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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_________________________
No. 16-13829
_________________________
D.C. Docket No. 8:15-cv-00076-SCB-TGW
SCOTT AXEL,
Plaintiff-Appellant,
versus
FIELDS MOTORCARS OF FLORIDA, INC.,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(October 6, 2017)
Before ED CARNES, Chief Judge, and WILLIAM PRYOR, Circuit Judge, and
MOORE, * District Judge.
*
Honorable K. Michael Moore, United States District Chief Judge for the Southern District of
Florida, sitting by designation.
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MOORE, District Judge:
Scott Axel (“Plaintiff”) was learning the business of automobile wholesaling
from his father, a wholesaler employed by Fields Motorcars of Florida, Inc.
(“Fields Motorcars”). Plaintiff shadowed his father for fifteen months. During this
time, Plaintiff also did additional wholesale work, as well as some retail work. This
arrangement continued until Fields Motorcars terminated Plaintiff’s father in the
spring of 2014, at which point Plaintiff stopped coming to work as well. Plaintiff
received no compensation during those fifteen months and, following his father’s
termination, sued Fields Motorcars, alleging violations of the Fair Labor Standards
Act, 29 U.S.C. §§ 201–219 (“FLSA”), and the Florida Minimum Wage Act, Fla.
Stat. § 448.10, et seq. (“FMWA”).
On summary judgment, the district court stated that Plaintiff’s unorthodox
employment did not neatly fit into traditional employment categories and
concluded that Plaintiff was not a Fields Motorcars employee. Because it found
that Plaintiff was not an employee, the district court granted summary judgment in
favor of Fields Motorcars on the FLSA and FMWA claims. Plaintiff now appeals
that decision. After careful consideration and with the benefit of oral argument, we
conclude that material issues of fact remain which preclude the entry of summary
judgment.
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I. BACKGROUND
Fields Motorcars is a multi-marque automobile dealer operating nationally.
It sells and leases new and used automobiles, and also services international
automobile brands. Towards the end of 2012, Plaintiff applied for a sales position
at Fields Motorcars but Plaintiff did not receive an offer. In the years preceding his
employment application, Plaintiff was arrested for driving while intoxicated,
terminated as an Enterprise Rent-A-Car management assistant for failing to show
up to work, and sought treatment for drug addiction at a residential drug treatment
facility for approximately eight months.
Plaintiff’s father, Michael Axel, worked as an automobile wholesaler for
Fields Motorcars at its Lakeland BMW and Mercedes stores. Michael spoke with
Gary Gordon, the General Manager of the Lakeland BMW and Mercedes stores
and Michael’s direct supervisor, about finding a job for his son—in sales or in any
other open position.1 Mr. Gordon told him that he was not hiring any new
employees at that time. Michael suggested that Fields Motorcars hire Plaintiff as an
employee and that Michael would split his own compensation or commissions with
Plaintiff. Mr. Gordon rejected this proposal. They discussed an arrangement
whereby Michael would hire Plaintiff as his own employee and teach Plaintiff how
to become an automobile wholesaler, with the future possibility of assuming
1
The Parties dispute who first suggested that Scott work for Michael. Michael testified that Mr.
Gordon first made the suggestion but Mr. Gordon denies this.
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Michael’s role upon his retirement. A few days later, Plaintiff met with Michael
and Mr. Gordon to discuss the arrangement. There was no agreement that Fields
Motorcars would compensate Plaintiff while he was learning how to be a
wholesaler. According to Plaintiff, Mr. Gordon said “[a]s long as you try to learn
everything you can that your dad knows, you know, we’ll try to ease you in here.”
Michael did not split his compensation with Plaintiff or pay him directly, but did
provide Plaintiff and his children with a place to live and other financial support.
