Department of Labor: 04 3753

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RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 05a0348p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _________________ LYDIA DEMSKI, X Petitioner, No. 04-3753 v. , UNITED STATES DEPARTMENT OF LABOR, Respondent, INDIANA MICHIGAN POWER COMPANY, Intervener. N On Appeal from the Department of Labor (except OSHA). No. 02-084. Argued: July 21, 2005 Decided and Filed: August 17, 2005 Before: KENNEDY, CLAY, and GILMAN, Circuit Judges _________________
  RECOMMENDED FOR FULL-TEXT PUBLICATION  Pursuant to Sixth Circuit Rule 206File Name: 05a0348p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT_________________L YDIA D EMSKI , Petitioner,v. U NITED S TATES D EPARTMENT OF L ABOR ,  Respondent, I NDIANA M ICHIGAN P OWER C OMPANY ,  Intervener. X---- > ,------N No. 04-3753On Appeal from the Department of Labor (except OSHA).No. 02-084.Argued: July 21, 2005Decided and Filed: August 17, 2005Before: KENNEDY, CLAY, and GILMAN, Circuit Judges_________________ COUNSELARGUED: Carol A. Dunning, QUARTO DUNNING, New York, New York, for Petitioner. RogerWilkinson, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent.J. Patrick Hickey, PILLSBURY, WINTHROP, SHAW, PITTMAN, LLP, Washington, D.C., forIntervenor. ON BRIEF: Carol A. Dunning, QUARTO DUNNING, New York, New York, BrettK. Bacon, FRANTZ WARD, Cleveland, Ohio, for Petitioner. Carol Arnold, Paul Frieden, UNITEDSTATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent. J. Patrick Hickey, JuliaE. Judish, PILLSBURY, WINTHROP, SHAW, PITTMAN, LLP, Washington, D.C., for Intervenor. _________________OPINION_________________ KENNEDY, Circuit Judge. Petitioner Demski seeks review of the decision of theAdministrative Review Board of the Department of Labor, which denied her claim because it foundthat she was not an employee for the purposes of the whistleblower provisions of the EnergyReorganization Act, 42 U.S.C. § 5851. Because we agree that Petitioner was not an employee of Defendant-Intervener Indiana Michigan Power Company (I & M), we DENY her petition forreview.1  No. 04-3753  Demski v. DOL Page 2 1 Petitioner’s complaint to OSHA was against the American Electric Power Company (AEP). I & M is a whollyowned subsidiary of AEP. 2 The ALJ found that because Congress did not specifically define the term “employee” in the ERA, thecommon law definition of the term applied based on  Nationwide Mut. Ins. Co. v. Darden , 503 U.S. 318, 322-23 (1992).This common law definition incorporates the master-servant relationship.  Id.   BACKGROUND Petitioner Demski was the president and sole shareholder of two different corporations,American Nuclear Resources, Inc., and Scope Services, Inc. (The corporations are hereinafterreferred to as ANR/Scope). ANR/Scope supplied contract labor (both skilled and unskilled) as wellas technical knowledge to power-generating plants. I & M entered into three contracts withANR/Scope. Under the contracts, ANR/Scope agreed to maintain ice condensers at the Donald C.Cook Nuclear Power Plant in Bridgman, Michigan, augment plant staff, and maintain plant buildingsand grounds. The terms of the agreements expressly provided that ANR/Scope were not agents oremployees of I & M.I & M never paid Petitioner a salary nor did it offer her benefits. She did not have an I &M supervisor. She did have two offices at the Cook plant, a security badge and clearance, and theright to use Cook office supplies. She participated in meetings with I & M management (althoughnot daily meetings), and she responded to I & M management inquiries. Two other managers of ANR/Scope were responsible for overseeing the day-to-day management of the contracts.Petitioner learned of serious safety problems with an ice condenser. She reported thoseproblems and raised concerns to I & M. I & M then terminated its ice condenser contract withANR/Scope. It also refused her bids to continue the other two contracts, and revoked the employeeaccess badges for her and her employees.Petitioner filed a complaint with the Department of Labor’s Occupational Safety and HealthAdministration (OSHA) both individually and as a representative of ANR/Scope, alleging thatAmerican Electric Power Company (AEP) 1 wrongfully terminated ANR/Scopes’ contracts becauseDemski reported safety concerns. Without determining whether she was an employee, OSHA foundthat her complaint had merit. AEP then sought a hearing before an administrative law judge (ALJ)who, before hearing the case, dismissed Petitioner’s claims against AEP and substituted I & M asa party because I & M was the legal holder of the licenses for the Cook plant.The ALJ also ruled that ANR/Scope were improperly listed as complainants because, underthe Energy Reorganization Act (ERA), only employees can recover for discrimination; corporationsmay not recover. The ALJ ruled that Petitioner was not a covered employee because she was notan employee as the common law defined the term. 2 Additionally under  Nationwide Mut. Ins. Co.v. Darden , 503 U.S. 318, 322-23 (1992), the ALJ found that the multiple-factor  Darden test was nottriggered because Petitioner was not a hired party in that she did not receive financial compensationfrom I & M. The ALJ found, in the alternative, that most of the  Darden factors indicated that shewas not an employee. The ALJ also found that Petitioner was not an employee of ANR/Scopebecause she was the sole shareholder of both companies.The Administrative Review Board of the Department of Labor affirmed the findings of theALJ. Petitioner then sought review in this court. In her petition, she asserts only that she was anemployee of I & M for the purposes of the ERA. She does not argue that she is an employee of ANR/Scope.  No. 04-3753  Demski v. DOL Page 3 ANALYSIS To determine whether Petitioner was an employee of I & M, we must first determine if Congress defined the term employee in the statute in question. In the absence of a congressionaldefinition or an explicit delegation of congressional authority to the agency, we determine how theagency responsible for implementing the statute (in this case, the Department of Labor) understandsthe term, and, under Chevron U.S.A., Inc., v. Natural Resources Defense Council, Inc. , 467 U.S. 837,843 (1984), we determine whether such an understanding is a “reasonable interpretation” of thestatute.  