Julianne Eisenberg v. Advance Relocation & Storage, Inc. 00-7216 00-7216 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ______________________ JULIANNE EISENBERG, Plaintiff-Appellant, v. ADVANCE RELOCATION & STORAGE, INC., ADVANCE RELOCATION & STORAGE OF CONNECTICUT, INC., B. NILSSON MOVING & STORAGE, INC., and MOLLOY BROS. MOVING & STORAGE, INC., Defendants-Appellees. _______________________________________________ On Appeal from the United States District Court for the Southern District of New York _________________________________________________ BRIEF OF AMICUS CURIAE THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION IN SUPPORT OF EISENBERG AND IN FAVOR OF REVERSAL __________________________________________________ C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W., Room 7014 Washington, D.C. 20507 (202) 663-4721 CERTIFICATE OF COMPLIANCE In accordance with Federal Rule of Appellate Procedure 32, I certify that this brief was prepared with Courier New (monospaced) typeface, 12 point font, and contains 6315 words, from the Statement of Interest through the Conclusion. ____________________________ Barbara L. SloanTABLE OF CONTENTS CERTIFICATE OF COMPLIANCE i TABLE OF CONTENTS ii TABLE OF AUTHORITIES iii STATEMENT OF INTEREST 1 STATEMENT OF THE ISSUE 2 STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings 2 2. Statement of Facts 3 3. District Court's Decision 6 STATEMENT OF STANDARD OF REVIEW 9 SUMMARY OF ARGUMENT 9 ARGUMENT WHERE A HIRING PARTY EXERCISES NEARLY COMPLETE CONTROL OVER WHEN, WHERE AND HOW LONG AN INDIVIDUAL WORKS, AS WELL AS WHAT SHE DOES AT THE WORKPLACE, THE INDIVIDUAL IS AN "EMPLOYEE," COVERED BY TITLE VII, WHETHER OR NOT THE HIRING PARTY CHOOSES TO WITHHOLD TAXES FROM HER PAY AND TO PROVIDE EMPLOYEE BENEFITS. 13 CONCLUSION 26 CERTIFICATE OF SERVICE TABLE OF AUTHORITIES Cases Page(s) Aymes v. Bonelli, 980 F.2d 857 (2d Cir. 1992) 7, 10-11, 17, 20, 21-25 Brock v. Superior Care, 840 F.2d 1054 (2d Cir. 1987) 23-24 Carter v. Helmsley-Spear, Inc., 71 F.3d 77 (2d Cir. 1995) 22 Cilecek v. Inova Health System Services, 115 F.3d 256 (4th Cir. 1997) 15, 20 Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) 14, 16, 18, 21 Dykes v. Depuy, Inc., 140 F.3d 31 (1st Cir. 1998) 18 EEOC v. Johnson & Higgins, Inc., 91 F.3d 1529 (2d Cir. 1996) 9 Frankel v. Bally, Inc., 987 F.2d 86 (2d Cir. 1993) 14-16, 20, 21, 23 Frishberg v. Esprit de Corps, 778 F. Supp. 793 (S.D.N.Y. 1991), aff'd without opinion, 969 F.2d 1042 (2d Cir. 1992) 24 Golden v. A.P. Orleans, Inc., 681 F. Supp. 1100 (E.D. Pa. 1988) 21, 23 Graham v. James, 144 F.3d 229 (2d Cir. 1998) 18 Hilton International Co. v. NLRB, 690 F.2d 318 (2d Cir. 1982) 14, 15, 17, 24 J. Huizinga Cartage Co. v. NLRB, 941 F.2d 616 (7th Cir. 1991) 20, 23 Keller v. Niskayuna Consolidated Fire District, 51 F. Supp. 2d 223 (N.D.N.Y. 1999) 24 Kirsch v. Fleet Street, Ltd., 148 F.3d 149 (2d Cir. 1998) 17, 18 Krijn v. Pogue Simone Real Estate Co., 752 F. Supp. 102 (S.D.N.Y. 1990) 24 McFadden-Peel v. Staten Island Cable, 873 F. Supp. 757 (E.D.N.Y. 1994) 23 Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992) passim O'Connor v. Davis, 126 F.3d 112 (2d Cir. 1997) 14 Ost v. West Suburban Travelers Limousine, 88 F.3d 435 (7th Cir. 1996) 18 Sharkey v. Ultramar Energy, Ltd., 70 F.3d 226 (2d Cir. 1995) 15, 23 Stetka v. Hunt Real Estate Corp., 859 F. Supp. 661 (N.D.N.Y. 1994) 24 Tagare v. Nynex Network Systems Co., 994 F. Supp. 149 (S.D.N.Y. 1997) 21 Whitmore v. Port Authority of N.Y. & N.J., 907 F.2d 20 (2d Cir. 1990) 20 Statutes Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq., passim 42 U.S.C. § 2000e(f) 14 Other Authority Black's Law Dictionary (6th ed. 1990) 20 Restatement (Second) of Agency (1958) 15IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ______________________ 00-7216 ______________________ JULIANNE EISENBERG, Plaintiff-Appellant, v. ADVANCE RELOCATION & STORAGE, INC., et al., Defendants-Appellees. _______________________________________________ On Appeal from the United States District Court for the Southern District of New York _______________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE _______________________________________________ STATEMENT OF INTEREST The Equal Employment Opportunity Commission is the agency established by Congress to administer, interpret and enforce Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq., and other federal employment discrimination laws. This case raises important questions of Title VII coverage. The district court held that, even though the defendants exercised "complete control over the manner and means of plaintiff's work" as an unskilled laborer, she was not a covered "employee," entitled to Title VII protections against sexual harassment and retaliation, because defendants chose not to withhold taxes from her wages or to provide her with fringe benefits. This ruling, if allowed to stand, would sharply limit the scope of Title VII and other federal employment discrimination laws because it would allow employers to avoid statutory coverage by simply paying no payroll taxes on workers' wages and providing no employee benefits. We therefore offer our views for the Court's consideration. STATEMENT OF THE ISSUE Whether the district court erred in holding that an individual who was offered a "stable, permanent position" as an unskilled laborer, reported to work on a daily basis and, once there, did "exactly what [her