Douglas Carpenter v. Pepperidge Farm Inc

• Court: Court of Appeals for the Third Circuit
• Decided: May 10, 2024
• Docket: 23-2372
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ____________

No. 23-2372 ____________

DOUGLAS CARPENTER; DANIEL KLETCHECK; CHRISTOPHER M. WALKER, Appellants

v.

PEPPERIDGE FARM, INCORPORATED

WAREHOUSE TRAINERS, INC.; CARPENTER CORE, INC. ____________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2:20-cv-03881) District Judge: Honorable Gerald J. Pappert ____________

Submitted Under Third Circuit L.A.R. 34.1(a) April 29, 2024 ____________

Before: KRAUSE, CHUNG, and RENDELL, Circuit Judges.

(Filed: May 10, 2024) ____________

OPINION* ____________

* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. CHUNG, Circuit Judge.

This appeal concerns whether Plaintiffs (and Appellants herein) are “employees”

under Pennsylvania’s Wage Payment and Collection Law (“WPCL”), 43 Pa. Cons. Stat.

§ 260.1 et seq. Because we agree with the District Court that Plaintiffs are independent

contractors, not employees, we will affirm.

I. BACKGROUND

The three Plaintiffs each own Pepperidge Farm distribution routes for which they

deliver Pepperidge Farm food products to retail stores. All three have agreements with

Pepperidge Farm that designate them “self-employed independent contractor[s]” or “self-

employed independent businessm[e]n,” and Pepperidge Farm classifies them as

independent contractors for payment purposes. Joint App. (“JA”) 50, 60, 73. By 2020,

the three Plaintiffs had worked with Pepperidge Farm for between five and fourteen

years. They brought a putative class action that year against Pepperidge Farm, claiming

that it violated the WPCL by wrongly classifying and paying them as independent

contractors instead of as employees.

Pepperidge Farm moved for summary judgment and the District Court granted its

motion. The District Court applied the ten-factor test that Pennsylvania courts have used

to determine whether a worker is an employee under the WPCL. After concluding that

all but two of the factors weighed in favor of finding that Plaintiffs are independent

contractors, the District Court found that Plaintiffs are not employees and that their

2 claims thus failed.1 See 43 Pa. Cons. Stat. § 260.9a(a) (stating that only employees may

bring actions under the WPCL).

II. DISCUSSION2

A. Standard for Evaluating Employment Status Under the WPCL

The WPCL does not define “employee,” so Pennsylvania courts have applied a

ten-factor test used to determine employment status under similar state statutes. Williams

v. Jani-King of Phila. Inc., 837 F.3d 314, 320 (3d Cir. 2016). These ten factors are:

the control of the manner that work is to be done; responsibility for result only; terms of agreement between the parties; the nature of the work or occupation; the skill required for performance; whether one employed is engaged in a distinct occupation or business; which party supplies the tools; whether payment is by the time or by the job; whether the work is part of the regular business of the employer, and the right to terminate the employment at any time.

Id. (quoting Morin v. Brassington, 871 A.2d 844, 850 (Pa. Super. Ct. 2005)).

We have explained that, as a general matter, “[w]hether a worker is an employee

or an independent contractor … is a mixed question of fact and law.” Verma v. 3001

1 The District Court also dismissed Plaintiffs’ unjust enrichment claim and Plaintiffs do not challenge that ruling on appeal. The District Court further found Pepperidge Farm’s own unjust enrichment counterclaim was moot given the granting of summary judgment.