Id. at 844.The ERA defines the term “employer,” but does not define the term “employee.” See 42U.S.C. § 5851. Additionally, the relevant regulations do not define the term. See 29 C.F.R. § 24.1-24.5. Both the ALJ and the Administrative Review Board relied on Supreme Court precedent,specifically  Nationwide Mut. Ins. Co. v. Darden , 503 U.S. 318, 322-23 (1992), to find that, in theabsence of a statutory definition, the term “employee” is defined as the common law defines it.  Darden also indicates that the common law defines an employee as the conventional master-servantrelationship.  Id.    Darden provides further guidance to lower courts in determining when a “hiredparty is an employee under the general common law of agency.”  Id. (quoting Community for Creative Non-Violence v. Reid  , 490 U.S. 730, 751-52 (1989) (“In determining whether a hired partyis an employee under the general common law of agency, we consider the hiring party’s right tocontrol the manner and means by which the product is accomplished. Among the other factorsrelevant to this inquiry are the skill required; the source of the instrumentalities and tools; thelocation of the work; the duration of the relationship between the parties; whether the hiring partyhas the right to assign additional projects to the hired party; the extent of the hired party’s discretionover when and how long to work; the method of payment; the hired party’s role in hiring and payingassistants; whether the work is part of the regular business of the hiring party; whether the hiringparty is in business; the provision of employee benefits; and the tax treatment of the hired party.”)).Neither party appears to argue that the Department of Labor’s understanding of the term “employee”is an unreasonable one. We agree that the agency understanding is reasonable in that the agencyrelies on Supreme Court precedent in reaching its understanding of the term in the absence of acongressionally supplied definition.We now turn to the question of whether the Administrative Review Board appropriatelygranted summary judgment to I & M. We review a grant of summary judgment de novo.  Adamsv. City of Auburn Hills , 336 F.3d 515, 518 (6th Cir. 2003). In reviewing a grant of summary judgment for lack of a dispute of a material fact, we construe the evidence in the light most favorableto Petitioner and draw all reasonable inferences in his favor.  Aiken v. City of Memphis , 190 F.3d753, 755 (6th Cir. 1999) (citing  Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S.574, 587, 106 S. Ct. 1348 (1986)).In reviewing the grant of summary judgment to I & M, the only relevant question is whetherPetitioner is an employee of I & M as the common law defines the term. The  Darden factors requirePetitioner to be a hired party. She is not. See O’Connor v. Davis , 126 F.3d 112, 115 (2d Cir. 1997). Cf. Shah v. Deaconess Hosp. , 355 F.3d 496, 499 (6th Cir. 2004). I & M never hired her in the sensethat we understand the term. It is undisputed that no contractual relationship of any sort existedbetween I & M and Demski. Instead, I & M had contracts with ANR/Scope, and Petitioner was thesole shareholder of ANR/Scope. That Petitioner was the sole shareholder does not mean that I &M had any sort of a contractual or employment relationship with her. The law does not transfercontractual relationships so easily.Additionally, viewed in the light most favorable to Petitioner, the record in this case fails todisclose any dispute regarding any of the  Darden factors. Petitioner’s relationship with I & M isnot a master-servant relationship. Petitioner had complete control over how to fulfill ANR/Scopes’  No. 04-3753  Demski v. DOL Page 4 3 Petitioner mentions that she worked at the reactor, had offices there, and could use I & M office supplies. Thefact that she could not control where she worked stems from the fact that ANR/Scopes’ contracts were related to onenuclear reactor at one location. Those facts are not indicative of whether she was employed by I & M. Thus, even if Petitioner was on-site daily, this factor would only marginally enhance her case under the  Darden factors. contractual obligations. She chose whether to seek to renew the agreements, just as I & M was freeto renew or not renew them. I & M could not assign more or different work to Petitioner orANR/Scope than the contracts allowed. Petitioner had control over how ANR/Scope fulfilled itscontractual obligations to I & M and who should perform that work. 3 She had exclusive controlover the hiring and compensation of ANR/Scope employees who worked on the three contracts.Petitioner, as the sole shareholder and principal of ANR/Scope, was in the business of providingservices to the owners of nuclear reactors. Petitioner’s compensation came from any profitsANR/Scope made on the contracts with I & M, not from a salary or an hourly wage provided by I& M. Finally, the record does not contain any information that would indicate that I & M providedPetitioner any benefits, or that it withheld social security or income taxes from any payments toANR/Scope on her behalf. The  Darden factors indicate that Petitioner was not an employee, but thather solely owned corporations were independent contractors.Finally, we briefly address Petitioner’s argument that because nuclear safety is of criticalimportance, this court should construe the term “employee” broadly. While we agree with Petitionerthat nuclear safety is extremely important, we cannot read the ERA in the manner Petitioner wishes.To do so would subvert a reasonable agency determination, one based on Supreme Court precedent.Congress may always expand the definition of employee under the ERA beyond the common lawdefinition by amending the statute if it believes that nuclear safety so requires. In the meantime, wedefer to the agency’s reasonable interpretation. CONCLUSION For the foregoing reasons, we DENY the petition for review.
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