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Matias Guerra v. Teixeira

United States District Court, D. Maryland

August 8, 2018

SANTOS GABRIEL MATIAS GUERRA, Plaintiff,
v.
MARCO TEIXEIRA, d/b/a Twicegood Drapery Experts, Defendant.

          MEMORANDUM OPINION

          THEODORE D. CHUANG, UNITED STATES DISTRICT JUDGE.

         Plaintiff Santos Gabriel Matias Guerra has brought this federal and state wage law case against Defendant Marco Teixeira, alleging that Teixeira failed to pay him overtime wages, in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-19 (2012), the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl. §§ 3-401-31 (2016), and the Maryland Wage Payment and Collection Law (“MWPCL”), Md. Code Ann., Lab. & Empl. §§ 3-501-09. Guerra has also brought a claim under the Maryland Workplace Fraud Act (“MWFA”), Md. Code Ann., Lab. & Empl. §§ 3-901-20, alleging that Teixeira misclassified him as an independent contractor, and a claim under 26 U.S.C. § 7434, alleging that Teixeira unlawfully issued him an Internal Revenue Service (“IRS”) Form 1099 (“1099”), reflecting payments to a contractor, rather than an IRS Form W-2 (“W-2”), reflecting payments to an employee. Pending before the Court are Teixeira's Motion for Summary Judgment, ECF No. 60, and Guerra's Motion for Partial Summary Judgment, ECF No. 64. Having reviewed the briefs and submitted materials, the Court finds that no hearing is necessary. See D. Md. Local R. 105.6. For the following reasons, Teixeira's Motion is GRANTED IN PART and DENIED IN PART, and Guerra's Motion is DENIED.

         BACKGROUND

         The parties are before the Court on cross-motions for summary judgment but have reached little consensus on what transpired between them. They do agree on the following facts: Teixeira has operated Twicegood Drapery Experts as a sole proprietorship since 2004. Teixeira contracts with drapery and blinds manufacturers to install their products at commercial properties across the mid-Atlantic region. Guerra performed drapery installation work as part of a professional relationship with Teixeira from approximately June 2011 until September 14, 2015. Guerra signed a document entitled an “Independent Contractor Agreement” on March 26, 2012, with a listed effective date of July 21, 2011. Teixeira issued 1099s to Guerra for the years 2011 through 2015, and Guerra filed a federal income tax return in 2012 in which he stated that he was self-employed. The parties otherwise strongly disagree about Teixeira's business model and the role that Guerra played in it.

         At his deposition, Teixeira testified that he enters into contracts with manufacturers, who sell their draperies and blinds to commercial entities in a package with installation services. Teixeira agrees to coordinate the installation of the draperies and blinds, which he accomplishes by arranging for installers to hang the products in customers' properties. Teixeira claimed that the drapery installers who perform the work are independent contractors, that he has each of them sign an Independent Contractor Agreement, and that the contractors are free to turn down the jobs that he offers them. The Independent Contractor Agreement requires contractors to carry workers' compensation insurance. Teixeira testified, however, that none of his contractors have purchased their own such insurance, so he purchases it on behalf of the contractors and subtracts the cost from their pay. He also testified that the contractors perform the work without his instruction or direction, as he is rarely on the job sites, and that they must provide their own tools to perform the installation services. Teixeira does, however, provide some tools and equipment for use, but contractors who use them are charged a rental fee. Although contractors are expected to wear shirts provided by Teixeira which display the Twicegood logo, Teixeira claimed that this requirement applies only when the job site requires some form of identification, and that he does not force contractors to wear the shirts and does not even know if they do wear them.

         Teixeira further testified that he has a number of company vehicles and that contractors may arrange to meet at his house and ride together in a company vehicle to and from job sites, but he insisted that the contractors are not required to, and do not always, use these company vehicles to get to work locations. The contractors are instructed to swipe their Twicegood-issued identification cards on an app loaded onto their smart phones whenever they start or finish driving a company vehicle, as well as whenever they arrive at or leave a job site. Teixeira maintains, however, that the use of this electronic tracking system is merely recommended for liability purposes, that he cannot and does not enforce its use, and that he never uses the system to track the contractors' work hours, as he does not pay them by the hour but by the day or by the project. Finally, Teixeira stated that his contractors were advised to report back to him by email, by 8:00 a.m. the next day, on how much work they had completed the previous day, and to provide photographs of the work accomplished. He explained, however, that this practice was only a “guideline” for the contractors. Teixeira Dep. at 312-13, J.R. 79.

