United States District Court, D. Minnesota
GEORGE SCHMIDT, JR., TIMOTHY HANGGI, DAN BENJEGERDES, ROBERT KIEKBUSCH, JR., JAMES NORD, MITCHELL FINWALL, DYLAN MONROE, JOHN KOZIOL, TANNER PORISCH, NEILL JERRY, JEFFERY ENGELKE, DENNIS GREGORSON, CRAIG WEMPLE, VACHEE YANG, Plaintiffs,
DIRECTV, LLC, and DIRECTSAT USA, LLC, Defendants.
A. HANSON, STUEVE SIEGEL HANSON, LLP, AND PAUL J. LUKAS,
NICHOLS KASTER, PLLP, FOR PLAINTIFFS.
D. DOUGHERTY, FOX ROTHSCHILD LLP, AND AARON MILLS SCOTT, FOX
ROTHSCHILD LLP, FOR DEFENDANTS.
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
R. TUNHEIM CHIEF JUDGE
DIRECTV, LLC (“DIRECTV”) and DirectSat USA, LLC
(“DirectSat”) (together “Defendants”)
sell satellite subscription services to the general public.
DIRECTV contracts with DirectSat to perform installations,
and DirectSat, in turn, subcontracts with entities
(“Subordinate Entities”) to perform that work.
Plaintiffs George Schmidt, Jr., Timothy Hanggi, Dan
Benjegerdes, Robert Kiekbusch, Jr., James Nord, Mitchell
Finwall, Dylan Monroe, John Koziol, Tanner Porisch, Neill
Jerry, Jeffery Engelke, Dennis Gregorson, Craig Wemple, and
Vachee Yang (collectively, “Plaintiffs”) were
Minnesota satellite installation technicians who installed
DIRECTV satellite systems for customers.
instituted this action under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq.,
seeking to obtain overtime compensation from Defendants for
uncompensated work performed in excess of forty hours per
week. Plaintiffs assert that Defendants retained control and
management over Plaintiffs but attempted to avoid FLSA
overtime requirements by treating Plaintiffs solely as
independent contractors or employees of Subordinate Entities.
move for summary judgment on several grounds and also move
for sanctions relating to a declaration report filed by
Plaintiffs' counsel. The Court will grant in part and
deny in part Defendants' motions for summary judgment.
Specifically, the Court will grant summary judgment with
respect to Plaintiffs' FLSA claims falling outside of a
two-year limitations period because the record does not
support a finding of Defendants' willfulness. In all
other respects, the Court will deny summary judgment because
there are genuine and material factual disputes relating to
the FLSA claims and defenses. The Court will also deny the
Defendants' motion for sanctions because the report at
issue need not comply with Fed.R.Evid. 1006 at this stage of
a California limited liability company, (Second Decl. of
Colin D. Dougherty (“Second Dougherty Decl.”),
Ex. 126 at 1, Feb. 1, 2017, Docket No. 187), is a
“leading provider of digital television entertainment,
” that sells “digital entertainment
programming” to consumers via satellite, (First Decl.
of Colin D. Dougherty (“First Dougherty Decl.”),
Ex. 79 at 5, Feb. 1, 2017, Docket No. 186). After a customer
agrees to purchase a DIRECTV satellite system, technicians
receive a work order to install the necessary DIRECTV
equipment in the customer's home or business.
(Id. at 6; Second Dougherty Decl., Ex. 148 at
contracts with home service providers (“HSPs”),
like DirectSat, to perform work orders for installations.
(Second Dougherty Decl., Ex. 148 at 16:25-17:22; 45:20-46:4.)
DirectSat is a Delaware limited liability company with its
principal place of business in Pennsylvania. (First Dougherty
Decl., Ex. 3 ¶ 21; id., Ex. 5 ¶ 21.)
DirectSat does not share a board of directors, officers, or
offices with DIRECTV. (Second Dougherty Decl., Ex. 156 ¶
in turn, contracts with Subordinate Entities to perform the
installation work that DirectSat agreed to provide DIRECTV.
(Second Dougherty Decl., Ex. 151 at 25:17-26:7.) It is
undisputed that Plaintiffs were Minnesota satellite
installation technicians who installed DIRECTV satellite
systems for customers while Plaintiffs were classified as
either W-2 employees or independent contractors of
relationships between DIRECTV and DirectSat, as well as
DirectSat and Subordinate Entities, are delineated in the
contractual agreements detailed in part below.
