09-000714 Joseph Deleo vs. Properties Of The Villages, Inc. Status: Closed Recommended Order on Thursday, July 16, 2009.

Summary: Petitioner filed a complaint of discrimination. The Florida Commission on Human Relations found that he was an independent contractor and not subject to Chapter 760, Florida Statutes. The facts reveal that he was an employee, and entitled to Chapter 760.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOSEPH DELEO, )

)

Petitioner, )

)

vs. ) Case No. 09-0714

)

PROPERTIES OF THE VILLAGES, )

INC., )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for final hearing before Harry L.

Hooper, Administrative Law Judge with the Division of

Administrative Hearings, on May 14, 2009, in The Villages,

Florida.

APPEARANCES

For Petitioner: Carla D. Franklin, Esquire

Carla D. Franklin, P.A.

204 West University Avenue, Suite 3

Gainesville, Florida 32601

For Respondent: Stephen W. Johnson, Esquire

McLin & Burnsed

Post Office Box 491357

Leesburg, Florida 34749-1357

STATEMENT OF THE ISSUE

The issue is whether Petitioner is entitled to seek relief

pursuant to the Florida Civil Rights Act of 1992 under the

jurisdiction of the Florida Commission on Human Rights.

PRELIMINARY STATEMENT

Petitioner, Joseph DeLeo (Mr. DeLeo), during all times

pertinent, sold real estate pursuant to the business model of

Respondent Property of The Villages, Inc. (POV). Subsequent to

Mr. DeLeo's claimed discharge, he filed an Employment Complaint

of Discrimination with the Florida Commission on Human Relations

(Commission). He claimed his discharge was based on age and

disability discrimination. Further, he complained that having

made an allegation of discrimination, he suffered discharge in

retaliation.

On January 8, 2009, the Commission made a determination

that it lacked jurisdiction to act because POV was not

Mr. DeLeo's employer, but rather had an independent contractor

relationship with him, and issued a Notice of Determination: No

Jurisdiction. On February 9, 2009, Mr. DeLeo timely filed a

Petition for Relief. The Petition for Relief was transmitted to

the Division of Administrative Hearings on February 10, 2009.

At the May 14, 2009, hearing, only the question of

jurisdiction was considered. This is because a recommended

order finding jurisdiction, if adopted by the Commission, would

trigger the investigation required by Subsection 760.11(3),

Florida Statutes (2008). Or, in the alternative, a recommended

order finding no jurisdiction, if adopted by the Commission,

would end the case.

As will be addressed in more detail below, the party

asserting the Commission's jurisdiction, Mr. DeLeo, has the

burden of proving it. If Mr. DeLeo was an employee of POV, the

Commission has jurisdiction. If Mr. DeLeo was an independent

contractor, the Commission does not have jurisdiction.

At the hearing, Petitioner presented the testimony of two

witnesses and offered four exhibits into evidence. Respondent

presented the testimony of two witnesses and offered six

exhibits into evidence.

A Transcript was filed on June 19, 2009. After the

hearing, Petitioner and Respondent filed their Proposed Findings

of Fact and Conclusions of Law on June 29, 2009.

References to statutes are to Florida Statutes (2008)

unless otherwise noted.

FINDINGS OF FACT

1. Mr. DeLeo is a former Miami homicide detective, who

received a disability retirement. He has held a real estate

salesman license and real estate broker's license since about

1986. Both licenses were issued by the State of Florida.

Official recognition was taken that he is over 40 years of age.

2. POV is the sales arm of a venture known as The Villages

of Lake Sumter (The Villages). The Villages is a large

community located south of Ocala, Florida. It is a development

that caters to persons 55 years of age and older and provides

recreational opportunities, including golf. Sales of new homes

in The Villages are handled exclusively by POV.

3. The typical real estate broker-salesperson relationship

is clearly one of principal and independent contractor, and

cases in Florida and elsewhere describe it thus. However, The

Villages mass markets its concept and its properties,

nationally, and as a result, POV's relationship with its

salespersons is not typical.

4. In the course of marketing its real estate, The

Villages advertises nationally. This marketing effort attracts

large numbers of potential buyers to visit. A guest

coordinator, who is an employee of The Villages, books visits

for potential buyers. When guests arrive they are greeted by

the guest coordinator who connects them with a sales

representative, like Mr. DeLeo.

