2 Defining Employment 2 Defining Employment

2.1 Misclassification 2.1 Misclassification

Misclassification suits reflect the contested future of worker movements in employment law. At a time when rates of unionization have continued to fall, some organizers have sought to unionize workplaces, such as Amazon warehouses, to strengthen the labor movement in the private sector. Others have focused on public interest litigation, seeking to designate contingent workers as employees, entitled to benefits. Companies have resisted these efforts, arguing that employee designations will cripple profitability and strip workers of advantages that make certain jobs attractive in the first place. Consider these conflicts as you read the next several cases.

2.1.1 Ansoumana v. Gristede's Operating Corp. 2.1.1 Ansoumana v. Gristede's Operating Corp.

Faty ANSOUMANA, Jacques Legrand Ngouvi, Lassana Diarra, Moussa Soumahoro, Mamadou Camara, Justin Obiang, Issa Diabate, Sidy Soukona, Dramane Zoungrana, Individually, and on behalf of all others similarly situated as Class Representatives, Plaintiffs, v. GRISTEDE’S OPERATING CORP.; Great Atlantic and Pacific Tea Company, Inc., d/b/a A & P; Shopwell, Inc., d/b/a Food Emporium; Duane Reade, Inc.; Charlie Baur, individually, and d/b/a B & B Delivery Service a/k/a Citi Express; Scott Weinstein and Steven Pilavin, individually and d/b/a Hudson Delivery Service, Inc.; Chelsea Trucking, Inc., a/k/a Hudson York, Defendants.

No. 00 Civ. 253(AKH).

United States District Court, S.D. New York.

Jan. 28, 2003.

*185National Employment Law Project, Catherine Ruckelshaus, Palyn Hung, New York, New York; Outten & Golden, Adam Klein, Scott Moss, New York, New York; Office of the New York Attorney General, Jennifer Brand, Mary Hughes, New York, New York, for Plaintiffs.

Putney, Twombly, Hall & Hirson, James E. McGrath III, Larissa A. Cason, New York, New York, for Defendants Duane Reade, Inc.; Milman & Heidecker, Perry Heidecker, Lake Success, New York, for Defendants Scott Weinstein, Steven Pila-vin, Hudson Delivery Service, Inc. & Chelsea Trucking, Inc.

OPINION AND ORDER GRANTING PLAINTIFFS PARTIAL SUMMARY JUDGMENT

HELLERSTEIN, District Judge.

Plaintiffs Faty Ansoumana et al, and the class they represent, were delivery workers for supermarkets and drugstore chains, including stores owned and operated by Duane Reade, Inc., a defendant. The delivery workers were hired by the Hudson/Chelsea group of defendants1 and *186assigned to Duane Reade stores to make deliveries to customers and to provide general in-store services, as directed by the store supervisors. I am asked to decide, on these cross-motions for summary judgment, whether, as to the Hudson/Chelsea defendants, the plaintiffs were independent contractors or employees entitled to be paid a minimum wage and time-and-a-half for overtime and, if plaintiffs were employees, whether Duane Reade was a “joint employer,” jointly obligated with the Hudson/Chelsea defendants to pay minimum wages and overtime. I will be applying, in determining the issues put to me, the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219 (2002), and the New York Minimum Wage Act, N.Y. Lab. Law §§ 650-665 (2002).

The defendant, Duane Reade, Inc. is a large retail drugstore chain in the New York metropolitan area. Duane Reade outsourced its requirements for delivery workers by engaging the Hudson/Chelsea defendants to provide delivery workers to the Duane Reade stores, at the rate of $250 to $300 per week, per worker. The Hudson/Chelsea defendants, in turn, paid the delivery workers whom they assigned $20-$30 per day, characterizing them as independent contractors in order to avoid the minimum wage and overtime provisions of federal and New York law.

I hold in this decision that those delivery workers who were assigned to work in Duane Reade stores and made deliveries on foot were not independent contractors, that the Hudson/Chelsea defendants are liable to them for violations of the FLSA and the New York Labor law, and that Duane Reade and the Hudson/Chelsea defendants were joint employers within the meaning of those laws and were jointly and severally obligated to pay minimum wages and overtime to the delivery workers.

The record shows that besides those delivery workers who were assigned to work at or in a Duane Reade store and made their deliveries mainly by foot, Duane Reade also used other types of delivery services including: beeper service, where a delivery person would be called by beeper to a Duane Reade store to pick up a delivery; van service, where delivery workers would make deliveries using vans which either they owned or were supplied by the Hudson/Chelsea defendants; and a shared service, where a Duane Reade store utilized the labor of a delivery worker who was assigned to more than one Duane Reade store or to another retailer. The record with respect to the delivery workers who delivered by these methods was not well-developed. Accordingly, I make no decision with respect to these workers pending further discovery, and defer ruling as to them on the pending motions for summary judgment. The instant grant of partial summary judgment against Duane Reade therefore encompasses only those delivery workers who were assigned to work at or in a Duane Reade store and made their deliveries mainly by foot.

In addition, the record is not well-developed in regard to plaintiffs who were hired by the Hudson/Chelsea defendants and were assigned to other supermarket chains that are not defendants in this lawsuit. Thus, I also defer ruling with respect to this latter group of plaintiffs, pending further discovery. The motion for summary judgment against the Hudson/Chelsea defendants therefore is granted only with respect to those delivery workers who were assigned to Duane Reade.

Finally, although plaintiffs have moved for summary judgment against the Hudson/Chelsea defendants and Duane Reade for the entire class period, I believe that *187the evidence on the instant motions is not sufficient to allow summary judgment to be granted with respect to the period after March 26, 2000, the effective date of a collective bargaining agreement signed by the Hudson/Chelsea defendants and plaintiffs. A ruling on plaintiffs’ claims after the March 26, 2000 date will be deferred pending further discovery and more complete briefing. Thus, summary judgment against Duane Reade and the Hudson/Chelsea defendants is granted only through March 26, 2000.

I. Background

Plaintiffs filed this action on January 13, 2000 against three large chains of New York supermarkets and drugstores, and several companies and individuals who hired employees to work as deliverymen in such chains. Plaintiffs alleged that the defendants were operating in violation of the FLSA and the New York Minimum Wage Law. They claimed that the defendants, who had hired the delivery workers, and the chains to which they were assigned and in which they worked were jointly and severally liable to them. In May 2001, I certified a class of delivery workers and dispatchers who had worked for defendants between January 13, 1994 and May 24, 2001 and who had not been paid the minimum wage or overtime required under New York law. More than 500 delivery workers have filed consents and are participating in this lawsuit pursuant to the collective action provisions of the FLSA. 29 U.S.C. § 216(b).

The delivery workers involved in the motion before me were hired by the Hudson/Chelsea defendants and were assigned to and worked for Duane Reade stores in Manhattan. The workers are mainly unskilled immigrants, mostly from West Africa. They provided services in the stores and made deliveries from the stores, and, despite working eight to eleven hours a day, six days a week, were paid a flat rate of between $20-$30 per day, well below minimum wage requirements.

The record developed in discovery shows that the Hudson/Chelsea defendants hired the delivery workers for 45 to 60 of the 200 Duane Reade stores located in Manhattan and the boroughs. By oral agreement between Duane Reade and the Hudson/Chelsea defendants, Duane Reade has depended on the Hudson/Chelsea defendants exclusively, since 1994, to supply its stores with delivery workers and has been paying the Hudson/Chelsea defendants a flat weekly rate of $250-$300 per worker. The Hudson/Chelsea defendants hired their workers essentially without advertising, from recommendations by one worker to another, and provided them with uniforms and delivery carts. Since 1989, the Hudson/Chelsea defendants have regarded their delivery workers as independent contractors, not employees, and have required some of the workers to sign statements so acknowledging. The Hudson/Chelsea defendants have not withheld federal, state, or local taxes, nor made FICA or other statutory required with-holdings from the payments to the workers, and have given them IRS Forms 1099 rather than W-2s to reflect their compensation. The Hudson/Chelsea defendants did not maintain a system for tracking the delivery workers’ hours or pay and did not keep records of any tips the delivery workers received.

In March 2000, the Hudson/Chelsea de-fendánts entered into a collective bargaining agreement with those of its delivery workers who had joined Local 338, Retail, Wholesale and Department Store Workers Union, AFL-CIO.' That agreement required that all employees hired by the Hudson/Chelsea defendants earn at least $5.15 an hour and time and a half for overtime. Employees assigned to drug stores are allowed $1.65 of the wage to be *188credited as tip allowance. Since the agreement was signed, the Hudson/Chelsea defendants,have been issuing IRS Forms W-2 to their delivery workers.

The.delivery workers assigned to Duane Reade stores reported to the Duane Reade store to which they had been assigned and received directions from Duane Reade personnel in that store. Generally, they were assigned to the pharmacy departments and made deliveries of pharmaceutical items to customers. Duane Reade personnel provided the pharmaceutical stickers, issued the delivery instructions and, if payment was to be collected, instructed the delivery workers how much money to bring back from the customer. The Duane Reade stores maintained logs at the stores, and the delivery workers signed in and out of the logs upon each delivery, recording deliveries and receipts. In their spare time, the' delivery workers were often asked to help customers with heavy items, provided bagging services at check-out registers, helped with security, stocked shelves, and moved products from one Duane Reade store to another. If a delivery worker was unsatisfactory, the Duane Reade manager asked Hudson/Chelsea to reassign the worker and provide another to replace him. Thus, the delivery worker, although not hired or paid by Duane Reade, was directed by Duane Reade managers and supervisors and provided services essentially similar to other Duane Reade employees.

II. Legal Framework

A. The Fair Labor Standards Act

The Fair Labor Standards Act mandates that “employees” receive a minimum wage and overtime pay of time and a half of the workers’ regular hourly rate for each hour worked in excess of forty hours per workweek.2 29 U.S.C. §§ 206(a)(1), 207(a)(1) (2002). The FLSA defines an “employee,” with certain exceptions not relevant here, as “any individual employed by an employer.” Id. § 203(e)(1). The statute in turn defines “employ” as “to suffer or permit to work,” id. § 203(g), and “employer” to include “any person acting directly or indirectly in the interest of an employer.” Id. § 203(d). The terms are to be expansively defined, with “striking breadth,” in such a way as to “stretch ... the meaning of ‘employee’ to cover some parties who might not qualify as such under a strict application of traditional agency law principles.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992). As the Second Circuit has ruled, the FLSA, in accordance with its remedial purpose, has been written in the “broadest possible terms,” Carter v. Dutchess Cmty. Coll., 735 F.2d 8, 12 (2d Cir.1984), and is to be construed broadly, for it would run “counter to the breadth of the statute and to the Congressional intent to impose a qualification which permits an employer who exercises substantial control over a worker ... to escape compliance with the Act.” Id.; see also Frankel v. Bally, Inc., 987 F.2d 86, 89 (2d Cir.1993) (noting “the expansive nature of the FLSA’s definitional scope”); Brock v. Superior Care, Inc., 840 F.2d 1054, 1058 (2d Cir.1988) (noting that the definition of “employ” is “necessarily a broad one in accordance with the remedial purpose of the Act”).

The regulations implementing the FLSA contemplate that an employee may have more than one employer. 29 C.F.R. § 791.2(a) (“a single individual may stand in the relation of an employee to two or more employers at the same time” under *189the FLSA). Such “joint employment” arises when the employee “performs work which simultaneously benefits two or more employers” and “one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee.” 29 C.F.R. § 791.2(b). This question of joint employment of plaintiffs, by Duane Reade and by the Hudson/Chelsea defendants, is a central issue in these cross motions.

B. New York Law

The New York Minimum Wage Act, like the FLSA, requires employers to pay a minimum wage-$4.25 before March 31, 2000, and $5.15 thereafter, N.Y. Lab. Law § 652.1 (2002)-and time and a half for overtime. N.Y.C.R.R. § 142-2.2. Like the FLSA, the New York Labor law defines “employee” broadly, as “including any individual employed or permitted to work by an employer in any occupation.”. N.Y. Lab. Law § 651(5) (2002). Because New York Labor Law and the FLSA embody similar standards with respect to the. legal issues before me, I will consider the federal law in deciding whether defendants were joint employers. Lopez v. Silverman, 14 F.Supp.2d 405, 411 n. 4 (S.D.N.Y.1998) (noting that “the legal issues involved in the plaintiffs’ state-law causes of action are governed by the same standards as those applicable to their FLSA claims”); Zheng v. Liberty Apparel Co., No. 99 Civ. 9033(RCC), 2002 WL 398663, at *6 n. 3, 2002 U.S. Dist. LEXIS 4226, at *17 n. 3 (S.D.N.Y. Mar. 13, 2002) (holding that for the purposes of decision, “the same analysis applies for both the FLSA and NYCRR”).

C. Summary Judgment

Summary judgment is warranted if the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(c). A “genuine issue” of “material fact” exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When parties have filed cross-motions for summary judgment, “each party has an initial burden of informing the court of the basis for its motion and of identifying those parts of the record which it believes demonstrate the absence of a genuine issue of material fact.” Vogel v. W.A. Sandri, Inc., 898 F.Supp. 254, 255 (D.Vt.1995). Although all facts and inferences therefrom are to be construed in the light most favorable to the party opposing the motion, see Harlen Assocs. v. Vill. of Mineola, 273 F.3d 494, 498 (2d Cir.2001), the nonmoving party must raise more than just “metaphysical doubt as to the material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “[Mjere speculation and conjecture is insufficient to preclude the granting of the motion.” Harlen, 273 F.3d at 499. “If the evidence is merely colorable or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). Thus, in order for defendants to survive summary judgment, they must come forward with evidence to show that there is a genuine issue of material fact with respect to their status as joint employers.

III. Plaintiffs Are Employees of the Hudson!Chelsea Defendants

There is no dispute that the plaintiffs were hired by one or the other of Scott Weinstein, Hudson Delivery Service, Inc., Steven Pilavin, and Chelsea Trucking, Inc. (also known as Hudson York)-the defendants to whom I have been referring as *190“the Hudson/Chelsea defendants.” These defendants also do not dispute that they may be treated interchangeably. Thus, if one corporate entity is held hable, that finding may extend to the others. There is also no dispute that the Hudson/Chelsea defendants regarded the plaintiffs as independent contractors, not employees, and until the collective bargaining agreement with Local 338, which became . effective March 26, 2000, the Hudson/Chelsea defendants did not keep the records mandated for employees by the FLSA and the New York Minimum Wage Act, did not pay minimum wages or overtime, did not withhold taxes or FICA from payroll, and issued IRS Forms 1099, rather than W-2s.

An employer’s characterization of an employee is not controlling, however, for otherwise there could be no enforcement of any minimum wage or overtime law. There would be nothing to prevent old-fashioned labor contractors from rounding up workers willing to sell their ■ labor cheaply, and assigning them to perform outsourced work, without complying with minimum wage requirements. Thus, not the characterization of a hiring hall, but the test of “economic reality,” governs how a relationship of employment is to be characterized in relation to the FLSA. Brock, 840 F.2d at 1059.

In Brock v. Superior Care, Inc., the Court set out an “economic reality” test to distinguish between employees and independent contractors. The test considers five factors: (1) the degree of control exercised by the employer over the workers; (2) the workers’ opportunity for profit or loss and their investment in the business; (3) the degree of skill and independent initiative required to perform the work; (4) the permanence or duration of the working relationship; and (5) the extent to which the work is an integral part of the employer’s business. Id.; United States v. Silk, 331 U.S. 704, 67 S.Ct. 1463, 91 L.Ed. 1757 (1947). No one factor is dispositive; the “ultimate concern” is “whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service or are in business for themselves.” Brock, 840 F.2d at 1059.

Normally, the existence and degree of each factor is a question of fact, and the legal conclusion to be drawn from those facts is a question of law. Id. Here, however, as the discussion below makes clear, there is no genuine issue of material fact as to plaintiffs’ proper status as employees.

