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Click here for the full text of this decision FACTS:Jenifer Arbaugh was a bartender and waitress at the Moonlight Cafe in New Orleans from May 2000 to February 2001. In November 2001, Arbaugh filed a Title VII suit against the restaurant’s parent company, Y&H Corp., and one of its owners, Yalcin Hatipoglu, alleging that Hatipoglu subjected her to a sexually hostile work environment. In a jury trial before a magistrate judge, Arbaugh was awarded $5,000 in back pay, $5,000 in compensatory damages and $30,000 in punitive damages. Two weeks after judgment was entered by a district court, Y&H moved to dismiss the case for lack of jurisdiction, saying that it was exempt from Title VII coverage since it did not employ 15 or more employees for 20 calendar weeks during the period when Arbaugh was employed. Y&H did not count the delivery drivers nor the spouses of Hatipoglu and the other owner in its total, conceding that if those people were counted, they would not have been exempt. The district court granted the motion. HOLDING:Affirmed. The court first discusses whether the district court erred in ruling that the employee-census determination was jurisdictional in nature, or part of the merits. The court points to a split in the circuits on the issue, some saying an employee-census determination is jurisdictional, some saying it is but another issue to be decided by the fact finder. The court also points out that in a trio of cases in its own circuit — Dumas v. Town of Mt. Vernon-Alaska, 612 F.2d 974 (5th Cir. 1980), Womble v. Bhangu, 864 F.2d 1212 (5th Cir. 1989), and Greenlees v. Eidenmuller Enters., Inc., 32 F.3d 197 (5th Cir. 1994), this court has sided with those courts that have said it is a jurisdictional element. Arbaugh points to a subsequent case, Clark v. Tarrant County, Texas, 798 F.2d 736 (5th Cir. 1986), which held that where questions concerning subject matter jurisdiction are intertwined with the merits, a Title VII claim should not be dismissed for lack of subject matter jurisdiction unless the claim is frivolous or clearly excluded by prior law. “Because the precise issue before us was decided in Dumas six years before Clark, and because Clark was neither a Supreme Court case nor an en banc decision, we are bound by the holding in Dumas that the employee census finding is determinative of subject matter jurisdiction.” The court then examines the particulars of the employee-census determination. There is no definition of “employee” in Title VII, so here the court looks to the eight factors the court in Broussard v. L.H. Bossier, Inc., 789 F.2d 1158 (5th Cir. 1986), came up with: “(1) ownership of the equipment necessary to perform the job; (2) responsibility for costs associated with operating that equipment and for license fees and taxes; (3) responsibility for obtaining insurance; (4) responsibility for maintenance and operating supplies; (5) ability to influence profits; (6) length of the job commitment; (7) form of payment; and (8) directions on schedules and on performing work.” The first four factors are not in contention. The court finds the remaining four factors support a finding that the delivery drivers were not employees. With regard to the fifth factor, the court points out that the more deliveries a driver made during a shift, the more money they could earn. As for the sixth factor, while the parties do not dispute that the drivers were expected to work all of the hours in their respective shifts, there is no evidence that the drivers were prohibited from working elsewhere when not on duty at Y&H. At trial, testimony was presented indicating that some of the drivers in fact worked other jobs. With respect to the seventh factor, the drivers were paid $4 per hour and retained 100 percent of their tips. Most drivers earned the majority of their income from tips. For tax purposes, the drivers were issued a Form 1099, as opposed to a Form W-2, which the kitchen and restaurant staff received. While Y&H withheld the appropriate federal and state income taxes and paid social security taxes on its kitchen and restaurant staff, it did not do so with its delivery drivers. As to the eighth factor, there is conflicting evidence about how scheduling was carried out, but the court defers to the district court’s conclusion that even the influence Y&H did exert did not rise to the level of “control.” The court reaches a similar result by considering 11 factors spelled out in Spirides v. Reinhardt, 613 F.2d 826 (D.C. Cir. 1979): “(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. The court then examines the status of the wives of the Y&H owners. The women received salary for advertising and publicity work, were included on the payroll register and had taxes deducted from their wages. Nonetheless, they were not employees, but shareholders, the court determines, by applying six factors advanced by the EEOC : 1. Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work; 2. Whether and, if so, to what extent the organization supervises the individual’s work; 3. Whether the individual reports to someone higher in the organization; 4. Whether and, if so, to what extent the individual is able to influence the organization; 5. Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; 6. Whether the individual shares in the profits, losses, and liabilities of the organization. OPINION:DeMoss, J.; Garza, DeMoss and Clement, JJ.

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