5. Mr. DeLeo worked in the real estate business for about

21 years prior to becoming involved with POV. He entered into a

contract with POV on September 30, 2004. The contract is

entitled, "Independent Contractor Agreement" (Agreement). The

Agreement was drafted by POV, and Mr. DeLeo had no opportunity

to negotiate its terms. As will be discussed below, it is the

actual relationship between the parties that controls the

outcome of this case, not the title of the Agreement.

6. The Agreement provided that either party could

terminate the contract at will. Mr. DeLeo learned that he had

been terminated on April 7, 2008.

7. Mr. DeLeo attended an extensive training program

provided by POV. He completed the training in February 2001 and

thereafter began selling property pursuant to the Agreement.

8. According to the Agreement, Mr. DeLeo could only sell

houses marketed in The Villages. He was specifically prohibited

from selling property not located in The Villages. He sold new

properties owned by The Villages and property marketed by

individuals in The Villages, in accordance with the Agreement.

In a typical broker and salesperson relationship, the

salesperson is not limited to selling in a geographically

defined area.

9. The Agreement had an attachment to it that was entitled

Commission Structure. This set forth the details of how

Mr. DeLeo was to receive compensation. Mr. DeLeo was satisfied

with the commission arrangement. He received no salary. If a

dispute arose over splitting a commission, the dispute was

resolved by POV. Typically, disputes between real estate sales

persons are resolved by committees of realtors acting under the

auspices of a multiple listing service.

10. POV provided Mr. DeLeo, as well as all salespersons,

with an office, telephones, computer support, and all other

items needed to complete a real estate sale except for an

automobile which Mr. DeLeo provided. The computer provided a

shared database which maintained information about potential

buyers, and the information in the database was reviewed by

management. Mr. DeLeo was required to provide liability

insurance, business cards, certain signs, lock boxes, and on

occasion, to pay the salaries of personal assistants, who are

provided by POV.

11. Paragraph 4 of the Agreement recites that "The parties

agree that the Sales Representative is an independent contractor

and not an agent, joint venturer, or employee of POV or The

Villages, and nothing in this Agreement shall be construed to be

inconsistent with this relationship or status. Hours devoted by

the Sales Representative is [sic] entirely within the Sales

Representative's control, and POV will rely upon the Sales

Representative to work those hours that the Sales Representative

deems necessary to perform the job in a competent and

professional manner."

12. Mr. DeLeo testified that he was required to work a set

schedule and that he was required to obtain permission from a

"team leader" prior to taking vacation time. Vacation time was

limited. The team leader evaluated the performance of

salespersons and provided feedback on ways to improve

performance. The team leader was a salaried employee of POV.

This sort of supervision is not typical in the real estate

business.

13. POV asserted that they did not exercise control over

their salespersons with regard to working hours. However, it is

unlikely that The Villages would import a large group of

potential buyers and merely hope that sufficient staff would be

available to make sales. Clearly, POV required salespersons to

be available when needed by POV. Accordingly, the weight of the

evidence proves that Mr. DeLeo's work schedule was controlled by

POV. Therefore, the testimony of Mr. DeLeo is deemed accurate.

14. Supervision of the team leader included accompanying

the salespersons to meetings with clients and listening in on

telephone contacts to critique the salesperson's performance.

The close supervision is different from the usual relationships

found in the real estate business. It is more controlling than

that found in independent contractor relationships.

15. In late 2007, POV introduced a new sales program

called ValueMatch. Mr. DeLeo was required to participate in the

ValueMatch sales training and utilize the ValueMatch sales

approach. Mr. DeLeo was required to document his compliance

with the ValueMatch sales program via a worksheet at every

client contact. This requirement demonstrates that POV

maintained close control over its sales and marketing

representatives.

16. POV provided an information packet to Mr. DeLeo and

other sales and marketing representatives in 2006 and again in

2008.

17. The 2006 version listed numerous "Essential duties and

responsibilities." It includes a duty to be "Present and

prepared for work when noted by various rotation options and/or

customer needs" and "Attend training opportunities, team huddles

and meetings."

18. The 2008 version includes, "Present and prepared for

work when noted by various appointments to include Open Homes,

New Home showcase, 1st and 2nd Step CMA's, Resident Touches,

Rotation, Pre Owned Home Floor Time, and any other customer

opportunities. All appointments are expected to be logged in

the customer AS400 account allowing various members of the

support staff to assist in the process."

19. The information packets present these requirements as

imperatives and thus exhibit an exercise of close control over

sales and marketing representatives.

20. The 2006 version, under "Some Recommendations," sets

out a detailed dress code. The 2008 version merely requires

maintaining a professional appearance. It is clear that these

requirements are imperative in nature thus reveal the exercise

of close control over sales and marketing representatives.