         Guerra painted a very different picture through his deposition testimony. A Guatemalan immigrant with limited English proficiency and a ninth-grade education, Guerra testified through an interpreter that he was a day laborer before he met Teixeira on a street corner outside a 7-Eleven in June 2011. According to Guerra, Teixeira promised to train him on drapery installation and offered him $12 an hour in pay. From June 2011 until September 2015, Guerra worked only for Teixeira. Although Teixeira had testified that Guerra sometimes turned down work, Guerra stated that he was not allowed to turn down Teixeira's installation projects and that occasionally when he wanted to take a sick day, Teixeira forced him to work.

         Guerra's testimony revealed that Teixeira maintained strict control over his workers. For example, Teixeira had to be on the phone with the workers when motorized blinds were being installed. Guerra had to comply with project deadlines set by Teixeira and provide proof of work completion by submitting photographs to Teixeira. Guerra believed that the electronic tracking system, by which he scanned his identification card through the required app on his smart phone, was also how Teixeira tracked Guerra's working hours in order to pay him. Guerra also testified that he almost always drove a Twicegood vehicle to get to the job site and had to wear the Twicegood uniform at the job site.

         Guerra admitted to signing the Independent Contractor Agreement but also stated that he asked Teixeira on multiple occasions to pay him overtime. Every time he broached the topic, Teixeira rebuffed him without explanation. Guerra also understood that he was earning an hourly wage as from time to time Teixeira would call him and tell him that his hourly rate was going up. Guerra never knew how much he would earn, however, because Teixeira would deduct seemingly random amounts from Guerra's paycheck and would not provide an explanation for those deductions when asked.

         There are also factual disputes arising from the documentary evidence. Based on posts on Guerra's Facebook profile page, which state that Guerra began working for a company known as LG Installation in 2010, Teixeira has argued that Guerra was operating that business while working for Twicegood and that Teixeira was therefore contracting with Guerra's business for installation services rather than with Guerra himself. Guerra, however, has testified that he referenced LG Installation in postings showing his work because he aspired to have his own company someday, that he did not form this business until 2017-after he had left Twicegood- and that he then referenced the 2010 date in an attempt to show how experienced he is in drapery installation. In any event, the Independent Contractor Agreement that Guerra signed makes no mention of LG Installation.

         Teixeira also notes that Guerra's income tax return for 2012-the only year that Guerra filed a tax return while he was working with Twicegood-states that Guerra was self-employed at the time. But Guerra testified that this tax form was completed by an accountant recommended by Teixeira and that Guerra did not understand what the tax return meant.

         Finally, the parties dispute whether Guerra ever worked more than 40 hours a week so as to merit overtime pay at all. Guerra received in discovery and provides as evidence the read-outs from the electronic tracking system that recorded him clocking in and out from December 30, 2012 until August 22, 2015. Based on the times that Guerra clocked in at the beginning of each day and the times that he clocked out for a final time at the end of the day, these records show that Guerra worked 4, 912 hours in the relevant time period, of which 2, 080 hours should have resulted in overtime pay. Teixeira, however, argues that this calculation includes driving time and unpaid breaks, and that there is no evidence that Guerra was working during all of the hours when he was clocked in.

         Guerra has asserted five claims against Teixeira. In Counts I through III, Guerra seeks unpaid overtime pay and enhanced damages under the FLSA, the MWHL, and the MWPCL. In Count IV, Guerra seeks damages under the MWFA for his misclassification as an independent contractor. In Count V, Guerra asserts a claim for damages under 26 U.S.C. § 7434, because he received 1099s rather than W-2s from Teixeira.

         DISCUSSION

         Teixeira argues that he is entitled to summary judgment on the grounds that (1) Guerra was an independent contractor, not an employee, and therefore is not entitled to overtime pay or damages under the FLSA, the MWHL, the MWPCL, or the MWFA; (2) Guerra has provided insufficient evidence that he worked more than 40 hours a week; (3) Guerra's FLSA, MWHL, and MWPCL claims are partially barred by the statute of limitations; (4) Guerra's MWFA claim is time-barred; and (5) Guerra has not asserted a plausible claim for a violation of 26 U.S.C. § 7434. Guerra seeks partial summary ...


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