The Hudson/Chelsea defendants argue that they merely “placed” workers with the Duane Reade stores, and it was the store managers and supervisors, not the Hudson/Chelsea defendants, who exercised control. However, the Hudson/Chelsea defendants were more than a placement agency. Hudson/Chelsea, not Duane Reade, paid the delivery workers, and controlled their hiring, firing, transfer and pay. If a worker assigned to a Duane Reade store met with disfavor, the store manager asked the Hudson/Chelsea defendants to transfer him out and assign someone else. Moreover, the Hudson/Chelsea defendants never offered proof of any license as an employment agency, and did not function, vis-a-vis Duane Reade, in the manner of an employment agency, receiving a commission based on several weeks or months of earnings.

The Hudson/Chelsea defendants’ relationship with plaintiffs satisfies the first of the Brock considerations, showing a substantial degree of control over the workers. As Brock made clear, “[a]n employer does not need to look over his workers’ shoulders every day in order to exercise control.” 840 F.2d at 1060; Herman v. RSR Sec. Servs., 172 F.3d 132, 140 (2d Cir.1999) (finding the first Brock factor *191satisfied where putative employer hired employees and “on occasion, supervised and controlled employee work schedules and the conditions of employment”); Thomas v. City of Hudson, No. 95-CV-0070, 1996 WL 280828, at *6-*7, 1996 U.S. Dist. LEXIS 7244, at *17-*21 (N.D.N.Y. May 18, 1996); see also Goldberg v. Whitaker House Co-op., 366 U.S. 28, 32-33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961) (finding homeworkers “employees” where putative employer had power to hire and fire them); Walling v. Twyeffort, Inc., 158 F.2d 944 (2d Cir.1946) (finding tailors, who occasionally did jobs for more than one employer and hired employees to work for them, employees rather than independent contractors). The fact that the Hudson/Chelsea defendants hired, fired, transferred and paid the delivery workers weighs substantially in favor of finding an employment relationship between the Hudson/Chelsea defendants and plaintiffs.

The second consideration of Brock -opportunity for investment, and profit or loss-also weighs heavily in favor of an employment relationship. As defendants conceded, plaintiffs’ investment in the business was negligible. Brock, 840 F.2d at 1059. Plaintiffs are not asked to invest in Duane Reade, Hudson/Chelsea, or their own jobs. Hudson/Chelsea provided the delivery workers with delivery carts that they could rent and uniforms that they could purchase; the workers did not have to make an • up-front investment in such things in order to be hired or assigned to a Duane Reade store.

Hudson/Chelsea argues that delivery services require plaintiffs to exercise “skill and independent initiative,” the third consideration of Brock, but clearly this is not so in any objective sense. The Duane Reade stores are located throughout Manhattan and the boroughs, and customers typically reside within a neighborhood of a few blocks. Little “skill” or “initiative” is needed to find one’s way from a Duane Reade store to a customer’s residence. See, e.g., Gustafson v. Bell Atl. Corp., 171 F.Supp.2d 311, 326 (S.D.N.Y.2001) (plaintiffs duties as a chauffeur “required no specialized skill or initiative, suggesting that plaintiff was an employee rather than an independent contractor”); cf. Brock, 840 F.2d at 1060 (holding that nurses have special skills and show independent initiative). The third consideration, then, also argues for finding plaintiffs to be employees, not independent contractors.

The fourth consideration, the permanence and duration of the plaintiffs’ working relationship with the Hudson/Chelsea defendants, is disputed. Plaintiffs claim that most delivery workers have been working for the Hudson/Chelsea defendants for years, but offer testimony of only four deliverymen, of approximately 500 delivery workers who opted into the lawsuit, to support their claim, and even these four had only a three-year working relationship with the Hudson/Chelsea defendants. Nevertheless, the transience of the work force here says less about the status of the worker than about the nature of the job. Many delivery workers do not endure for long periods of time in this line of work due to the long hours, the low pay, the dangers of the streets, and the vagaries of the weather inherent in delivery work. Any transience of the work force therefore reflects “the nature of [the] profession and not [the workers’] success in marketing their skills independently.” Brock, 840 F.2d at 1060-61.

The fifth consideration looks at the extent to which the work is integral to the business, and it also weighs heavily in favor of an employment relationship. The Hudson/Chelsea defendants concede that they are engaged primarily in the business of providing delivery services to retail establishments and that plaintiffs perform *192the actual delivery work. Thus, plaintiffs’ services constitute an integral part of the Hudson/Chelsea defendants’ business.

It is clear, from the “economic reality” and the totality of circumstances, that the delivery workers depend upon the Hudson/Chelsea defendants for the opportunity to sell their labor and are not in any real sense in business for themselves. See id. at 1059. The delivery workers, as a matter of law, are employees, not independent contractors, and are entitled to summary judgment against the Hudson/Chelsea defendants.

In a footnote in their brief on this motion, plaintiffs state that they seek summary judgment not only , for those delivery workers whom the Hudson/Chelsea defendants assigned to Duane Reade stores, but also on behalf of class members who were hired by the Hudson/Chelsea defendants and assigned to supermarket chain stores that had agreements with the Hudson/Chelsea defendants similar to the agreement with Duane Reade. Although plaintiffs point to some evidence in the record that defendant Weinstein treated all of his delivery walkers similarly, regardless of what store he sent them to, I do not believe that such evidence is sufficient to make out a claim for summary judgment on behalf of the delivery workers who worked for the Hudson/Chelsea defendants and were assigned to supermarket chains not named in this action. I therefore defer ruling with respect to these workers, pending further discovery and briefing.

IV. Defendants Weinstein and Pilavin Are Individually.Liable as Employers

Plaintiffs argue that, along with their companies Hudson Delivery Service, Inc. and Chelsea Trucking, Inc., Scott Weinstein and Steven Pilavin are “employers,” and are therefore individually liable under the FLSA for underpayments of minimum wages and overtime. Plaintiffs are correct.

Officers and owners of corporations may be deemed employers under the FLSA where “the individual has overall operational control of the corporation, possesses an ownership interest in it, controls significant functions of the business, or determines the employees’ salaries and makes hiring decisions.” Lopez, 14 F.Supp.2d at 412; United States Dep’t of Labor v. Cole Enters., Inc., 62 F.3d 775, 778 (6th Cir.1995) (“One who is the chief executive officer of a corporation, has a significant ownership interest in it, controls significant functions of the business, and determines salaries and makes hiring decisions has operational control and .qualifies as an ‘employer’ for the purposes of FLSA.”) (internal citations omitted); Reich v. Circle C Investments, Inc., 998 F.2d 324, 329 (5th Cir.1993) (“[T]he FLSA’s definition of employer is sufficiently broad to encompass an individual who, though lacking a possessory interest in the ‘employer’ corporation, effectively dominates its administration or otherwise acts, or has the power to act, on behalf of the corporation vis-a-vis its employees.”) (internal citation omitted); Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir.1983) (“The overwhelming weight of authority is a corporate officer with operational control of a corporation’s covered enterprise is an employer with the corporation, jointly and severally hable under the FLSA for unpaid wages.”). In Herman v. RSR Security Services, Ltd., 172 F.3d 132 (2d Cir.1999), the Second Circuit found that a shareholder and member of the board was an “employer” under the FLSA where he had the authority to hire managerial staff, occasionally supervised and controhed employee work schedules, and had the authority to sign payroll checks. The Court empha*193sized that “the overarching concern is whether the alleged employer possessed the power to control the workers in question,” id. at 139, and looked at the “totality of the circumstances” in determining whether defendant had “operational control.” Id. at 140. Thus, it did not matter that the putative employer did not directly hire workers, but only managerial staff, and that he did not have direct control over the workers in question; instead, the Court looked at whether he had “operational control” over the business.

Weinstein and Pilavin argue that they should not be held individually liable for underpayments because they did not directly control the delivery workers. Clearly, however, Weinstein and Pilavin exercised operational management of Hudson Delivery and Chelsea Trucking, and that is sufficient under the law to satisfy the broad statutory definition of “employer.” See 29 U.S.C. § 203(d); Darden, 503 U.S. at 326, 112 S.Ct. 1344. Weinstein and Pilavin are the founders, owners, and sole shareholders of Hudson Delivery Service and Chelsea Trucking, and together they personally oversee and operate the companies and their agents on a daily basis. Thus, under Herman, each is an “employer” under the FLSA, and can be held individually liable for failure to pay minimum wages to their employees.

Weinstein and Pilavin argue that they could not be said to exercise control over the delivery workers if Duane Reade exercised such control. This argument misses the point; as I discuss below, the FLSA recognizes joint employment, meaning that more than one employer can be responsible for FLSA obligations. Cole, 62 F.3d at 778. Because Weinstein and Pilavin had operational control over Hudson Delivery Service and Chelsea Trucking, they are individually liable under the FLSA for any underpayments -in plaintiffs’ salaries. Thus, plaintiffs are entitled to summary judgment against Weinstein and Pilavin, as well as against Hudson Delivery Services, Inc. and Chelsea Trucking, Inc.

Y. Duane Reade is a Joint Employer

The FLSA contemplates that more than one employer may be responsible for underpayments of minimum wages and overtime. 29 C.F.R. §§ 791.2(a)-(b). Duane Reade may be liable to plaintiffs for such underpayments, jointly and severally with the Hudson/Chelsea defendants, if Duane Reade was also their “employer” under the FLSA. The issue is determined by an “economic reality” test, Goldberg, 366 U.S. at 33, 81 S.Ct. 933; Danneskjold v. Hausrath, 82 F.3d 37, 40 (2d Cir.1996); Carter, 735 F.2d at 12, which takes into account the real economic relationship between the employer who uses and benefits from the services of workers and the party that hires or assigns the workers to that employer.

In Rutherford Food Corporation v. McComb, 331 U.S. 722, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947), meat boners who worked on the premises of a slaughterhouse were hired by another employer under contract with the slaughterhouse, much as the delivery workers for Duane Reade were hired to work there by the Hudson/Chelsea defendants. The issue in Rutherford was whether the slaughterhouse should be considered the employer of the meat boners when there already was an employer, the head boner who had hired the workers, and also managed and paid them.

The Supreme Court held that the slaughterhouse was a joint employer with the head meat boner for the purpose of minimum wage obligations under the FLSA. The Supreme Court considered that the boners’ work was “part of the integrated unit of production,” and that the workers did a “specialty” job on the *194production line, integral to the entire operation of the line. 331 U.S. at 729, 67 S.Ct. 1473. It was the boners themselves, not their company, functioning like piece-workers on- a production line, who used the premises and equipment of the slaughterhouse to do their work, rather than shifting from one slaughterhouse to another as “an enterprise that actually depended for success upon the initiative, judgment or foresight of the typical independent contractor.” Id. at 730, 67 S.Ct. 1473.

In Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d Cir.1984), the Second Circuit considered a work-release program of the New York State Department of Correctional Services (“DOCS”), which assigned inmates to work at sites of private employers. The plaintiff was a prison inmate and, under a DOCS program for college graduates, was assigned to work as a teaching assistant at Dutch-ess County Community College (“DCC”). DOCS paid plaintiff a stipulated allotment, less than the minimum wage, and plaintiff sued under the FLSA for back wages, punitive damages, and an injunction requiring defendants to pay all tutors, including inmate tutors, the same compensation.

The Second Circuit set out a four-part set of criteria to help determine whether DOCS, or DCC, or both, were “employers” required to pay minimum wages, examining who hired and fired the workers; who supervised and controlled their work schedules and conditions of employment; who determined the rate and method of payment; and who was to maintain employment records. Id. at 12. Applying the criteria, the Court of Appeals found that it was DCC that had initially proposed to employ prisoners and suggested the wage to pay them; that DCC had established the standards to decide who would be eligible to be a teaching assistant and had identified several inmates whom it proposed to accept; that DCC reserved the right to refuse those inmates whom it did not want; and that DCC had decided for how many sessions and for how long an inmate would be permitted to tutor. Id. at 15. On this record, the Court of Appeals held that there were questions of fact whether DCC had exercised sufficient control over the prison inmates to make DCC an “employer” required to pay minimum wages and overtime under the FLSA. Id. Nevertheless, even taking into account the plaintiffs status as a prisoner, the Court did not rule out the possibility that he had FLSA claims against DCC as an employer, stating that the record, while not perhaps reflecting “the full panoply of an employer’s prerogatives,” may be sufficient to warrant FLSA coverage. Id.

The Second Circuit applied the same criteria in Herman v. RSR Security Services, Ltd., and held that a shareholder and member of the board was an “employer” under the FLSA, because it was he who had the authority to hire managerial staff, to supervise and control employee work schedules, and to sign payroll checks. 172 F.3d at 140.

In Torres-Lopez v. May, 111 F.3d 633, 642-44 (9th Cir.1997), farm laborers were procured through a labor agent, who hired them and assigned them to a farm. The Ninth Circuit Court of Appeals found that because these laborers constituted an integral part of the farm’s business and because the farm exercised indirect control over them by supervising them and controlling the harvest schedule and the number of workers it needed for harvesting, the farm was a joint employer, along -with the labor agent who hired them. See also Antenor v. D & S Farms, 88 F.3d 925, 937-38 (11th Cir.1996). Similarly, in Lopez v. Silverman, the district court for the Southern District of New York found that where the putative joint employer, a gar*195ment manufacturer, directly monitored the quality of work done by garment cutters, controlled “the substance of the plaintiffs’ daily work-both physically and procedurally,” and where the garment cutters’ work was integral to the manufacturer’s work in that they functioned essentially as the manufacturer’s own sewing and pressing unit, such a situation weighed heavily in favor of finding a joint employment relationship. 14 F.Supp.2d at 420-21; see also Liu v. Donna Karan Int’l, No. 00 Civ. 4221(WK), 2001 WL 8595, 2000 U.S. Dist. Lexis 18847 (S.D.N.Y. Jan. 2, 2001). But see Zheng v. Liberty Apparel Co., No. 99 Civ 9033, 2002 WL 398663, at *6, 2002 U.S. Dist. LEXIS 4226, at *19 (S.D.N.Y. Mar. 13, 2002).

Like the meat boners in Rutherford, 331 U.S. at 730, 67 S.Ct. 1473, the farm workers in Torres-Lopez, 111 F.3d at 642-44, and the garment cutters in Lopez, 14 F.Supp.2d at 420, the delivery workers assigned to Duane Reade performed an integral service for the stores in which they worked, enabling Duane Reade to compete more effectively with mail order fulfillment companies and other drug stores by offering drug deliveries to its customers. The delivery workers worked from the premises of the Duane Reade stores, and assisted other workers in those stores with bagging items at check-out counters, stocking shelves, providing security, and making inter-store deliveries.

Duane Reade offers an analogy to Federal Express, United Parcel, and other delivery services, but the analogy is misplaced. Duane Reade’s delivery workers worked out of the Duane Reade stores, and not from a central depot; deliveries were made directly from the pharmacy counters to customers’ homes, and not via a central facility; and control was exercised throughout by Duane Reade, and not by some independent service. Duane Reade used the delivery workers to extend its shelves and counters to the homes of customers, allowing them the convenience of shopping from home instead of having to come physically into a store. Duane Reade managers and supervisors directed the delivery workers in their tasks, instructing them what to pick up, where to make deliveries, how to log their deliveries, and how much to receive in payment. The delivery workers worked as individuals, and not as a group shifting from store to store according to seasonal and hourly needs. Indeed, it was not until they were organized by Local 338, in March 2000, that they even had a bargaining representative to negotiate for them as a collective. Clearly, the economic reality of the relationship between Duane Reade and the delivery workers reveals that Duane Reade was an employer of the delivery workers, responsible for assuring that they were paid the wages required by the FLSA and the New York Minimum Wage Act as a condition of their employment.

Additionally, the relationship between Duane Reade and the Hudson/Chelsea defendants establishes joint employment. That relationship was “so extensive and regular as to approach exclusive agency.” Lopez, 14 F.Supp.2d at 421. The Hudson/Chelsea defendants acted directly in the interest of Duane Reade in relation to the delivery workers, 29 C.F.R. § 791.2, and Duane Reade used the Hudson/Chelsea defendants’ services almost exclusively, for a lengthy period of years, since 1994, showing consistent dependence on them for delivery services. See Lopez, 14 F.Supp.2d at 421.

I therefore hold, looking at the “circumstances of the whole activity,” that plaintiffs were economically dependent on both the Hudson/Chelsea defendants and Duane Reade, see Antenor, 88 F.3d at 938, and that both were their “employers” under *196the FLSA and the New York Minimum Wage Act.