21. Both information packets address rotation (or work)

schedules that are consistent with maintaining close control

over the work schedules of sales and marketing representatives.

22. Upon consideration of all of the evidence, and despite

the title of the contract to the contrary, it is clear that POV

maintained tight controls over the activities of their sales and

marketing representatives, and, of course, over Mr. DeLeo.

CONCLUSIONS OF LAW

23. The Division of Administrative Hearings has

jurisdiction over the subject matter of and the parties to this

proceeding. §§ 120.569, 120.57(1), and 760.11, Fla. Stat.

24. Mr. DeLeo is an aggrieved person within the meaning of

Subsection 760.02(10), Florida Statutes. Mr. DeLeo has the

burden of proof. See Balino v. Department of Health &

Rehabilitative Services , 348 So. 2d 349 (Fla. 1st DCA 1977).

The standard of proof is by a preponderance of the evidence.

§ 120.57(1)(j), Fla. Stat.

25. The Florida Civil Rights Act (Act), Section 760.01 et

seq. , Florida Statutes, is patterned after Title VII of the

Federal Civil Rights Act, 42 U. S. C. Section 2000e, et seq.

Federal case law interpreting Title VII and similar federal

legislation is applicable to cases arising under the Florida

Act. See Harper v. Blockbuster Entm't Corp. , 139 F.3d 1385,

1387 (11th Cir. 1998). The Act provides protection for

employees. It does not protect independent contractors.

26. In Cobb v. Sun Papers, Inc. , 673 F.2d 337, 340-41

(11th Cir. 1982), it was asserted by plaintiff/appellant that

some wider net should be cast in order to find the existence of

an employer-employee in civil rights cases. However, the court

rejected that theory and held that courts should use a common

law analysis in deciding the question of whether plaintiff was

an employee or an independent contractor.

27. The court in Cobb adopted the test explained in

Spirides v. Reinhardt , 613 F.2d 826 (D.C. Cir. 1979), when it

articulated a test requiring an analysis of the economic

realities of the work relationship and stated:

This test calls for application of general

principles of the law of agency to

undisputed or established facts.

Consideration of all of the circumstances

surrounding the work relationship is

essential, and no one factor is

determinative. Nevertheless, the extent of

the employer's right to control the "means

and manner" of the worker's performance is

the most important factor to review here, as

it is at common law . . . . If an employer

has the right to control and direct the work

of an individual, not only as to the result

to be achieved, but also as to the details

by which that result is achieved, an

employer/employee relationship is likely to

exist.

28. The court in Spirides then listed additional factors

which are relevant to the consideration of this issue:

(1) the kind of occupation, with reference

to whether the work usually is done under

the direction of a supervisor or is done by

a specialist without supervision; (2) the

skill required in the particular occupation;

(3) whether the "employer" or the individual

in question furnishes the equipment used and

the place of work; (4) the length of time

during which the individual has worked; (5)

the method of payment, whether by time or by

the job; (6) the manner in which the work

relationship is terminated; i.e., by one or

both parties, with or without notice and

explanation; (7) whether annual leave is

afforded; (8) whether the work is an

integral part of the business of the

"employer"; (9) whether the worker

accumulates retirement benefits; (10)

whether the "employer" pays social security

taxes; and (11) the intention of the

parties.

29. Virtually identical criteria are set forth in F. L.

Enterprises v. Unemployment Appeals Commission , 515 So. 2d 1340

(5th DCA 1987). The recently unemployed Ms. Jouben operated in

a slightly different relationship with her employer than did

Mr. DeLeo. In F. L. Enterprises it was Ms. Jouben's job to

approach tourists at central Florida hotels, shopping malls, and

the like, to arrange for them to tour particular resorts.

Ms. Jouben was permitted to work for other business entities and

did work at other business entities. Factually, F. L.

Enterprises is quite different from this case. She was found to

be an independent contractor.

30. The court in Cobb also noted that courts must consider

that when "an employer has the right to control and direct the

work of an individual, not only as to the result to be achieved,

but also as to the details by which that result is achieved, an

employer-employee relationship is likely to exist." Cobb , 637

F.2d at 340. As was pointed out in VIP Tours v. State,

Department of Labor & Employment Security , 449 So. 2d 1307 (Fla.

5th DCA 1984), "Of all the factors, the right of control as to

the mode of doing the work is the principal consideration."

Mr. DeLeo's work activities were closely controlled by POV.