supervisor] told her to do" is an independent contractor and, so, not covered by Title VII, merely because the company chose not to withhold taxes from her wages or to provide employee benefits to her. STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings This is an appeal from a final judgment dismissing plaintiff's employment discrimination action. Plaintiff brought suit on February 26, 1999, alleging sexual harassment and retaliation in violation of Title VII and state law. District court docket number ("R.") 1. Defendants moved for summary judgment, R. 10-11, and plaintiff opposed the motion. R. 6-9. On February 16, 2000, the district court granted the motion, holding that plaintiff was not entitled to statutory protection because she was an independent contractor, rather than an "employee." R. 14. Final judgment was entered on February 17, 2000. R. 15. Plaintiff filed a timely notice of appeal on February 29, 2000. R. 16. 2. Statement of Facts Julianne Eisenberg's tenure with Advance Relocation and Storage ("Advance") resulted from a chance conversation with a former high school acquaintance, Peter White, in late July of 1998. Eisenberg Dep. 44-49, 53-54. Eisenberg ran into White and another Advance worker, Mike Ewing, at lunch time at a local restaurant. Both men were wearing Advance Relocation and Storage t-shirts. Id. at 60. White explained that he was working as the warehouse manager and was responsible for all the hiring at Advance's Danbury, Connecticut, location. Id. at 52, 67. Learning that Eisenberg was finishing up a temporary construction job, the men mentioned that Advance needed laborers. Id. at 54-55. The job was described as a 40-hour-a-week, "permanent full-time position," with the possibility of overtime, doing manual labor on a truck and/or in the company warehouse. Id. at 62-65. Eisenberg expressed interest, adding that it was important to her to find a "stable, permanent position" because she was tired of temporary jobs. Id. at 62-63. The men urged her to apply. Consequently, a few days later, she went down to the warehouse to complete a formal job application. Hired on the spot, she was handed some t-shirts bearing the company name and immediately sent out with the crew on a job. Eisenberg Affidavit ¶ 5. Eisenberg testified that she and the other regular crew members all wore company t-shirts at work. Eisenberg Dep. 95. The crew normally worked from 8:00 a.m. to 5:00 p.m., Monday through Friday, but if, on a given occasion, they were told to start earlier, stay later or work on a weekend, then "so be it." Eisenberg Dep. 70. On the other hand, the crew was sometimes dismissed early when work was slow, and they were paid only for the time they had actually worked. See id. at 131-33. Hours were tracked on time cards. Eisenberg Dep. 104, 141; see also Isaacson Dep. 73-75 (warehouse workers and regular office staff all punched time clock). At work, Eisenberg and the other regular crew members "did exactly what [Peter White] told [them] to do, Pete was [the] boss." Eisenberg Dep. 95; see also id. at 71-72, 75 ("Basically, [I did] whatever I was told to do by Pete."). According to Eisenberg, "Pete would give me my orders. If he wasn't going to be there that day, he told me what I needed to do that day, where I was going to be going unless something was changed at the last second." Id. at 72. Eisenberg added that if White was not going to accompany the crew, he told them who would be in charge and "the individual in charge would direct [the crew] as to what objects each [crew member] was to move." Eisenberg Affidavit ¶ 11. Some days, the crew spent the entire day at the warehouse, loading and unloading crates or trucks. Other days, they reported to the warehouse and were sent out by truck to do a move at another location. Id. Eisenberg stated that Advance sometimes also hired additional laborers to assist with a big job. Unlike the regular crew members, however, those persons did not wear company t-shirts and would simply meet the crew at the job site or warehouse at the start of the job. Eisenberg Dep. 90-92, 95. According to Eisenberg, she was told that, if she wanted to take time off, she should clear it in advance with White, and permission would depend on the projected workload. Eisenberg Affidavit ¶ 8; Eisenberg Dep. 65 ("If we wanted to take a vacation day, we put in for [one]. If it got approved, it got approved; if it didn't, it didn't."). She was also told, however, that she would be entitled to paid sick leave and vacation only after her first year of work. Eisenberg Dep. 83-84; Eisenberg Affidavit ¶ 9. Eisenberg did not receive any health insurance or other employee benefits. Advance did not withhold any taxes from Eisenberg's wages. When she started work, she was asked to complete an IRS form W-9, rather than a W-4, and the parties understood that Advance would provide her with an IRS form 1099, rather than a W-2, at tax time. Eisenberg Dep. 80. According to Eisenberg, throughout her tenure at Advance, she was subjected to sexual harassment -- derogatory and abusive comments as well as physical touching -- by her coworkers. She repeatedly complained to White, but he took no steps to remedy the situation. Eisenberg Affidavit ¶ 15. In mid-September of 1998, Eisenberg reported to the office manager, Joan Isaacson, that several of the crew members were using cocaine in the warehouse. See Isaacson Dep. 42. She