VI. Period of Liability

On March 26, 2000, a collective bargaining agreement signed by the plaintiffs, who had joined Local 338, Retail, Wholesale and Department Store Workers Union, AFL-CIO, and the Hudson/Chelsea defendants went into effect. Under the terms of the agreement, workers who worked for a drugstore were to receive minimum wage, of which $1.65 could be tip credit. Pursuant to these terms, the Hudson/Chelsea defendants paid plaintiffs who worked for Duane Reade at a rate starting at $4.20 per hour, and added to that a tip credit of $.95 per hour (depending on hours worked, between $25-$39 per week), the total being equal to the minimum wage. The record is uncertain, however, if the $.95 per hour credited to plaintiffs on their paystubs actually reflects reality. These paystubs show that plaintiffs properly were credited between $25-$39 a week in tips. However, in two affidavits, plaintiffs testify that they really earned only $5 — $15 per week in tips.

The evidence is not sufficient to allow summary judgment to be granted with respect to the period after March 26, 2000. Discovery shall continue with respect to the provision of minimum wages between March 26, 2000 and May 24, 2001, the closing date of the class period, and the parties should r,e-file their motions upon further factual development, more thorough briefing, and presentation of any applicable regulations. I invite counsel for Local 338 and the New York State Attorney General’s Office also to brief the issue.

The impact on Duane Reade, with respect to the post-March 26, 2000 period, is also uncertain. Did Duane Reade have the right to rely on the collective bargaining agreement, and is its good faith a defense? These issues, too, should be addressed by all those interested, including Local 338 and the New York State Attorney General’s Office.

VII. Conclusion

Duane Reade had the right to “outsource” its requirement for delivery services to an independent contractor, here the Hudson/Chelsea defendants, and seek, by such outsourcing, an extra measure of efficiency and economy in providing an important and competitive service. But it did not have the right to use the practice as a way to evade its obligations under the FLSA and the New York Minimum Wage Act. Both Duane Reade and the Hudson/Chelsea defendants were the “employers” of the plaintiffs under these laws, jointly and severally obligated for underpayments of minimum wage and overtime during the period between January 13, 1994 and March 26, 2000.

All plaintiffs who were hired by or worked for the Hudson/Chelsea defendants, were assigned to a Duane Reade store, and made deliveries mainly on foot are entitled to summary judgment against the Hudson/Chelsea defendants and Duane Reade, jointly and severally. With respect to plaintiffs who were hired by, the Hudson/Chelsea defendants and were assigned to a supermarket chain not named as a defendant in this suit and plaintiffs who worked for a Duane Reade store by beeper service, van service, or as part of a shared service, the cross-motions for summary judgment are deferred.

SO ORDERED.

2.1.2 Cotter v. Lyft, Inc. 2.1.2 Cotter v. Lyft, Inc.

Cotter was one of several cases decided before California voters voted 58.63 percent to 41.37 to approve Proposition 22, which designated rideshare and delivery drivers. Consider, in reading Cotter, whether this analysis might change should a different definition of "employee" might apply.

Patrick COTTER, et al., Plaintiffs, v. LYFT, INC., Defendant.

Case No. 13-cv-04065-VC

United States District Court, N.D. California.

Signed 03/11/2015

*1069Matthew David Carlson, Carlson Legal Services, San Francisco, CA, for Plaintiffs.

Alex Santana, Christopher M. Ahearn, Thomas Michael Mclnerney, Ogletree Deakins Nash Smoak & Stewart, P.C., San Francisco, CA, for Defendant.

Re: Dkt. Nos. 69, 74

ORDER DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT

VINCE CHHABRIA, District Judge

I.

The question in this case 'is whether Lyft drivers are “employees” or “independent contractors” under California law. The answer is of great consequence for the drivers, because the California Legislature has conferred many protections on employees, while independent contractors receive virtually none. The answer is also of great import to Lyft, because its business model assumes the drivers are independent contractors.

At first glance, Lyft drivers don’t seem much like employees. We generally understand an employee to be someone who works under the direction of a supervisor, for an extended or indefinite period of time, with fairly regular hours, receiving most or all his income from that one employer (or perhaps two employers). Lyft drivers can work as little or as much as they want, and can schedule their driving around their other activities. A person might treat driving for Lyft as a side activity, to be fit into his schedule when time permits and when he needs a little extra income.

But Lyft drivers don’t seem much like independent contractors either. We generally understand an independent contractor to be someone with a special skill (and with the bargaining power to negotiate a rate for the use of that skill), who serves multiple clients, performing discrete tasks for limited periods, while exercising great discretion over the way the work is actually done. Traditionally, an independent contractor is someone a principal might have found in the Yellow Pages to perform a task that the principal or the principal’s own employees were unable to perform— often something tangential to the day-today operations of the principal’s business. See Antelope Valley Press v. Poizner, 162 Cal.App.4th 839, 75 Cal.Rptr.3d 887, 900 (2008) (describing the traditional “notion [of] an independent contractor [as] someone hired to achieve a specific result that is attainable within a finite period of time, such as plumbing work, tax service, or the creation of a work of art for a building’s lobby”). Lyft drivers use no special skill when they give rides. Their work is central, not tangential, to Lyft’s business. Lyft might not control when the drivers work, but it has a great deal of power over how they actually do their work, including the power to fire them if they don’t meet Lyft’s specifications about how to give rides. And some Lyft drivers no doubt treat their work as a full-time job — their livelihood may depend solely or primarily on weekly payments from Lyft, even while they lack any power to negotiate their rate of pay. Indeed, this type of Lyft driver— the driver who gives “Lyfts” 50 hours a week and relies on the income to feed his family — looks very much like the kind of worker the California Legislature has always intended to protect as an “employee.”

*1070The plaintiffs in this case were once Lyft drivers. They contend Lyft owes them money because it should have paid them as employees rather than independent contractors. For example, they argue that, under California law, Lyft should have reimbursed them for expenses, and that, at least sometimes, Lyft failed to pay them minimum wage. The plaintiffs propose to represent a class consisting of all people who have driven for Lyft in California since the company’s inception in 2012. The plaintiffs and Lyft have filed cross-motions for summary judgment, with the plaintiffs urging the Court to declare them “employees” as a matter of law, and Lyft urging the Court to declare them “independent contractors” as a matter of law. But under California law, the question of how to classify a worker is typically for a jury. A court may only decide the question as a matter of law if application of the multitude of relevant factors would require any reasonable juror to reach the same conclusion. Here, because the numerous factors for deciding whether a worker is an employee or an independent contractor point in decidedly different directions, a reasonable jury could go either way. Accordingly, there must be a trial.

II.

Lyft operates a smartphone application, or “app,” through which passengers are matched with nearby drivers who are available to transport people in their personal automobiles.. Lyft markets itself as “Your friend with a car.” Carlson Deck, Ex F at LYFT 000088. Cars that transport passengers for Lyft are easily recognizable, because Lyft gives each driver a “Carstache” (a big fuzzy pink mustache) to attach to the front of his car when using it to give “Lyfts.”1 To be a Lyft driver, a person must download the app, submit his car for inspection, undergo some form of background check, and submit to an in-person interview with a Lyft representative. See Cotter Depo. 40:21^6:13. To be a Lyft rider, a person must simply download the app onto her smartphone and register her credit card information. See Kirtikar Deck, p.l; Carlson Deck, Ex F at LYFT 000108.

The rider uses the app to hail a ride. Kirtikar Deck, p.l. Lyft’s system forwards the request to the nearest driver who is logged in to the app. That driver may then accept, decline, or ignore the ride request. Id. If the driver declines the request or ignores it for a specified period, Lyft’s system sends the request to the next closest driver who is logged on. If that driver accepts the ride, he is “matched” with the rider and generally proceeds to pick her up and drive her to her destination. However, the driver may cancel his acceptance before picking up the rider, or upon meeting the rider but before commencing the ride. Id.

At the time the plaintiffs drove for Lyft, the company operated on a “donation” system. After the driver dropped off the rider at her destination, the app recommended a donation for the ride. The rider could decide whether to accept this amount, pay a different amount, or pay nothing at all. If the rider took no action within 24 hours after the end of the ride, Lyft automatically charged the recommended amount to the rider’s credit card. But if the rider chose to pay a different amount, Lyft instead charged that amount to the rider’s credit card (or charged nothing, if the rider so chose). Lyft retained a 20 percent “administrative fee” from each *1071charge and paid the remainder to the driver, with the driver receiving payment from Lyft on a weekly basis for all rides given during that week. Goldin Depo. at 67:7-12. Lyft has since changed its system in some markets, including California,’so that rather than recommending a donation, Lyft charges riders a minimum fare for every ride.2

To accept rides, a driver must log onto the Lyft app in “driver mode.” Lyft uses projected demand to determine how many drivers it will allow to log onto the app in driver mode at any one time. In the first several months after the Lyft app became operational in May 2012, Lyft provided two methods by which drivers could arrange to drive for Lyft on a given day: (i) drivers could submit requests for particular hours one week in advance and Lyft would approve some or all of these hours; or (ii) if it was less than one week in advance, drivers could log onto a website and reserve any available hours. In early 2013, Lyft added a third method — allowing drivers to simply log onto driver mode at any time, without having a particular time slot approved or reserved. But this third method is only available when Lyft determines that demand is not already being met by the drivers who reserved time through the reservation system. Kirtikar Depo. at 61:04-62:04.

Lyft tracks each driver’s acceptance rate, and tells drivers that an acceptance rate above 90 percent is “excellent,” while an acceptance rate below 75 percent “needs improvement.” It tells drivers that an acceptance rate “well below the community standard” will result in an email warning, and after three such warnings the driver’s account will be deactivated. Carlson Decl., Ex. T at LYFT001733-34. Lyft also tracks each driver’s cancellations, and may terminate a driver for high cancellation rates. Kirtikar Depo 159:15-160:14. Lyft instructs drivers to “call support” before canceling a ride. Carlson Deck, Ex. ¿ at LYFT000038.

At the end of a ride, the app prompts riders to rate the ride on a scale of one to five stars, with one star being “awful” and five being “awesome.” Id. at LYFT 000041. Drivers whose average star rating falls below a certain threshold are subject to termination.3 .

Lyft’s relationship with its drivers is governed in part by its Terms of Service, which drivers must accept if they wish to give “Lyfts.” The Terms of Service apply to both drivers and riders. Under a section titled “Driver Representations and Warranties,” each driver agrees that:

• he is at least 23 years old
• ' he has a valid driver’s license
• he owns or has the legal right to operate the vehicle and is named on the insurance policy covering the vehicle
• he will only use the vehicle that has been registered with Lyft
• his vehicle is in good operating condition
• he will not “offer or provide transportation services for profit, as a public carrier or taxi service, charge for rides or otherwise seek non-vol*1072untary compensation from Riders, or engage in any other activity in a manner that is inconsistent with such Driver’s obligations under this Agreement”
• he will not offer rides exceeding 60 miles

Santana Decl, Ex. D at LYFT 000147-48. Elsewhere in the Terms of Service, Lyft disclaims its “control over the quality or safety of the transportation that occurs as a result of the Service.” Id. at LYFT000153. Similarly, in the “Limitation of Liability” section, the Agreement states that “LYFT HAS NO RESPONSIBILITY WHATSOVER FOR THE ACTIONS OR CONDUCT OF DRIVERS OR RIDERS.... LYFT HAS NO CONTROL OVER THE IDENTIY OR ACTIONS OF THE RIDERS AND DRIVERS. ...” Id. atLYFT000154.

But the Terms of Service tell drivers that Lyft “reserve[s] the right ... to investigate and terminate Your participation in the Lyft Platform if You ... behaved in a way which could be regarded as inappropriately.]” Id. at LYFT 000148. In addition, the Terms of Service state that “Either You or We may terminate Your participation in the Lyft Platform ... at any time, for any or no reason, without explanation, effective' upon sending written or email notice to the other party.... We maintain sole discretion to bar Your use of the Services in the future, for any or no reason.” Id. at LYFT 000153.

Between December 2012 and July 2013, Lyft also gave drivers a guide. This included a section called “Lyft Rules of the Road,” which gave drivers a list of “rules to live by,” including:

• “Phone should always be mounted and plugged into charger”
• “No talking on the phone (unless it’s the passenger)”
• “Only pick up Lyft passengers, don’t pick up passengers who hail from the street or who use other mobile apps.”
• “You should be the only non-passen-gér in the car. (no friends, children or pets can ride along with you)”
• “Greet every passenger with a big smile and fist bump”
• “Keep your car clean on the inside and outside”
• “Keep your seats and trunk clear for use by your passengers”
• “Do not request tips. If asked by the passenger, let them know that the app will suggest a price”
• “Do not accept any cash”
• “Go above and beyond with good service such as helping passengers with luggage or holding an umbrella for passengers when it’s raining”
“If you ever need to cancel a Lyft, call support first.”

Carlson Deck, Ex. Z at LYFT000038. Another section of the guide instructed drivers to “Make sure your Carstache is on whenever you’re driving for Lyft,” “[o]ffer your passenger a phone charge, and ask what kind of music they would like to listen to,” and “[f]irst ask your passenger if there is a preferred route they would like to take. If not, use [a GPS navigation system], even if you think you know where you’re going.” Id. at LYFT000039.

In July 2013, Lyft replaced the guide with a frequently asked questions (“FAQs”) section on its website. Like the guide, the FAQs instruct drivers about such things as the cleanliness of their vehicles and the use of GPS navigation while driving, but the FAQs include more detail. For example, under the question ‘What are Lyft’s standards for keeping my car clean?” drivers are instructed that “[h]av-ing a clean car is a key part of the Lyft *1073experience. It’s relaxing for passengers (and you!) to ride in a pleasantly spotless and nice smelling car ... Wash and vacuum your car at least once a week to keep it in tip-top condition.” Carlson Deck, Ex. RR at LYFT001705. The FAQs also cover a number of issues not addressed in the guide. For example, under the question “Can I ask ... my passenger for their phone number or other contact information?” drivers are told that they may never ask for the contact information of a passenger. Carlson Deck, Ex. EE at LYFT001495. And under the question “Can I smoke in my car? Can passengers smoke in my car?” Lyft warns drivers it will disable their accounts if a passenger reports that the driver’s car smells like smoke. Carlson Deck, Ex. GG at LYFT001498.

III.

Plaintiff Patrick Cotter drove for Lyft from early September 2012 to January 30, 2013, when the drivers’ guide was in effect. In the roughly four months he drove for Lyft, Cotter gave 173 rides, which covered a total of 410 miles. Carlson Supp. Deck, Ex. DDDD. During this time, Cotter also worked at Facebook, and arranged his driving schedule so it would not conflict with that work. Cotter Depo. at 147:9-16. Cotter was terminated after using a substitute vehicle to give rides, rather than the car that Lyft had approved. Carlson Supp. Deck, Ex. UUU.

Plaintiff Alejandra Maciel drove for Lyft from August 2, 2013 to September 13, 2013. By this time, Lyft had replaced the drivers’ guide with the FAQs. In the roughly six-week period she worked for Lyft, Maciel drove anywhere from 5 to 20 hours per week, averaging roughly 30 completed rides per week. This does- not include time spent logged onto the app waiting for ride requests. Lyft terminated Maciel after she received an average passenger rating of 4.54 stars, a rating that placed her in the bottom 5 percent of drivers. Carlson Deck, Ex. J.

The lawsuit is a proposed class action. Cotter and Maciel originally asserted claims under the California Labor Code on behalf of all Lyft drivers in the country, regardless of the state in which they drove for Lyft. But the Court ruled that they could not pursue a nationwide class action under California’s wage and hour laws. (Docket No. 51.) The plaintiffs subsequently amended their complaint, and now seek to represent only people who have , driven for Lyft in California since the company’s inception in 2012. The plaintiffs allege that because Lyft misclassifies its drivers as independent contractors, the drivers have been deprived of California’s minimum wage, reimbursement for work-related expenses, and other protections that California law confers upon employees. The question whether the ease may proceed as a class action has not yet been presented. The parties first filed these cross-motions for summary judgment on whether Cotter and Maciel themselves were employees or independent contractors.