2 The District Court had jurisdiction under 28 U.S.C. § 1332(a). We have jurisdiction under 28 U.S.C. § 1291. We conduct plenary review of the District Court’s summary judgment decision. See Barna v. Bd. of Sch. Dirs. of the Panther Valley Sch. Dist., 877 F.3d 136, 141 (3d Cir. 2017). Summary judgment is appropriate when the movant “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Summary judgment should be granted “unless there is sufficient evidence for a jury to reasonably find for the nonmovant.” Barefoot Architect, Inc. v. Bunge, 632 F.3d 822, 826 (3d Cir. 2011). 3 Castor, Inc., 937 F.3d 221, 229 (3d Cir. 2019). The factual component addresses the

underlying facts reflecting “economic relations” between the parties, while the legal

component addresses “whether those facts make a worker an ‘employee’ or ‘independent

contractor.’” Id. At the summary judgment stage, the non-movant’s evidence “is to be

believed, and all justifiable inferences are to be drawn in his favor” in determining

whether a genuine factual question exists. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 255 (1986). The court then considers the legal question as applied to this factual

record. Verma, 937 F.3d at 229. Thus, summary judgment for Pepperidge Farm is

proper if applying Pennsylvania’s ten-factor test to the undisputed facts taken as true,

with all reasonable inferences about Plaintiffs’ relationship with Pepperidge Farm drawn

in Plaintiffs’ favor, leads to the conclusion that Plaintiffs are independent contractors as a

matter of law.

We begin by addressing Plaintiffs’ misunderstanding of the District Court’s role in

determining employment status at summary judgment. Plaintiffs argue that the District

Court erred by “weighing … the evidence” to reach its conclusions about their

employment status. Opening Br. 28. They argue that instead, it was “the province of the

jury” to make a finding “as to each employment factor” in Pennsylvania’s multi-factor

test. Id. at 18. It is true that, in considering the underlying facts at summary judgment,

the court does not “weigh the evidence” and takes as true the non-moving party’s facts.

Parkell v. Danberg, 833 F.3d 313, 323 (3d. Cir. 2016) (quoting Armour v. County of

Beaver, 271 F.3d 417, 420 (3d Cir. 2001)). However, the kind of “weighing” that

Plaintiffs address here—that is, the court’s consideration of the cumulative weight of

4 those facts in each party’s favor to decide the legal question of employment status—is

precisely the court’s role at summary judgment. Therefore, to the extent Plaintiffs argue

that the District Court overstepped its role at summary judgment, their argument fails.

B. Right to Control

We next turn to analyzing the factors under Pennsylvania’s test. None of the ten

factors is “dispositive.” Williams, 837 F.3d at 320. The “most important” factor,

however, is the “right to control” the manner in which the work is done. Id. at 321; see

also Morin, 871 A.2d at 850 (describing the right to control as “[p]aramount”); Lynch v.

W.C.A.B., 554 A.2d 159, 160 (Pa. Commw. Ct. 1989) (identifying that the right to

control is “most persuasive”). “Control” means more than controlling another’s “work

product.” C E Credits OnLine v. Unemployment Comp. Bd. of Rev., 946 A.2d 1162,

1169 (Pa. Commw. Ct. 2008). Rather, it means “control over the time, place and manner

of performance.” Id. That distinction is important because all jobs involve some type of

control. As the Commonwealth Court of Pennsylvania has explained, “[e]very job,

whether performed by an employee or by an independent contractor, has parameters and

expectations.” Id. In other words, while a client can set the parameters and expectations

it has for an independent contractor’s performance, only an employer can both set

parameters and expectations and direct the time, place, and manner in which an employee

accomplishes them.

In this case, the right-to-control factor favors independent-contractor status. To be

sure, Pepperidge Farm—which pays Plaintiffs to deliver its products—has expectations

about the results of Plaintiffs’ work. Still, Pepperidge Farm has little ability to control

5 the time, place, and manner in which Plaintiffs achieve those ends. As just a few

examples of Plaintiffs’ autonomy, Plaintiffs can: choose their distribution routes by

buying and selling them, organize their distribution businesses as they like, hire

employees to do their work for them, set their own hours, and make deliveries when and

how they see fit. This evidence shows that Pepperidge Farm’s “control” is generally

limited to setting forth its expectations regarding the results of Plaintiffs’ work and that

Pepperidge Farm has little right to control the time, place, and manner in which they

work. See, e.g., C E Credits OnLine, 946 A.2d at 1169 (holding that “absence of day-to-

day supervision” supports independent-contractor status); Morin, 871 A.2d at 850

(finding independent-contractor status where worker could “open and close” on his own

schedule and conduct “day-to-day business … in the manner [he] saw fit”); Johnson v.