also reported the harassment and White's failure to take remedial action. Id.; McLaughlin Dep. 61 (Isaacson mentioned that "Julie Eisenberg, one of the gals that worked there, was reporting sexual harassment"). Isaacson confirmed the reported cocaine use. The next day, the company closed the warehouse and "terminated" all the workers except Isaacson. Eisenberg testified that, since she was not involved with the cocaine, Isaacson promised to reemploy her either in Danbury or at another location within a few months. Eisenberg Affidavit ¶¶ 18-20 (adding that Isaacson also urged her not to seek other work in the interim). However, Eisenberg stated, when she mentioned that she was considering filing a sexual harassment charge, Isaacson warned her that, if she pursued such a claim, the company would not re-hire her. Accordingly, Eisenberg alleges, after she filed a charge with EEOC, Isaacson did not contact her, and she was not offered another job at the company. Id. ¶¶ 22-24. Eisenberg brought suit alleging sexual harassment and retaliation. Advance moved for summary judgment, arguing in pertinent part that Eisenberg was not entitled to the protections of Title VII because, according to defendants, she was hired only as casual labor and, so, was not covered by Title VII. 3. District Court's Decision The district court granted summary judgment, holding that Eisenberg was not an "employee" for coverage purposes under Title VII. The court recognized that, because Title VII provides only a "circular" definition of the word "employee," common law agency principles should be used in determining whether Eisenberg was an employee or an independent contractor. Slip op. at 7. The court also recognized that, in applying this test, it should consider a number of factors, no one of which was determinative. Slip op. at 7-8. The court added, however, that, under Second Circuit case law, five of the factors -- "the tax treatment of the hired party, the skill required by the position, the provision of employee benefits, the hiring party's right to control the manner and means by which the product is accomplished, and whether the hiring party has the right to assign additional projects" -- have special relevance and should be weighted more heavily than the others. Id. at 8 (citing Aymes v. Bonelli, 980 F.2d 857, 861 (2d Cir. 1992)). Applying this weighted analysis, the district court concluded that Eisenberg was an independent contractor, rather than an employee. Slip op. at 16. In particular, the court relied on the fact that Advance did not "deduct or withhold any income, social security, payroll or other taxes from plaintiff's wages," and that plaintiff received no employee benefits. Id. at 8-9, 12, 16. The court reasoned that the tax treatment of the plaintiff's wages is "highly indicative" -- indeed, it "may even constitute a virtual admission" of the hired party's employment status, id. at 8-9, and the fact that employee benefits are not provided is also "a strong indicator" of independent contractor status, id. at 12. The court also mentioned that plaintiff was paid only for the hours she worked and was not guaranteed a specific number of hours. Id. at 15. The court acknowledged that "other important factors weigh in favor of employee status." Slip op. at 16. The court noted that defendants had "complete control over the manner and means of plaintiff's work" at Advance, id. at 12, 14, 16 (White "exercised nearly complete control over plaintiff's hours and the day-to-day details of her work); and that plaintiff was not hired for a specific job but rather to "do the daily work that is Advance's business." Id. at 13, 16. The court also noted that the work was unskilled labor, thus rejecting defendants' argument that she was hired for her strength and that strength should be considered a specialized skill under the common law test. Slip op. at 10-11. The court further recognized that defendants supplied all of the necessary instrumentalities for the job, id.; that the bulk of the work took place at defendants' place of business, id. at 14; that plaintiff was paid on an hourly basis, rather than by commission, id. at 15; and that plaintiff's work as a laborer was in the regular business of Advance and, as such, was "central to Advance's functioning," id. at 15, 16. In light of these countervailing factors, the court stated that this was a "difficult case"; that plaintiff's employment status was "a close call." Slip op. at 16, 17. On balance, however, the court concluded that plaintiff could not invoke the protections of Title VII because she was not an employee for purposes of coverage under that statute. STATEMENT OF STANDARD OF REVIEW This Court reviews the grant of summary judgment de novo. EEOC v. Johnson & Higgins, Inc., 91 F.3d 1529, 1534 (2d Cir. 1996). SUMMARY OF ARGUMENT The district court erred in holding that Julianne Eisenberg was an independent contractor, beyond the scope of Title VII, while she was working as an unskilled laborer at Advance Relocation and Storage. Where a statute such as Title VII contains no contrary definition of "employee," the Supreme Court directed courts to apply the common law test for agency in determining whether an individual is an employee or independent contractor for statutory coverage purposes. See Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992). This test focuses primarily on the degree of control the hiring