Towards the middle or end of January 2013, Plaintiff began working with
his father. On a typical day, Plaintiff and his father arrived at the Lakeland BMW
store together at around 8:30 or 9:00 in the morning. Alongside his father, Plaintiff
reviewed inventory, attended a daily used-car meeting with Mr. Gordon, and
would then go to lunch. In the afternoon, Plaintiff would meet with the used car
manager, who would have a list of cars for Plaintiff to post for sale. Plaintiff posted
cars on an internal website called TradeRev, an on-line auction for dealers who
subscribe to the website. In order to post on TradeRev, Plaintiff used an application
on his phone and had to enter a password that was provided to him by Lance
Lightsey—the sales manager. Plaintiff spent several hours each day posting
vehicles for wholesale on TradeRev. Additionally, Plaintiff also possibly discussed
cars that could be listed for retail sale and new inventory, as well as cars that
needed to be posted on eBay or Craigslist. Plaintiff researched cars that were for
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sale at auction. Plaintiff also purchased cars from other Fields Motorcars
dealerships, and brought them to the Lakeland BMW and Mercedes stores.
Plaintiff estimates that he signed at least sixty or seventy purchase agreements.
Plaintiff learned what the role of an automobile wholesaler entailed from his
father. These duties included traveling to different auctions and researching
vehicles that were for sale at auction. Plaintiff never attended auctions without his
father and rarely came to work at either of the Lakeland Mercedes or Lakeland
BMW stores without his father. Unrelated to wholesaling, Plaintiff also did some
retailing, including posting cars for sale on eBay and Craigslist. Other minor and
infrequent tasks Plaintiff might have done included washing a car, filling a car with
fuel, or picking a car up at an auction. Plaintiff estimates that he worked in excess
of 60 hours per week. In mid-May of 2014, Plaintiff stopped working at Fields
Motorcars.
II. STANDARD OF REVIEW
The determination of an individual’s employment status under the FLSA is a
question of law and reviewed de novo. Schumann v. Collier Anesthesia, P.A., 803
F.3d 1199, 1207 (11th Cir. 2015).
Decisions granting summary judgment under Fed. R. Civ. P. 56 are reviewed
de novo. Evans v. Stephens, 407 F.3d 1272, 1277 (11th Cir. 2005). Summary
judgment is appropriate only “if the pleadings, depositions, answers to
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interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue of material fact and that the court does not make
credibility determinations, but instead believes the evidence of the non-movant and
all justifiable inferences are drawn in his favor. Evans, 407 F.3d at 1277. And
“when conflicts arise between the facts evidenced by the parties, we credit the
nonmoving party’s version.” Id. at 1278.
III. THE FLSA2
In 1938, Congress enacted the FLSA “to aid the unprotected, unorganized
and lowest paid of the nation’s working population; that is, those employees who
lacked sufficient bargaining power to secure for themselves a minimum
subsistence wage.” Brooklyn Sav. Bank v. O’Neill, 324 U.S. 697, 707 n. 18 (1945).
However, the FLSA’s protections extend only to employees. Schumann, 803 F.3d
at 1207. The FLSA broadly defines an “employee” as “any individual employed by
an employer,” and an “employer” as “any person acting directly or indirectly in the
interest of an employer in relation to an employee.” 29 U.S.C. §§ 203(d) and
(e)(1). To “employ” is “to suffer or permit to work.” 29 U.S.C. § 203(g).
These broad definitions are intended to be “comprehensive enough” to
include “working relationships, which prior to this Act, were not deemed to fall
within an employer-employee category.” Rutherford Food, 331 U.S. 722, 729
2
The same legal standards that apply to Plaintiff’s FLSA claim also apply to the FMWA claim.
See Article X, Section 24, Fla. Const.
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(1947) (quoting Walling v. Portland Terminal Co., 330 U.S. 148, 150 (1947)).
“Without doubt the Act covers trainees, beginners, apprentices, or learners if they
are employed to work for an employer for compensation.” Portland Terminal, 330
U.S. at 151 (emphasis added).Thus, not all trainees are covered.
To determine whether an individual is an employee or an exempted trainee,
courts look to the totality of the circumstances. Layton v. DHL Exp. (USA), Inc.,
686 F.3d 1172, 1181 (11th Cir. 2012). As training programs and internships have
evolved over time, so have the relevant tests and considerations.