W.C.A.B., 631 A.2d 693, 698 (Pa. Commw. Ct. 1993) (“Employees are generally not

empowered with hiring other personnel.”).

Plaintiffs argue that several facts show Pepperidge Farm has the right to control

their work. None of the facts Plaintiffs cite are persuasive. Some facts Plaintiffs cite

merely show the kind of control over results that is expected when a company hires

independent contractors to do its work. These include the fact that Pepperidge Farm

gives them customer-created “planograms” showing where to place products in certain

retail stores and that it has rules about things like food safety and stale products. Opening

Br. 26. Others, when viewed in light of all the facts, are insufficient to demonstrate

Pepperidge Farm’s comprehensive right to control the time, place, and manner of their

work—for instance, that Pepperidge Farm requires them to use “a particular handheld

6 computer” needed to connect them to Pepperidge Farm’s inventory system; expects

Plaintiffs to follow the same rules that all people follow when in its warehouses; and, on

three occasions over fourteen years, communicated to one Plaintiff customer requests

regarding store displays. Id. at 27. Taken in context of the full record, none of the facts

relied upon by Plaintiffs show that Pepperidge Farm has the right to control their work in

a way that indicates an employment relationship.

C. Other Factors

The District Court decided that seven of the remaining nine factors show that

Plaintiffs are independent contractors. We agree. On appeal, Plaintiffs argue at length

that those factors reflect they are employees and cite many facts in support. For instance,

Plaintiffs argue that when considering “which party supplies the tools,” we should

conclude this factor favors employment status because Pepperidge Farm provides certain

“infrastructure” and the “depot” for storing products. Opening Br. 44–45. Plaintiffs,

however, supply the vast majority of their own tools, including the trucks and delivery

equipment that they use to deliver products from the depots to stores. This significantly

alters the balance against the Plaintiffs in considering this factor. Plaintiffs also argue

that Pepperidge Farm has the “right to terminate [them] at any time.” Id. at 24.

Pepperidge Farm does not have employer-like discretion to terminate them at will,

though. Rather, Plaintiffs’ contracts provide that Pepperidge Farm can only terminate the

agreement (a) for certain enumerated “causes” or (b) by exercising an option to buy the

distribution route for 125% of its fair market value. JA 51–52, 61–62, 74–75. Again,

viewing all undisputed facts in the light most favorable to the Plaintiffs, this factor still

7 weighs against them. We find Plaintiffs’ other arguments similarly unpersuasive for the

same reasons set forth by the District Court and thus will not repeat all of those

arguments here.

As noted above, the District Court decided that two factors—whether Plaintiffs’

work is part of Pepperidge Farm’s “regular business” and whether Plaintiffs’ business is

“distinct” from Pepperidge Farm’s—were either neutral or could favor an employment

relationship. JA 28–29. Those isolated points are not “dispositive,” Williams, 837 F.3d

at 320, and do not outweigh the other factors that reflect Plaintiffs’ status as independent

contractors, see Faush v. Tuesday Morning, Inc., 808 F.3d 208, 215 (3d Cir. 2015)

(“When a legal standard requires the balancing of multiple factors, as it does in this case,

summary judgment may still be appropriate even if not all of the factors favor one party,

so long as the evidence so favors the movant that no reasonable juror could render a

verdict against it.” (quotation marks omitted)).

III. CONCLUSION

In sum, we agree with the District Court’s conclusion that Plaintiffs are not

employees under the WPCL. Because Plaintiffs are not employees under the WPCL,

their claims fail, and we will affirm.