party exercises over the plaintiff. An employer-employee relationship typically exists if the hiring party controls both the result to be accomplished and the means and manner by which the hired party accomplishes that result. While control is key, the test also calls for a flexible analysis of the totality of the circumstances. Other relevant factors include the skill required, the source of the tools and location of the work, whether the hiring party has the right to assign additional projects to the hired party, the extent of the hired party's discretion over when and how long to work, the method of payment, whether the work is part of the regular business of the hiring party, the provision of employee benefits and the tax treatment of the hired party's pay. Applying this test to the circumstances of this case, it is clear that Eisenberg was an employee, rather than an independent contractor. Virtually all of the relevant factors point in that direction. Initially, Eisenberg was recruited with an offer of a "stable, permanent position." Moreover, and significantly, the district court expressly found that, once Eisenberg was hired, Advance exercised nearly complete control over when, where and how long she worked as well as what she did and even what she wore at the workplace. The company also supplied any necessary tools; the work was unskilled labor and performed on a daily basis at locations selected by Advance. In addition, while Eisenberg was at work, the company could assign her any work that needed to be done, and that work -- loading and unloading crates and trucks -- was central to Advance's functioning as a moving and storage company. Despite this compelling evidence of employee status, the district court held that Eisenberg was an independent contractor because Advance did not deduct payroll taxes from her wages or provide her with any employee benefits. In according conclusive weight to these two factors, the court relied on Aymes v. Bonelli, 980 F.2d 857 (2d Cir. 1992). The court's reliance on Aymes was misplaced. Significantly, Aymes was not a Title VII case but rather concerned the work-for hire doctrine under copyright law. In the work-for-hire context, a hiring party has a strong incentive to establish the existence of an employer-employee relationship with a hired party because, in general, the hiring party is entitled to the copyright on works created by an "employee" within the scope of employment but not on works created by an independent contractor. In light of that incentive, the Aymes Court held that a hiring party's decision not to withhold taxes or to provide employee benefits should be considered a virtual admission that the hired party was an independent contractor, entitled to the copyright. The Court reasoned that it would be unfair to allow the hiring party to treat the hired party as a non-employee for tax and benefits purposes while claiming title to the works the hired party created. The same reasoning does not apply in cases such as this one under Title VII or other federal employment statutes. In this context, an employer unilaterally determines the terms of employment and has nothing to gain by treating workers as employees for tax and benefits purposes. Moreover, these factors shed no light on the critical question whether the hiring party exercises substantial control over the means and manner by which the hired party does her work. In this context, therefore, a hiring party's decision not to withhold taxes or provide employee benefits is simply not indicative of whether an employer-employee relationship exists between the hiring party and the plaintiff. These factors should, therefore, be given little weight particularly where, as here, the other evidence strongly suggests the plaintiff was an employee. By holding that non-employee tax treatment and an absence of employee benefits conclusively established that Eisenberg was an independent contractor, the district court's decision here erroneously reduced the common law, totality-of-the-circumstances test to a simplistic litmus test for independent contractor status. This holding not only makes no sense but is inconsistent with the Supreme Court's directive in Darden. Moreover, the decision erodes the reach of Title VII and other federal employment statutes by providing employers with an easy way to avoid coverage and compliance with these laws. This, in turn, would frustrate the dual statutory goals of eliminating unlawful discrimination in the work place and compensating individuals harmed by such discrimination. This Court should therefore reaffirm that the common law totality-of-the-circumstances test in Darden continues to control the analysis of employee status under Title VII and other federal employment statutes. Since analysis under Darden establishes that Eisenberg was an employee, despite the treatment of her payroll taxes and employee benefits, we urge the Court to hold that she was covered by Title VII at Advance and, so, is entitled to the statute's protections against harassment and retaliation. ARGUMENT WHERE A HIRING PARTY EXERCISES NEARLY COMPLETE CONTROL OVER WHEN, WHERE AND HOW LONG AN INDIVIDUAL WORKS, AS WELL AS WHAT SHE DOES AT THE WORKPLACE, THE INDIVIDUAL IS AN "EMPLOYEE," COVERED BY TITLE VII, WHETHER OR NOT THE HIRING PARTY CHOOSES TO WITHHOLD TAXES FROM HER PAY AND TO PROVIDE EMPLOYEE BENEFITS. Julianne Eisenberg alleges that