Hageman v. Park West Gardens

480 N.W.2d 223, 30 Wage & Hour Cas. (BNA) 1198, 1992 N.D. LEXIS 17, 1992 WL 4501
CourtNorth Dakota Supreme Court
DecidedJanuary 14, 1992
DocketCiv. 910193
StatusPublished
Cited by1 cases

This text of 480 N.W.2d 223 (Hageman v. Park West Gardens) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Hageman v. Park West Gardens, 480 N.W.2d 223, 30 Wage & Hour Cas. (BNA) 1198, 1992 N.D. LEXIS 17, 1992 WL 4501 (N.D. 1992).

Opinion

ERICKSTAD, Chief Justice.

Scott A. Hageman appeals from the judgment of the District Court for Cass County dismissing his complaint against Park West Gardens and Midwest Management. We reverse and remand.

On March 6, 1990, Hageman brought this action against Park West Gardens and Midwest Management for unpaid overtime compensation under the Fair Labor Standards Act, 29 U.S.C. section 201 et seq. An amended complaint was served on March 23, 1990, alleging, in addition, discriminatory discharge under the Act. After a bench trial, 1 the district court determined, among other things, that Hageman was an independent contractor and not an employee for purposes of the Act, and thus entered judgment dismissing Hageman’s complaint with prejudice. This appeal followed.

In March of 1988, Hageman was hired as a maintenance person for the Park West Gardens apartment complex in West Fargo, North Dakota. Park West Gardens consists of 14 separate buildings and 144 apartments owned by a general partnership (Park West Partners). The apartment complex was, however, managed by a separate entity, namely Midwest Management, Inc. 2 Midwest replaced the former management company in August of 1988.

As a maintenance laborer, Hageman performed a variety of tasks including electrical, plumbing, heating and air conditioning repair, as well as general maintenance. He generally used his own tools, but Midwest purchased new tools for him when needed. In addition, Midwest provided Hageman with a $100 or $150 check to Menards each month for the purchase of supplies. Hage-man could also charge some supplies at another hardware store. For his work, Hageman was paid $7 per hour. In addition, he received a $125 per month rent concession or credit on the rental of his apartment at Park West Gardens as well as a $10 per week gasoline allowance.

The work that Hageman performed usually started when a tenant made a request for repairs or maintenance to the resident manager of the apartment complex. The resident manager would then fill *225 out a work order outlining the problem. Although Hageman had no set hours, he usually went to the office at Park West Gardens at approximately 10:00 a.m. daily to pick up the work orders. Additionally, Hageman was provided a voice pager, which was used to contact him in case of an emergency. After completing the work, Hageman filled out the form by indicating the work he had done, the materials used, the number of hours it took him, the date work was completed, and the amount due and affixed his signature. The form also required the signature of the resident manager before it could be forwarded to Midwest. Hageman, apparently, worked more or less under this arrangement for approximately two years.

I. EMPLOYEE STATUS

On appeal, Hageman first argues that the trial court incorrectly applied the law respecting who is a covered employee under the Fair Labor Standards Act. We agree. 3

The Fair Labor Standards Act was enacted in 1938 to combat the low wages and long working hours then endured by some laborers. As part of this remedial legislation, maximum working hours were established. 29 U.S.C. section 207(a)(1) states in relevant part:

“Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.”

Thus, those laborers that are deemed employees under the Act must be paid time and a half for hours worked over 40.

The term “employee” is defined under the Act as “any individual employed by an employer.” 29 U.S.C. section 203(e)(1). An “employer” is defined as including “any person acting directly or indirectly in the interest of an employer in relation to an employee_” 29 U.S.C. section 203(d). “Employ” is defined as including “to suffer- or permit to work.” 29 U.S.C. section 203(g). 4 Recognizing the remedial purpose of the Fair Labor Standards Act and similar legislation such as the Social Security Act, the United States Supreme Court while construing such terms has held that the common law distinctions between employees and independent contractors are not applicable. United States v. Silk, 331 U.S. 704, 713, 67 S.Ct. 1463, 1468, 91 L.Ed. 1757 (1947). Rather, the test is whether or not a worker is an employee as a matter of “economic reality.” Id. See also Goldberg v. Whitaker House Cooperative, Inc., 366 *226 U.S. 28, 33, 81 S.Ct. 933, 936, 6 L.Ed.2d 100 (1961).

In discerning the “economic realities” of a given working relationship, a number of factors, derived in part from United States v. Silk, 331 U.S. 704, 715, 67 S.Ct. 1463, 1469, 91 L.Ed. 1757 (1947), have developed. These factors include: “1) the nature and degree of the alleged employer’s control as to 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 workers; 4) whether the service rendered requires a special skill; 5) the degree of permanency and duration of the working relationship; 6) the extent to which the service rendered is an integral part of the alleged employer’s business.” Secretary of Labor, United States Department of Labor v. Lauritzen, 835 F.2d 1529, 1535 (7th Cir.1987). However, “[t]hese factors are not exhaustive, nor can they be applied mechanically to arrive at a final determination of employee status.” Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1043 (5th Cir.1987). “Rather they must always be aimed at an assessment of the ‘economic dependence’ of the putative employees, the touchstone for this totality of the circumstances test.” Id. The Fifth Circuit in Brock, quoting Usery v. Pilgrim Equipment Company, Inc.,

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480 N.W.2d 223, 30 Wage & Hour Cas. (BNA) 1198, 1992 N.D. LEXIS 17, 1992 WL 4501, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hageman-v-park-west-gardens-nd-1992.