Archie v. Grand Central Partnership, Inc.

OPINION AND ORDER

Plaintiffs, formerly homeless and jobless individuals, allege that the defendants — the Grand Central Partnership, Inc. (“GCP”), the Grand Central Partnership Social Services Corporation (“SSC”), and the 34th Street Partnership, Inc. (“34th SP”) — unlawfully paid them sub-minimum wages to perform clerical, administrative, maintenance, food service, and outreach work in the defendants’ Pathways to Employment (“PTE”) Program. Plaintiffs argue that the payment of sub-minimum wages allowed the defendants unfairly to underbid competitors who compensated their employees at lawful rates. Defendants maintain that the plaintiffs were not employees of the PTE Program, but were instead trainees receiving essential basic job skills development and counseling, and thus were not entitled to minimum wage payment.

Plaintiffs claim that the defendants violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, and the New York State Minimum Wage Act, N.Y. Labor Law § 650. They seek judgment that the plaintiffs were employees of the defendants and damages in the amount of back wages, liquidated damages, and reasonable attorneys’ fees and costs.

For the reasons to be discussed, the Court finds that the defendants’ program did provide the plaintiffs with some meaningful benefits. Nonetheless, despite the defendants’ intent, they did not structure a training program as that concept is understood in case law and regulatory interpretations but instead structured a program that required the plaintiffs to do work that had a direct economic benefit for the defendants. Therefore, the plaintiffs were employees, not trainees, *508 and should have been paid minimum wages for their work.

The work the plaintiffs performed competed with other business enterprises paying minimum wages. Despite the attractive nature of the defendants’ program in serving the needs of the homeless, the question of whether such a program should be exempted from the minimum wage laws is a policy-decision either Congress or the Executive Branch should make. The defendants had the right to apply for an exemption from the minimum wage requirements of the FLSA and the New York Minimum Wage Act, and should have done so. The Court, however, cannot grant an exemption where one does not exist in law.

FINDINGS OF FACT

I adopt as findings the following facts agreed upon by the parties in their Joint Pre-Trial Order:

AGREED FINDINGS OF FACT

1. Plaintiffs in this action are all homeless or formerly homeless persons. When this case was filed on February 1, 1995, forty individuals had signed consent forms to become Plaintiffs and are named in the caption of this case: Keith Archie; Rudy Askew; Raymond Del Valle; Pereival Dennis; Cynthia Dilbert; Joyce Dorsey; William Farrior; Carlton Ford; Fitzroy Frederick; Miles Harp; Felicia Hart; Warren Hartshorn; Jay Hemphill; Derrick Johnson; William Johnson; William J. Johnson; Mona Lisa Larry; Gregory Lloyd; Frederick Mack; Ronald Manning; Mark McMillan; Regina Miller; Ernest Montgomery; James Moore; Dennis Novak; Nina Paul; Nathan Rhames; Jose Rodriguez; William Scott; David Solomon; Lee Springer; Zachary Suddith; Arnold Thornton; Stanley Turner; Tony Turner; Thelma Wall; James Whitman; Earl Williams; Jerome Williams; and Oscar Willis.

2. Defendants have taken the depositions of nine Plaintiffs. They have received responses to interrogatories from an additional 33 Plaintiffs. They have received affidavits from seven Plaintiffs, all of whom submitted interrogatory responses and four of whom were deposed.

3. Defendant Grand Central Partnership (“GCP”) is a New York not-for-profit corporation organized and existing under the New York State Not-For-Profit Corporation Law with its principal place of business at 6 East 43rd Street.

4. Defendant Grand Central Partnership Social Services Corporation (“SSC”) is a not-for-profit corporation organized and existing under the New York State Not-For-Profit Corporation law, and has its principal place of business at 152 East 44th Street, New York, New York.

5. Defendant 34th Street Partnership (“34th Street”) is a business improvement district (“BID”) organized and existing under the New York State Not-For-Profit Corporation law.