IV.

Under California law, if someone performs a service for a company (or for another individual), the person performing the service is generally presumed to be an employee. If the company contends the person is not an employee, but rather is performing services as an independent contractor, the burden is on the company to prove this. See Narayan v. EGL, Inc., 616 F.3d 895, 900 (9th Cir.2010); see also Bemis v. People, 109 Cal.App.2d 253, 240 P.2d 638, 644 (1952).

Whether a worker is classified as an employee or an independent contractor has *1074great consequences. California law gives many benefits and protections to employees; independent contractors get virtually none. Employees are generally entitled to, among other things, minimum wage and overtime pay, Cal. Lab.Code § 1194, meal and rest breaks, Cal. Lab.Code § 226.7, reimbursement for work-related expenses, Cal. Lab.Code § 2802, workers’ compensation, Cal. Lab.Code § 3700, and employer contributions to unemployment insurance. Cal. Unemp. Ins.Code § 976. Employers are also required under the California Unemployment Insurance Code to withhold and remit to the state their employees’ state income tax payments. Cal. Unemp. Ins.Code § 13020.

These statutes are designed to protect workers. For exaprple, the minimum wage statute seeks to guarantee that the “weakest and most helpless class” of workers receive “a wage that insures for them the necessary shelter, wholesome food and sufficient clothing.” . Martinez v. Combs, 49 Cal.4th 35, 109 Cal.Rptr.3d 514, 231 P.3d 259, 271 (2010). The rule that employees be reimbursed for costs ensures that employers don’t undercut wages by passing the cost of doing business on to their employees. See Janken v. GM Hughes Elecs., 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741, 753 (1996); see also Grissom v. Vons Companies, Inc., 1 Cal.App.4th 52, 1 Cal.Rptr.2d 808, 812 (1991) (“[T]he obvious purpose of [section 2802] is to protect employees from suffering expenses in direct consequence of doing their jobs.”). And “[t]he purpose of the unemployment insurance program is to provide benefits for ‘persons unemployed through no fault of their own, and to reduce involuntary unemployment and the suffering caused thereby to a minimum.’ ” W. Hollywood Cmty. Health & Fitness Ctr. v. Cal. Unemployment Ins. Appeals Bd., 232 Cal. App.4th 12, 181 Cal.Rptr.3d 196, 198 (2014) (quoting Cal. Unemp. Ins.Code § 100).

The California Legislature has decided that employees need these protections as a check against the bargaining advantage employers have over employees' — particularly unskilled, lower-wage employees— and the corresponding ability employers would otherwise have to dictate the terms and conditions of the work. See C.S. Smith Metro. Mkt. Co. v. Lyons, 16 Cal.2d 389, 106 P.2d 414, 420-21 (1940) (“The inequality of bargaining power between employer and employee has long been fully recognized by legislation curtailing the employer’s freedom to bargain with his employees as he chooses.”); see also Narayan, 616 F.3d at 897 (“[Statutes enacted to confer special benefits on workers are designed to defeat rather than implement contractual arrangements.”).

Independent contractors do not receive these protections because they generally are in a far more advantageous position:

[Contractors who are truly independent readily can sever the business relationship and take their services and equipment elsewhere when faced with unfair or arbitrary treatment, or unfavorable working conditions. They usually have contracts with more than one company, or contract with one company on a full-time basis for short durations, and consequently are not dependent on a single employer in the same all-or-nothing fashion as traditional employees who tend to work on a full-time basis for an indefinite term. Because of these characteristics of independence, a true contractor does not suffer the effects of unequal bargaining power to any degree comparable to that suffered by employees.4

*1075Accordingly, although it’s easy to get lost in the weeds when applying California’s test for deciding whether a worker is an employee or an independent contractor, courts should apply the test with an eye towards the purposes those statutes were meant to serve, and the type of person they were meant to protect. “[Pjast decisions ... teach that in light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.” Martinez, 109 Cal.Rptr.3d 514, 231 P.3d at 275 (quoting Indus. Welfare Com. v. Superior Court, 27 Cal.3d 690, 166 Cal.Rptr. 331, 613 P.2d 579, 585 (1980)); see also Borello, 256 Cal.Rptr. 543, 769 P.2d at 406 (“[Tjhe ‘eontrol-of-work-details’ test for determining whether a person rendering service to another is an ‘employee’ or an excluded ‘independent contractor’ must be applied with deference to the purposes of the protective legislation.”); id., 256 Cal.Rptr. 543, 769 P.2d at 400 (explaining that the court’s decision “has implications for the employer-employee relationship upon which other state social legislation depends”); Truesdale v. Workers’ Comp. Appeals Bd., 190 Cal.App.3d 608, 235 Cal.Rptr. 754, 759 (1987) (“Persons such as Truesdale ... are certainly within the class of persons the legislative scheme was meant to protect; and there are no applicable statutory exclusions. Truesdale had little or no bargaining position; he was simply required to sign the so-called independent contractor agreement prepared by the alleged employer’s attorney. There were no negotiations, no options.”).

Turning to the actual test, the “principal” question “is whether the person [or company] to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Borello, 256 Cal.Rptr. 543, 769 P.2d at 404 (quoting Tieberg v. Unemployment Ins. Appeals Bd., 2 Cal.3d 943, 88 Cal.Rptr. 175, 471 P.2d 975, 977 (1970) (alteration and internal quotation marks omitted)). See also Ayala v. Antelope Valley Newspapers, Inc., 59 Cal.4th 522, 173 Cal.Rptr.3d 332, 327 P.3d 165, 170-71 (2014); Alexander v. FedEx Ground Package Sys., Inc., 765 F.3d 981, 988 (9th Cir.2014); Ruiz v. Affinity Logistics Corp., 754 F.3d 1093, 1101 (9th Cir.2014), cert. denied, — U.S. —, 135 S.Ct. 877, 190 L.Ed.2d 704 (2014); Millsap v. Fed. Express Corp., 227 Cal.App.3d 425, 277 Cal.Rptr. 807, 811 (1991) (“If control may be exercised only as to the result of the work and not the means by which it is accomplished, an .independent contractor relationship is established.”).

The company need not exercise its full right of control for a worker to be deemed an émployee. “ ‘It is not a question of interference, or non-interference, not a question of whether there have been suggestions, or even orders, as to the conduct of the work; but a question of the right to act, as distinguished from the act itself or the failure to act.’ ” Ayala, 173 Cal.Rptr.3d 332, 327 P.3d at 172 (quoting Hillen v. Indus. Acc. Comm’n, 199 Cal. 577, 250 P.570, 571 (1926)).

And although the focus of the test is on the company’s right to control, a , finding of employee status for a particular worker or group of workers does not require that the company retain the right to *1076control every last detail. Employee status may still exist where “[a] certain amount of ... freedom is inherent in the work.” Air Couriers Int’l v. Ernp’t Dev. Dep’t, 150 Cal.App.4th 923, 59 Cal.Rptr.3d 37, 44 (2007). What matters is whether the entity retains “all necessary control over the [relevant] portion of its operations.” Borello, 256 Cal.Rptr. 543, 769 P.2d at 408.

The right to terminate at will, without cause, is “[s]trong evidence in support of an employment relationship.” Borello, 256 Cal.Rptr. 543, 769 P.2d at 404 (quoting Tieberg, 88 Cal.Rptr. 175, 471 P.2d at 979 (internal quotation marks omitted)). “Whether a right of control exists may be measured by asking whether or not, if instructions were given, they would have to be obeyed on pain of at-will discharge[] for disobedience.” Ayala, 173 Cal.Rptr.3d 332, 327 P.3d at 172 (quoting Toyota Motor Sales U.S.A., Inc. v. Superior Court, 220 Cal.App.3d 864, 269 Cal.Rptr. 647, 653 (1990) (internal quotation marks omitted)).

Beyond the primary question whether the principal retains the right to control the manner and details of the work, California courts look to a number of “ ‘secondary’ indicia of the nature of' a service relationship.” Borello, 256 Cal.Rptr. 543, 769 P.2d at 404. These include:

(a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.

Id. Borello also recognized, as “logically pertinent to the inherently difficult determination” of employee status, the six-factor test employed by other jurisdictions, whose factors include: “(1) the alleged employee’s opportunity for profit or loss depending on his managerial skill; [and] (2) the' alleged employee’s investment in equipment or materials required for his task, or his employment of helpers[.]” Id., 256 Cal.Rptr. 543, 769 P.2d at 404.

These factors “[generally ... cannot be applied mechanically as separate tests; they are intertwined and their weight depends often on particular combinations.” Id., 256 Cal.Rptr. 543, 769 P.2d at 404 (quoting Germann v. Worker’s Comp. Appeals Bd., 123 Cal.App.3d 776, 176 Cal.Rptr. 868, 871 (1981) (internal quotation marks omitted)); see also Ruiz, 754 F.3d at 1100. “[T]o determine whether a worker is an employee or independent contractor, a court should evaluate ‘[e]ach service arrangement ... on its facts, [recognizing that] the dispositive circumstances may vary from case to case.’ ” Ruiz, 754 F.3d at 1100 (quoting Borello, 256 Cal.Rptr. 543, 769 P.2d at 407).

V.

Under California law, if reasonable people could differ on whether a worker is an employee or an independent contractor based on the evidence in the case, the question is not for a court to decide; it must go to the jury. See Angelotti v. Walt Disney Co., 192 Cal.App.4th 1394, 121 Cal.Rptr.3d 863, 870 (2011). This is true even if no significant dispute exists about the underlying facts, because *1077the act of weighing and applying numerous intertwined factors, based on particular facts, is itself generally the job of the jury. See, e.g., Narayan, 616 F.3d at 901 (“The drawing of inferences from subordinate to ‘ultimate’ facts is a task for the trier of fact — if, under the governing legal rule, the inferences are subject to legitimate dispute.” (quoting Sec’y of Labor v. Lauritzen, 835 F.2d 1529, 1543 (7th Cir.1987) (Easterbrook, J., concurring))). Only when a court concludes that “from all the facts only a single inference and one conclusion may be drawn” may the court rule on the question as a matter of law, without the need for a jury trial. Borello, 256 Cal.Rptr. 543,769 P.2d at 416 (internal quotation marks omitted).5

The Ninth Circuit has observed that, given California’s “multi-faceted test” for employee status, and given the presumption in favor of employee status under California law, establishing independent contractor status as a matter of law presents a “particularly difficult” hurdle. Narayan, 616 F.3d at 900. Even though in Narayan many of the underlying facts were undisputed, the Ninth Circuit concluded it could not “readily say ... that the ‘ultimate conclusion as to whether the workers are employees or independent contractors’ is one of law.” Id. at 901 (quoting Lauritzen, 835 F.2d at 1543). Likewise, in Arzate v. Bridge Terminal Transport Inc., 192 Cal.App.4th 419, 121 Cal.Rptr.3d 400 (2011), the California Court of i Appeal reversed a trial court’s grant of summary judgment in favor of a transportation company where there was little dispute about' the underlying facts. The court noted that even though there was little indication the company controlled ;the “manner and means” by which its drivers hauled their loads, several of the secondary factors weighed in favor of employee status. Id. at 405, The court concluded that weighing this “competing, if not necessarily conflicting, evidence” fell within the province of a trier of fact. Id.

To be sure, all factors need not point in one direction for a court to rule as a matter of law about a worker’s proper classification. See Arnold v. Mut. of Omaha Ins. Co., 202 Cal.App.4th 580, 135 Cal.Rptr.3d 213, 221 (2011) (“Even if one or two of the individual factors might suggest an employment relationship, summary judgment is nevertheless proper when ... all the factors weighed and considered as a whole establish that [an individual] was an independent contractor and not an employee.”). Accordingly, several recent California Court of Appeal cases have held that plaintiffs were independent contractors as a matter of law, even while acknowledging that certain factors cut in favor of employee status. See, e.g., Beaumont-Jacques v. Farmers Grp., Inc., 217 Cal.App.4th 1138, 159 Cal.Rptr.3d 102, 108 (2013); Arnold, 135 Cal.Rptr.3d at 220. And on the flip side, two recent Ninth Circuit cases have *1078held that plaintiffs were employees as a matter of law, even when some factors cut in favor of independent contractor status. See Alexander, 765 F.3d at 994-97; Ruiz, 754 F.3d at 1103-05. But those rulings were based on a conclusion that the arrow pointed so strongly in the direction of one status or the other that no reasonable juror could have pointed the arrow in the opposite direction after applying California’s multi-factor test.

VL

Under the standards discussed above, a reasonable jury could conclude that the plaintiff Lyft drivers were employees. But because a reasonable jury could also conclude that they were independent contractors, there must be a trial.

A.

As a threshold matter, Lyft tepidly asserts there is no need to decide how to classify the drivers, because they don’t perform services for Lyft in the first place. Under this theory, Lyft drivers perform services only for their riders, while Lyft is an uninterested bystander of sorts, merely furnishing a platform that allows drivers and riders to connect, analogous perhaps to a company like eBay. But that is obviously wrong. Lyft concerns itself with far more than simply connecting random users of its platform. It markets itself to customers as an on-demand ride service, and it actively seeks out those customers. See Hartman Depo. at 64:17-65:24 (describing Lyft’s marketing efforts aimed at attracting riders). It gives drivers detailed instructions about how to conduct themselves. Notably, Lyft’s own drivers’ guide and FAQs state that drivers are “driving for Lyft.” Carlson Deck, Ex. U, Ex. Z at LYFT000039. Therefore, the argument that Lyft is merely a platform, and that drivers perform no service for Lyft, is not a serious one. See Yellow Cab v. Workers’ Comp. Appeals Bd., 277 Cal.Rptr. 434, 437, 226 Cal.App.3d 1288 (1991) (noting that, contrary to Yellow Cab’s insistence that it merely served as a lessor of taxicabs, Yellow “cultivated the passenger market by soliciting riders, process[ed] requests for service through a dispatching system,” and instructed the drivers in “service” and “courtesy”). Cf. Decision Adopting Rules and Regulations to Protect Public Safety While Allowing New Entrants to the Transportation Industry, California Public Utilities Commission, Decision 13-09-045, pp. 63-68 (Sept. 19, 2013) (concluding that companies such as Lyft are engaged in the business of providing passenger transportation for compensation).6

With respect to Lyft’s more reasonable argument — -that the plaintiffs are independent contractors as a matter of law — the primary issue is the degree to which Lyft retains the right to control drivers. As discussed in Section IV, under California law, whether Lyft actually exercises this control is less important than whether it retains the right to do so.

Although Lyft drivers enjoy great flexibility in when and how often to work, once they do accept ride requests, Lyft retains a good deal of control over how they proceed. Lyft instructed the plaintiffs (in the “Rules of the Road” section of the driver guide and later in the FAQs on its website) not to do a number of things — not to talk on the phone with a passenger present, not to pick up non-Lyft passengers, not to have anyone else in the car, not to request tips, not to smoke or to allow the car to *1079smell like smoke, and not to ask for a passenger’s contact information. Lyft also affirmatively instructed the plaintiffs to do a number of things — to wash and vacuum the car once a week, to greet passengers with a smile and a fist-bump, to ask passengers what type of music they’d like to hear, to offer passengers a cell phone charge, and to use the route given by a GPS navigation system if the passenger does not have a preference. See supra Section II.

Lyft insists these are suggestions, with no real consequence for a driver who ignores them. But most are written as commands or prohibitions, not suggestions. The title “Rules of the Road” does not sound like a list of suggestions. Nor do Lyft’s answers to the questions posed in the FAQs, which include statements such as “do not “take personal calls,” “always use navigation,” “you must keep your phone mounted at all times,” “[m]ake sure to you always have music playing,” and “always wear your ‘stache on the grill!” See Carlson Deck, Exs. DD, JJ, KK, 00, SS.

