Ansoumana v. Gristede's Operating Corp.: Immigrant Delivery Workers Found to Be Employees, Covered by Federal Minimum Wage and Overtime Law

IMMIGRANTS & EMPLOYMENT

Immigrants' Employment Rights and Remedies

ANSOUMANA ET AL. V. GRISTEDE'S OPERATING CORP. ET AL.: IMMIGRANT DELIVERY WORKERS FOUND TO BE EMPLOYEES, COVERED BY FEDERAL MINIMUM WAGE AND OVERTIME LAW
Immigrants' Rights Update, Vol. 17, No. 2, April 8, 2003

A federal court in New York has ruled that more than 200 African immigrant delivery workers who were paid less than $3 per hour were "employees," not independent contractors, and are therefore entitled to the federal minimum wage and overtime pay. The men worked for the Manhattan stores of Duane Reade, a company that operates a large supermarket and drug store chain in the New York metropolitan area. The judge also determined that because Duane Reade and the corporations and individuals that supplied the workers are "joint employers," they are jointly liable for violations of the Fair Labor Standards Act and New York labor law.

Instead of hiring workers directly, Duane Reade paid two corporations and their principals (who are also defendants in the action) to hire the delivery workers at the rate of $250 to $300 per week per worker. Those entities then paid the workers whom they assigned to the Duane Reade stores a flat rate of $20 to $30 per day, despite requiring them to work 8 to 11 hours per day, 6 days a week. The store and the outsourcing company characterized the workers as "independent contractors" in order to evade the minimum wage and overtime protections mandated by federal and New York law.

The court applied an "economic reality test" in determining that the workers were employees of the store and the outsourcing company, not independent contractors. The court focused on the fact that the outsourcing entities hired, fired, transferred, and paid the delivery workers; that the workers were not required to make an up-front investment in their equipment and uniforms in order to be hired or assigned to a store; that the workers needed no special skills to find their way from the stores to the customers' homes, where they completed the deliveries; and that the plaintiffs' services constituted an integral part of the defendants' business. The judge concluded that "it is clear . . . that the delivery workers depend upon the [outsourcing entities] for the opportunity to sell their labor and are not in any real sense in business for themselves."

In concluding that Duane Reade was a "joint employer," the court focused on the workers' performance of "an integral service for the store in which they worked, [which enabled] Duane Reade to compete more effectively with mail order fulfillment companies and other drug stores by offering drug deliveries to its customers." The court also found that the delivery workers worked from the premises of the stores and assisted other workers in those stores with their regular tasks, such as bagging items at checkout counters, stocking shelves, providing security, and making inter-store deliveries. The court determined that the relationship between the store and the outsourcing entities was "so extensive and regular as to approach exclusive agency."

On Mar. 11, 2003, the court denied the defendants' motion for reconsideration.

Ansoumana et al. v. Gristede's Operating Corp. et al., 2003 U.S. Dist. LEXIS 985 (Jan. 28, 2003),
reconsideration denied, 2003 U.S. Dist. LEXIS 3470 (Mar. 11, 2003).