6. The SSC runs a multi-service drop-in center for the homeless (the “drop-in center,” the “Multi-Service Center,” the “Center”), for which it receives funding from New York City pursuant to contract (the “City Contract”), among other funding sources. The SSC was formed in 1989 to take over from the Moravian Church the running of the Center. At the Center, the SSC operates the Pathway to Employment (“PTE”) program.

7. Plaintiffs became homeless for a range of reasons. All of the Plaintiffs eventually learned of and visited the Center for homeless persons operated by the SSC.

8. The SSC’s current City Contract mandates that the SSC “operate the Center to [serve] the target population.” An average of 200 clients are to be served per day, and the Center is to “operate 24 hours a day, 7 days per week.” Pursuant to the contract, the SSC provides counseling, referrals, clothing, showers, and mail access, to those clients wishing such services. The SSC contracts that its delivery of these services will meet the social service standards established by the City. The contract also requires the SSC to operate an outreach program to serve homeless people outside the Center and, if possible, help bring them in for additional services. The SSC is required to “operate *509 the Center with the purpose of resocializing clients, providing social services and rehabilitation services for clients with the goal of allowing clients to become appropriate for placement into alternative living arrangements.”

9. The City Contract requires the SSC to “implement a Work Experience Program which will assist clients in developing alternate living skills for independent living.” The Contract states that the “program shall aid clients in developing vocational skills for the purpose of future employment.”

10. The City Contract provides funds for services to about 200 clients per day.

11. Homeless persons who visited the Center were known as “contacts” or “clients.”

12. The Center allows any adult homeless person to become a client.

13. Upon arriving at the Center, clients usually were interviewed in a process known as “intake.” The intake interviewer completed an Intake Interview form that asked where the client spent the last five nights, how he or she heard about the center, and what services the client requested.

14. Clients typically would also undergo another interview called an Assessment Interview. The form used with this interview asked for the client’s family history, education, employment history, resources, legal history, medical history, mental health history, substance abuse history and housing history. The form also called for the interviewer to elicit the client’s goals and asked the interviewer to provide an overall assessment and treatment plan for the client.

15. The SSC maintained a Self-Help Center at the Center, which contained various materials to assist clients in seeking a job.

16. The SSC identified individuals who had severe or chronic medical or mental health problems, or who otherwise needed to enter therapeutic programs or undergo intensive case management. Those individuals were referred to outside programs for certain services.

17. The SSC provided those clients who requested it counseling regarding substance abuse rehabilitation, housing, employment, entitlements, mental health, educational /vocational training, and family issues.

18. Some plaintiffs had mental health, physical health, or substance abuse problems, and some had limited work histories. Some had experienced periods of unemployment before coming to SSC.

19. The program that became known as PTE was started in 1989, and its structure has changed in some respects over time, but its basic elements and methods have remained consistent.

20. The PTE program was operated through the SSC and out of the SSC’s offices.

21. Some SSC clients opted to join the PTE program. PTE participants were required to make arrangements for stable housing before entering PTE.

22. Once a participant entered the PTE program, he or she was assigned to one of five areas, all of which, directly or indirectly, contributed to the overall operation and goals of the Center. The five areas were maintenance, food services, administration, outreach and recycling (the recycling area was added in January 1993).

23. The PTE program required that an individual participate in the program for 40 hours per week. The target length of the program was 700 hours, but certain participants participated in the program for more than 700 hours.

24. SSC staff conducted various workshops, including workshops called “job readiness” and “motivational” workshops, designed for an audience that included PTE participants. Some such workshops covered areas such as how to prepare a resume, how to search help-wanted advertising, and how to interview for a job.

25. When individuals at the Center, including PTE participants, attended workshops, they were required to sign in.

26. Over the life of the PTE program, PTE participants received amounts ranging between $40 and $60 per week.

*510 27. The maintenance department was responsible for the sweeping, mopping, occasional painting, repairing and cleaning of the Center.

28. The Food Services department was responsible for operating the drop-in center’s kitchen, which served over 400 meals per day.