she was subjected to sexual harassment and retaliation during and after her tenure as a laborer at Advance Relocation and Storage. The district court dismissed the suit, holding that she was an independent contractor, rather than an employee, and so was not protected by Title VII. The court based its holding on two facts -- Advance chose not to withhold any taxes from Eisenberg's wages or to provide her with any employee benefits. According to the court, Advance's unilateral decision to treat Eisenberg as an "independent contractor" for tax and benefits purposes effectively trumps all of the contrary circumstances suggesting she was an "employee." This was error. It is well settled that whether an employer-employee relationship exists depends largely on the degree to which the hiring party can control the manner and means by which the work is accomplished. Here, Advance had, in the court's own words, "nearly complete control" over Eisenberg's work -- what she did; when, where and how long she worked; and even what she wore. This degree of control, coupled with the other evidence, establishes that Eisenberg was an "employee" for Title VII coverage purposes. She is, therefore, entitled to invoke the protections of the statute in this suit. Title VII's protections against sexual harassment and retaliation do not extend to independent contractors but apply only to persons who qualify as "employees." See Frankel v. Bally, Inc., 987 F.2d 86, 88-89 (2d Cir. 1993). Although the meaning of the word "employee" is central to determining coverage, the statutory definition of the word -- "an individual employed by an employer," 42 U.S.C. § 2000e(f) -- is unenlightening. See O'Connor v. Davis, 126 F.3d 112, 115 (2d Cir. 1997) (definition is "circular" and "explains nothing"). Where a statute uses the word "employee" without defining it precisely, courts are to assume that "Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine." Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992) (construing parallel definition of "employee" in ERISA); see also Community for Creative Non-Violence v. Reid, 490 U.S. 730, 741 (1989) (construing "employee" under copyright law) (unless otherwise defined, "term 'employee' should be understood in light of the general common law of agency"). In accordance with this mandate, this Court has applied common law agency principles in determining whether a plaintiff is a covered employee under Title VII and other federal employment statutes. See O'Connor, 126 F.3d at 115 (Title VII); Frankel, 987 F.2d at 89 (ADEA); cf. Hilton Int'l Co. v. NLRB, 690 F.2d 318, 320 (2d Cir. 1982) (NLRA). Under the common law test for agency, the distinction between an employee and an independent contractor rests primarily on the degree of control exercised over the plaintiff by the hiring party. Cilecek v. Inova Health Sys. Servs., 115 F.3d 256, 260 (4th Cir. 1997); see also, e.g., Restatement (2d) of Agency § 220, com.(d) ("control or right to control the physical conduct of the person giving service . . . in many situations is determinative"). As a rule, an "employer-employee relationship exists if the purported employer controls or has the right to control both the result to be accomplished and the 'manner and means' by which the purported employee brings about that result." Hilton, 690 F.2d at 320; see also Frankel, 987 F.2d at 90 ("greatest emphasis" is placed on "the hiring party's right to control the manner and means by which work is accomplished"). The "more detailed the supervision and the stricter the enforcement standards, the greater the likelihood of an employer-employee relationship." Hilton, 690 F.2d at 320. While control is key, the test also calls for "a flexible analysis of the totality of the circumstances." Frankel, 987 F.2d at 90; see also Sharkey v. Ultramar Energy, Ltd., 70 F.3d 226, 232 (2d Cir. 1995) ("Employment status depends on all of the factual incidents of the relationship.") (discussing ERISA). "Since the common law test contains no short-hand formula or magic phrase that can be applied to find the answer, . . . all of the incidents of the relationship must be assessed and weighed with no one factor being decisive." Darden, 503 U.S. at 324. A "non-exhaustive" list of factors that may also be considered includes: * the skill required, * the source of the instrumentalities and tools, * the location of the work, * the duration of the relationship between the parties, * whether the hiring party has the right to assign additional projects to the hired party, * the extent of the hired party's discretion over when and how long to work, * the method of payment, * the hired party's role in hiring and paying assistants, * whether the work is part of the regular business of the hiring party, * whether the hiring party is in business, * the provision of employee benefits, and * the tax treatment of the hired party. Id. at 323-24; Reid, 490 U.S. at 751-52; Frankel, 987 F.2d at 90 (list is non-exhaustive). Applying this test to the circumstances in this case, it is clear that Eisenberg was an employee, rather than an independent contractor. Significantly, the district court expressly found that Advance had "nearly complete control" over the manner and means by which Eisenberg did her work at the company, as well as when she arrived and left and what she did at the work place. Slip op. at 16; see also id. at 12. The evidence confirms