The seminal case analyzing whether trainees are employees under the FLSA
is Walling v. Portland Terminal Co. In Portland Terminal, individuals participated
in a week-long practical training course provided by the defendant railroad. 330
U.S. at 149. During training, an individual would first learn by observation and
then, under close supervision, be permitted to do actual work that did not displace
any of the regular employees’ work. Id. The Supreme Court concluded that,
because the railroads received no immediate advantage from the trainees’ work,
the trainees were not employees under the FLSA. Id. at 153. The Supreme Court
stated that it did not ignore “the argument that such a holding may open up a way
for evasion of the law. But there are neither findings nor charges here that these
arrangements were either conceived or carried out in such a way as to violate either
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the letter or the spirit of the minimum wage law.” Id. Thus, in Portland Terminal,
the Supreme Court focused on the immediate advantage to the employer.
More than sixty years later, this Court considered the employment status of
students enrolled in a program that required clinical placement as part of a course
of study. Schumann, 803 F.3d at 1199. In Schumann, plaintiffs were twenty-five
former student registered nurse anesthetists who attended a master’s degree
program that required both classroom and clinical training, with the goal of
becoming certified registered nurse anesthetists. Id. at 1202. As part of the clinical
training, the students were required to participate in a minimum of 550 clinical
cases in a variety of surgical procedures. Id.at 1203. Additionally, the students
completed other tasks during the clinical phase of training, such as cleaning
equipment, preparing forms, and stocking anesthesia carts. Id. at 1204. The
students alleged that they were employees entitled to FLSA protection because
defendant benefited financially by using their services instead of certified
registered nurse anesthetists whom they would have had to pay. Id. The district
court found that the students were not employees and granted summary judgment
in favor of defendant. Id. at 1202. On appeal, this Court stated that the best way to
discern the primary beneficiary in a relationship where both the intern and the
employer may benefit significantly is to “focus on the benefits to the student while
still considering whether the manner in which the employer implements the
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internship program takes unfair advantage of or is otherwise abusive towards the
student.” Id. at 1211.
In Schumann, the Court analyzed seven non-exhaustive considerations,
borrowed from the Second Circuit, that are helpful in determining the primary
beneficiary of modern internships. Id. at 1211–1212 (citing Glatt v. Fox
Searchlight Pictures, Inc., 791 F.3d 376 (2d Cir. 2015)).3 These factors are:
1. The extent to which the intern and the employer clearly understand that
there 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 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.
Id. (quoting Glatt, 791 F.3d at 384). The Schumann Court, upon finding the Glatt
analysis inconclusive, was unable to determine the primary beneficiary of that
3
The Schumann Court cited to a prior version of the Glatt opinion which was subsequently
amended and superseded.
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particular employment relationship. Id. at 1214. The Court vacated the district
court’s grant of summary judgment and remanded for further proceedings. Id. at
1215.
Thus, in Schumann, this Court focused on the primary beneficiary of the
internship relationship. Schumann also tells us that an individual’s employment
status may be bifurcated depending on either the task or hours worked beyond
what could be fairly expected. Id. at 1214. Importantly, the Court noted that
in applying the factors to ascertain the primary beneficiary of an
internship relationship, we caution that the proper resolution of a case
may not necessarily be an all-or-nothing determination. That is, we
can envision a scenario where a portion of the student’s efforts
constitute a bona fide internship that primarily benefits the student,
but the employer also takes unfair advantage of the student’s need to
complete the internship by making continuation of the internship
implicitly or explicitly contingent on the student’s performance of
tasks or his working of hours well beyond the bounds of what could
fairly be expected to be a part of the internship.
Id. at 1214–1215.
The factors and inquiries put forth in the Portland Terminal “immediate
advantage” test and the Schumann primary beneficiary test overlap substantially.
As this Court noted in Schumann, “the Glatt factors involve consideration of the
same or similar facts to those that the Supreme Court found important in Portland
Terminal and that the DOL Handbook guidance deemed relevant factors for
consideration.” Schumann, 803 F.3d at 1212.