29. PTE participants in the administration department answered the telephone, filed, made intra-office deliveries, maintained lists, dispensed mail, and recorded information.

30. On one occasion a PTE participant in the administration department performed administrative duties for an entity outside the Center. From November 1990 to April 1991, Terence Weaver (‘Weaver”) — who became an Outreach supervisor in October 1994 and then coordinator of PTE from March 1995 to January 1996 — was a PTE participant in administration. His participation took place at the Jewish Board of'Family and Children’s Services (the “Jewish Board”), an entity in the same budding as the drop-in center. Among other things, Weaver compiled a resource list of 65 single room occupancies and information related thereto.

31. PTE participants were among those who performed outreach for the SSC.

32. Some PTE participants participated in the outreach program after midnight and before 6 a.m. because homeless individuals to whom outreach was directed were sleeping in public and private properties during those hours.

33. The SSC has a contract with the Port Authority of New York and New Jersey to provide recycling services at the World Trade Center. This contractual relationship, which began in 1993, provided another area where PTE participants could participate.

34. Outreach and recycling both generated revenues for the SSC. According to an SSC income statement for the fiscal year ending June 30, 1994, the SSC received around $950,000 from outreach and recycling contracts. These monies were used to cover the costs of performing outreach and recycling as well as to fund various SSC expenses, including those associated with the programs and activities of the Center.

35. At some point, the SSC began requiring PTE participants to produce three vouchers, each demonstrating attendance at a workshop, before they could receive their weekly amount.

36. Some PTE participants did not attend workshops even when such participation was required.

37. Staff members at the SSC maintained notes on some PTE participants on sheets with titles such as “Progress Notes.”

38. In July 1993, the SSC began a video resume program, pursuant to which individuals seeking employment, including PTE participants and staff members, were videotaped and the tapes aired on television.

39. Between July 1993 and 1995, Lisa Davis, as the SSC’s Employment Coordinator; sent a number of PTE participants on interviews for jobs outside the Center. Ms. Davis assisted clients in finding jobs outside the center, including by conducting practice interviews and contacting prospective employers. Ms. Davis maintained a report regarding her job placement efforts.

40. Some PTE participants were hired at minimum wage by the SSC as staff members following their participation in PTE.

41. Some PTE participants signed a document entitled “Pathway to Employment Enrollment Contract.” Some PTE participants signed a printed document entitled “Grand Central Partnership Social Services Corporation Multi-Service Center PTE Letter of Agreement” which included the statement “I understand that I am not an employee of GCPSSC, and any stipend I receive for personal expenses related to my training is not considered a wage.”

42. Both Daniel Biederman, the president of the GCP, and Ira Mandelker, a former Program Director of the SSC and a former Associate Director of the 34th SP, testified that PTE participants were not volunteers.

43. PTE does not constitute a ‘Work Experience Program” under New York City’s “WEP” regulations. PTE is not a recipient of Job Training Partnership Act funds.

*511 44. During 1990-1995, neither the GCP nor 34th Street possessed any document authorizing either BID to operate a training or a rehabilitation program.

ADDITIONAL FINDINGS OF FACT

On the basis of the testimony 1 presented at the bench trial held on April 16 and 17, 1997, and the Exhibits admitted at trial, which are made a part of the record in this case, I find pursuant to Fed.R.Civ.P. 52, the following additional facts:

I. The Parties

45. At one time or another between 1990 and 1995, each plaintiff participated in a work program that the defendants call the PTE program. Some of the defendants’ officers and most plaintiff's referred to it as a “work program” or simply as a job. See Mandelker Dep. at 310 (“The term ‘work program’ has been regularly used as a shorthand for the Pathway to Employment Program.”); Flynn Dep. at 54 (“[The PTE Program] was a work program.”); Springer Aff. ¶ 2; Hart Aff. ¶¶ 2,27.

