Saleem v. Corporate Transportation Group, Ltd.

854 F.3d 131 (2nd Cir. 2017)


Ps are black-car drivers who owned or operated black-car franchises and were affiliated with Ds. Ds each own a 'base license' that allows them to operate a black-car dispatch base in New York City, and to sell franchises to individual drivers. The Corporate Transportation Group (CTG) provides administrative support for the operation of the Ds' dispatch bases by handling billing, referral, payment, bookkeeping, accounting, voucher processing, and dispatching. Franchisor Ds and CTG operate out of a single facility and constitute 'a single integrated enterprise and/or joint employer for the purposes of the FLSA.' There were roughly 700 black cars affiliated with the Ds' dispatch bases and operating under the CTG umbrella. CTG's clients were primarily corporate entities, such as Deutsche Bank and Bank of America. Ps rented or purchased their franchises directly from Ds or, in some cases, from other franchisees. Ps who rented franchises paid $130 to $150 per week, while Ps who purchased paid franchise fees ranging from a nominal amount (or even nothing) to as much as $60,000. The agreements also required franchisees to pay additional fees, some upfront and some recurring, which varied from agreement to agreement. Franchisees also had to obtain a New York City Taxi & Limousine Commission (TLC) license, insurance, and a vehicle which they were responsible for maintaining. The franchise agreements stated: Franchisee is not an employee or agent of Franchisor, but merely a subscriber to the services offered by Franchisor. Franchisee shall at all times be free from the control or direction of Franchisor in the operation of Franchisee's business, and Franchisor shall not control, supervise or direct the services to be performed by Franchisee. The agreement also contains a 'non-compete' provision which prohibited CTG-affiliated drivers from driving CTG customers 'without processing payment for such services through CTG.' The agreements did not prohibit drivers from transporting non-CTG customers for a competitor black-car company, or independently, during their affiliation with CTG. The agreements required that drivers comply with 'Rulebooks' - manuals setting out certain standards of conduct. The Rulebooks included a dress code, which required drivers to dress neatly in specified business attire, as well as guidelines for keeping vehicles clean. Drivers were not required to wear a uniform, however, or to mark their cars with insignia denoting an affiliation with Ds. Ps possessed considerable autonomy in their day-to-day affairs. They determined when and how often to drive, and the record reflects that they worked vastly different amounts of time, without providing any notice to Ds. They were at liberty to - and did - accept or decline jobs that were offered. Ps could - and did - drive for dispatch bases other than the one with which they were affiliated, and they were thus free to shift as they chose during the workday from one dispatch service to another. Most drove for other black-car companies regularly, and some earned substantial sums as a result. Some were paid directly by customers with whom they had made individual arrangements, and others, though it was contrary to TLC regulations, see 35 R.C.N.Y. § 59B-25(a), picked up street hails. Ps netted up to 85% - of each CTG fare, less some small additional fees. Ps classified themselves as independent contractors on their tax returns and took substantial business deductions. Ps sued Ds seeking to recover unpaid overtime and other wages under the FLSA. Ds' motion for summary judgment was granted. The court found that Ps were not, as a matter of law, employees of Ds for FLSA purposes. Ps appealed.