Sanchez v. KTG Multiservices, Inc.

Background

Javier Torres Sanchez and Oscar David Posada brought wage-and-hour claims under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL) against KTG Multiservices, Inc.; AAC Maintenance Corp.; Andrea Catalina Gonzalez; Alveiro Echeverri; Alejandro Acosta; and Rosa Martinez. The plaintiffs sued on behalf of themselves and others similarly situated.

AAC, Acosta, and Echeverri moved for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. The moving defendants argued that no reasonable factfinder could determine that they were the plaintiffs’ employers under the FLSA or NYLL.

Magistrate Judge Gabriel W. Gorenstein recommended granting the motion as to AAC and Acosta and denying it as to Echeverri. No party filed an objection to the recommendation.

Employer Status and Echeverri

The court applied the FLSA’s economic-reality approach and considered whether the defendants exercised control over the plaintiffs. Under the formal-control factors discussed in the opinion, the court considered the power to hire and fire, control over work schedules and employment conditions, authority over pay, and maintenance of employment records. The court stated that the NYLL uses the same joint-employer standards for purposes relevant here.

The evidence concerning Echeverri included his identification on KTG’s website as its chief operating officer, his frequent presence at KTG’s offices, his instructions to Sanchez about clocking in, work times, and job duties, and his direction that Sanchez relay instructions to coworkers. Gonzalez also described herself and Echeverri as the company’s bosses and referred to management decisions as joint decisions.

Although the evidence did not show that Echeverri maintained employment records, and the evidence concerning his power to hire and fire was a close question, the court concluded that a reasonable jury could find that he was a joint employer. The court therefore held that the issue should be decided by a jury rather than on summary judgment.

AAC and Acosta

The plaintiffs offered little evidence that AAC or Acosta controlled them as employees. Acosta signed some of Sanchez’s and Posada’s paychecks during a brief period in 2018, but the court concluded that this did not show that he determined their pay rates or payment methods. The court also noted that the plaintiffs offered no evidence addressing the other employer-status factors as to AAC or Acosta.

Evidence that Acosta controlled AAC’s own employees did not establish that he controlled Sanchez or Posada. The court concluded that no reasonable jury could find that AAC or Acosta was the plaintiffs’ employer.

Disposition

Judge Failla found no clear error in Judge Gorenstein’s report and recommendation and adopted it in its entirety. The court granted in part and denied in part the Moving Defendants’ motion for summary judgment. It granted the motion as to all claims against AAC and Acosta and denied the motion as to all claims against Echeverri. The parties were ordered to file a joint letter about their availability for trial during the first quarter of 2023.