DIRECTV and DirectSat: Home Services Provider Agreement
relationship between DIRECTV and DirectSat is governed by an
HSP Agreement. (See Second Dougherty Decl., Ex. 126
(“HSP Agreement”).) The HSP Agreement states that
DirectSat is as an “independent contractor”
(id. at 11), and explains that DirectSat will
install and maintain DIRECTV's satellite system based on
DIRECTV's work orders, (id. at 1). To compensate
DirectSat for its services under the agreement, DIRECTV pays
DirectSat according to a rate matrix for certain services and
according to a schedule for certain service calls.
(Id. at 5-6.)
pertinent part, the HSP Agreement places certain restrictions
on DirectSat when it dispatches a subcontractor technician to
perform the installation and maintenance services
contemplated in the HSP Agreement. (See Id. at 4
(incorporating Exhibit 2.c).) First, it requires any
DirectSat subcontractor technician to be “qualified,
able and suitable to perform the duties assigned in a good,
professional and workmanlike manner and with care and concern
for DIRECTV” and have “successfully completed the
applicable DIRECTV-approved training program.”
(Id. at 25.) Additionally, the HSP Agreement
requires that any DirectSat subcontractor technician pass a
background check and drug test, (id.), wear a
DIRECTV uniform (id. at 27), adhere to DIRECTV
personal grooming standards, (id.), and obtain
specific technician certifications, (id.). DIRECTV
also has the sole ability to approve or terminate any
subcontractor technician. (Id. at 25.)
DirectSat and Subordinate Entities: Independent Contractor
the relationship between DirectSat and Subordinate Entities
is governed by an ICA. (See Second Dougherty Decl.,
Ex. 135 (“ICA”).) The ICA provides that the
respective Subordinate Entity is an “independent
contractor” or “Contractor, ” that will
perform satellite installation services in accordance with
DIRECTV's quality assurance guidelines. (Id. at
2.) Under the ICA, DirectSat pays the Subordinate Entity a
predetermined amount per task, and the amount paid varies
based on the type of task. (Id. at 1, 11-12.)
pertinent part, the ICA requires a Subordinate Entity to
conduct drug tests and background checks of its technicians
in accordance with DIRECTV's guidelines, and to provide
those results to DirectSat. (Id. at 2.) The ICA also
requires that a Subordinate Entity provide written
notification to DirectSat of technicians who resign or are
terminated shortly after a personnel change, (id. at
2); submit to DirectSat a motor vehicle record review of
technicians before they begin working, (id. at 3);
and clear each technician with DirectSat's risk
management department, (id. at 2-3).
also maintain a software called SIEBEL to schedule
installation and service call work orders for technicians,
regardless of whether that technician is affiliated with
DIRECTV, DirectSat, or a Subcontracting Entity. (Decl. of
Todd C. Werts (“Werts Decl.”), Ex. 19 at 34:5-11,
Mar. 3, 2017, Docket No. 198); see also Id. at
37:15-38:19 (explaining that both DirectSat and DIRECTV use
SIEBEL to manage work orders); HSP Agreement at 26 (providing
SIEBEL maintains subcontractor technicians' identities).
While either Defendant can access SIEBEL, the Subordinate
Entities cannot. (Werts Decl., Ex. 19 at 34:16-25;
id., Ex. 21 at 43:1-7; id., Ex. 29 at
36:7-37:20.) SIEBEL maintains contact information, work-day
starting addresses, skill sets, professional certifications,
and work order history for all technicians. (Werts Decl., Ex.
30 at 121:16-122:5, 124:25-125:9, 141:12-143:12,
270:23-271:8; Second Doughtery Decl., Ex. 148 at
is conflicting evidence on whether SIEBEL accurately recorded
or had the ability to accurately record the hours Plaintiffs
worked. (Compare Werts Decl., Ex. 29 at 151:16-24
(suggesting SIEIBEL could track the actual start and stop
times, travel times, and planned duration times for work
orders), with Doughtery Decl., Ex. 150 at 275:7-12
(providing SIEBEL does not accurately reflect the hours
Plaintiffs worked), and id., Ex. 151 at 67:17-68:15
(explaining SIEBEL only “soft books” work orders
to technicians “because [DirectSat or a Subcontracting
Entity] could end up [scheduling] any different
filed the initial Complaint against Defendants on November 1,
2013, and the Second Amended Complaint on March 12, 2015.
Plaintiffs asserted two claims: (1) violation of the FLSA for
uncompensated work performed in excess of forty hours a week;
and (2) state-law claims for damages.
April 3, 2015, Defendants moved to dismiss the action in its
entirety. On February 9, 2016, the Court granted
Defendants' motion to dismiss the state-law claim, but
denied the motion to dismiss the FLSA claim. Schmidt v.
DIRECTV, LLC, No. 14-3000, 2016 WL 519654 (D. Minn. Jan.
22, 2016), adopted by 2016 WL 526210 (D. Minn. ...