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Rounds v. Kare

United States District Court, E.D. Michigan, Southern Division

February 26, 2018

PHIL'S KAR KARE and PHILIP GIACONA, JR., jointly and severally, Defendants.

          Elizabeth A. Stafford Judge.



         Philip Giacona Jr. owns Phil's Kar Kare. Phil's Kar Kare details vehicles for the Parkway Chrysler dealership. Giacona hired Raymoun Harris in 2013, and Allen Rounds in 2014. Rounds and Harris detailed cars.

         Giacona paid Rounds and Harris-by personal check-a weekly, agreed-upon amount. Rounds and Harris say they were Giacona's employees, working sixty-hour weeks and handling all the car detailing business Giacona could generate. Giacona says the men were independent contractors free to set their own hours and solicit their own business.

         In 2016, Rounds and Harris filed the current lawsuit alleging violations of the Fair Labor Standards Act and its Michigan analog. The men claim Giacona misclassified them as independent contractors, allowing Giacona to avoid paying them minimum wage and overtime. Soon after filing suit, Giacona fired both Rounds and Harris.

         Rounds and Harris now move for summary judgment on their claims. Yet on the record before the Court, genuine issues of material fact remain. So, for the reasons that follow, the Court will deny Rounds and Harris' motion.


         Philip Giacona Jr. owns Phil's Kar Kare. (R. 26, PID 147, 151.) His son, Phil III, now runs it for him. (R. 26, PID 151.) Phil' Kar Kare details vehicles for the Parkway Chrysler dealership in Clinton Township, Michigan. (R. 26, PID 148.) The business is behind the Parkway dealership. (Id.) The dealership and Phil's Kar Kare keep the same hours of operation: 9:00-6:00 Tuesday, Wednesday, Friday; 9:00-9:00 Monday and Thursday; and 9:00-3:00 on Saturday. (R. 16, PID 244.) Parkway provides the cars for Phil's Kar Kare to detail. However, the two businesses are separate entities. (Id.)


         Giacona relies on eight detailers to handle the actual car detailing. (R. 26, PID 156.) When Giacona hires detailers, he offers a flat, weekly rate that he terms the “base pay.” (R. 26, PID 152.) Giacona pays his detailers by personal check, occasionally offering cash bonuses or advances on the next week's pay. (Id.)

         In October 2013, Giacona hired Raymoun Harris. (R. 26, PID 202.) Eight months later, Giacona brought on Allen Rounds. (Id.) Giacona advertised job openings by word of mouth. Usually, prospective detailers had prior experience in car washes, or learned on the job. (R. 26, PID 151.) Learning on the job was easy-as Giacona put it, “[i]t doesn't take a scientist to wash a car.” (R. 26, PID 151.)

         The dealership provides the daily flow of cars to Phil's Kar Kare. (R. 26, PID 150.) To manage the flow, each morning Giacona posted a list of Parkway cars to be detailed that day. (R. 26, PID 155.) The list included new and used cars for sale on Parkway's lot, cars owned by Parkway's customers, and so-called “showrooms”-vehicles earmarked for display inside the dealership thereby requiring extra attention. (R. 26, PID 152, 164.) Sometimes, detailers handled the list in whatever order they wished (R. 26, PID 155), and sometimes Giacona directed his detailers to handle the list in a certain order (R. 26, PID 151). Other times a car would come in and Giacona made sure “who's ever not doing anything washes it.” (Id.) Still other times, Giacona changed the list order based on customer demand (R. 26, PID 156), his business priorities (R. 26, PID 155), or the need to offer complimentary services to Parkway's owners (R. 26, PID 161).

         Along with six other detailers, Rounds and Harris handled the daily flow. (R. 26, PID 152.) On a normal day, the detailers worked in two-person teams to clean the listed cars. (R. 26, PID 151.) Used cars took an hour, new cars required twenty minutes, and showrooms required thirty minutes-ten extra minutes to apply spray wax. (R. 26, PID 164.) On busy days, the eight detailers sometimes worked five cars at a time. (R. 26, PID 151.) On slower days, Giacona says he sent detailers home without pay-a practice another detailer referred to as optional days off. (R. 26, PID 156, 244.)

         Every day, detailers ordered the supplies they needed through “the supply lady, ” (R. 26, PID 155), and Giacona paid for all supplies. (Id.) Along with supplies, Giacona provided rented uniforms for his detailers, although Giacona says he never required detailers to wear them. (R. 26, PID 177.) Giacona says the detailers willingly paid him a $7 weekly uniform fee. (Id.) And Giacona deducted the uniforms' rental cost as a business expense. (Id.)