Even if these instructions were ambiguous about whether they are suggestive or mandatory, the record tends to resolve that ambiguity in favor of the latter, by indicating that Lyft reserves the right to penalize (or even terminate) drivers who don’t follow them. Indeed, Lyft reprimanded both Cotter and Maciel after passengers reported to Lyft each plaintiffs respective violations of Lyft policies — Cotter’s driving with a car other than the one Lyft had approved and Maciel’s driving with her husband in the car. See Cotter Depo. at 111:10-116:18; see also Carlson Deck, Exs. PPP, SSS. In the Terms of Service, Lyft reserves the right to “investigate” and “terminate” drivers who have “behaved in a way which could be regarded as inappropriate.” The FAQs tell drivers Lyft will disable their accounts if their cars smell like smoke. Lyft also tells drivers it may terminate them for declining too many ride requests, or for accepting and then canceling too many ride requests. And, as happened to Maciel, Lyft terminates drivers whose passenger ratings fall below a certain threshold. See supra Section II.

What’s more, the Terms of Service not only give Lyft a broad right to terminate drivers for cause, but also the right to bar drivers from the platform “for any or no reason.” As the California Supreme Court recently explained in Ayala, a hirer’s ability to discharge a worker without cause is “[p]erhaps the strongest evidence of the right to control.” 173 Cal.Rptr.3d 332, 327 P.3d at 171; see also id. (“ ‘The power of the principal to terminate the services of the agent gives him the means of controlling the agent’s activities.’ ” (quoting Malloy v. Fong, 37 Cal.2d 356, 232 P.2d 241, 249 (1951)).

It would be difficult to rule as a-matter of law that the plaintiffs were independent contractors when the most important factor for discerning the relationship under California law, namely, the right of control, tends to cut the other way. But even beyond that, the “secondary” factors cut in both directions. Several tend to support Lyft’s position. For example, the parties evidently believed they were entering into an independent contractor relationship, as evidenced by the statement to that effect in the Terms of Service (although the parties’ own perception of their relationship is not dispositive). See Alexander, 765 F.3d at 998, 997. Other factors tend to support the plaintiffs’ position. For example, the work performed by the drivers is “wholly integrated” into Lyft’s business — after all, Lyft could not exist without its drivers— and “[t]he [riders] are [Lyft’s] customers, not the drivers’ customers,” Estrada v. *1080 FedEx Ground Package System, Inc., 154 Cal.App.4th 1, 64 Cal.Rptr.3d 327, 334, 336 (2007). ' And driving for Lyft requires no special skill — something we often expect independent contractors to have. See JKH Enters. v. Dep’t of Indus. Relations 142 Cal.App.4th 1046, 48 Cal.Rptr.3d 563, 579 (2006).

Many of the remaining secondary factors are equivocal. The primary instrumentality needed to drive for Lyft, a 2000 model year or. newer car, is provided by the drivers, but in contrast to a truck or other commercial vehicle, providing a car often does not require a significant investment. See Gonzalez v. Workers’ Comp. Appeals Bd., 46 Cal.App.4th 1584, 54 Cal.Rptr.2d 308, 312-13 (1996) (noting that a car used by a worker “frequently serves also as a family all-purpose vehicle”). Drivers are paid based on individual rides, but they have no apparent ability to negotiate the rates at which Lyft’s suggested donations are calculated, or the percentage Lyft retains as an “administrative fee.” Ultimately, none of these secondary factors is dispositive. See Narayan, 616 F.3d at 901 (“ “We must assess and weigh all of the incidents of the relationship with the understanding that no one factor is decisive!)]’ ” (quoting NLRB v. Friendly Cab Co., 512 F.3d 1090, 1097 (9th Cir.2008))).

Finally and most importantly, two relatively recent cases, JKH Enterprises v. Department of Industrial Relations and Air Couriers International v. Employment Development Department, undermine Lyft’s argument that its drivers are independent contractors as a matter of law. Both cases involved facts quite similar to this one, and in both cases the California Court of Appeal upheld rulings that delivery drivers were employees. In JKH, the court upheld the Department of Industrial Relations’ conclusion that “special” package delivery drivers were employees of JKH, even though the special drivers:' (1) were not required to work either at all or on any particular schedule, but instead called in to a JKH dispatcher to say they were available to accept packages for delivery; (2) were free to decline to perform a particular delivery when contacted by the dispatcher, even if they had made themselves available; (3) chose their own driving routes; (4) took time off whenever they wanted and did not need permission to do so; (5) used their own vehicles (which did not bear any JKH marking or logo) to make the deliveries and paid for their own gas, maintenance, and insurance; (6) did not wear uniforms or badges that evidenced their affiliation or relationship with JKH; (7) performed delivery services for other companies; (8) were not supervised by JKH; (9) earned their money by splitting the fee that JKH charged its customers for each delivery; and (10) filled out application forms acknowledging their status as independent contractor. 48 Cal.Rptr.3d at 568-70. And in Air Couriers, the court upheld a trial court’s determination that drivers for Sonic Couriers were employees where the drivers: (1) decided when and how long to' work; (2) worked other jobs while driving for Sonic; (3) were not required to accept every job, but instead rejected jobs for a variety of reasons and were not required to give reasons for doing so; (4) did not suffer repercussions for rejecting jobs; (5) were paid by the job, and were able to negotiate higher rates on some jobs for a variety of reasons; (6) supplied their own vehicles, supplies, and equipment when delivering for Sonic; (7) were not required to wear uniforms; and (8) received no formal training. 59 Cal.Rptr.3d at 38-39.

In light of these California cases (particularly the two discussed immediately above), and given the evidence here, Lyft’s motion for summary judgment must be denied. While the evidence is far from *1081conclusive, “there exist[s] at the very least sufficient indicia of an employment relationship between the plaintiff [d]rivers and [Lyft] such that a reasonable jury could find the existence of such a relationship.” Narayan, 616 F.3d at 904.

B.

For similar reasons, the record precludes a summary judgment ruling in favor of the plaintiffs. As already discussed, Lyft drivers enjoy great flexibility in when and how often to work- — far more flexibility than the typical employee. Indeed, Cotter and Maciel both testified that they felt free to set their work hours as they saw fit, and that they could accept or reject individual ride requests. Both plaintiffs testified that they chose which parts of San Francisco in which they accepted ride requests, and that they were never required to adhere to any appearance standards. Both plaintiffs testified to having minimal contact with Lyft management during their tenure as drivers. See Cotter Depo. at 150:3-25; Maciel Depo. at 105:25-106:24. They did not drive full time, and it does not appear that driving for Lyft was their primary source' of income. See Cotter Depo. at 147:9-16; Santana Decl., Ex. F (Cotter’s resume, describing driving for Lyft as a “hobby”); Maciel Depo. at 31:22-24, 81:02-20 (explaining that she worked another job and drove around 10 hours per week, scheduling her driving around other commitments). Indeed, particularly given Cotter and Maciel’s relatively sparse work schedules, one could easily imagine a reasonable jury concluding that they were independent contractors, even if other Lyft drivers with heavier or more regular schedules might properly be deemed employees.7

The primary cases the plaintiffs cite in support of their motion for summary judgment, Alexander v. FedEx Ground Package Systems and Ruiz v. Affinity Logistics, are very different from the case at hand. In both cases, the Ninth Circuit held that delivery drivers in California were employees as a matter of law. But in each case, the undisputed facts provided “overwhelming evidence” of control over of the drivers’ day-to-day work. See Ruiz, 754 F.3d at 1093. For example, Alexander turned on FedEx’s “control over every exquisite detail of the drivers’ performance,” 765 F.3d at 991, including: (i) their appearance; (ii) the appearance and specifications of their vehicles; (iii) their work schedules; and (iv) their service areas. Id. at 989-90. The experience of the Lyft driver is much different from the experience of the FedEx driver, underscoring why the plaintiffs have not established here that summary judgment should be granted in their favor.

VII.

As should now be clear, the jury in this case will be handed a square peg and asked to choose between two round holes. The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem. Some factors point in one direction, some point in the other, and some are ambiguous. Perhaps Lyft drivers who work more than a certain *1082number of hours should be employees while the others should be independent contractors. Or perhaps Lyft drivers should be considered a new category of worker altogether, requiring a different set of protections. But absent legislative intervention, California’s outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide. That is certainly true here.

IT IS SO ORDERED.

2.1.3 Natkin v. Winfrey 2.1.3 Natkin v. Winfrey

Paul NATKIN and Stephen Green, Plaintiffs, v. Oprah WINFREY; Harpo Productions, Inc.; Bob Greene; and Buena Vista Books, Inc., d/b/a Hyperion, Defendants.

No. 99 C 5367.

United States District Court, N.D. Illinois, Eastern Division.

Aug. 30, 2000.

*1005Mark H. Barinholtz, Chicago, IL, Elliot R. Zinger, Elliot Zinger & Associates, Chicago, IL, Melinda H. Schramm, Chicago, IL, for Paul Natkin, Stephen Green.

David P. Sanders, David Eric Jimenez-Ekman, Darren H. Lubetzky, Jenner & Block, Chicago, IL, for Oprah Winfrey, Harpo Productions, Inc., Bob Greene, Disney Book Publishing Co., Luchina Fisher.

David P. Sanders, David Eric Jimenez-Ekman, Darren H. Lubetzky, Jenner & Block, Chicago, IL, Charles L. Babcock, Jackson and Walker, Dallas, TX, Nancy W. Hamilton, Houston, TX, for Buena Vista Books Inc., The Walt Disney Co.

AMENDED MEMORANDUM OPINION AND ORDER

CASTILLO, District Judge.

This case is about eleven photographs of Oprah Winfrey taken by Plaintiffs Paul Natkin and Stephen Green on the set of her (rather) well-known television show. The photographs were subsequently published in Winfrey’s book Make the Connection, co-authored with Bob Greene and’ published in 1996 by Buena Vista Books under the name Hyperion, without Natkin and Green’s permission. That publication resulted in this copyright infringement action and various other causes of action under the Lanham Act and Illinois state law. The defendants counterclaim seeking a declaration of rights.

Currently under consideration by this Court are the plaintiffs’ motion for partial summary judgment, (R. 76); the defendants’ motion for summary judgment as to Count I, the copyright infringement claim, (R. 77); and the defendants’ motion for summary judgment on Counts II through XI, (R. 78). At base, we must decide whether either side has definitively established ownership of the copyrights to the photographs: to succeed on their motion, Natkin and Green must show that they own the copyrights to the exclusion of the defendants and that no valid license to use the photographs in the book existed, whereas the defendants, to succeed on their first motion, must show that they were at least co-authors of the pictures or had a license that encompassed this use of the photos. For the reasons that follow, we conclude that there is no genuine issue that the defendants authored the photographs, either solely or jointly, but that a triable issue exists as to whether the defendants used the pictures pursuant to a valid license.

As to the defendants’ second motion, seeking summary resolution of Counts II through IX, we conclude that the Copyright Act preempts Counts II through V, which include claims under the Lanham Act, the Illinois Consumer Fraud and De*1006ceptive Practices Act, the Illinois Uniform Deceptive Trade Practices Act, and Illinois common law. Counts VI through VIII, which include claims for breach of bailment, conversion, and tortious interference with prospective business advantage, are not preempted and genuine issues exist as to the bailment and conversion claims, but not as to the tort claim. Finally, we dismiss Counts IX and X, which seek declaratory judgment, as duplicative of the plaintiffs’ substantive causes of action and deny summary judgment on the plaintiffs’ request for attorney fees.

BACKGROUND1

Natkin and Green, are both professional “live event” photographers. Natkin owns (and owned during the relevant times) a private photography studio, Photo Reserve, Inc., and throughout the relevant time period he photographed concerts, live television broadcasts, movie sets, rock video productions, and album/CD covers. Green, since 1982, has been employed by the Chicago Cubs baseball organization, but also engages in freelance photography for others, such as the organizers of the World Series and NBA playoff games.

Natkin photographed Tim Oprah Winfrey Show between 1986 and 1993; Green worked on the show from 1989 to 1996. The photos at issue here were taken between 1988 and 1995.2 Natkin and Green primarily shot pictures of the show while it was being taped live in the Chicago studio. On occasion, however, when the show was broadcast from another location, they traveled with the show to take pictures. Additionally, Natkin and Green took posed photographs of Winfrey, usually with her more famous guests, either at the show’s studio or their own studios. Both men used their own camera equipment and lenses, brought additional equipment (such as lights and backdrops) when taking posed shots, chose the appropriate film, and usually processed the film themselves. The record contains conflicting evidence about who arranged to process the film when Natkin and Green did not perform that task, which company processed the film, and in all cases who stored the negatives.

When photographing the live show, Nat-kin and Green had no control over the position or appearance of their subjects (i.e. Winfrey and her guests, the audience, etc.), the layout and design of the sets, or even the lighting of the set — Harpo prohibited Natkin and Green from using flash bulbs or any other light source not provided by the studio. Additionally, during live taping of the show, Natkin and Green were restricted to certain locations — they were allowed to move freely about the set only during commercial breaks. But, as to creating the photographs, Natkin and Green had complete discretion over the technical aspects of the shoot: they chose which cameras, lenses, and film to use; the appropriate shutter speed, aperture settings, and timing for the shots; and how to frame the images.

During the relevant times, neither Nat-kin nor Green worked pursuant to a written agreement.3 Both men billed Harpo Productions a flat fee for each show they photographed and for any related expenses, including such items as parking *1007and film. Harpo never withheld federal income taxes, FICA, or state income taxes from their payments to Natkin and Green and reported those payments to the IRS on 1099 forms (rather than W-2 forms) as “nonemployee compensation.” Additionally, Harpo did not provide health or life insurance, pension benefits, or paid vacation to either Natkin or Green, and both men purchased the insurance for their equipment. Neither photographer was ever given a copy of the Harpo employee manual, but both received paid parking, access to the company cafeteria, Harpo security, and invitations to Harpo staff functions. Additionally, both were referred to, and referred to themselves as, staff photographers for the show. When Natkin or Green was unable to photograph a show due to other commitments, they hired the substitute photographer and billed Harpo.

Green’s invoices each contained the following provision:

Terms/Conditions One time, non exclusive reproduction rights to the photographs listed above, solely, for the uses and specifications indicated ... (unless otherwise indicated in writing) .... Acceptance of this submission constitutes acceptance of these terms.

(See, e.g., R. 85, Pis.’ 56.1(a) Statement, Ex. Z,-Green Invoice to Harpo of Feb. 25, 1994.) The record contains examples of Green Invoices on which the terms and conditions provision was struck out and “buy out” or “buy out by Harpo” was handwritten and initialed by Green in the margin. (R. 85, Pis.’ 56.1(a) Statement, Ex. AA, Green Invoices.) Natkin’s invoices explicitly reserved his copyright to the invoiced photos: “All photos remain the property of, and copyrights remain with, Photo Reserve Inc.” (R. 85, Pis.’ 56.1(a) Statement, Ex. BB, Natkin Invoice, Confirmation of Assignment and Terms of Submission No. 1.)

Natkin 'and Green contend that they were freelance photographers that were hired by Harpo and Winfrey as independent contractors to take pictures for publicity purposes only. They claim they are the sole authors of the photographs and, having never transferred their copyrights, are the sole owners of the rights to the pictures. Additionally, Natkin and Green maintain that the only possible license Harpo or Winfrey could have obtained was an oral, non-exclusive license to use the photos for publicity purposes. Thus, according to Natkin and Green, publication of the photos in Make the Connection infringed their copyrights.

The defendants, on the other hand, contend that Harpo and Winfrey are the authors of the pictures and thus own the copyrights to them. The defendants asserts that Natkin and Green were employees of Harpo and that the pictures were taken within the scope of their employment. Alternatively, they argue that Har-po and Winfrey are joint authors of the photographs because they controlled the vast majority of the picture elements. Finally, as to the infringement claim, the defendants allege that their publication of the pictures in the book was pursuant to a valid license.

In their second motion, the defendants predominantly argue that the plaintiffs’ remaining claims are preempted by the Copyright Act, 17 U.S.C. § 301(a). Alternatively and to the extent the claims are not preempted,' the defendants argue that the plaintiffs cannot produce evidence in support of their claims.

LEGAL STANDARDS

We first analyze whether summary judgment on the copyright infringement claims is appropriate. After concluding that a genuine issue exists as to the scope of the defendants’ license to use the photographs, we address whether any of the plaintiffs’ remaining claims survive summary judgment.