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IV. DISCUSSION
During the fifteen months or so that Plaintiff worked at Fields Motorcars, he
was learning the business from his father, a wholesaler. Plaintiff was not enrolled
in a formal educational program, but he was undoubtedly afforded the opportunity
to learn a trade by observation and practical application.
Although the scenarios described in Portland Terminal and Schumann are
not precisely analogous, the Schumann approach provides the most applicable
guidance for the employment relationship at hand. Specifically, we consider the
non-exhaustive Glatt factors in assessing the primary beneficiary of the
relationship between Plaintiff and Fields Motorcars, and we also bear in mind the
import of the analysis set forth in Portland Terminal.
The first Glatt factor—expectation of compensation—does not support a
finding that Plaintiff was an employee. Plaintiff did not receive any compensation
for his work at Fields Motorcars—either from Fields Motorcars or his father.
Plaintiff understood that his father would earn commissions on the wholesaling
work that Plaintiff did. Plaintiff thought it was a good opportunity and hoped that it
might lead to a full-time position. Plaintiff did not expect to be compensated for
the work he was doing at Fields Motorcars. At best, Plaintiff expected future
employment but future employment and an expectation of compensation are not
one and the same.
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The district court correctly noted that Glatt factors two through four are
inapplicable here as they are tailored to training in the context of a formal
academic program and neither party contends that the training at issue was part of
such a program.
The fifth Glatt factor—duration—does not clearly cut one way or the other.
The relevant inquiry is whether the duration of the training was necessary to
accomplish the goals of the training. See Schumann, 803 F.3d at 1213. However,
the record is unclear as to what the goals of the training were, whether those goals
were met and, if so, when those goals were met. Despite these outstanding
threshold questions, certain facts bear noting.
At fifteen months, the training period seems fairly long and it is not evident
from the record that Plaintiff’s work was limited to the period in which the training
provided beneficial learning. The training period was also presumably indefinite as
it was tied to Michael’s retirement, which had no date certain. 4 Plaintiff testified
that Mr. Gordon told him that “there was a good chance [he] could take
[Michael’s] position when and if [Michael] retired.” This fact is inconclusive but
suggests that the duration of the training might have been excessive. Consideration
of Plaintiff’s work schedule is also relevant to this inquiry. See id. at 1213–14 (“As
4
We have no reason to know whether the training period would have continued but for
Michael’s termination. As previously noted, Plaintiff stopped coming to work in May of 2014—
which coincided with Michael’s termination.
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part of this consideration, the court should also evaluate the extent to which the
nature of the training requires the daily schedule that the intern must endure.”) It is
possible that Plaintiff’s alleged sixty-hour work week was excessive for purposes
of meeting the goals of his training.
A review of the sixth Glatt factor—displacement of work—suggests that
Plaintiff was a trainee at times and an employee at others. The contours of
Plaintiff’s workday were primarily defined by his father’s job. Michael testified
that his duties as wholesale manager included: purchasing inventory for the
Lakeland Mercedes and Lakeland BMW stores, helping the used car managers
certify vehicles, assisting the sales staff, pricing cars, and clearing out inventory
after sixty days. Plaintiff spent much of his time shadowing his father—which
would support finding him a trainee. Plaintiff also came to work with his father
each day and attended meetings and auctions with his father.
Plaintiff also did wholesaling work which his father did not do. This “extra”
wholesaling work—namely the TradeRev posting—was done at the direction of
others. Although categorized as wholesaling, Michael never posted vehicles to
TradeRev himself. Michael’s only involvement with the TradeRev postings was to
inform Mr. Lightsey that cars had been uploaded to the application. Plaintiff’s
TradeRev work displaced work that would have been done by Mr. Lightsey.
