06-000343 Madelyn Victor vs. Ramada Plaza Resorts Status: Closed Recommended Order on Friday, August 11, 2006.

Summary: Petitioner proved that Respondent was a covered employer because of the economic realities of its employment relationship with its sales managers, whom it tried to treat as independent contractors.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MADELYN VICTOR, )

)

Petitioner, )

)

vs. ) Case No. 06 - 0343

)

RAMADA PLAZA RESORTS, )

)

Respondent. )

______________________________)

PARTIAL RECOMMENDED ORDER

Robert E. M eale, Administrative Law Judge of the Division

of Administrative Hearings conducted the final hearing on

June 12, 2006, by videoconference in Tallahassee, Florida. The

parties, attorneys for the parties, witnesses, and court

reporter appeared in Ft. Laude rdale, Florida.

APPEARANCES

For Petitioner: John de Leon

Law Offices of Chavez & de Leon, P.A.

5975 Sunset Drive, No. 605

South Miami, Florida 33143

For Respondent: Richard W. Epstein

Myrna L. Maysonet

Greenspoon Marder, P.A.

201 East Pine Street, Suite 500

Orlando, Florida 32801

STATEMENT OF THE ISSUE

The issue is whether Petitioner has proved th at Respondent

employed the requisite number of employees to establish

jurisdiction in the Florida Commission of Human Relations over

an alleged claim of employment discrimination against

Respondent.

PRELIMINARY STATEMENT

By Employment Charge of Discrimina tion dated September 6,

2005, Petitioner alleged that "Ramada Plaza Resorts/South FL

Business Ventures" discriminated against Petitioner in

employment on the basis of sex, race, and national origin. The

charge cites several instances of discrimination and adds that

the employer retaliated against her after she reported the

incidents to her supervisor.

By Determination: No Jurisdiction (not employer) dated

December 16, 2005, the Florida Commission on Human Relations

(Commission) determined that Ramada Pla za Resorts did not employ

15 or more persons for each working day in each of 20 or more

calendar weeks in the current or preceding calendar year, nor

was Ramada Plaza Resorts an agent of a person employing such

persons for such period of time. Accordingly , on December 16,

2005, the Clerk of the Commission issued a Notice of

Determination: No Jurisdiction.

By Petition for Relief dated January 19, 2006, Petitioner

alleged that Ramada Plaza Resorts used several companies to

circumvent the jurisdictional lim itations of the Florida Civil

Rights Act of 1992 (Act). The Petition for Relief incorporates

the Charge of Discrimination and refers to the employer as

"Respondents, including Respondent Ramada Plaza Resorts." The

Petition for Relief alleges that Ramada Plaza Resorts was

Petitioner's employer. In the alternative, the Petition for

Relief alleges that Ramada Plaza Resorts was Petitioner's "joint

employer" "and/or" engaged in a "common enterprise" with "SFBV"

"and/or" they were "integrated employers."

The Petition for Relief claims that Ramada Plaza Resorts

was Petitioner's employer because the employment advertisement

to which Petitioner responded named it as the employer; as

instructed, Petitioner answered the phone at work, "Thank you

for calling Ramada Plaza Resorts"; all letterhead at the office

at which Petitioner worked stated "Ramada Plaza Resorts"; and

all management and supervision were provided by employees of

Ramada Plaza Resorts.

In response to the jurisdictional basis for the Notice of

Determi nation: No Jurisdiction, the Petition for Relief is

limited to allegations of employer status, except to the extent

that it incorporates the allegations of the Charge of

Discrimination.

At the hearing, the Administrative Law Judge bifurcated the

issues i n the case so that the hearing on June 12, 2006, would

address only the issue of whether Respondent was an employer

under the Act, which raised specific issues of the identity of

the employer(s), the number of employees of the employer(s), and

the identity of the legal entity or entities serving as the

employer(s).