I. Copyright Infringement Claims

To establish copyright infringement, Natkin and Green must demonstrate *1008that they own the copyrights to the photographs. Under the Copyright Act, ownership of a copyright “vests initially in the author or authors of the work.” 17 U.S.C. § 201(a). Usually, the author of a work is “the person who translates an idea into a fixed, tangible expression entitled to copyright protection.” Community for Creative Non-Violence v. Reid, 490 U.S. 730, 737, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989). Under normal circumstances, a photographer is the author of his or her photographs. Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 60, 4 S.Ct. 279, 28 L.Ed. 349 (1884); Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 412 (7th Cir.1992); Lindsay v. Wrecked and Abandoned Vessel R.M.S. TITANIC, 52 U.S.P.Q.2d 1609, 1612 (S.D.N.Y.1999). But, as with any general rule, exceptions exist. Two specific exceptions are relevant to this case: the “work made for hire” and “joint work” exceptions.

A. Works Made for Hire

Works made for hire are “authored” by the hiring party, and the “initial owner of the copyright is not the creator of the work but the employer or the party that commissioned the work.” Glovaroma, Inc. v. Maljack Prods., Inc., 71 F.Supp.2d 846, 850 (N.D.Ill.1999); see also 17 U.S.C. § 201(b) (“In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title.”). A work made for hire is “(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned ... if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire” 17 U.S.C. § 101. The defendants concede that they do not have a written “work made for hire” agreement with either Nat-kin or Green covering the eleven photographs.4 Instead, they argue that Natkin and Green were Harpo employees, as opposed to independent contractors, when they took the pictures.

The Supreme Court has set forth a nonexhaustive, thirteen-factor test for determining whether a creator is an employee within the meaning of the Copyright Act’s work made for hire provision. Reid, 490 U.S. at 751, 109 S.Ct. 2166. The Reid factors are

the hiring party’s right to control the manner and means by which the product is aceomplished[;j ... the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payments; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

Id. Additionally, Reid instructs courts to use general common law agency principles to analyze whether the author of a work for hire is an independent contractor or an employee. Id.

Applying the Reid factors to our circumstances demonstrates that Natkin and Green were not Harpo employees. Both men were highly skilled professionals specializing in live-action photography; both used (and insured) their own equipment; and both exercised discretion in hiring substitute photographers when they themselves were unavailable and paid those substitutes. Most importantly, neither photographer was ever treated like an em*1009ployee in terms of compensation, benefits, and taxes: Natkin and Green, via their companies, billed Harpo for their services and expenses, they did not receive regular paychecks or salary; they received none of the employee benefits traditionally associated with employee status, such as health insurance, life insurance, and paid vacation 5; and Harpo never withheld any payroll taxes on behalf of the photographers.

Further, Harpo’s IRS reports describe the payments to Green and Natkin as “nonemployee compensation.” We believe this factor alone would outweigh those few factors, discussed below, that favor the defendants’ position. Harpo may not obtain the benefits associated with hiring an independent contractor and, at the same time, enjoy the advantages of treating that person as an employee; it must choose. Here, as to Natkin and Green, Harpo chose the independent contractor route and cannot now change its position to reap a different benefit it probably had not considered when making its choice (i.e. ownership of the photographs).

The only factors clearly favoring the defendants are that the defendants are engaged in business and the duration of the parties’ relationship. That Harpo is a business and that Green and Natkin worked for Harpo over an extended period of time (seven years each) doesn’t come close to overriding the impact of the factors favoring the photographers’ status as independent contractors. Moreover, that Natkin and Green were referred to as “staff photographers” carries very little weight. See Carter v. Helmsley-Spear, Inc., 71 F.3d 77, 87 (2d Cir.1995) (“One of the factors that did not persuade us was the appellants’ simplistic contention that usage of the words ‘employ’ or ‘employment’ in the agreements between the artists and [the defendants] establishes that the [artists] were employees”).

The remaining factors are either inconclusive or add insignificant weight in favor of either party’s position. For example, all of the parties exercised control over the manner and means of production to some extent: Harpo controlled the appearance of Winfrey and her guests, the sets, and the lighting, while Natkin and Green controlled the technical aspects of taking the photographs (i.e., lenses, film speed, etc.) and, ultimately, the image on the photographs. However, because the task was to create photographs, this factor weighs slightly in favor of independent contractor status. Compare Marco v. Accent Publishing Co., 969 F.2d 1547, 1551-52 (3d Cir.1992) (“Accent controlled only the subject matter and composition of the images. Accent did not control most aspects of the work, which include choice of light sources, filters, lenses, camera, film, perspective, aperture setting, shutter speed, and processing techniques”). In any event, Har-po’s control of the product here resembles the defendants’ control over the statue at issue in Reid, where the Supreme Court concluded the artist was an independent contractor.

That Natkin and Green worked on Har-po’s set and were unable to choose when they worked is of negligible importance to our inquiry. Given the nature of the assignment (photographing a live television show), the location and timing of the work was necessarily within Harpo’s discretion, and neither factor appears to have much relevance to Natkin and Green’s employment status. Compare Carter, 71 F.3d at 87 (“Also, that the work was produced on the employer’s premises is a necessary incident to all nonremovable art and therefore should not carry great weight”).

Finally, the parties vigorously contest whether “the work is part of [Harpo’s] regular business.” Natkin and Green contend that the defendants are in the busi*1010ness of producing a television show, not taking pictures of the show, whereas the defendants maintain that they are in the business of promoting Oprah Winfrey, which includes taking photographs of her on the show. Even assuming this factor weighs in favor of the defendants’ position, Harpo’s treatment of Natkin and Green as independent contractors in terms of pay, taxes, and benefits; the photographers’ use of their own equipment, judgment, and expertise; and that the relationship was technically between Harpo and the photographers’ companies definitively establishes that Natkin and Green were independent contractors.

On the basis of the record before us, we conclude there is no genuine issue that Natkin and Green were ever Harpo employees. They were not. Harpo hired Natkin and Green as independent contractors, and they continued in that capacity during their tenures with the show. Thus, Harpo must produce a written work made for hire agreement signed by both sides to successfully claim exclusive ownership of the copyrights to these photographs. Schiller & Schmidt, 969 F.2d at 412. Harpo does not have such a document. Consequently, we grant Natkin and Green’s motion for partial summary judgment on the work made for hire issue.

B. Joint Work

The defendants next claim that they own the copyrights jointly with Nat-kin and Green because they are co-authors of the photographs. Co-authors of a joint work “hold undivided interests in a work, despite any differences in each author’s contribution.” Erickson v. Trinity Theatre, Inc., 13 F.3d 1061, 1068 (7th Cir.1994). A joint work is “a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” 17 U.S.C. § 101. But “[a] contributor is not considered an ‘author,’ and does not gain a co-owner copyright interest unless her contribution, standing alone, is copyrightable.” Glovaroma, Inc. v. Maljack Prods., Inc., 71 F.Supp.2d 846, 862 (N.D.Ill.1999); see also Erickson, 13 F.3d at 1070 (“A collaborative contribution will not produce a joint work, and a contributor will not obtain a co-ownership interest, unless the contribution represents original expression that could stand on its own as the subject matter of copyright.”). Thus, to establish co-ownership of the photograph copyrights, the defendants must show that “the parties intended to be joint authors at the time the work was created [and] .... that [their] contributions to the works were independently copyrightable.” Erickson, 13 F.3d at 1071. Although the parties have demonstrated a genuine issue as to their intent to create a joint work, there is no question that the defendants contributions to the eleven photographs were not independently copyrightable.

The Copyright Office, whose opinion as to the scope of the Copyright Act is afforded great deference, instructs that “the nature of the thing depicted or the subject of the photograph or hologram ... is not regarded as a copyrightable element.” Copyright Office, Compendium II of Copyright Office Practices § 508.01 (1998 Supp.). This is because ideas and facts are not copyrightable; rather copyright law protects only the tangible expression of ideas and facts. Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 350, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). Thus, for example, in Leigh v. Warner Bros., Inc., 212 F.3d 1210, 1214-15 (11th Cir.2000), the Eleventh Circuit rejected a photographer’s copyright claim to the subject of his photograph, the combination of items in the photograph, the association of the photograph’s subject matter with the best-selling novel on which the picture appeared (an association the defendants copied when advertising their film based on the book), and the “mood” of the photograph. See also Gentieu v. John Muller & Co., 712 F.Supp. 740, 742 (W.D.Mo.1989) (“[T]he plaintiff cannot claim a copyright on the idea of photo*1011graphing naked babies. Neither can the poses in which those babies are photographed be the proper material for copyright”).

The defendants’ co-authorship claim boils down to the assertion that they contributed non-copyrightable elements to the pictures. Specifically, they claim authorship of Winfrey, her facial expressions, her attire, the “look” and “mood” of the show, the choice of guests, the staging of the show, and so on. In simpler terms, they claim a copyright to the show, which Nation and Green photographed. But, as just explained, the subject matter of the photographs is not copyrightable. See Erickson, 13 F.3d at 1071 (“To qualify as an author, one must supply more than mere direction or ideas. An author is the party who actually creates the work, that is, the person who translates an idea into a fixed, tangible expression.”) (quotation omitted).

Likewise, a performance itself is not subject to copyright until it is captured in a fixed tangible form. See id.; Baltimore Orioles, Inc. v. Major League Baseball Players Assoc., 805 F.2d 663, 674-75 (7th Cir.1986). No doubt, Harpo has the copyright to the videotape of the show’s broadcast; Harpo employees created a fixed, tangible expression of the performances via videotape. But, in terms of the photographs, Natkin and Green translated images of the performance into photographs. As to those photographs, the plaintiffs are the sole authors.

C. License

Finally, the defendants contend that they published the photographs pursuant to a valid license and, thus, are entitled to summary judgment. First, they contend that the Green invoices with “buy out by Harpo” written in the margin establish their exclusive license as to those photographs. Although that proposition may be accurate, nothing in the record links the photographs in the book to these specific invoices. In other words, there is no evidence that the photographs “bought out” by the invoices in the record are the photographs at issue in this case. Further, the defendants produce no evidence that Harpo always “bought out” Green’s photographs or that some other written agreement constituting an exclusive license exists. I.A.E., Inc. v. Shaver, 74 F.3d 768, 774 (7th Cir.1996) (Under § 204(a) of the Copyright Act, a transfer of exclusive rights must be in writing.). Thus, we grant summary judgment in favor of the plaintiffs on the issue of whether Harpo had an exclusive license to the photographs published in the book.

Second, the defendants contend that they had an implied nonexclusive license to use the photographs as they did. “A nonexclusive license may be granted orally, or may even be implied from conduct.” Id. at 775 (quotation omitted). That Harpo had an implied nonexclusive license to use the photographs taken by Natkin and Green cannot be doubted. The record shows that Harpo regularly used the plaintiffs’ photographs in press kits, offered the photographs for publication in magazines and newspapers, and displayed them in Harpo’s offices. Natkin and Green never objected to these uses of their photographs and, in fact, maintain that this use constituted the full scope of Harpo’s implied license.

The parties agree, however, that a fact issue remains as to the scope of the implied license. (R. 97, Defs.’ Resp.Mem. at 32-33, R. 82, Pls.’ Mem. at 21 n. 8). The plaintiffs claim that the license limited Harpo’s use of the photographs to publicizing the show. They submit evidence that it is customary in their field to charge customers a higher day rate and an additional usage fee when the photograph will be used for other than “PR and editorial uses (ie. [sic] magazine/newspaper articles about you).” (R. 82, Pls.’ Mem.Ex. 10, Letter from Harrison to Oprah Winfrey of Apr. 23, 1997.) This evidence amply supports their contention that the implied nonexclusive license limited the use of the photographs to publicity for the show.

*1012On the other hand, the defendants submit evidence that the nonexclusive license was not limited to publicity and, even if it were, “publicity” encompasses publication of the photographs in Winfrey’s book. For example, although not conclusive, there is some evidence that Natkin and Green gave Harpo their negatives without expecting or requesting their return. Additionally, a Harpo representative claims that she told both Natkin and Green when they were hired that Harpo and Winfrey would use the photographs for whatever purposes they wanted.

Nevertheless, Natkin and Green contend that an implied license of indeterminate duration violates the statute of frauds and that the photographers terminated the implied license. The statute of frauds is simply inapplicable to a copyright license implied by law from the parties’ conduct, “because either party could terminate the relationship in good faith within one year, the statute [of frauds] is not implicated.” Louis Glunz Beer, Inc. v. Martlet Importing Co., 864 F.Supp. 810, 818 (N.D.Ill.1994) (applying statute of frauds defense to a distribution contract of indeterminate duration); see also Jones v. Sabis Educ. Systems, Inc., No. 98 C 4252, 2000 WL 369720, at *3 (N.D.Ill. Apr.7, 2000) (“Illinois courts have interpreted [the] statute [of frauds] to provide that a contract is unenforceable only if it is impossible of performance in one year.”) (quotation omitted) (applying statute of frauds in context of employment contract of indeterminate duration).

On the other hand, the Seventh Circuit recently held that, under Illinois law, a contract of indeterminate duration is terminable at will and that the Copyright Act does not preempt this state law. Walthal v. Rusk, 172 F.3d 481, 484-85 (7th Cir.1999). Thus, in Walthal, the plaintiff-musicians’ written revocation to the defendant-record producer of its implied license to distribute the musicians’ recordings effectively terminated that license, even though the producer manufactured the recording pursuant to the license before the revocation. Id. at 485 (“That letter rendered the license kaput.”). Here, as in Walthal, there is no question that the photographers each sent Harpo a letter containing a blanket revocation of any existing implied licenses to use photographs taken by them. (R. 85, Pis.’ Rule 56.1(a) Statement, Ex. H, Natkin letter of Apr. 29, 1997; Ex. N, Green letter of Feb. 26, 1998.)

Unfortunately, whether Harpo’s implied licensé to use the photos was of indeterminate duration is a question of fact, which neither party has definitively answered. Additionally, because we don’t know the scope of the implied license, we also don’t know if Harpo paid consideration and, if it did, whether that payment precludes at-will termination. Thus, we must deny the plaintiffs’ summary judgment motion on this question.

In conclusion, the plaintiffs have demonstrated that they are the sole authors of the photographs and, thus, that they hold the copyrights to the pictures. Furthermore, there is no genuine issue that Nat-kin and Green granted Harpo an implied license to use the photographs. But a triable issue remains as to (1) the scope of the implied license and whether the defendants’ publication of the photographs in Make the Connection was permissible under the license, and (2) whether the license was of indeterminate duration such that Natkin and Green’s letters effectively revoked Harpo’s implied license. A trial will be necessary to answer these questions.

II. Claims Based on the Lanham Act and Illinois State Law

Natkin and Green allege numerous causes of action in addition to their infringement claim. (R. 17, Am.Compl.) Specifically, they seek relief under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count II); under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 (Count III), and the Illinois Uniform Deceptive Trade Practices *1013Act, 815 ILCS 510/2 (Count IV); and under Illinois common law for unfair competition (Count V), breach of contract for bailment (Count VI), conversion (Count VII), and tortious interference with prospective economic advantage (Count VIII). Additionally, they seek a declaration regarding the right to possess the photographs, ownership of the copyrights in the photographs, and the terms of any license (Count IX (Natkin photographs); Count X (Green photographs)). Finally, in Count XI, the plaintiffs seek attorney fees.

In their second summary judgment motion, the defendants argue that Counts II through X are preempted by the Copy-" right Act, 17 U.S.C. § 301(a), and alternatively that the plaintiffs cannot produce evidence supporting every element of each claim. As to Count XI for attorney fees, the defendants assume success on their first arguments and, from there, argue that the plaintiffs cannot recover attorney fees for failed Lanham Act and Illinois Consumer Fraud Act claims.

A. Preemption under 17 U.S.C. § 301(a)

Section 301 preempts state law based causes of action that are equivalent to copyright infringement claims:

[A]ll legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright ... are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any state.

17 U.S.C. § 301(a). The Seventh Circuit has set forth a two-part test to determine whether a state law claim is equivalent to one protected by the Copyright Act: the work at issue must be fixed in a tangible form and come within the subject matter of copyright as specified in § 102, and the right asserted must be equivalent to any of the rights specified in § 106. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1453 (7th Cir.1996); Baltimore Orioles, 805 F.2d at 674.

