Mota Bautista v. Countywide Builders, Inc.

Background

Nine construction workers sued County-Wide Masonry Corp., several Carben corporations, and individual defendants for unpaid minimum and overtime wages under the Fair Labor Standards Act (FLSA) and the New York Labor Law. The workers performed construction work at projects in Brooklyn and Manhattan. County-Wide had hired Carben, and Carben had hired Batrume Industries, Inc. to provide labor.

The workers testified that they worked for County-Wide or “Country-Wide,” wore County-Wide badges or shirts, and were hired, supervised, and paid by a person known as Peru. Several workers testified that Peru worked for County-Wide. The defendants disputed which company employed Peru.

Summary-judgment motions against the workers

County-Wide and Anthony Derasmo—the “County-Wide Defendants”—moved for summary judgment on the ground that they were not the workers’ employers. Carben, Anthony LoGiudice, and Ronald Browning—the “Carben Defendants”—made the same argument.

The court applied the FLSA’s broad definition of “employer” and the economic-reality tests used to determine whether an entity employed workers. The tests consider such matters as hiring and firing authority, supervision, control over work conditions and payment, recordkeeping, and functional control over subcontracted workers. The New York Labor Law analysis followed the FLSA analysis.

The court held that a trial was required because the record contained a genuine factual dispute about whether Peru worked for County-Wide or Batrume. If Peru worked for County-Wide, a jury could find that his hiring, supervision, and payment of the workers were attributable to County-Wide. The County-Wide Defendants therefore were not entitled to summary judgment against the workers.

The court also held that a jury could find Carben to be an employer under the functional-control test if the workers were Batrume employees. Although Carben did not formally control Batrume’s employees, the labor was integral to Carben’s construction projects, Carben had not adequately explained its need to subcontract the labor, and the record did not show that Batrume had other clients or employees. The workers also did not know Batrume’s name and worked full time on projects involving Carben contracts. These circumstances could support a finding that the subcontracting arrangement was being used to avoid wage-law obligations. The court therefore denied the Carben Defendants’ motion for summary judgment against the workers.

Indemnification claims

Carben moved for summary judgment on County-Wide’s common-law and contractual indemnification claims. County-Wide moved for summary judgment on Carben’s common-law indemnification claims, including its third-party claim against County-Wide.

The court held that an employer found liable under the FLSA cannot obtain contribution or indemnification from another party for that wage-law liability. The same rule applies to claims arising under the New York Labor Law, and the parties could not avoid that rule by labeling the claims as state-law indemnification or breach-of-contract claims. Because the workers’ claims arose only under the FLSA and New York Labor Law, the court granted the Carben Defendants’ motion against the County-Wide Defendants and granted the County-Wide Defendants’ motion against the Carben Defendants.

Disposition

The County-Wide Defendants’ motion for summary judgment against the workers was DENIED, and their motion against the Carben Defendants was GRANTED. The Carben Defendants’ motion for summary judgment against the workers was DENIED, and their motion against the County-Wide Defendants was GRANTED. The court stated that it would refer the matter for settlement and later set a trial date and related deadlines.