31. Analyzing the facts in this case in light of the

Spirides factors, it is found that:

(1) Typically a real estate salesperson

operates with little supervision. Mr. DeLeo

was a real estate salesperson, but he was

closely supervised by POV which was in the

business of developing residential areas and

selling homes;

(2) Typically a real estate salesperson

must, if he or she is to be successful, have

excellent marketing skills. Marketing

skills, except to a limited extent, were not

required of Mr. DeLeo because The Villages

operated a national mass marketing program;

(3) POV provided Mr. DeLeo with an

office, office equipment, data processing

hardware, communications, and training in a

specific sales technique.

(4) Mr. DeLeo worked for POV for less

than four years. The length of employment

in this case is not a factor in the

determining whether an employer-employee

relationship existed.

(5) Mr. DeLeo was not paid by the

hours he worked. He was paid a commission

based on the sales he made. Or, stated

another way, he was paid by the job. On the

other hand his availability to make sales

was closely controlled and his production

was closely monitored.

(6) Mr. DeLeo could end his employment

at will, and POV could discharge him at

will.

(7) Mr. DeLeo was required to adhere

to a schedule, notify a team leader if he

took a day off, and seek approval for

vacation time. Such close control is not

typical of the relationship between broker

and salesperson found in the usual case.

(8) Mr. DeLeo's work was an integral

part of the business plan of POV and The

Villages. Obviously, POV and The Villages

could not arrange for large numbers of

potential purchasers to arrive at The

Villages and merely hope that salespersons

would appear. Moreover, he was required to

work exclusively for POV.

(9) There is no information in the

record demonstrating that POV provided a

retirement plan for its salespersons, or

that it did not.

(10) Mr. DeLeo was provided with an

IRS Form 1099 each year. This indicates

that he was treated as an independent

contractor by POV. No evidence was provided

indicating this decision was made subsequent

to the submission of a properly completed

IRS Form SS-8, "Determination of Worker

Status for Purposes of Federal Employment

Taxes and Income Tax Withholding," which is

the form that the Internal Revenue Service

uses in order to determine whether an

employment relationship exists.

(11) The evidence of record indicates

that both parties intended an independent

contractor relationship at the time they

entered into the Agreement in September 30,

2004. The intent of the parties is

important, just as the Agreement is

important, in determining the nature of the

relationship. However, the parties can't

"intend" a relationship to exist that

factually does not exist.

32. A real estate agent was found to be an independent

contractor in the case of a workers' compensation claim. See

Florida Industrial Commission v. Schoenberg , 117 So. 2d 538

(Fla. 3d DCA 1960). Conversely, in a suit under the Florida

Equal Access to Justice Act, Section 57.111, Florida Statutes

(1990), a real estate agent was found to be an employee rather

than an independent contractor. See Jayne R. Phoenix vs.

Department of Professional Regulation, Division of Real Estate ,

Case No. 91-3598F (DOAH October 1, 1991).

33. As noted by Judge Cave in Phoenix , "In the instant

case, the evidence establishes too many ties that bind between

Phoenix and Earhart Realty. She was not truly independent since

Earhart Realty exercised substantial control over her

activities." Such is the situation in this case.

34. In the case of Golden v. A. P. Oleans, Inc. , 681 F.

Supp. 1100 (E.D. Pa. 1988), there was an agreement explicitly

reciting an independent contractor relationship between the

salesperson and a real estate developer. However, the actual

relationship in Golden was remarkably similar to the facts of

this case, and the court found an employment relationship.

35. Upon consideration of the facts developed by testimony

and other evidence of record, it is found that Mr. DeLeo was an

employee of POV.

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law, it

is

RECOMMENDED that the Florida Commission on Human Relations

assert jurisdiction over Petitioner Joseph DeLeo and Respondent

Properties of The Villages, Inc., and commence proceedings

pursuant to Section 760.11, Florida Statutes.

DONE AND ENTERED this 16th day of July, 2009, in

Tallahassee, Leon County, Florida.

S

HARRY L. HOOPER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of July, 2009.

COPIES FURNISHED :

Carla D. Franklin, Esquire

Carla D. Franklin, P.A.

204 West University Avenue, Suite 3

Gainesville, Florida 32601

Stephen W. Johnson, Esquire

McLin & Burnsed

Post Office Box 491357

Leesburg, Florida 34749-1357

Larry Kranert, General Counsel

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

Denise Crawford, Agency Clerk

Florida Commission on Human Relations

2009 Apalachee Parkway, Suite 100

Tallahassee, Florida 32301

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 should be filed with the agency that

will issue the Final Order in this case.