Although the Seventh Circuit has not addressed the issue, district courts in this circuit and other Courts of Appeals have applied these principles to claims brought under § 43(a) of the Lanham Act. See, e.g., Montgomery v. Noga, 168 F.3d 1282, 1298-1300 (11th Cir.1999); Lipton v. Nature Co., 71 F.3d 464, 473-74 (2d Cir.1995); Lacour v. Time Warner Inc., No. 99 C 7105, 2000 WL 688946, at *3-4 (N.D.Ill. May 24, 2000); Goes Lithography Co. v. Banta Corp., 26 F.Supp.2d 1042, 1046-47 (N.D.Ill.1998); see also Weber v. Geffen Records, Inc., 63 F.Supp.2d 458, 464 (S.D.N.Y.1999) (“[PJlaintiffs Lanham Act claim is impermissible because it would essentially duplicate a Copyright Act claim”). As relevant here Lipton, Lacour, and Goes Lithography hold that a false designation of origin claim under § 43(a) based exclusively on a copyright notice violation is preempted by the Copyright Act; the Montgomery court declined to decide that question, and instead distinguished Lipton on the ground that the Montgomery defendant was charged with more than a simple copyright notice violation because the defendant claimed actual ownership of the plaintiffs copyrighted material.

Here, Counts II through V of Natkin and Green’s complaint are identical to each other:6 each count complains that the defendants falsely claimed a copyright in the eleven photographs published in Make the Connection thereby falsely suggesting that Natkin and Green “endorsed and approved of such use of their [photographs] and their names,” (R. 17, Am.ComplV 39), falsely passing off the photos as belonging to Harpo, (id. at ¶ 42), associating Natkin and Green with Harpo and Winfrey without authorization, (id. at ¶ 44), and repro-*1014during their copyrighted material without correct attribution of authorship or copyright, (id at ¶ 45). The plaintiffs maintain that these allegations state claims for false designation of origin and false advertising under the Lanham Act; unfair and deceptive business practices under the Illinois Consumer Fraud Act and the Illinois Uniform Deceptive Trade Practices Act; and unfair competition in violation of Illinois’ common law.

As a factual matter, Natkin and Green’s allegations are not entirely accurate. For example, the photographs in the hardcover version of Make the Connection on pages 45, 53, and 92 have no copyright notice whatsoever; all of Natkin’s photographs used in the book identify him as the photographer; and only two of Green’s photographs are not attributed to him.

Be that as it may, Counts II through V are preempted under § 301(a). The works at issue are fixed in a tangible form (photographs), they fall within the subject matter of copyright (§ 102(a)(5) (pictorial, graphic, and sculptural works)), and the rights asserted are equivalent to those specified in § 106, namely the exclusive right to reproduce, distribute, and display the photographs. Although Natkin and Green are creative in arguing all the various harms they suffered as a result of Harpo’s alleged misuse of their photographs, they allege only a garden variety copyright violation, and not an especially egregious violation at that. At base, Nat-kin and Green assert no more than that they own the copyrights to the pictures, the defendants published' the pictures without their permission in violation of their copyrights, and the defendants falsely claimed copyrights in some of the pictures. Here, as in Lacour, Goes Lithography, and Weber, the plaintiffs have done nothing more than reallege their copyright claims under the guise of the Lanham Act and identical state law claims. For these reasons, we grant summary judgment in favor of the defendants on Counts II through V of Natkin and Green’s amended complaint.

Conversely, Counts VI through VIII are not preempted by the Copyright Act because they allege violations of rights fundamentally different than those protected by copyright. Specifically, Count VI alleges that the defendants, at least Harpo and Winfrey, breached a contract for bailment by taking possession of certain negatives with the understanding that they would return them and then refusing to do so; Count VII states a cause of action for conversion based on the same facts; and Count VIII alleges tortious inference with prospective economic advantage because, without the negatives, the plaintiffs could not follow through on a book deal they were negotiating. Obviously, these allegations go far beyond those pertaining to copyright law.7

B. The Merits of Counts VI through VIII

Additionally, as to the conversion and bailment claims, the plaintiffs have produced evidence (deposition testimony and affidavits) that the defendants have refused to return their property, namely negatives and hard copies of photographs taken by Natkin and Green, in violation of their contract and the common law. And, again, the record evidence is inconclusive as to which party has a superior right to the negatives and photographs. Therefore, we deny summary judgment as to plaintiffs’ bailment and conversion claims.

The result is otherwise with respect to Natkin and Green’s tortious interference claim. They have not produced evidence establishing a genuine issue for trial. To demonstrate tortious interfer*1015ence with prospective economic advantage “requires, among other things,' a showing that the tortfeasor acted with actual malice.” Capital Options Inv., Inc. v. Goldberg Bros. Commodities, Inc., 958 F.2d 186, 189 (7th Cir.1992). To show malice, Natkin and Green must produce some evidence that the defendants “acted with a desire to harm which was unrelated to the interest [they were] presumably seeking to protect.” Id.

Although there is some evidence that Green was negotiating a book deal,8 there is no evidence that any of the defendants did anything to derail those negotiations. Instead, the plaintiffs point to the defendants’ response to a supplemental interrogatory listing the prospective publisher as a person with personal knowledge of facts in this lawsuit. First, this interrogatory response does not in any way indicate that the defendants actually communicated with the publisher. More importantly, it doesn’t even remotely suggest that, assuming Harpo did communicate with the publisher and gummed up the book deal, Har-po did so out of malice. The plaintiffs do not produce any evidence that Harpo interfered with Green’s book deal (or any other unidentified prospective business) or that, if it did, it did so for reasons unrelated to protecting its interests in the photographs. Therefore, we grant summary judgment in favor of defendants on the tortious interference claim.

C. Counts IX and X

Finally, we dismiss Counts IX and X, seeking declaratory judgment. To the extent Natkin and Green seek a declaration of rights in the eleven photographs, rights in the negatives Harpo possesses, and the terms of Harpo’s implied license to use Natkin and Green’s pictures, the claims are duplicative of the substantive claims. Once the claims unresolved by this summary judgment proceeding are decided, any declaration would be redundant. To the extent Natkin and Green seek a declaration of anything else,9 declaratory judgment would be premature. The plaintiffs have not identified a live controversy that will not be resolved by the close of this lawsuit. Thus, we dismiss Counts IX and X of the amended complaint.

CONCLUSION

As set forth above, we grant in part and deny in part the plaintiffs’ motion for summary judgment, (R. 76-1), we deny the defendants’ summary judgment motion on Count I, (R. 77-1), and we grant in part and deny in part the defendants’ summary judgment motion on Counts II through XI, (R. 78-1). Additionally,- we deny the defendants’ motion to strike, (R. 91-1), as moot.

The remaining issues involved in this lawsuit will proceed to trial on August 14, 2000 as previously scheduled. A status hearing will be held on August 2, 2000 at 10:00 a.m. to discuss all issues necessary for a fair and efficient trial.

2.1.4 Glatt v. Fox Searchlight Pictures, Inc. 2.1.4 Glatt v. Fox Searchlight Pictures, Inc.

In 2010, the Department of Labor issued new guidance on when unpaid internships in the for-profit private sector constitute an exception to the Fair Labor Standards Act’s wage and hour requirements. Some states, by contrast, provide employment-like antidiscrimination and antiretaliation protections for interns (while not regulating wages or hours). See, e.g., 2014 N.Y. Sess. Laws Ch. 97 (McKinney); OR. REV. STAT. §659A.350 (2018). 

Other courts have focused on whether interns gain a greater benefit than hirers from their working relationship. Consider these alternatives as you read the next case.

Eric GLATT, Alexander Footman, Eden M. Antalik, on behalf of herself and all others Similarly Situated, Plaintiffs-Appellees, v. FOX SEARCHLIGHT PICTURES, INC., Fox Entertainment Group, Inc., Defendants-Appellants.*

Nos. 13-4478-cv, 13-4481-cv.

United States Court of Appeals, Second Circuit.

Argued: Jan. 30, 2015.

Decided: July 2, 2015.

Amended: Jan. 25, 2016.

*531Neal Kumar Katyal, Hogan Lovells U.S. LLP, Washington, DC, (Mary Helen Wim-berly, Frederick Liu, Hogan Lovells U.S. LLP, Washington, DC, and Elise M. Bloom, Mark D. Harris, Chantel L. Febus, Amy F. Melican, Joshua S. Fox, Proskauer Rose LLP, New York, N.Y., on the brief), for Defendants-Appellants.

Rachel Bien, Outten & Golden LLP, New York, N.Y., (Adam T. Klein, Juno Turner, Outten & Golden LLP, New York, N.Y., on the brief), for Plaintiffs-Appel-lees.

Maria Van-Buren, U.S. Department of Labor, Washington, DC, (Jennifer S. Brand, Paul L. Frieden, on the brief), for M. Patricia Smith, Solicitor of Labor, U.S. Department of Labor, Washington, DC, as Amicus Curiae.

Before: WALKER, JACOBS, and WESLEY, Circuit Judges.

JOHN M. WALKER, JR., Circuit Judge:

Plaintiffs, who were hired as unpaid interns, claim compensation as employees under the Fair Labor Standards Act and New York Labor Law. Plaintiffs Eric Glatt and Alexander Footman moved for partial summary judgment on their employment status. Plaintiff Eden Antalik moved to certify a class of all New York interns working at certain of defendants’ divisions between 2005 and 2010 and to conditionally certify a nationwide collective of all interns working at those same divisions between 2008 and 2010. The district court (William H. Pauley III, J.) granted Glatt and Footman’s motion for partial summary judgment, certified Antalik’s New York class, and conditionally certified Antalik’s nationwide collective. On defendants’ interlocutory appeal, we VACATE the district court’s order granting partial summary judgment to Glatt and Footman, VACATE its order certifying Antalik’s New York class, VACATE its order conditionally certifying Antalik’s nationwide collective, and REMAND for further proceedings.

BACKGROUND

Plaintiffs worked as unpaid interns either on the Fox Searchlight-distributed film Black Swan or at the Fox corporate offices in New York City. They contend *532that the defendants, Fox Searchlight and Fox Entertainment Group, violated the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 206-07, and New York Labor (NYLL), NY. Labor Law § 652, by failing to pay them as employees during their internships as required by the FLSA’s and NYLL’s minimum wage and overtime provisions. The following background facts are undisputed except where noted.

Eric Glatt

Eric Glatt graduated with a degree in multimedia instructional design from New York University. Glatt was enrolled in a non-matriculated (non-degree) graduate program at NYU’s School of Education when he started working on Black Swan. His graduate program did not offer him credit for his internship.

From December 2, 2009, through the end of February 2010, Glatt interned in Black Swan’s accounting department under the supervision of Production Accountant Theodore Au. He worked from approximately 9:00 a.m. to 7:00 p.m. five days a week. As an accounting intern, Glatt’s responsibilities included copying, scanning, and filing documents; tracking purchase orders; transporting paperwork and items to and from the Black Swan set; maintaining employee personnel files; and answering questions about the accounting department.

Glatt interned a second time in Black Swan’s post-production department from March 2010 to August 2010, under the supervision of Post Production Supervisor Jeff Robinson. Glatt worked two days a week from approximately 11:00 a.m. until 6:00 or 7:00 p.m. His post-production responsibilities included drafting cover letters for mailings; organizing filing cabinets; filing paperwork; making photocopies; keeping the takeout menus up-to-date and organized; bringing documents to the payroll company; and running errands, one of which required him to purchase a non-allergenie pillow for Director Darren Aronofsky.

Alexander Footman

Alexander Footman graduated from Wesleyan University with a degree in film studies. He was not enrolled in a degree program at the time of his Black Swan internship. From September 29, 2009, through late February or early March 2010, Footman interned in the production department under the supervision of Production Office Coordinator Lindsay Feld-man and Assistant Production Office Coordinator Jodi Arneson. Footman worked approximately ten-hour days. At first, Footman worked five days a week, but, beginning in November 2009, he worked only three days a week. After this schedule change, Black Swan replaced Footman with another unpaid intern in the production department.

Footman’s responsibilities included picking up and setting up office furniture; arranging lodging for cast and crew; taking out the trash; taking lunch orders; answering phone calls; watermarking scripts; drafting daily call sheets; photocopying; making coffee; making deliveries to and from the film production set, rental houses, and the payroll office; accepting deliveries; admitting guests to the office; compiling lists of local vendors; breaking down, removing, and selling office furniture and supplies at the end of production; internet research; sending invitations to the wrap party; and other similar tasks and errands, including bringing tea to Aro-nofsky and dropping off a DVD of Black Swan footage at Aronofsky’s apartment.

Eden Antalik

Eden Antalik worked as an unpaid publicity intern in Fox Searchlight’s corporate office in New York from the beginning of May 2009 until the second week of August *5332009. During her internship, Antalik was enrolled in a degree program at Duquesne University that required her to have an internship in order to graduate. Antalik was supposed to receive credit for her internship at Fox Searchlight, but, for reasons that are unclear from the record, she never actually received the credit.

Antalik began work each morning around 8:00 a.m. by assembling a brief, referred to as “the breaks,” summarizing mentions of various Fox Searchlight films in the media. She also made travel arrangements, organized catering, shipped documents, and set up rooms for press events.

Prior Proceedings

On October 19, 2012, plaintiffs filed their first amended class complaint seeking unpaid minimum wages and overtime for themselves and all others similarly situated. Thereafter, Glatt and Footman abandoned their class claims and proceeded as individuals. After discovery, Glatt and Footman moved for partial summary judgment, contending that they were employees under the FLSA and NYLL. The defendants cross-moved for summary judgment claiming that Glatt and Footman were not employees under either statute. At about the same time, Antalik moved to certify a class of New York State interns working at certain Fox divisions and a nationwide FLSA collective of interns working at those same divisions.

On June 11, 2013, the district court concluded that Glatt and Footman had been improperly classified as unpaid interns rather than employees and granted their partial motion for summary judgment. The district court also granted Antalik’s motions to certify the class of New York interns and to conditionally certify the nationwide FLSA collective.

On September 17, 2013, the district court, acting on defendants’ motion, certified its order for immediate appeal under 28 U.S.C. § 1292(b). On November 26, 2013, we granted defendants’ petition for leave to file an interlocutory appeal from the district court’s orders. For the reasons that follow, we vacate the district court’s orders and remand.

DISCUSSION

At its core, this interlocutory appeal raises the broad question of under what circumstances an unpaid intern must be deemed an “employee” under the FLSA and therefore compensated for his work. That broad question underlies our answers to the three specific questions on appeal. First, did the district court apply the correct standard in evaluating whether Glatt and Footman were employees, and, if so, did it reach the correct result? Second, did the district court err by certifying Antalik’s class of New York interns? Third, did the district court err by conditionally certifying Antalik’s nationwide collective?

I. Glatt’s and Footman’s Employment Status

We review the district court’s order granting' partial summary judgment to Glatt and Footman de novo. See Velez v. Sanchez, 693 F.3d 308, 313-14 (2d Cir. 2012). Summary judgment is appropriate only if, drawing all reasonable inferences in favor of the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Id. at 314.

With certain exceptions not relevant here, the FLSA requires employers to pay all employees a specified minimum wage, and overtime of time and one-half for hours worked in excess of forty hours per week. 29 U.S.C. §§ 206-07. NYLL requires the same, except that it specifies *534a higher wage rate than the federal minimum. See N.Y. Labor Law § 652. An employee cannot waive his right to the minimum wage and overtime pay because waiver “would nullify the purposes of the [FLSA] and thwart the legislative policies it was designed to effectuate.” Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 740, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981) (internal quotation marks omitted); see also Tony & Susan Alamo Found, v. Sec’y of Labor, 471 U.S. 290, 302, 105 S.Ct. 1953, 85 L.Ed.2d 278 (1985) (exceptions to coverage under the FLSA affect more people than those workers directly at issue because exceptions are “likely to exert a general downward pressure on wages in competing businesses”).