         As compensation for their work, Rounds and Harris initially received a flat, weekly rate of $300. (R. 26, PID 183, 214.) Giacona raised the base pay in regular increments: by the time they were fired, Harris made $500 per week (R. 26, PID 187), and Rounds took home $400 (R. 26, PID 215). (See also R. 26, PID 160.) After a busy week, Giacona occasionally offered cash bonuses, saying “when I made a lot of money-more money, they'd make more money.” (R. 26, PID 161.)

         From Giacona's perspective, the detailers worked a flexible schedule. (R. 26, PID 170.) Detailers could come and go as they pleased. (R. 26, PID 156, 170.) Giacona says on slow days, he sent detailers home without pay. (R. 26, PID 156.) He also says the detailers never worked sixty hours per week. (R. 26, PID 170.) And if detailers handled the daily flow with time to spare, Giacona claims he let them solicit business. (R. 26, PID 154-55.) When detailers solicited their own business, Giacona says he let them use Phil' Kar Kare supplies but keep the money they earned. (Id.)

         Other people connected to Phil's Kar Kare also say the detailers solicited business. Fred Kakos owned a shop not far from Phil's Kar Kare. (R. 32, PID 427.) Kakos says he let the detailers wash his car. (Id.) Kakos also saw the detailers going through a nearby strip-mall to solicit business. (Id.) Another detailer, Frederick Haskins, says he went looking for customers among Parkway's staff, but never ventured any farther. (R. 26, PID 236.)

         Jerry Robinson, also a Phil's Kar Kare detailer, says that Rounds and Harris actively solicited their own business. (R. 26, PID 247-48.) Robinson says Rounds and Harris solicited so much business, they prioritized their cars over Giacona's list. (R. 26, PID 250.) Robinson says soliciting business earned Rounds and Harris an additional $400 to $500 per week (R. 26, PID 248.)

         Giacona says the detailers had every right to earn extra cash: he considered them independent contractors.[1] (R. 26, PID 157-58.) And Giacona's tax filings treated them accordingly. Giacona says the detailers filled out W-9s, but W-9s for Rounds and Harris are not in the record. (See e.g., R. 26, PID 288-89.) Giacona also claims he provided his detailers with 1099s (R. 26, PID 156, 173), though Harris says he never received one (R. 26, PID 186; see also R. 26, PID 289).

         However, tax forms for Phil's Kar Kare detailers were sent to the IRS lacking signatures, social security numbers, or addresses. (R. 26, PID 163.) The W-9s for other detailers that are in the record lack signatures (R. 26, PID 317) and addresses (Id. at 319-20.) And the 1099s in the record, including ones for Rounds and Harris, lack social security numbers and addresses. (R. 26, PID 311-16.) Rounds and Harris say Giacona filed 1099s for them, so Giacona left out the crucial information.[2] (R. 26, PID 311-12, 316.) Yet Giacona does not remember filing 1099s for any of his detailers. (R. 26, PID 174.) He claims any tax preparation and filing would have been handled by his accountant. (R. 26, PID 174.)

         Overall, Giacona was not much of a record keeper. Prior to January 2017, Giacona did not have a timeclock, never maintained a payroll, and did not record his detailers' hours. (R. 26, PID 156.) However, he did maintain a system to record the number of cars detailed. (R. 26, PID 151.) So Giacona's tax filings memorialized the gross sales revenue for Phil's Kar Kare. In 2013, Phil's Kar Kare detailed enough cars to bring in $376, 819. (R. 26, PID 296.) In 2014 and 2015, Kar Kare's gross sales totaled $546, 781 and $510, 001 respectively. (R. 26, PID 298, 300.) In 2016, gross sales dipped to $478, 714. (R. 26, PID 302.)


         Rounds and Harris tell a different story about their work at Phil's Kar Kare. They both claim Giacona required detailers to work sixty hours per week. (R. 26, PID 183, 214.) Other detailers say they also worked sixty hours per week. (See R. 26, PID 235, 244.) Rounds and Harris spent their time detailing eighty to 100 Parkway cars per week. (R. 26, PID 183.) They worked on a set schedule to wash the listed cars as directed by Giacona, sometimes forced to stay past business hours to get all the work done. (R. 26, PID 193.) Giacona did not permit them to come and go. (R. 26, PID 227.) Instead, Giacona made detailers spend their ...

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