Respondent contended that, if the Administrative Law Judge

determined that the Commission had jurisdiction over the claims

of discrimination, he should not proceed directly to conduct an

evide ntiary hearing on those claims, but should instead

relinquish jurisdiction to the Commission for the purpose of

conducting an investigation, making a determination on the

substantive claims of jurisdiction, and transmitting the

petition to the Division of Administrative Hearings. Except for

a reference to the Petition for Relief, the Transmittal of

Petition, which is dated January 24, 2006, does not otherwise

identify the issues that the Commission wants the Administrative

Law Judge to address. However, a fter re - examining the charging

documents and Notice of Determination: No Jurisdiction, the

Administrative Law Judge is granting Respondent's request not to

proceed to an evidentiary hearing on the substantive issues, but

instead to relinquish jurisdiction to the Commission for

consideration of this Partial Recommended Order.

Relinquishing jurisdiction to the Commission with a Partial

Recommended Order determining that Respondent is a covered

employer will permit the Commission to conduct an investigatio n

on the substantive allegations -- something that the Commission

evidently has not yet done. This procedure will also permit the

Commission to rule on the Administrative Law Judge's

jurisdictional conclusions of law prior to requiring the parties

to presen t evidence on the substantive claims of discrimination.

A determination that Respondent is an employer includes

conclusions of law within the substantive jurisdiction of the

Commission, not the Administrative Law Judge, so the Commission

will have the fin al word, as between the Commission and

Administrative Law Judge, concerning such conclusions, which

could effectively result in a determination that the Commission

lacks jurisdiction.

At the hearing, Petitioner called three witnesses and

offered into evidence two exhibits: Petitioner Exhibits 1

and 2. Respondent called one witness and offered into evidence

three exhibits: Respondent Exhibits 1 - 3. All exhibits were

admitted.

The court reporter filed the transcript on June 19, 2006.

Petitioner an d South Florida Business Ventures, Inc., submitted

proposed recommended orders on June 29, 2006.

FINDINGS OF FACT

1. South Florida Business Ventures, Inc. (SFBV) was

incorporated about ten years ago. For the past five years, SFBV

has provided telemarketing services for "Ramada Plaza Resorts."

These services provide substantially all of the revenue of SFBV.

2. For this case, "Ramada Plaza Resorts" is SFBV. A

corporation known as "Ramada Plaza Resorts

Orlando/Ft. Lauderdale Vacations, Inc." (RPR, Inc.) is in the

business of selling timeshare units. The tradename "Ramada

Plaza Resorts" enjoys wider use and not merely by RPR, Inc. or

the legal owner of the tradename, if different from RPR, Inc.

However, for this case, "Ramada Plaza Resorts" does not refer to

RPR, Inc., or the owner of the tradename.

3. Petitioner earlier filed a charge of discrimination

directly against SFBV, which the Commission has dismissed.

Petitioner did not continue to prosecute that case after its

dismissal, but has instead prosecuted t his case against "Ramada

Plaza Resorts." Regardless of the wisdom of abandoning the case

against the proper legal entity and proceeding against a

fictitious name, Petitioner's present claim, as a matter of

fact, is against SFBV, doing business as "Ramada Plaza Resorts"

or as sales agent of RPR, Inc. To avoid confusion, this Partial

Recommended Order shall refer to Respondent simply as SFBV, and

not as SFBV doing business as Ramada Plaza Resorts or as agent

of RPR, Inc.

4. During 2003 and 2004, RPR, Inc., entered into contracts

with several telemarketers, not only SFBV. The role of SFBV was

to sell to the public three - or five - night "vacations" to

Orlando, Ft. Lauderdale, or Las Vegas -- essentially providing

potential timeshare purchasers to RPR, Inc., whi ch would promote

its timeshare units to the "vacationers" during their

"vacations." At the end of each telemarketing call that

resulted in a sale by SFBV, the telemarketers transferred the

call to a call center operated in Ft. Lauderdale by RPR, Inc.,

whe re a person employed by RPR, Inc., confirmed the sale and the

accuracy of the material representations made by the

telemarketer.

