A now-defunct security company cannot avoid liability for unpaid wages by declaring its workers are independent contractors, a federal judge held.
In a written opinion last week, U.S. District Judge Sharon Johnson Coleman granted partial summary judgment on the issue of employee status in favor of the guards who sued Stevens Security & Training Services Inc.
Coleman held the strict control Stevens Security and its owner exercised over the guards shows they were employees protected by the federal Fair Labor Standards Act and Illinois’ Minimum Wage Law and Wage Payment Collection Act.
Coleman also held that undisputed evidence shows paycheck deductions for the cost of uniforms often led to guards being paid less than minimum wage during the first few weeks they worked for Stevens Security.
And Coleman held that undisputed evidence also shows Stevens Security did not pay time-and-a-half for any overtime the guards worked.
Coleman did not determine the amount of unpaid wages the guards are owed.
Stevens Security offered security services to film and television crews working in Chicago.
The company was owned and operated by Al Stevens from 2014 until the business was dissolved in 2019.
In August 2017, four former guards for Stevens Security filed a lawsuit against the company and Al Stevens alleging collective-action claims under the Fair Labor Standards Act and class-action claims under the Illinois statutes.
In July 2019, Coleman granted a motion by defense counsel to withdraw from the case.
No lawyer has filed an appearance for the defendants since then, and the defendants have not appeared in court, Coleman wrote in Thursday’s opinion.
She wrote the defendants also did not respond to a notice to pro se defendants that the plaintiffs filed concerning their motion for partial summary judgment.
The facts alleged by the plaintiffs are undisputed and supported by evidence in the record, according to Coleman.
Stevens Security required newly hired guards to sign agreements that listed the company as the employer.
Stevens Security gave all guards an employment handbook that set out work rules and detailed employee benefits and employee hours. The company often held employee meetings to discuss the rules.
Stevens Security deducted money from guards’ paychecks for any infraction of the rules. It also deducted the cost of uniforms and identification badges that guards were required to buy from the company.
In her opinion, Coleman wrote the Fair Labor Standards Act and the Illinois Minimum Wage Law — which parallel each other — protect only employees.
Courts look at “the totality of the circumstances” to determine whether a worker is an employee or an independent contractor, Coleman wrote.
Factors that courts consider, she wrote, citing Secretary of Labor v. Lauritzen, 835 F.2d 1529 (7th Cir. 1987), include the amount of control the alleged employer exercises over the way the work is done, any investment the alleged employee makes in the equipment or materials needed to do the work, whether the alleged employee must have a special skill and the length of the working relationship.
The plaintiffs’ undisputed facts show they were employees under the Fair Labor Standards Act and the Illinois Minimum Wage Law, Coleman held.
After Stevens Security was sued, she noted, the company directed its guards to sign agreements stating they were independent contractors.
“Stevens Security’s last-minute attempt to label its employees as independent contractors after this lawsuit was filed does not change this analysis,” Coleman wrote, citing Berger v. National Collegiate Athletic Association, 843 F.3d 285 (7th Cir. 2016).
She held the undisputed facts show the plaintiffs also were employees under the Illinois Wage Payment Collection Act.
That statute defines an employee as “any individual permitted to work by an employer in an occupation,” Coleman wrote.
Excluded from this definition, she wrote, quoting the statute, are individuals whose work is not controlled by the employer and who do work “which is either outside the usual course of business or is performed outside all the places of business of the employer unless the employer is in the business of contracting with third parties for the placement of employees.”
The individual also must be in “an independently established trade, occupation, profession or business,” Coleman wrote, quoting the statute.
She wrote the plaintiffs do not meet the requirements to be excluded from this definition of “employee.”
The evidence shows that “the guards were anything but free from Stevens Security’s control and direction over their job tasks,” Coleman wrote.
Also, she wrote, the plaintiffs have “a limited skill set” and worked at Steven Security’s places of business — sites where the company’s clients were filming.
Coleman held Al Stevens also is liable for the violations of the Fair Labor Standards Act because he exercised daily control over the guards’ work schedules, wages and conditions of employment.
And Stevens is liable for the violations of the Illinois Wage Payment Collection Act because he knowingly allowed violations of that statute to occur, Coleman held.
The case is Michelle Gunn, et al. v. Stevens Security & Training Services Inc., et al., No. 17 C 6314.
The plaintiffs are represented by Christopher J. Wilmes and Matthew J. Piers, both of Hughes Socol Piers Resnick & Dym Ltd.
“We are pleased with Judge Coleman’s ruling finding that the security guards were employees and not independent contractors,” Wilmes said in an email.
“In our opinion, this was a pretty obvious case of independent contractor misclassification, and we are happy that Judge Coleman agreed.”
Wilmes said he and Piers do not know if the guards will be able to collect their unpaid wages because they do not yet have Stevens Security’s and Al Stevens’ financial records.
“We will undertake collection efforts once we obtain a final judgment in our favor,” Wilmes said.
Stevens could not be reached for comment.