Steilberg v. C2 Facility Solutions, LLC

275 S.W.3d 732, 2008 Ky. App. LEXIS 246, 104 Fair Empl. Prac. Cas. (BNA) 508, 2008 WL 2941163
CourtCourt of Appeals of Kentucky
DecidedAugust 1, 2008
Docket2007-CA-001500-MR
StatusPublished
Cited by5 cases

This text of 275 S.W.3d 732 (Steilberg v. C2 Facility Solutions, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steilberg v. C2 Facility Solutions, LLC, 275 S.W.3d 732, 2008 Ky. App. LEXIS 246, 104 Fair Empl. Prac. Cas. (BNA) 508, 2008 WL 2941163 (Ky. Ct. App. 2008).

Opinion

OPINION

COMBS, Chief Judge.

Lucy Craig Steilberg appeals from a summary judgment and order of the Jefferson Circuit Court dismissing her claims against C2 Facility Solutions, LLC and Dale A. Cain, the President and Chief Executive Officer of the corporation. Steilberg’s claims against C2 and Cain arise out of alleged violations of Kentucky’s Civil Rights Act. Kentucky Revised Statutes (KRS) Chapter 344. The trial court concluded that Steilberg was not an employee of C2 and that, therefore, she could not invoke the Act to protect herself against unlawful discrimination. The court ruled that C2 and Cain were entitled to judgment as a matter of law. After our review of the oral and written arguments of counsel, we affirm the conclusion of the trial court that the charges of unlawful discrimination were not viable because Steilberg worked with the firm as an independent contractor rather than as an employee.

In November 2004, C2 was a recently established, subscription-based, software company offering an internet-assisted facility asset management and maintenance service. As of that date, the corporation had only a dozen clients. Management believed that the company could be stimulated to expand if an effective marketing plan were implemented. Cain was acquainted with Steilberg and was aware that she had experience both in marketing and in public relations. An interview was scheduled, and Steilberg met with Cain and other C2 employees over a two-day period in November 2004. In her deposition testimony, Steilberg indicated that she and Cain quickly identified a shared vision for the company’s future. Cain offered her an opportunity to “join the group” because “we [C2] need marketing expertise.” C2 offered to pay Steilberg $5,000.00 per month for her services, and she accepted. On December 1, 2004, Steil-berg began working with C2 to define its target customers and to develop an array of branding ideas.

Steilberg alleges that within two weeks, Cain began to harass her with inappropriate and unwelcome sexual overtures. On December 17, 2004, Steilberg alleges that Cain made his final inappropriate sexual advance toward her. From that point on, Steilberg contends that Cain began to retaliate against her.

In March 2005, Steilberg made a complaint to the company’s human resource department about Cain’s sexual harassment and retaliatory behavior. Because she felt that his hostility against her was increasing, Steilberg began to perform more of her work away from C2’s offices. C2 terminated its association with Steil-berg in July 2005.

*734 On October 7, 2005, Steilberg initiated this action against C2 and Cain. In her complaint, she alleged that Cain had sexually harassed her; had created a hostile work environment; and had retaliated against her after she refused to submit to his inappropriate demands. She sought recovery for economic and emotional damage along with attorneys’ fees, costs, and expenses. In their answer, Cain and C2 denied Steilberg’s substantive allegations. Cain and C2 explained that the association with Steilberg had been terminated because the company could no longer afford to pay for her unproductive services. In addition, they denied that Steilberg was entitled to pursue a civil rights action against them since she had never been an employee of the company.

Following a period of extensive discovery, C2 and Cain filed a joint motion for summary judgment in May 2007. In their memorandum in support of them motion, C2 and Cain argued that they were entitled to judgment as a matter of law because Steilberg had been affiliated with C2 only as an independent contractor and not as an employee entitled to the protection of Kentucky’s Civil Rights Act. According to C2 and Cain, Steilberg had been paid in accordance with monthly invoices that she submitted to the company; the company did not permit her to participate in the employee benefits package offered to the company’s employees; the company did not withhold any income taxes, Medicare, or Social Security payments from her compensation; the company reported her compensation to the Internal Revenue Service on a Form 1099; and Steilberg had consistently held herself out to others as an independent contractor.

According to C2 and Cain, all of these facts defined the nature of the relationship that existed between Steilberg and C2, indicating conclusively that Steilberg was not an “employee” entitled to the protection offered by the provisions of Kentucky’s Civil Rights Act. In addition, C2 and Cain argued that Steilberg’s association with the company was severed solely because she was never able to become proficient in demonstrating the company’s software service or to understand its technical aspects. The company never realized a benefit from her services.

After Steilberg’s memorandum in response was filed, the Jefferson Circuit Court determined that the provisions of the Kentucky Civil Rights Act did not apply to protect independent contractors from discrimination. Since Steilberg had not been an employee of C2, the court held that C2 and Cain were entitled to judgment as a matter of law. Judgment in their favor was entered on July 26, 2007, and this appeal followed.

On appeal, Steilberg argues that the Jefferson Circuit Court erred by summarily dismissing her claims of unlawful discrimination against Cain and C2. We disagree.

Kentucky Rules of Civil Procedure (CR) 56.08 provides that a summary judgment should be granted if the pleadings and all relevant discovery indicate that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky.1991). The trial court must grant a motion for summary judgment only if it appears that it would be impossible for the respondent to produce evidence indicating the possibility of a favorable judgment against the movant. Paintsville Hasp. Co. v. Rose, 688 S.W.2d 255 (Ky.1985). Our standard of review on appeal focuses on whether the trial court correctly concluded that the moving party was entitled to judgment as a matter of law. Scifres v. Kraft, 916 S.W.2d 779 (Ky.App.1996).

*735 The parties agree that the Kentucky Civil Rights Act protects an employee against unlawful discrimination. They also agree that the correct resolution of the motion for summary judgment turns upon whether Steilberg can be regarded as C2’s employee. C2 and Cain argue that an independent contractor is not an “employee” as that term is used in the Act and that, therefore, the Act does not apply. Steilberg contends that the Act protects all individuals and that the term employee ought to be construed so broadly as to include independent contractors. In the alternative, Steilberg contends that she was not associated with C2 merely as an independent contractor but that she was indeed working for the firm as an employee.

We have already noted that the Act’s definition of employee offers little guidance in construing its meaning. Kearney v. City of Simpsonville,

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275 S.W.3d 732, 2008 Ky. App. LEXIS 246, 104 Fair Empl. Prac. Cas. (BNA) 508, 2008 WL 2941163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/steilberg-v-c2-facility-solutions-llc-kyctapp-2008.