5. In June 2004, Petitioner saw a newspaper advertisement

seeking a receptionist. The advertisement states in part:

"Ramada Pl aza Resorts Industry leader hiring . . .." Petitioner

telephoned the number listed, which belonged to SFBV, and was

given an interview at an office in Boynton Beach, which was the

headquarters of SFBV. Nothing in the advertisement mentioned

SFBV.

6. The o ffice building to which Petitioner was directed

bore a sign, "Ramada Plaza Resorts." Entering the office, which

bore no sign indicating that it was the office of SFBV,

Petitioner asked for Kelly Mincey, as she had been instructed to

do by the person with whom she had spoken on the telephone.

SFBV employed Ms. Mincey as its administrator. Among her duties

for SFBV was human relations, including the hiring of

secretaries. Ms. Mincey has worked for SFBV for four years.

7. During the interview, Ms. Mincey explained to

Petitioner that the receptionist was required to answer

telephone calls, perform data entry, and fax memos to the

Ft. Lauderdale office. Specifically, Ms. Mincey directed

Petitioner to answer the telephone, "Ramada Plaza Resorts. How

may I d irect your call?" In entering data, Petitioner inputted

the identification number for each buyer. In faxing memos to

Ft. Lauderdale, Petitioner's testimony did not establish whether

these documents went to SFBV's Ft. Lauderdale office or RPR,

Inc., whose main office was in Ft. Lauderdale.

8. Ms. Mincey gave Petitioner an employment application.

It was a form that did not bear the name of the employer. After

examining the completed application and performing the job

interview, Ms. Mincey offered the job t o Petitioner, who

accepted it and, shortly after the interview, began working at

the Boynton Beach office of SFBV.

9. SFBV employed Petitioner. SFBV issued her payroll

checks, which bore the name of SFBV. Petitioner's W - 2 form bore

the name of SFBV as he r employer. Any claim of Petitioner that

she was employed by some other entity alone or in conjunction

with SFBV is unsupported by the evidence. The evidence supports

the subordinate finding of a sales agency relationship between

SFBV and RPR, Inc., so a s to support the ultimate finding that

"Ramada Plaza Resorts," as used in this case to identify

Respondent, means SFBV. However, the evidence is not sufficient

to find an employment agency relationship for the purpose of

finding that Respondent was employ ed by RPR, Inc., or the owner

of the tradename, or co - employed by RPR, Inc., or the owner of

the tradename. In any event, such evidence would be irrelevant

anyway because of the absence of evidence as to the number of

employees, during 2003 or 2004, of RP R, Inc., or the owner of

the tradename.

10. At various times, SFBV operated offices in Boynton

Beach, Delray Beach, West Palm Beach, and Ft. Lauderdale. The

Ft. Lauderdale office, which was actually in Oakland Park, was

open from September through December 20 04.

11. SFBV concedes that it employed Warren Izard as

president, Kirk Izard as vice - president, Gabriel Izard as an

operations employee, Ms. Mincey, and eight receptionists at the

four offices operated during 2004. SFBV thus employed these 12

employees in 200 4.

12. The jurisdictional dispute centers around the proper

classification of two other categories of workers: the persons

making the telephone calls and their sales managers. SFBV

contends that these persons were independent contractors of

SFBV, and Petiti oner contends that they were employees of SFBV.

A third classifica tion of worker -- general manager was restricted

to one person, Enrico Merada, so, even if he had been an

employee, the total number of employees would still have been

less than the jurisdict ionally required 15 -- thus, his status is

irrelevant.

13. During 2003 and 2004, 25 - 100 telemarketers worked at

SFBV offices at any given time. However, it is unnecessary to

determine whether the telemarketers were employees of SFBV.

SFBV employed more than tw o sales managers during 2004 so that,

if they were determined to have been employees, the

jurisdictional prerequisite of 15 employees over 20 calendar

weeks would have been satisfied. The evidentiary basis for

characterizing the sales managers as employee s is largely

undisputed while the evidentiary basis for characterizing the

telemarketers as employees would require discrediting the

testimony of SFBV's witnesses, who claimed that the

telemarketers were not required to work specific shifts.

