Smith v. Calypso Charter Cruises Inc.

Background

Rean Smith, a chef, provided catering services for Calypso’s charter cruises through two limited liability companies that he owned: Rean Smith Catering LLC and Salt and Vinegar Catering LLC. The business relationship lasted from 2002 to 2013 and again from 2015 to 2018. Calypso ended the relationship in June 2018. Smith alleged that the decision was based on his diagnosis with sarcoidosis. The defendants said they ended the relationship after customer complaints about late-arriving staff, insufficient food, and poor food quality.

Smith asserted claims under the Americans with Disabilities Act, the New York State Human Rights Law, and the New York City Human Rights Law. The defendants moved for summary judgment, arguing that Smith was not their employee. They maintained that this defeated the federal and state claims and also placed Smith outside the relevant coverage of the New York City law.

Evidence Considered

The court disregarded Smith’s Local Civil Rule 56.1 counterstatement and interrogatory responses. The responses were not properly verified under the federal statute governing unsworn declarations, even after the court gave Smith an opportunity to correct the problem. Because the counterstatement relied on those responses and cited no other supporting admissible evidence, the court disregarded it as well. The court did not rely on the late filing of Smith’s submissions as an independent reason to exclude them.

Employee or Independent Contractor

The court applied the common-law agency test from Community for Creative Non-Violence v. Reid. That test considers 13 factors, including the hiring party’s control over the work, the worker’s skill, who supplies tools, where the work occurs, the relationship’s duration, the method of payment, the worker’s ability to hire assistants, whether the work is part of the hiring party’s regular business, employee benefits, and tax treatment. The court gave the greatest weight to the hiring party’s control over the manner and means of the work.

Most of the factors favored independent-contractor status. Smith operated through his own companies; the cruise clients selected from menus created by those companies; the record did not show that Calypso directed how particular dishes were prepared; much of the food was prepared away from the yacht; Smith could send other chefs; payment was made by check for particular cruises; and the checks generally went to the catering companies without tax withholdings. Smith and his companies did not receive employee benefits, W-2 forms, or 1099 forms from Calypso.

Three factors favored employee status: the relationship lasted about 14 years, catering was part of Calypso’s regular offerings, and Calypso operated a business. The court concluded that these factors were outweighed by the factors supporting independent-contractor status. It held that Smith was not Calypso’s employee and instead worked through companies that were independent contractors relative to Calypso.

New York City Human Rights Law

During the relevant period, the New York City Human Rights Law covered some independent contractors, including natural persons employed as independent contractors to perform work for an employer’s business who were not themselves employers. The court held that the evidence showed Calypso engaged Smith through his two limited liability companies rather than directly as a natural person. More than 100 checks were made out to those companies, and other workers for the companies performed catering services without being paid individually by Calypso. The court therefore held that Smith’s claims fell outside the New York City law’s coverage on the summary-judgment record.

Ruling and Disposition

Judge Paul A. Engelmayer granted the defendants’ motion for summary judgment and directed dismissal of all of Smith’s claims. The grant was with prejudice as to claims based on the theory that Smith was an employee. The grant was without prejudice as to New York City Human Rights Law claims asserting that Smith worked as an independent contractor protected by that law. The court explained that its targeted-discovery order had not clearly identified whether an independent-contractor relationship could fall within the law, so it would not bar Smith from bringing a new action on that theory in a court with authority to hear it. The court directed the clerk to close the case.