46. As noted, defendant, 34th Street Partnership (“34th SP”), has its principal place of business at 6 East 43rd Street. See PE 62; PE 76 ¶ 11. 34th SP is an association of property owners of businesses located in the vicinity of Pennsylvania Station in Manhattan (“Penn Station”). Like the GCP, it assesses its members a fee and uses the proceeds to provide services within the Penn Station district.

47. The GCP, SSC, and 34th SP are all closely affiliated. The defendants share employees — including key executives — office space, and operations. Indeed, the GCP and 34th SP’s controller consolidated the financial statements of the GCP and SSC and described the SSC as a “subsidiary” of the GCP. See Sehaly Dep. at 28-30, 43-44 [David Schaly is the Controller and Assistant Treasurer for the GCP and the 34th SP]; Biederman Dep. at 195; Mandelker Dep. at 546. Robert Hayes, an agent of the defendants who was commissioned by them to issue a report describing the SSC’s activities, concluded that the SSC was a “subsidiary” of the GCP and that “the SSC has become an entity resembling a department of the Grand Central Partnership.” PE 32 (Hayes Report) at 14, 32 (emphasis added).

II. The Work Program

48. For a period of time in 1994, participants in the PTE Program worked from the offices of the 34th SP. See Weaver Dep. at 154-55.

49. One element of the PTE Program that varied during the program’s existence was the amount of time required to complete the program. Until early 1994 or early 1995, the program had a completion requirement of 700 hours of work over an indeterminate number of weeks (“the Completion Requirement”). See Crain Dep. II at 112-13; Mandelker Dep. at 113-14; Hart Aff. ¶ 53; Moore Aff. ¶ 10. Starting in or around March 1995, the Completion Requirement changed to approximately 40 hours per week for 20 weeks. Prior to that time, the Completion Requirement was 25 weeks. See Weaver Dep. at 104. Notwithstanding the various Completion Requirements, however, the SSC has always knowingly permitted many PTE participants to continue working in the Program indefinitely. See PE 33 (setting forth total accumulated hours of some PTE workers in the Program); PE 34 (same); Mandelker Dep. at 499-504 (explaining PE 34); West Aff. ¶ 1; Del Valle Aff. ¶ 31; Flynn Dep. at 175-78 (explaining PE 33). As a result, several plaintiffs accumulated over 700 hours of work in the program. See PE 34.

50. The PTE Program enabled the SSC to obtain significant revenue-generating contracts with outside corporations by underbidding businesses who compensated their em *512 ployees at higher rates. See Anderson Dep. at 19-20, 48-59 (Chase Manhattan Bank representative); Haddock Dep. at 29-30, 43-50 (Fleet Bank representative); PE 22 (contract between SSC and Fleet Bank). As agreed upon in paragraph 34 supra and according to an SSC income statement for the fiscal year ending June 30, 1994, the SSC generated over $950,000 in revenues from contracts to provide “outreach” and recycling services. It generated an additional $45,000 by providing laborers to The New York City Parks Department to work in Bryant Park in Manhattan. See PE 46; Schaly Dep. at 78-79 (explaining certain line items of SSC income statements), 99-100 (explaining SSC’s services to Parks Department). These revenues were used not only to pay certain expenses incurred by the drop-in center, but also to pay the salaries of some of defendants’ officers. See Schaly Dep. at 83-35; Grunberg Dep. at 132-34; PE 47 (Transcript of the Minutes of the Committee on General Welfare of the New York City Council (“City Council Transcript”)) at 130-31 (testimony of SSC Executive Director Jeffrey Grunberg). Daniel Biederman, President of the GCP and 34th SP, is paid $335,000 per year for heading the GCP, 34th SP, and one other BID, the Bryant Park Restoration Corporation. See Biederman Dep. at 209. Jeffrey Grunberg, Executive Director of the SSC and 34th SP’s Vice President of Social Services, is paid over $127,000 per year. See Grunberg Dep. at 188-89. In addition, the PTE Program permitted the GCP and 34th SP to meet their designated business objectives of keeping the midtown Manhattan area safe and clear of homeless persons. See Biederman Dep. at 57-59, 74; PE 35 (letter of Jeffrey Grunberg).