14. Two sales ma nagers worked at each of the four offices

during 2004. At times during 2004, a total of eight sales

managers worked at SFBV's offices. There was little turnover

among sales managers. Mr. Merada supervised these sales

managers, who, in turn, supervised t he telemarketers.

Interestingly, Ms. Mincey twice characterized the sales managers

as employees of SBFV, distinguishing them from the

telemarketers, whom she described as independent contractors.

15. SFBV employed the sales managers and receptionists in

pairs because it needed one person in each position at each

office for each of the two shifts that it ran daily: a day

shift and a night shift. SFBV strictly controlled the work of

the sales managers, evidently in an effort to avoid

misrepresentations by the telemarketers to purchasers. As

required by SFBV, sales managers provided scripts to

telemarketers, who were required to stick to the scripts and

prohibited from certain acts, such as uttering profanities. As

required by SFBV, sales managers provided tel emarketers with

rebuttals for certain responses from potential buyers and

guidelines for what could be said. As required by SFBV, sales

managers informed telemarketers that they could make no personal

calls and could not sell for other companies while tel emarketing

for SFBV. To ensure that telemarketers complied with these

rules, as required by SFBV, sales managers randomly listened in

on calls made by telemarketers. As required by SFBV, sales

managers helped telemarketers with the paperwork following sa les

and sometimes telemarketed directly to potential buyers.

16. SFBV paid the sales managers weekly with SFBV checks

and required that they perform their job duties, which included

hiring and firing telemarketers, at the SFBV office to which

they were assigne d and during the shift to which they were

assigned. SFBV paid the sales managers based on total sales, so

that each sales manager made the same amount during the same pay

period, provided they were scheduled for, and actually worked,

the same number of sh ifts.

17. Even if SFBV had operated only three offices, thus

with six receptionists and six sales managers, SFBV would have

employed 16 employees, if the sales managers were employees.

Although at times SFBV may have had only one sales manager at an

office, the evidence is clear that, during substantial parts of

2004, including at least 20 weeks, SFBV employed at least six

sales managers and six receptionists, and, for the last 17 weeks

of 2004, it employed eight sales managers and eight

receptionists.

18. In its proposed recommended order, SFBV states: "SFBV

sometimes will monitor a Direct Seller's selling pitch . . .."

This statement implies an employer - employee relationship between

SFBV and the person monitoring the calls of telemarketers, and

these employee - monitors were the sales managers. A few lines

later, SFBV baldly asserts that sales managers were also "Direct

Sellers, not employees."

19. But the contrasts that SFBV draws between sales

managers and telemarketers suggest otherwise. Accepting

strictly for the sake of discussion SFBV's characterization of

its telemarketers, they were not required to work specific

shifts, but sales managers had specific shifts for which they

had to be in the office to monitor the calls of, and help, the

telemarketers.

20. Tele marketers were paid strictly on the basis of what

they sold, but sales managers were paid on the basis of the

sales during the shifts that they worked. This means that the

compensation of sales managers was tied directly to the time

that they were in the office working, as opposed to the

compensation of the telemarketers, whose pay was not so time -

dependent. The effect of this difference is obvious upon

consideration that the sales managers were paid equally, if they

worked an equal number of shifts, but the telemarketers were

paid based on sales, not at all on the amount of time they spend

working.

21. Also, there was much churning of telemarketers, unlike

the situation with sales managers. And the sales managers had a

stricter dress code than did the tele marketers.

22. For both sales managers and telemarketers, SFBV

supplied the telephone and office equipment, including computers

to automatically dial prospective purchasers. All of this

equipment was necessary for the work to be performed. For both

sales man agers and telemarketers, SFBV provided the names and

telephone numbers of potential buyers to be called -- also

crucially important to the success of the telemarketing effort.