these findings. Eisenberg testified, without contradiction, that Peter White told her when, where and how long to work, what to do on the job, and even what to wear -- a t-shirt bearing the company name. See, e.g., Eisenberg Dep. 72 ("Pete would give me my orders. If he wasn't going to be there that day, he told me what I needed to do that day, where I was going to be going unless something was changed at the last second."); id. at 95 (regular crew wore company t-shirts at work). Compare Hilton, 690 F.2d at 321 (that band leader exercised all the significant control over members' work suggested that members were not hotel employees). In addition, if Eisenberg wanted time off, she was required to ask White's permission; permission depended on the projected work load. Eisenberg Affidavit at ¶ 8. Compare Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 170 (2d Cir. 1998) (that plaintiff set his own schedule and took vacations when he wished evidenced that he was independent contractor). As for the other Darden factors, the district court acknowledged that, with the exception of two -- tax treatment and the provision of employee benefits -- they generally weigh in favor of employee status. See generally slip op. at 10-11, 13-16. Specifically, Eisenberg was hired to be an unskilled laborer -- all she needed was a strong back. The job did not require any special skill, as might be true, for example, of an artist or computer programmer. See Aymes v. Bonelli, 980 F.2d at 862 (specialized skills used by "architects, photographers, graphic artists, drafters and . . . computer programmers" would suggest independent contractor status). Advance provided any necessary tools and instrumentalities, cf. Hilton, 690 F.2d at 322 (that bands supplied their own instruments and music suggested that band members were not employees); and the work was done on Advance premises or other sites selected by Advance, cf. Kirsch, 148 F.3d at 170 (that plaintiff was not required to spend time in company's offices suggested independent contractor status). In addition, unlike the workers who were hired by Advance for only a specific job, Eisenberg and the other regular crew members were expected to show up at the warehouse each morning. During working hours, the company had the right to assign Eisenberg any work that needed to be done. Cf. Ost v. West Suburban Travelers Limo., 88 F.3d 435, 438 (7th Cir. 1996) (that plaintiff could refuse assignments suggested she was independent contractor). Eisenberg was paid by the hour, rather than on commission or by the project. Compare Dykes v. Depuy, Inc., 140 F.3d 31, 38 (1st Cir. 1998) (that plaintiff was paid by commission indicated he was independent contractor); Graham v. James, 144 F.3d 229, 235 (2d Cir. 1998) (that plaintiff was hired project by project indicated he was independent contractor). Moreover, Advance is a business, not a private individual, and the work Eisenberg was assigned to do -- packing, moving, loading and unloading crates or trucks -- was, as the district court acknowledged, "central to Advance's functioning" as a moving and storage company. Cf. Reid, 490 U.S. at 753 (sculptor was independent contractor inter alia because "[c]reating sculptures was hardly 'regular business'" for hiring party, a homeless shelter, which was "not a business at all"). Furthermore, the Darden factors are a non-exhaustive list, and courts should consider all relevant evidence. In our view, it is highly relevant that when Eisenberg was hired, she was expressly promised a "stable, permanent position" when she indicated that she did not want temporary work. Such a promise is inconsistent with defendants' present position that Eisenberg was hired merely on a casual basis. Rather, particularly in light of the other evidence, this fact confirms the existence of an ongoing employer-employee relationship between Eisenberg and Advance.<1> In holding that Eisenberg was instead an independent contractor, the district court erroneously placed undue reliance on Advance's unilateral decision to treat her as a non-employee for purposes of payroll taxes and employee benefits.<2> The court concluded that these two factors -- virtually the only indicia here of independent contractor status -- were dispositive, effectively trumping the compelling evidence of employee status. See slip op. at 16-17; see also id. at 8 (tax treatment is "virtual admission" of hired party's status).<3> On the contrary, both this Court and the Supreme Court have made clear that, at least in cases under federal employment statutes, there is no such "short-hand formula." See Darden, 503 U.S. at 324; Frankel, 987 F.2d at 90-91 (court should consider totality of circumstances). While the absence of payroll deductions and employee benefits may in other contexts suggest an independent contractor relationship, the legal significance of these factors is diminished where, as here, the hiring party unilaterally controls the terms of employment and can only benefit from treating workers as non-employees for tax and employee benefits purposes. As the Seventh Circuit recognized, "if an employer could confer independent contractor status through the absence of payroll deductions" or fringe benefits, "there would be few employees falling under the protection of [federal fair employment laws]." See J. Huizinga Cartage Co. v. NLRB, 941 F.2d 616, 620 (7th Cir. 1991). To the extent that any factors warrant greater emphasis in this context, they are those relating to the hiring party's right to control -- which here "weigh[] heavily in favor of employee status," slip op. at 12. See Frankel, 987 F.2d at 90 ("greatest emphasis" should be placed on hiring party's right to control); see also Golden v. A.P. Orleans, Inc., 681 F. Supp. 1100, 1103 (E.D. Pa. 1988) (where absence of fringe benefits and payroll deductions benefitted only hiring party, relevance of these factors was "diminished by the control exerted by [hiring party] over [plaintiff's] daily activities"). The district court cited this Court's decision in Aymes v. Bonelli, 980 F.2d at 861, as support for its conclusion that tax treatment and fringe benefits should trump the other Darden factors. See, e.g., slip op. at 8-9, 12.