According to Plaintiff, much of his work (more than 50%) involved posting
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vehicles for sale on eBay, Craigslist, and TradeRev, and he testified that he spent
several hours a day on the TradeRev work. Also relevant, Plaintiff communicated
with and received direction from Tim Scheid, a Fields Motorcars employee,
regarding the TradeRev postings. Fields Motorcars hired Mr. Scheid to wholesale
vehicles for the various stores in Florida and represent them at auction. Mr. Scheid
had no authority over Michael’s employment at Fields, which also suggests that the
TradeRev work was beyond the scope of Plaintiff’s training.
Apart from wholesaling, Plaintiff also posted vehicles for sale on eBay and
Craigslist. These tasks are related to retail sales, and were also beyond the scope of
Michael’s work. There is also evidence that Mr. Gordon oversaw this work
because Plaintiff once received a verbal warning from Mr. Gordon for spending
too much money listing cars on eBay. Plaintiff testified that he spent significantly
more time on these tasks than “the wholesaling business.”5
We cannot properly weigh this factor without additional information. We
also note the possibility that Plaintiff’s work displaced Michael’s work as well.
The seventh Glatt factor—entitlement to a paid job at the end of the
training—does not support a finding that Plaintiff was an employee. Even
weighing the evidence in the light most favorable to Plaintiff, the non-moving
5
Plaintiff appears to draw a distinction between the online postings and the wholesaling work
done under Michael’s supervision. For purposes of weighing this factor, the distinction is not
critical but we note that the Parties agree that the TradeRev postings constitute wholesale-related
work.
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party, the record does not lead to the conclusion that Plaintiff and Fields Motorcars
both understood that Plaintiff would be entitled to a paid position at the conclusion
of the training.6
Of the four applicable factors, expectation of compensation and entitlement
to a paid job at the conclusion of the training weigh in favor of finding that
Plaintiff was a trainee. Because material issues of fact remain, we are unable to
properly weigh the factors relating to duration and displacement of work. With the
record before us, we cannot determine the primary beneficiary of this employment
relationship.
Given that the Glatt analysis proves inconclusive, we must look to the
totality of the circumstances when factors are disputed. Layton, 686 F.3d at 1181.
This is not a situation where a trainee infrequently performed ministerial tasks
during the course of a formalized training program. Plaintiff did wholesaling work
for his father, but he also did wholesaling work for Mr. Lightsey, as well as other
work unrelated to wholesaling. As noted above, material issues of fact remain
regarding how much time Plaintiff devoted to tasks that extended beyond his
training.
6
Plaintiff testified that there was merely a “good chance” that Plaintiff would be hired “when
and if [Michael] retired.” But Plaintiff also testified that he “expected an opportunity to work full
time in the future.” Fields Motorcars characterizes the expectation as a possibility of future
employment rather than a promise. The Court is not persuaded that Plaintiff and Fields
Motorcars both understood that Plaintiff would be entitled to a paid job at the conclusion of
training and any inference to the contrary would be based upon speculation.
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Without knowing how much time Plaintiff spent doing tasks unrelated to
wholesaling and how much time Plaintiff spent doing tasks that were related to
wholesaling but not under the purview of his father, we cannot properly assess
when Plaintiff was a trainee and when he was an employee. The facts here present
a situation where, as this Court noted in Schumann, the proper outcome may not be
an “all-or-nothing” determination. Material issues of fact remain and, based on the
record before us, we cannot conclude that Plaintiff was not an employee at times.
V. CONCLUSION
In light of the record and the relevant considerations, it appears that Plaintiff
might have been a trainee at times and an employee at others. We vacate the
district court’s entry of summary judgment for Fields Motorcars and remand for
further proceedings consistent with this opinion.7
VACATED AND REMANDED.
7
In light of the issues of fact that remain regarding Plaintiff’s employment status as to Fields
Motorcars and Plaintiff’s primary reliance upon informal guidance from the Department of
Labor which has since been withdrawn, the Court need not address Plaintiff’s argument that he
was an employee of both his father and Fields Motorcars by virtue of vertical joint employment.
See U.S. Dep’t of Labor, https://www.dol.gov/newsroom/releases/opa/opa20170607 (news
release June 7, 2017) (Last visited Oct. 2, 2017).
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