## Facts

- Delivery workers performed customer deliveries (primarily on foot) and additional in-store tasks (e.g., stocking, bagging, customer assistance) at New York City retail stores, including Duane Reade locations.
- Workers were hired and paid by delivery-service entities and individuals (the Hudson/Chelsea defendants) and were assigned to specific Duane Reade stores.
- Duane Reade obtained delivery labor by contracting with the Hudson/Chelsea defendants at a set weekly rate per worker.
- The Hudson/Chelsea defendants paid workers flat daily amounts (about $20–$30 per day) and classified them as independent contractors.
- Store supervisors at Duane Reade directed the workers’ day-to-day duties, schedules, and manner of performing deliveries and in-store services.
- Workers alleged they routinely worked long shifts and six-day weeks without minimum wage and overtime compensation required by federal and New York wage-and-hour laws.
- The action was brought as a putative class action alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law; the decision addressed cross-motions for summary judgment focused on Duane Reade and the Hudson/Chelsea defendants.

## Issues

1. Whether, under the FLSA and New York Labor Law, the delivery workers were employees rather than independent contractors despite being labeled independent contractors.
2. Whether Duane Reade was a joint employer of the delivery workers with the Hudson/Chelsea defendants and thus jointly responsible for minimum wage and overtime compliance.

## Decision

- The court granted plaintiffs’ motion for partial summary judgment.
- The court held that delivery workers assigned to Duane Reade stores and making deliveries on foot were employees, not independent contractors, under the FLSA and New York Labor Law.
- The court held that Duane Reade and the Hudson/Chelsea defendants were joint employers and were jointly and severally liable for minimum wage and overtime obligations to the covered workers.
- The ruling was limited to liability on employee-status and joint-employer questions; damages and remaining issues were left for later proceedings.

## Legal Principles

- Employee status under the FLSA and New York Labor Law turns on the “economic reality” of the relationship, not contractual labels.
- Economic-reality factors include the degree of control, opportunity for profit or loss, worker investment, permanency of the relationship, and whether the work is integral to the business.
- A company that outsources labor may still be a joint employer where, as a practical matter, it shares control over work and working conditions and the workers function as part of its operations.
- Joint employers under the FLSA and New York Labor Law may be jointly and severally liable for minimum wage and overtime violations.

## Conclusion

The court concluded that the delivery workers were economically dependent on the delivery-service entities and functioned as supervised store labor within Duane Reade’s operations, making them employees and rendering Duane Reade a joint employer responsible for wage-and-hour compliance.


Ansoumana v. Gristede's Operating Corp., 255 F. Supp. 2d 184 (S.D.N.Y. 2003)