The strictures of both the FLSA and NYLL apply only to employees. The FLSA unhelpfully defines “employee” as an “individual employed by an employer.” 29 U.S.C. § 203(e)(1). “Employ” is defined as “to suffer or permit to work.” Id. § 203(g). New York likewise defines “employee” as “any individual employed, suffered or permitted to work by an employer.” 12 N.Y.C.R.R. § 142-2.14(a). Because the statutes define “employee” in nearly identical terms, we construe the NYLL definition as the same in substance as the definition in the FLSA. See Zheng v. Liberty Apparel Co., 355 F.3d 61, 78 (2d Cir.2003).

The Supreme Court has yet to address the difference between unpaid interns and paid employees under the FLSA. In 1947, however, the Court recognized that unpaid railroad brakemen trainees should not be treated as employees, and thus that they were beyond the reach of the FLSA’s minimum wage provision. See Walling v. Portland Terminal Co., 330 U.S. 148, 67 S.Ct. 639, 91 L.Ed. 809 (1947). The Court adduced several facts. First, the brakemen-trainees at issue did not displace any regular employees, and their work did not expedite the employer’s business. Id. at 149-50, 67 S.Ct. 639. Second, the brakemen-trainees did not expect to receive any compensation and would not necessarily be hired upon successful completion of the course. See id. at 150, 67 S.Ct. 639. Third, the training course was similar to one offered by a vocational school. Id. at 152, 67 S.Ct. 639. Finally, the employer received no immediate advantage from the work done by the trainees. Id. at 153, 67 S.Ct. 639.

In 1967, the Department of Labor (“DOL”) issued informal guidance on trainees as part of its Field Operations Handbook. The guidance enumerated six criteria and stated that the trainee is not an employee only if all of the criteria were met. See DOL, Wage & Hour Div., Field Operations Handbook, Ch. 10, ¶ lObll (Oct. 20, 1993), available at http://www.dol. gov/whd/FOH/FOH_Ch10.pdf. In 2010, the DOL published similar guidance for unpaid interns working in the for-profit private sector. This Intern Fact Sheet provides that an employment relationship does not exist if all of the following factors apply:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
*5356. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

DOL, Wage & Hour Div., Fact Sheet # 71, Internship Programs Under The Fair Labor Standards Act (April 2010), available at http://www.dol.gov/whd/regs/compliance/ whdfs71.pdf.

The district court evaluated Glatt’s and Footman’s employment using a version of the DOL’s six-factor test. However, the district court, unlike the DOL, did not explicitly require that all six factors be present to establish that the intern is not an employee and instead balanced the factors. The district court found that the first four factors weighed in favor of finding that Glatt and Footman were employees and the last two factors favored finding them to be trainees. As a result, the district court concluded that Glatt and Footman had been improperly classified as unpaid interns and granted their motion for partial summary judgment.

The specific issue we face — when is an unpaid intern entitled to compensation as an employee under the FLSA? — is a matter of first impression in this Circuit. When properly designed, unpaid internship programs can greatly benefit interns. For this reason, internships are widely supported by educators and by employers looking to hire well-trained recent graduates.1 However, employers can also exploit unpaid interns by using their free labor without providing them with an appreciable benefit in education or experience. Recognizing this concern, all parties agree that there are circumstances in which someone who is labeled an unpaid intern is actually an employee entitled to compensation under the FLSA. All parties also agree that there are circumstances in which unpaid interns are not employees under the FLSA. They do not agree on what those circumstances are or what standard we should use to identify them.

The plaintiffs urge us to adopt a test whereby interns will be considered employees whenever the employer receives an immediate advantage from the interns’ work. Plaintiffs argue that focusing on any immediate advantage that accrues to the employer is appropriate because, in their view, the Supreme Court in Portland Terminal rested its holding on the finding that the brakemen trainees provided no immediate advantage to the employer.

The defendants urge us to adopt a more nuanced primary beneficiary test. Under this standard, an employment relationship is not created when the tangible and intangible benefits provided to the intern are greater than the intern’s contribution to the employer’s operation. They argue that the primary beneficiary test best reflects the economic realities of the relationship between intern and employer. They further contend that a primary beneficiary test that considers the totality of the circumstances is in accordance with how we decide whether individuals are employees in other circumstances.

DOL, appearing as amicus curiae in support of the plaintiffs, defends the six factors enumerated in its Intern Fact Sheet and its requirement that every factor be present before the employer can escape its obligation to pay the worker. DOL argues (1) that its views on employee status are entitled to deference because it is the agency charged with administering the FLSA and (2) that we' should use the six *536factors because they come- directly from Portland Terminal.

We decline DOL’s invitation to defer to the test laid out in the Intern Fact Sheet. As DOL makes clear in its brief, its six-part test is essentially a distillation of the facts discussed in Portland Terminal. DOL Br. at 11-12, 21. Unlike an agency’s interpretation of ambiguous statutory terms or its own regulations, “an agency has no special competence or role in interpreting a judicial decision.” State of N.Y. v. Shalala, 119 F.3d 175, 180 (2d Cir.1997). And as DOL concedes, DOL Br. at 21, this interpretation is entitled, at most, to Skidmore deference to the extent we find it persuasive. See Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944) (the weight given to the Administrator’s judgment depends on “all those factors which give it power to persuade”). Because the DOL test attempts to fit Portland Terminal’s particular facts to all workplaces, and because the test is too rigid for our precedent to withstand, see, e.g., Velez, 693 F.3d at 326, we do not find it persuasive, and we will not defer to it.

Instead, we agree with defendants that the proper question is whether the intern or the employer is the primary beneficiary of the relationship. The primary beneficiary test has three salient features. First, it focuses on what the intern receives in exchange for his work. See Portland Terminal, 330 U.S. at 152, 67 S.Ct. 639 (focusing on the trainee’s interests). Second, it also accords courts the flexibility to examine the economic reality as it exists between the intern and the employer. See Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 141-42 (2d Cir.2008) (employment for FLSA purposes is “a flexible concept to be determined on a case-by-case basis by review of the totality of the circumstances”). Third, it acknowledges that the intern-employer relationship should not be analyzed in the same manner as the standard employer-temploy-ee relationship because the intern enters into the relationship with the expectation of receiving educational or vocational benefits that are not necessarily expected with all forms of employment (though such benefits may be a product of experience on the job).

Although the flexibility of the primary beneficiary test is primarily a virtue, this virtue is not unalloyed. The defendants’ conception of the primary beneficiary test requires courts to weigh a diverse set of benefits to the intern against an equally diverse set of benefits received by the employer without specifying the relevance of particular facts. Cf. Brown v. N.Y.C. Dep’t of Educ., 755 F.3d 154, 163 (2d Cir. 2014) (“While our ultimate determination [of employment status] is based on the totality of circumstances, our discussion necessarily focuses on discrete facts relevant to particular statutory and regulatory criteria.” (internal citation omitted)).

In somewhat analogous contexts, we have articulated a set of non-exhaustive factors to aid courts in determining whether a worker is an employee for purposes of the FLSA. See, e.g., Velez, 693 F.3d at 330 (domestic workers); Brock v. Superior Care, Inc., 840 F.2d 1054, 1058-59 (2d Cir.1988) (independent contractors). In the context of unpaid internships,2 we think a non-exhaustive set of considerations should include:

1. The extent to which the intern and the employer clearly understand that *537there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Applying these considerations requires weighing and balancing all of the circumstances. No one factor is dispositive and every factor need not point in the same direction for the court to conclude that the intern is not an employee entitled to the minimum wage. In addition, the factors we specify are non-exhaustive— courts may consider relevant evidence beyond the specified factors in appropriate cases. And because the touchstone of this analysis is the “economic reality” of the relationship, Barfield, 537 F.3d at 141, a court may elect in certain cases, including cases that can proceed as collective actions, to consider evidence about an internship program as a whole rather than the experience of a specific intern.

. This flexible approach is faithful to Portland Terminal. Nothing in the Supreme Court’s decision suggests that any particular fact was essential to its conclusion or that the facts on which it relied would have the same relevance in every workplace. See Portland Terminal, 330 U.S. at ISO-53, 67 S.Ct. 639; see also Solis v. Laurel-brook Sanitarium & Sch, Inc., 642 F.3d 518, 526 n. 2 (6th Cir.2011) (“While the Court’s recitation of the facts [in Portland Terminal] included those that resemble the Secretary’s six factors, the Court gave no indication that such facts must be present in future cases to foreclose an employment relationship.” (internal citation omitted)).

The approach we adopt also reflects a central feature of the modern internship — the relationship between the internship and the intern’s formal education — and is confined to internships and does not apply to training programs in other contexts. The purpose of a bonafide internship is to integrate classroom learning with practical skill development in a real-world setting,3 and, unlike the brakemen at issue in Portland Terminal, all of the plaintiffs were enrolled in or had recently completed a formal course of post-secondary education. By focusing on the educational aspects of the internship, our approach better reflects the role of internships in today’s economy than the DOL factors, which were de*538rived from a 68-year old Supreme Court decision that dealt with a single training course offered to prospective railroad brakemen.

In sum, we agree with the defendants that the proper question is whether the intern or the employer is the primary beneficiary of the relationship, and we propose the above list of non-exhaustive factors to aid courts in answering that question. The district court limited its review to the six factors in-DOL’s Intern Fact Sheet. Therefore, we vacate the district court’s order granting partial summary judgment to Glatt and Footman and remand for further proceedings. On remand, the district court may, in its discretion, permit the parties to submit additional evidence relevant to the plaintiffs’ employment status, such as evidence on Glatt’s and Footman’s formal education. Of course, we express no opinion with respect to the outcome of any renewed motions for summary judgment the parties might make based on the primary beneficiary test we have set forth.

II. Antalik’s Motion to Certify the New York Class

We turn now to the defendants’ appeal of the district court’s order certifying Antalik’s proposed class. We review the district court’s class certification ruling for abuse of discretion and the conclusions' of law that informed its decision to grant certification de novo. See Parker v. Time Warner Entm’t Co., 331 F.3d 13, 18 (2d Cir.2003).

Antalik moved to certify the following class:

All individuals who had unpaid internships between September 28, 2005 and September 1, 2010 with one or more of the following divisions of FEG [Fox Entertainment Group]: Fox Filmed Entertainment, Fox Group, Fox Networks Group, and Fox Interactive Media (renamed News Corp. Digital Media).

Pls.’ Mot. For Class Cert. 19, Doc. No. 104.

Antalik bore the burden of showing that her proposed class satisfied Rule 23’s requirements of: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. See Fed.R.Civ.P. 23(a)(l — 4). Because Antalik moved to certify the class pursuant to Rule 23(b)(3), she was also required to show that “questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” See Fed R. Civ. P. 23(b)(3). “The predominance requirement is satisfied if resolution of some of the legal or factual questions that qualify each class member’s case as a genuine controversy can be achieved through generalized proof, and if these particular issues are more substantial than the issues subject only to individualized proof.” In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 118 (2d Cir.2013) (internal quotation marks omitted).

The district court found that common questions pertaining to liability could be answered by evidence tending to show that interns were recruited to help with busy periods, that they displaced paid employees, and that Fox employees overseeing internships did not believe they complied with the law. Because “common questions of liability predominate over individual calculations of damages,” the district court concluded that Antalik had satisfied her burden to establish predominance. S.A. 33-34.

On appeal, the defendants argue the district court erred by concluding that Anta-lik demonstrated predominance because it misconstrued our standards for determin*539ing when common questions predominate over individual ones. We agree and therefore vacate the district court’s order certifying Antalik’s class.4

Antalik points to evidence, relied on by the district court, suggesting that the defendants sometimes used unpaid interns in place of paid employees. Such evidence is relevant but not sufficient to answer the question of whether each intern was an employee entitled to compensation under the FLSA. As our previous discussion of the proper test indicates, the question of an intern’s employment status is a highly context-specific inquiry. Anta-lik’s evidence that the defendants received an immediate advantage from the internship program will not help to answer whether the internship program could be tied to an education program, whether and what type of training the internship program provided, whether the internship program continued beyond the primary period of learning, or the many other questions that are relevant in this case. Moreover, defendants’ undisputed evidence demonstrated that the various internship programs it offered differed substantially across the many departments and four Fox divisions included in the proposed class.

In sum, even if Antalik established that Fox had a policy of replacing paid employees with unpaid interns, it would not suffice to show that Fox’s internship program created employment relationships, the most important issue in each case. Thus, assuming some questions may be answered with generalized proof, they are not more substantial than the questions requiring individualized proof. See, e.g., Myers v. Hertz Corp., 624 F.3d 537, 548 (2d Cir.2010) (district - court did not abuse its discretion by denying certification of a class of store managers where determination of whether managers were exempt under the FLSA would be resolved only “by examining the employees’ actual job characteristics and duties”); In re Wells Fargo Home Mortgage Overtime Pay Litig., 571 F.3d 953, 958-59 (9th Cir. 2009) (district court abused its discretion by certifying a class of mortgage consultants because employer’s centralized policy of exempting consultants did not predominate over individual variation in job responsibilities).

Because the most important question in this litigation cannot be answered with generalized proof on this record in light of the new legal standard, we vacate the district court’s order certifying Antalik’s proposed class and remand for further proceedings consistent with this opinion.5

III. Antalik’s Motion to Conditionally Certify the Nationwide FLSA Collective

Finally, we turn to the defendants’ appeal of the district court’s order conditionally certifying Antalik’s proposed nationwide FLSA collective. Like the district court’s certification determination pursuant to Rule 23, we review its decision to conditionally certify an FLSA collective for abuse of discretion. See Myers, 624 F.3d at 554; Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1260 (11th Cir .2008).

*540The FLSA permits employees to create a collective by opting-in to a backpay claim brought by a similarly situated employee. 29 U.S.C. § 216(b). The unique FLSA collective differs from a Rule 23 class because plaintiffs become members of the collective only after they affirmatively consent to join it. See Genesis Healthcare Corp. v. Symczyk, — U.S. -, 133 S.Ct. 1523, 1530, 185 L.Ed.2d 636 (2013). As a result, unlike a Rule 23 class, a conditionally certified FLSA collective does not acquire an independent legal status. Id.

In Myers, we endorsed a two-step process for certifying FLSA collective actions. At step one, the district court permits a notice to be sent to potential opt-in plaintiffs if the named plaintiffs make a modest factual showing that they and others together were victims of a common policy or plan that violated the law. 624 F.2d at 555. At step two, with the benefit of additional factual development, the district court determines whether the collective action may go forward by determining whether the opt-in plaintiffs are in fact similarly situated to the named plaintiffs. Id.

Antalik moved, at step one, to conditionally certify the following nationwide collective:

All individuals who had unpaid internships between September 28, 2008 and September 1, 2010 with one or more of the following divisions of FEG: Fox Filmed Entertainment, Fox Group, Fox Networks Group, and Fox Interactive Media (renamed News Corp. Digital Media).

Pls.’ Mot. For Class Cert. 28, Doc. No. 104.

After some discovery had been completed, the district court, relying primarily on its analysis of commonality with respect to Antalik’s Rule 23 motion, authorized plaintiffs to send the opt-in notice because An-talik put forth generalized proof that interns were victims of a common policy to replace paid workers with unpaid interns. On defendants’ motion for reconsideration, the district court narrowed the opt-in notice to include only those individuals who held unpaid internships between January 18, 2010, and September 1, 2010, because the statute of limitations precluded claims by earlier Fox interns.

We certified for immediate review the question of whether a higher standard, urged by defendants, applies to motions to conditionally certify an FLSA collective made after discovery. We do not need to decide that question, however, because in light of the new test for when an internship program creates an employment relationship, we cannot, on the record before us, conclude that the plaintiffs in Antalik’s proposed collective are similarly situated, even under the minimal pre-discovery standard.6 The common proof identified by Antalik, and relied on by the district court, addresses only some of the relevant factors outlined above. If anything, Antalik’s proposed collective presents an even wider range of experience than her proposed class because it is nationwide in scope, rather than limited to just New York interns.

Accordingly, for substantially the same reasons as with respect to Antalik’s Rule 23 motion, we vacate the district court’s order conditionally certifying Antalik’s proposed nationwide collective action and remand for further proceedings.7

*541CONCLUSION

For the foregoing reasons, the district court’s orders are VACATED and the case REMANDED for further proceedings consistent with this opinion.