Employment Law Daily Landscapers could sue real estate company for overtime while working at its owner’s personal residences
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Thursday, May 24, 2018

Landscapers could sue real estate company for overtime while working at its owner’s personal residences

By Marjorie Johnson, J.D.

Two landscapers who claimed they were denied overtime and minimum wages while performing work at the residences of the owner of a real estate company plausibly alleged that the company was a “joint employer” under the FLSA and the Pennsylvania Minimum Wage Act, a federal court in Pennsylvania ruled in denying the defendants’ motion to dismiss. In particular, the employees alleged that their pay stubs indicated the company’s address and that it possessed control of employee payroll records. Additionally, they claimed that the owner required them to “hold themselves out to the world” as the company’s employees by requiring or permitting the owner to have them wear shirts and jackets bearing the company’s logo while working (Bedolla v. Brandolini, May 18, 2018, Baylson, J.).

Wage violations. The two landscapers performed work at the family residences of the owner, chairman, and CEO of a diversified real estate organization that developed, owned, and operated a portfolio of properties. After one of them was abruptly terminated, the other was told to take on extra tasks. He asked the owner’s step-son—who also supervised his work—for additional compensation to reflect the overtime hours he would be required to work and after also complaining, later gave a letter directly to the owner requesting overtime compensation.

Retaliation. The owner subsequently accused the landscaper of engaging in a variety of improper activities, which he contended was knowingly false and in retaliation for his prior complaint about overtime. He was then advised by the owner’s step-son and daughter that he would no longer be provided a work vehicle to travel to and from work and that he also would not receive overtime compensation. Shortly thereafter, he was abruptly fired for having arrived to work 45 minutes late. Though he had already worked five hours, he was not paid for those hours.

Joint employment. The landscapers sued both the real estate company and its owner, claiming that they worked more than 40 hours per workweek without receiving premium overtime compensation or minimum wages for all hours worked. Specifically, they alleged that the terms of their employment and compensation were jointly controlled and directed by both defendants.

In support, they asserted that their compensation information was held by the real estate company’s payroll service, with its administrative staff assisting in the payroll process. Their paystubs also listed the company’s address as their “company code,” while listing the owner himself as the top line of the “company code.” They also claimed that the company “required or permitted” the owner to use shirts and jackets bearing its logo for the landscapers to wear while working, thereby requiring or permitting them “to hold themselves out to the world as employees of the former.”

Economic realities. Applying the economic realities test to their wage claims, the court found that they plausibly alleged the real estate company possessed authority to hire and fire them, as their pay stubs indicated the company’s address and they alleged that the payroll system was administered by the company’s employees. They also alleged facts indicating that it possessed control of employee payroll records.

As for the overarching question of whether it exercised “substantial control,” they alleged that the company “required or permitted” the owner to use shirts and jackets bearing its logo for them to wear while working and that this amounted to requiring them to “hold themselves out to the world” as the company’s employees. Accordingly, they plausibly alleged that the company exerted “significant control” over them and thus they could proceed on a joint employment theory against both defendants.

Other allegations. Though not contested by the defendants, the court also found that they plausibly alleged other aspects of their claims. For instance, they sufficiently asserted that they were employees who were “covered” by the FLSA’s overtime and minimum wage provisions. They also provided “sufficient detail about the length and frequency of their unpaid work to support a reasonable inference that they worked more than forty hours in a given week.”

The court also found that they adequately asserted that the defendants failed to pay the minimum wage of $7.25 per hour, as required by the FLSA. It noted that the Third Circuit had not specifically addressed the level of specificity required to plead a minimum wage claim under the FLSA. However, district courts have noted that the rationale for why plaintiffs are not required to allege specific facts regarding wages earned and hours worked is that the FLSA requires employers to keep records of the “wages, hours, and other conditions and practice” of its employees. In light of this burden, “it cannot be the case that a plaintiff must plead specific instances of unpaid overtime or minimum wage violations before being allowed to proceed to discovery to access the employer’s records.”

Retaliation and IIED. Though the defendants also did not contest the landscapers’ claim of retaliation and intentional infliction of emotional distress, the court also addressed those claims and allowed them to advance to discovery. In so ruling, the court noted that in defining what constitutes a “complaint” under the FLSA, the U.S. Supreme Court held that a formal written complaint is not required. Rather, an “informal oral complaint” to a supervisor can constitute protected activity if it is “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights and a call for their protection.”

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