March 23, 1993
Plaintiff asserts a claim under the Age Discrimination in Employment Act ("ADEA"), alleging that defendant terminated his employment because of his age. Defendant has moved for summary judgment on the ground that plaintiff was not an "employee" of defendant and thus is not entitled to the relief sought as a matter of law.
I. LEGAL STANDARD
A motion for summary judgment requires the court to consider whether the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Only facts that may affect the outcome of a case under applicable law are "material." "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id. at 247-48.
All reasonable inferences from the record must be drawn in favor of the non-movant. Id. at 255. Although the movant has the initial burden of demonstrating an absence of genuine issues of material fact, the non-movant must then establish the existence of each element on which it bears the burden of proof. See J.F. Feeser, Inc. v. Serv-A-Portion, 909 F.2d 1524, 1531 (3d Cir. 1990), cert. denied, 113 L. Ed. 2d 246, 111 S. Ct. 1313 (1991) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)).
The pertinent facts are uncontroverted or set forth in a light most favorable to plaintiff, and are as follow.
From 1972 until 1986, Mr. Cox worked as an "Independent Manufacturer's Representative" ("IMR") for Master Lock pursuant to a series of written agreements executed by Master Lock and Jimcox, Inc., an entity incorporated by plaintiff. Pursuant to the agreements, Mr. Cox was authorized to sell defendant's products in a territory encompassing northeastern Pennsylvania and portions of Philadelphia. The agreement in effect in August 1986 had been executed on March 1, 1985. Mr. Cox maintained and worked out of an office in Glenside and then Ambler, Pa. The defendant corporation manufactures locks and is headquartered in Milwaukee.
Either party had a right to terminate the IMR agreement by written notice to the other at any time and for any reason. The agreement provided that the sole basis of compensation was commissions on sales. Plaintiff assumed responsibility for payment of travel, insurance, office, equipment, supply and any other expenses which were incurred by him in the performance of the contract. Jimcox, Inc. had full responsibility for the withholding and payment of social security and income taxes for plaintiff. Jimcox was given discretion to conduct its business in "such manner as it sees fit."
Jimcox was not allowed to sell products manufactured by defendant's competitors or to sell at prices other than those set by Master Lock. Master Lock had the right to accept or reject any orders placed with plaintiff. Plaintiff was required to submit sales and marketing reports to defendant.
Mr. Cox was not required to report physically to defendant at any time but was required to maintain telephone contact. He set his own work hours and vacation times, and received no pension or insurance benefits from defendant. Mr. Cox received no sales training or performance reviews from Master Lock. On two occasions between May and August of 1986, he was visited by defendant's regional sales manager who accompanied and observed plaintiff while he made several sales calls. When asked at his deposition if it was true that his sales efforts were not supervised by Master Lock, plaintiff testified "That's correct." The agreement specified that Jimcox had "no authority to act on behalf of the Company as an agent or otherwise, and neither it nor its employees shall represent itself or themselves as agents or employees of the Company."
On August 26, 1986, Master Lock notified plaintiff in writing that it was terminating the IMR agreement as of
September 1, 1986.
Mr. Cox was 62 years-old at the time.
The ADEA protects only persons who are "employees." E.E.O.C. v. Zippo Mfg. Co., 713 F.2d 32, 33 (3d Cir. 1983). Whether a plaintiff is an "employee" for purposes of ADEA is a question of law to be determined by the court in the absence of disputed material underlying facts. See Golden v. A.P. Orleans, Inc., 681 F. Supp. 1100, 1102 n.2 (E.D. Pa. 1988).
The statute does not meaningfully define the term "employee." It simply provides that an "employee" is "an individual employed by any employer." See 29 U.S.C. § 630(f). The Third Circuit has adopted a so-called "hybrid test," combining the traditional test for common-law agency with modern economic realities, for determining whether a person is an employee or independent contractor for purposes of ADEA. Zippo, 713 F.2d at 38. More recently, however, the U.S. Supreme Court in Nationwide Mut. Ins. Co. v. Darden, 117 L. Ed. 2d 581, 112 S. Ct. 1344 (1992), an ERISA case, articulated a general rule of utilizing the common-law agency standard to define the meaning of "employee" in statutes in which Congress has not otherwise helpfully defined the term. Id. at 1348-49 (abandoning standard of United States v. Silk, 331 U.S. 704, 713, 91 L. Ed. 1757, 67 S. Ct. 1463 (1947) of construing "employee" "in the light of the mischief to be corrected and the end to be attained" from which hybrid test derives). See also Frankel v. Bally, Inc., 1993 WL 38541 (2d Cir. February 17, 1993)(Darden mandates application of common-law agency test in ADEA cases).
The court believes that Darden requires the application of the common-law agency test rather than a hybrid test in determining whether someone is an employee for purposes of ADEA. Under either test, however, the result in this case would be the same. Most of the twelve factors utilized by the Third Circuit in its hybrid test reflect common-law agency principles and both tests "place the greatest emphasis on the hiring party's right to control the manner and means by which the work is accomplished." Id. at *4-5; Zippo, 713 F.2d at 37. Applying either test, the plaintiff is not an employee for purposes of ADEA. Indeed, the facts of this case, construed most favorably to plaintiff, are quite similar to those in Zippo, in which the Third Circuit, applying the hybrid test, affirmed a grant of summary judgment on the ground that the plaintiffs were independent contractors.
The pertinent factors in the common-law agency test are:
1) the alleged employer's right to control the manner and means of the employment;