<4> In Aymes, this Court concluded that five of the Darden/Reid factors, including tax treatment and employee benefits, are "usually highly probative of the true nature of the employment relationship" and, so, "should be given more weight in the analysis" of employee status in most cases. Aymes, 980 F.2d at 861. Significantly, Aymes was decided in the context of the "work-for-hire" doctrine under copyright law, and it was error to apply the decision reflexively to this case under federal employment discrimination law. In a work-for-hire case, the court must determine which of the two parties -- the hirer or the hiree - is entitled to the copyright for a particular creation, such as a computer program or work of art. If the item was created by an "employee" acting within the scope of his employment, the copyright belongs to the employer; otherwise, it may belong to the creator. See id. at 860. In that context, a hiring party hoping to claim the copyright for the creation has every incentive to leave a track record establishing that the hired party was an employee. The Court in Aymes therefore reasonably held that the hiring party's deliberate decision not to extend employee benefits or withhold payroll taxes "constitute[d] a virtual admission" that the hired party was an independent contractor, entitled to the challenged copyright. See id. at 862. The Court reasoned that it would be inequitable to allow the hiring party to treat the hired party as a non-employee for tax and benefits purposes while claiming title to the computer program the hired party had created. See id. See also Carter v. Helmsley-Spear, Inc., 71 F.3d 77, 87 (2d Cir. 1995) (denial of "basic attributes of employment like vacation time and health benefits . . . would be wholly inconsistent with a 'work for hire' defense"). As discussed above, however, this same reasoning does not apply in the context of a case like this under federal employment law. Since Advance had nothing to gain by treating workers as employees for tax and benefit purposes, its failure to do so, standing alone, simply does not carry comparable weight. Indeed, this Court has never applied the Aymes analysis, rather than the totality of the circumstances analysis set out in Darden, in an employment case under any federal statute. See Sharkey, 70 F.3d at 231-32; Frankel, 987 F.2d at 90. The district court reasoned that in virtually every case where the hiring party failed to extend employee benefits or make payroll deductions, the plaintiff was found to be an independent contractor. See slip op. at 9-10 (citing cases). On the contrary, in federal employment law cases, this and other courts have recognized that an employer-employee relationship may exist regardless of whether the hiring party deducted payroll taxes and provided employee benefits. See Sharkey, 70 F.3d at 232 (holding that summary judgment was improper on question whether plaintiff was "employee" after he returned from retirement and resumed his pre-retirement duties, even though he received no employee benefits and no taxes were withheld); see also J. Huizinga Cartage Co., 941 F.2d at 620 (holding that plaintiffs were employees even though taxes were not withheld from pay); McFadden-Peel v. Staten Island Cable, 873 F. Supp. 757, 761 (E.D.N.Y. 1994) (holding that plaintiff was employee even though taxes were not withheld and she did not participate in employee benefit plans); Golden, 681 F. Supp. at 1103 (same). Cf. Brock v. Superior Care, 840 F.2d 1054, 1057-59 (2d Cir. 1987) (nurses for whom no payroll deductions were made were employees covered by FLSA where they did the same work as nurses who were on the payroll, work was central to employer's business, and evidence was that employer exercised substantial control over terms of employment); Hilton, 690 F.2d at 322 (band members were not employees even though hotels deducted payroll taxes; court concluded that the fact should be accorded little weight). In contrast, most of the cases -- including all of the appellate cases -- that the district court identified were work-for-hire cases like Aymes where, as noted above, these factors are far more telling. As for the employment law cases cited by the court, in none of them was the plaintiff was found to be an independent contractor based solely on the hiring party's treatment of payroll taxes and employee benefits.