## Facts

- Black-car drivers in the New York City area affiliated with dispatch “bases” owned or operated by Corporate Transportation Group, Ltd. and related entities.
- Drivers obtained access to dispatch accounts by renting franchises for weekly fees or purchasing franchises with fees that could reach $60,000, and they separately maintained required regulatory licenses.
- Franchise agreements stated drivers were not employees and required that payments for rides tied to certain accounts be processed through defendants’ systems; agreements also included non-compete limits for those accounts.
- Drivers typically kept a large share of fares and bore operating expenses, including vehicle purchase or lease, maintenance, fuel, insurance, and franchise fees.
- Drivers controlled when, where, and how often they worked; they could decline work, stop accepting dispatches, and were not required to accept a minimum number of rides.
- Many drivers obtained driving work from other companies and sometimes pursued other income-producing activities outside the defendants’ accounts.
- Defendants imposed certain service standards (e.g., dress and appearance requirements, vehicle cleanliness) and enforced compliance through discipline, but drivers did not wear company uniforms or display company logos on their cars.
- Drivers commonly treated themselves as independent contractors for tax purposes and claimed business deductions.
- Drivers sued under the Fair Labor Standards Act and New York Labor Law for unpaid overtime and related relief; the district court granted summary judgment to defendants on the ground that drivers were independent contractors.

## Issues

1. Whether the drivers were “employees” or “independent contractors” under the FLSA’s economic-realities test.
2. Whether the record presented genuine disputes of material fact that would preclude summary judgment on FLSA status (and related state-law wage claims).

## Decision

- The Second Circuit affirmed summary judgment for defendants.
- The court held that, under the totality of the economic-realities factors, the drivers were independent contractors as a matter of law and therefore not entitled to the sought overtime protections.

## Legal Principles

- FLSA employment status turns on the economic realities of the relationship, not contractual labels alone.
- The economic-realities analysis considers, among other factors: (1) the putative employer’s control, (2) the worker’s opportunity for profit or loss and investment, (3) permanence of the relationship, (4) whether the work is integral to the business, and (5) skill and independent initiative; no single factor is dispositive.
- Substantial discretion over schedule and work frequency, the ability to work for competitors or other clients, and meaningful capital investment with business risk support independent-contractor status.
- Brand-related rules and payment-processing requirements may evidence some control, but do not establish employee status when drivers retain day-to-day autonomy and operate as independent businesses.
- Tax treatment and contractual characterization as independent contractors are relevant but not controlling.

## Conclusion

The court concluded that the drivers’ significant autonomy, non-exclusive and terminable affiliations, and substantial investment and profit-or-loss opportunities showed they operated their own driving businesses, so they were independent contractors under the FLSA and could not recover overtime from the dispatch-base entities.


Saleem v. Corp. Transp. Grp., Ltd., 854 F.3d 131 (2d Cir. 2017)