A. Operation of the Work Program,

i. Pre-Hearing Events

51. Most clients discovered the PTE Program soon after arriving at the drop-in center. See Hart Aff. ¶¶ 19-24, Springer Aff. ¶ 8; Moore Aff. ¶ 10.

52. The intake interview with new clients usually lasted only a few minutes. See Hart Aff. ¶ 28; Del Valle Aff. ¶ 10. Among other things, clients were asked about any specific services they wished to obtain from agencies outside the SSC. No meaningful assessment of the client’s employment history or job training needs was made during the intake interview. See Hart Aff. ¶ 28; Brown Aff. ¶ 33 (“I asked the contact whether they needed any services. No assessment of the client’s employment history or job training needs was made during the intake interview.”)

53. Within a few days of the initial intake interview, clients were expected to have a second interview lasting no more than one hour. During the second interview clients typically were asked about their personal goals. Some clients were asked about their general work history, and whether they were interested in a training program or a job program. See Hart Aff. ¶¶ 26-29.

54. During the second interview, some clients also were asked what they sought from the SSC. Several plaintiffs responded that they were seeking a job. See Hart Aff. ¶ 29; Brown Aff. ¶ 6; Del Valle Aff. ¶ 11; Springer Aff. ¶ 8.

55. Some plaintiffs were not interviewed, but nevertheless learned about the Program through word of mouth. In or around November 1993, for example, plaintiff Lee Springer arrived at the SSC’s center, where he was “hoping to find another job.” Soon thereafter, Springer learned from others at the center that there were positions available in the SSC’s kitchen. Springer, who already had substantial experience in cooking and general kitchen work, approached the SSC’s kitchen supervisor, Ivan Anthony, and “told him that [he] was looking for a job.” Anthony acknowledged that there were job openings in the SSC’s kitchen, and stated that after 20 hours of unpaid service, Springer would receive a kitchen job that paid $50 per week. See Springer Aff. ¶¶ 8-9,12.

56. Not every homeless client who arrived at the drop-in center was qualified to work in the Work Program. The SSC routinely screened out individuals who had severe or chronic medical or mental health problems, or who otherwise needed to enter therapeutic programs or undergo intensive case management. Those individuals were *513 referred to outside programs. See Mandelker Dep. at 142-43. In addition, such clients received a yellow card that allowed them to be in the center for only limited periods of time. See Hart Aff. ¶ 20.

57. By contrast, clients who were deemed mentally and physically fit for work and who expressed an interest in obtaining a job in the PTE Program were permitted to remain in the center and obtain a “blue card” identifying them as members of the center. See Hart Aff. ¶ 20; Moore Aff. ¶ 11. Clients who displayed initiative and an intention to “go back to work” were qualified to participate in the PTE Program. See Flynn Dep. at 122-23; Brown Aff. ¶ 35.

58. In the PTE Program’s early years, participants were asked to sign a document that described the Program as a twelve-week program divided into three phases, each lasting four weeks. According to the document, PTE participants were to work 40 hours each week during the first phase followed by phases that would involve some “training” component and seminars. See PE 20 (“Throughout the first phase, [the PTE participant] will be given a 40 hour work week. Throughout the second phase, [the PTE participant] will be given a 32 hour work week and 8 hours of required training. Throughout the third phase, [the PTE participant] will be given a 24 hour work week and 16 hours of required training; seminars; interviews; and interview feedback meetings.”)

ii. Post-Hiring Events

59. The SSC recorded the “date of hire” of PTE participant, and in some cases created a special list of hiring dates for PTE workers. See PE 72; Flynn Dep. at 181. Thereafter, a PTE participant was assigned to a specific work location within one of the departments. Each PTE participant was expected to work the next day on his or her assigned shift. In general, PTE participants were assigned to departments based on the needs of the SSC rather than the needs of the participant. See Brown Aff. ¶¶ 10, 56; Springer Aff. ¶ 8; Archie Aff. ¶ 13; Del Valle Aff. ¶ 12.