The only thing that some telemarketers routinely provided were

telephone headsets , which were not necessary to perform their

duties.

23. In general, SFBV did not provide fringe benefits to

sales managers. But the telemarketing work that they supervised

and occasionally performed provided substantially all of the

revenue of SFBV. Also, SF BV tightly governed the means by which

the sales managers performed their duties. SFBV structured its

contract and withholding and reporting practices so as to

maximize its prospects for regulatory characterizations of its

relationships with telemarketers and sales managers as those of

employer and independent contractor, not employer and employee.

However, at least as to the sales managers in the context of the

jurisdictional requirements of the Act, these practices did not

reflect the economic realities of the employer - employee

relationship that actually existed between SFBV and its sales

managers.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction over the subject matter. §§ 120.569, 120.57(1),

and 760.11(7), Fla. Stat. (2005 ).

25. Section 760.10(1)(a), Florida Statutes, prohibits

discrimination on the basis of race, sex, or national origin by

an "employer” against any individual. Section 760.02(7),

Florida Statutes, defines "employer" as "any person employing 15

or more employee s for each working day in each of 20 or more

calendar weeks in the current or preceding calendar year, and

any agent of such a person." The key question in determining

the jurisdictional issue in this case is whether the sales

managers were "employees" of SFBV; if so, the Commission has

jurisdiction.

26. In determining whether an individual is an employee

under Title VII of the Civil Rights Act of 1964, the Eleventh

Circuit Court of Appeals uses an "economic realities" test. As

explained in Cuddeback v. Flori da Board of Education , 381 F.3d

1230 (11th Cir. 2004):

the term "employee" is "construed in light

of general common law concepts" and "should

take into account the economic realities of

the situation," "viewed in light of the

common law principles of agenc y and the

right of the employer to control the

employee." [ Cobb v. Sun Papers, Inc. , 673

F.2d 337, 340 - 41 (11th Cir. 1982).]

Specifically, the court should consider

factors such as whether the defendant

directed the plaintiff's work and provided

or paid for the materials used in the

plaintiff's work. Id. at 341.

381 F.3d at 1234.

27. In this case, Petitioner has proved that, based on the

economic realities of the relationship between SFBV and its

sales managers, the sales managers were employees, not

ind ependent contractors. SFBV supplied all customer leads, all

office and computer equipment, and all scripts that, in turn,

the sales managers supplied to the telemarketers under their

supervision. The sales managers trained and monitored the

telemarketers , who performed the core business of SFBV. SFBV

required the sales managers to be in the office at specified

shifts and compensated all of them equally, if they worked an

equal number of shifts.

28. Because the sales managers were employees, SFBV

employed at least 15 persons for each working day for at least

20 calendar weeks during 2004.

29. Petitioner has failed to prove that any other entity

operated as a joint employer, common enterprise, or integrated

employer with SFBV, or as the employment principal of SFBV , so

that the employees of such other entity could be counted with

the employees of SFBV to satisfy the jurisdictional requirements

set forth above.

RECOMMENDATION

It is

RECOMMENDED that the Florida Commission on Human Relations

enter a Partial Final Ord er determining that it has jurisdiction

over the claims of Petitioner against South Florida Business

Ventures, Inc., doing business as Ramada Plaza Resorts or as

sales agent of Ramada Plaza Resorts Orlando/Ft. Lauderdale

Vacations, Inc. , and take such addi tional action on the claims

as is required by law.

DONE AND ENTERED this 1 1 th day of August, 2006, in

Tallahassee, Leon County, Florida.

S

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 1 th day of August, 2006.

COPIES FURNISHED:

Cecil Howard, General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Flori da 32301

John de Leon

Law Offices of Chavez & de Leon, P.A.

5975 Sunset Drive, No. 605

South Miami, Florida 33143

Richard W. Epstein

Myrna L. Maysonet

Greenspoon Marder, P.A.

201 East Pine Street, Suite 500

Orlando, Florida 32801

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order must be filed with the agency that

will issue the final order in this case.