Co-authored by Robert S. Whitman and Howard M. Wexler

Although the U.S. Open came to an end earlier this month in Flushing Meadows, New York, match point remained to be played for the tournament’s umpires.  In Meyer v. United States Tennis Association, Judge Andrew Carter of the Southern District of New York shot a cross-court winner for the USTA, holding that the umpires were properly classified as independent contractors, not employees, and granting summary judgment on their wage claims under the FLSA and NY Labor Law.

The plaintiffs in Meyer were umpires who worked at the U.S. Open pursuant to independent contractor agreements prepared by the USTA.  Each umpire received a fixed daily rate (between $115 and $200 per day) as well as reimbursement for some travel, meal and equipment costs.  They filed a putative class/collective action alleging that they should have been classified as employees, and thus were entitled to overtime pay.

The court conditionally certified the FLSA claim in April 2013.  The parties then took part in a dizzying volley that included “extensive class certification and merits discovery” and culminated in dueling motions for summary judgment.

The Court applied the “economic reality” test for whether the umpires were employees or independent contractors under the FLSA.  The factors were:  (1) the degree of control exercise by the employer; (2) the workers’ opportunity for profit or loss; (3) the degree of skill and independent initiative required to perform the work; (4) the permanence or duration of the working relationship; and (5) the extent to which the work is an integral part of the employer’s business.  Although no one factor alone would “break serve,” Judge Carter held that the factors overall weighed in favor of independent contractor status.  Effectively declaring “Advantage: USTA,” Judge Carter noted that the umpires:

• Had full discretion and authority under the laws of the game of tennis to call the game as they saw fit, including the authority to penalize a player for a rule violation;
• Decided whether to officiate at the U.S. Open in a given year, and if so, how many days to work;
• Required a high degree of skill and independent initiative, including at least some level of certification; and
• Could work for other tennis associations throughout the year.

Although the New York Labor Law test required Judge Carter to assess several additional factors, he reached the same conclusion under that statute as well:  that the umpires were properly classified as independent contractors.

The case should be an object lesson for employers:  the mere fact that a worker is labeled an “independent contractor” and willing to work as such (without receiving minimum wage or an overtime premium) is not by itself enough to remove the worker from the coverage of wage-hour laws.  This was by no means a straight-sets victory for the USTA given the litigation costs it incurred and risks it faced in the event Judge Carter ruled that it doubled faulted on its classification decision.  Careful compliance for employers in classifying workers as independent contractors rather than employees, with an eye toward eliminating any unforced errors, remains as important as ever.