<5> Under the district court's approach, it does not matter whether a hiring party like Advance exercises "nearly complete control" over all aspects of an individual's terms of employment, including when, where, and how long she works as well as what she does at the work place. If the individual receives an IRS form 1099 and no benefits, she is an independent contractor. This holding not only makes no sense but is inconsistent with the Supreme Court's directive in Darden in that it improperly reduces the multi-factor common law analysis of the totality of the circumstances to a simplistic two-factor litmus test for independent contractor status. Moreover, and significantly, because coverage under Title VII and other federal employment laws extends only to employees, the decision sharply limits the scope of Title VII and other federal employment statutes by providing employers with an easy way to avoid coverage and compliance with these laws. This, in turn, would frustrate the dual statutory goals of eliminating unlawful discrimination in the work place and compensating individuals harmed by such discrimination. This Court should therefore reaffirm that, contrary to the district court's decision, the common law totality-of-the-circumstances test in Darden, with its emphasis on the employer's right to control, remains the appropriate means of analyzing employee status under Title VII and other federal employment statutes. The special significance that this Court attached to tax treatment and employee benefits in work-for-hire cases under Aymes is inapplicable in this context. Since the totality of the circumstances here establishes that Eisenberg was an employee at Advance, despite the treatment of her payroll taxes and employee benefits, we urge the Court to hold that she was covered by Title VII and, so, entitled to the statute's protections against harassment and retaliation. CONCLUSION For the foregoing reasons, the Commission respectfully asks this Court to reverse the judgment below and remand the case to the district court for further proceedings on the merits. Respectfully submitted, C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel _____________________________ BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W., Room 7014 Washington, D.C. 20507 (202) 663-4721 CERTIFICATE OF SERVICE I hereby certify that two copies of the foregoing brief were sent this 5th day of May, 2000, by first class mail, postage prepaid, to the following counsel of record: Daniel J. Schneider Drake, Sommers, Loeb, Tarshis & Catania, PLLC One Corwin Court Post Office Box 1479 Newburgh, NY 12550 Vincent Toomey Law Offices of Vincent Toomey 3000 Marcus Avenue, Suite 3W2A Lake Success, NY 11042 __________________________ 1 Also indicative of an ongoing employment relationship is defendants' use of the word "terminate" to describe why Eisenberg and the other regular crew members no longer work for Advance. See, e.g., Defs' Memorandum of Law in Support of Summary Judgment, at 5 (everyone working at the warehouse except Isaacson was "terminated" after cocaine was found). A hiring party need not "terminate" workers who are hired only casually. They can simply not be called back. 2 Although these factors appear at the very bottom of the list in Darden, the district court reversed their order, placing them at the top of its list. Compare Darden, 503 U.S. at 324 with slip op. at 7. 3 The court also indicated that the fact Eisenberg was paid an hourly wage weighs in favor of independent contractor status, especially because she was not guaranteed a specified number of hours per week. Slip op. at 15. On the contrary, those facts are, at most, inconclusive since laborers are rarely salaried, and hourly employees are typically paid only for the time they work. Compare Cilicek, 115 F.3d at 262 (that plaintiff was paid by the hour "is not indicative of whether [he] was an independent contractor or an employee") with Aymes, 980 F.2d at 863 ("payment of regular [hourly] wages . . . indicates that [plaintiff] was an employee"). See also Whitmore v. Port Authority of N.Y. & N.J., 907 F.2d 20, 21 (2d Cir. 1990) (worker whose compensation "can be docked for fractions of a workday missed" is "an hourly, not a salaried, employee"); Black's Law Dictionary 1579 (6th ed. 1990) (defining "wages" in pertinent part as "compensation of employees based on time worked"). 4 The district court also cited Tagare v. Nynex Network Systems Co., 994 F. Supp. 149 (S.D.N.Y. 1997). There, the court applied the weighted Aymes test in holding that the plaintiff, a fiberoptics specialist, was not an employee under the ADEA. While we believe the Tagare court erred in applying Aymes, the facts suggest that the plaintiff would be considered an independent contractor even under the proper legal standard since he was hired for his expertise and exercised substantial control over his work. 5 See Keller v. Niskayuna Consol. Fire Dist., 51 F. Supp. 2d 223 (N.D.N.Y. 1999) (noting among other things that defendant exercised little control over means and manner of work and jobs required high level of skill); Stetka v. Hunt Real Estate Corp., 859 F. Supp. 661 (N.D.N.Y. 1994) (skilled work; plaintiff set own hours, developed own business and was paid by commission); Frishberg v. Esprit de Corps, 778 F. Supp. 793 (S.D.N.Y. 1991) (skilled work; plaintiff developed own accounts, kept own hours, had little supervision and was paid by commission), aff'd without opinion, 969 F.2d 1042 (2d Cir. 1992); Krijn v. Pogue Simone Real Estate Co., 752 F. Supp. 102 (S.D.N.Y. 1990) (plaintiff had little direct supervision, set own hours and was paid by commission).