaughlin v. Richland Shoe Co., 486 U.S. 128, 134 (1988). But as the district court repeatedly

explained—most recently in denying Werner’s post-trial motion—the evidence pertaining to the

“economic reality” factors permitted multiple inferences and was thus an issue for the jury, and the

jury reasonably concluded that the totality of the circumstances weighed against finding Werner an

“employee.” According to the district court,

Werner simply has not demonstrated that the jury erred in deeming him an

independent contractor. Werner continues to gloss over the factual disputes that

necessitated a trial in the first instance, and the competing inferences that can be

drawn from even uncontested facts. For example, Werner contends that the degree

of skill factor weighs in his favor because he could perform ultrasounds only if Drs.

Chihombori and Quao ordered them for patients. Yet he acknowledges that he had

specialized training and skills. While Werner attempts to downplay the significance

of that unique training by contending that he just followed standard guidelines, he

apparently does not dispute that no other worker could perform onsite ultrasounds

for Defendants.

With respect to the degree of control factor, Werner again points to the fact

that he performed ultrasounds only when Defendants required them. This fact cuts

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both ways, however. As a practical matter, no employee or independent contractor

performs work not needed or requested by the employer. More importantly, Werner

does not suggest 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. The parties also disputed whether

Werner controlled his hours: although he was required to work until all patients had

left, it appears that no ultrasounds took place onsite if he was not at an office when

needed. Ultimately, multiple inferences could be drawn from these various facts,

along with others, presented at trial.

By way of another example, Werner contends that his work was integral to

Defendants’ business because his procedures were more profitable than regular

office visits. Certainly Werner’s work contributed to the success and profitability of

Defendants’ medical practices. On the other hand, however, Werner cannot say that

Defendants relied on his work to effectuate the primary purpose of their practices.

The heart of Defendants’ business was not providing ultrasounds, like an independent

diagnostic facility, or providing ultrasound technicians, like a staffing agency—but

operating full-service family medical practices. Werner does not allege, for example,

that every patient, or even a significant percentage of patients, needed ultrasounds.

Had the practices focused so heavily on ultrasounds, perhaps Defendants would have

hired a technician for each location, each day of the week, rather than schedule

Werner to rotate among the different offices. Regardless, and contrary to Werner’s

assertion, reasonable minds could draw more than one inference on these facts about

the importance of Werner’s work to Defendants’ overall operation.

Conflicting inferences could also be drawn from the evidence of Werner’s

economic dependence on his work with Defendants. Werner contends that he was

working too many hours for Defendants to find or hold another job. While that point

is relevant, he also acknowledges that he was able to find other employment as an

ultrasound technician in the area, both before and after his work with Defendants.

Werner concedes that Defendants agreed to pay him what he asked when he was

hired. Although Werner claims that the pay rate thus was not subject to negotiation,

this argument falters. One could readily infer there was no need for the parties to

negotiate when Defendants readily acquiesced in Werner’s initial request. Under

that interpretation, Werner set his own pay rate. The jury could have reasonably

found on these facts that Werner was not bound to Defendants the way that typical

“employees” are dependent on their employers.

In sum, while some of the evidence presented at trial surely support[s]

Werner’s position, other facts and inferences support the jury’s conclusion that he

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was an independent contractor. The jury did not have to find facts and draw

inferences in favor of Defendants as they did on Werner’s wage claims, but they did

so reasonably on the record before them. Because reasonable minds could have

reached this verdict, it must be upheld.

Werner v. Bell Family Med. Ctr., Inc., No. 3:09 C 0701, 2012 WL 3284789, at *4–5 (M.D. Tenn.

Aug. 10, 2012) (record and case citations omitted).3

Werner resists this conclusion, pointing to evidence that he had a lengthy at-will

employment relationship with the medical centers, during which time the centers controlled his

hours and the number of ultrasounds, set his compensation, supplied his tools, and effectively

precluded him from working elsewhere. He goes on to emphasize that the medical centers classified

his replacement as an “employee.” Further, he cites a DOL Fact Sheet advising that ultrasound

technicians do not qualify for the FLSA’s exemption of “bona fide executive, administrative, or

professional” employees from the statute’s minimum wage and overtime pay requirements, 29

U.S.C. § 213(a)(1). True enough, this evidence points to “employee” status, implicating the first

(permanence), third (equipment), fourth (profit opportunity), and fifth (employer control of work)

“economic reality” factors.4 And the DOL Fact Sheet suggests that Werner would not qualify for

3

We note that the court made these findings despite Werner’s failure to include record

citations in his post-trial motion. Werner, 2012 WL 3284789, at *3 (citing R. 179, Pl.’s JMOL

Reply Br. 2).

4

Werner does not address how the DOL’s conclusion that he was an “employee” factors into

the FLSA analysis (see Appellant’s Br. at 4, 14), but we recognize that such agency determinations

are relevant to other workplace discrimination claims. See, e.g., Kimble v. Wasylyshyn, 439 F.

App’x 492, 500 (6th Cir. 2011) (explaining that agency determinations regarding employment

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§ 213’s exemption. But when viewed in light of the substantial contrary evidence presented to the

jury, the record does not compel the conclusion that this ultrasound technician worked as an

“employee” as opposed to an “independent contractor.”

In addition to the examples cited by the district court, the trial evidence showed that Werner:

(1) agreed to begin work as an independent contractor believing the classification would provide tax

benefits; (2) did not have an exclusive working relationship with the centers; (3) began working part-

time and chose to work more hours and days at these facilities as the opportunities arose;

(4) received separate paychecks from each of the medical centers and prepared his income tax returns

as an independent contractor; and (5) received the pay rate he requested, which was significantly

higher than his prior rate ($27/hour), that of his successor ($20/hour), and the market rate for

ultrasound technicians during this time period ($18–$30/hour). (R. 183, 05/15/2012 Trial Tr. at

32–33, 76, 79, 84–86, 88; R. 186, 05/16/2012 Trial Tr. at 61–62.) Furthermore, other than placing

ultrasound orders, the medical centers did nothing to control his performance of the service. (R. 183,

05/15/2012 Trial Tr. at 80, 86.) This evidence reveals a less permanent working relationship,

wherein the certified ultrasound technician retained independence over the marketing of his

specialized services, exercised unfettered discretion regarding their performance, and received his

requested rate.

discrimination are relevant to litigation on the same subject).

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Given these facts, one could reasonably conclude that Werner operated as a business unto

himself and thus qualifies as an independent contractor. See Donovan, 736 F.2d at 1117–20

(affirming district court’s “independent contractor” determination for pickle farmers, emphasizing

their specialized skill set and the absence of employer supervision or control of the harvesting

process). The district therefore properly determined that there were disputed issues of material fact

regarding Werner’s employment status which could lead a reasonable jury to determine that he was

an independent contractor. We thus affirm the district court’s denial of Werner’s motion for a

judgment as a matter of law. And because we can find no “clear error of judgment” in the district

court’s careful determination that the jury’s verdict was not unreasonable, we affirm the court’s

denial of Werner’s motion for a new trial.5

IV.

For the above reasons, we AFFIRM.

5

The district court did not address Werner’s remaining retaliation claim under the FLSA and

state law because, as presented to the jury, it presupposed his “employee” status under the FLSA.

(R. 164, Redacted Jury Verdict Form at 1.) We do likewise because Werner’s appellate briefing

neither objects to this jury instruction nor distinguishes his retaliation claim from his FLSA claims.

See United States v. Newsom, 452 F.3d 593, 607 (6th Cir. 2006) (finding that the defendant “waived

any challenge by failing to object to the jury instruction and failing to . . . raise the issue on appeal”).

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