60. PTE participants in all departments were assigned to work 8-hour shifts. Their regular workweek was five days per week, for a total of 40 hours. See Moore Aff. ¶ 17; Brown Aff. ¶ 13; Hart Aff. ¶ 35; Springer Aff. ¶ 10; Flynn Dep. at 77,125-26.

61. In addition to registering their hiring dates, the SSC and the 34th SP attempted to record the total number of hours that PTE participants worked. According to plaintiffs’ recollections and defendants’ own calculations, several plaintiffs worked well over 700 hours — and some for more than 1000 hours— in the PTE program before leaving, being terminated or being promoted to a staff position. See Springer Aff. ¶ 19 (1,500 hours); West Aff. ¶ 1 (1,400 hours); Hart Aff. ¶ 52; Del Valle Aff. ¶ 31; see PE 33, 34 (defendants’ calculations of the total number of hours worked by PTE participants as of June 1994).

62. At all relevant times, PTE participants who were unable to work on their assigned shifts were required to provide a bona fide excuse and to complete a PTE excused absence sheet. See Hart Aff. ¶ 48; PE 5 (PTE excused absence sheet); PE 36 (memorandum describing “Administrative PTE Procedures”); PE 17 (“PTE enrollment contract”).

63. As noted, the SSC generally compensated PTE participants at a rate ranging from $40 to $60 per week for a 40-hour work week, or $8 to $10 per eight-hour day. This amounts to approximately $1 to $1.50 per hour worked. PTE participants were paid no more than $1.50 per hour, however, for the work they performed in each of the PTE departments. See Mandelker Dep. at 192-94, 200.

64. PTE participants who worked fewer than 40 hours in one week had their pay reduced by a corresponding amount. See Moore Aff. ¶ 20; Hart Aff. ¶¶45, 48-49; Brown Aff. ¶ 44.

B. Job Tasks In The Work Program’s Departments

65. According to several PTE participants and the defendants’ own documents, virtually all of the .drop-in center’s day-to-day maintenance and outreach, much of the food preparation, and some of the clerical work *514 was done by PTE participants. See PE 37; PE 38; Moore Aff. ¶¶ 13-14, 16, 24; Brown Aff. ¶ 14; Hart Aff. ¶¶ 33, 37-38; Archie Aff. ¶ 17.

66. PTE participants in the maintenance department performed almost all the basic janitorial and maintenance work needed for the SSC’s offices, including repairs, fixing light fixtures, painting, mopping floors, cleaning hallways, offices and bathrooms, removing garbage, stacking and unstacking chairs in the drop-in center gym and washing the uniforms worn by staff and PTE participants. See Archie Aff. ¶¶ 16-17; Hart Aff. ¶ 62; Moore Aff. ¶24; Biederman Dep. at 103. PTE maintenance participants also performed tasks for the GCP. See Biederman Dep. at 49. PTE maintenance participants were assigned to all three 8-hour shifts, including the “graveyard shift” from midnight to 8 a.m. See Hart Aff. ¶ 64; PE 39 (PTE maintenance participant’s time card and overtime slips indicating work on midnight to 8 a.m. shift). To the extent that staff worked in the maintenance department, PTE participants performed the same job tasks as those staff members, who were paid minimum wage or more. See Hart Aff. ¶¶ 62-63; Archie Aff. ¶ 17; Moore Aff. ¶ 23.

67. PTE participants in the food service department helped prepare over 400 meals each day in the SSC’s kitchen, traveled to the market to help purchase food products, loaded and unloaded food, assisted the food services director with general chores around the kitchen, cooked, washed dishes and removed garbage from the kitchen. See Springer Aff. ¶ 14. PTE participants performed the same job tasks as staff members- — other than the department head — who worked in food preparation and were paid minimum wage or more. See id. at ¶ 15.

68. PTE participants in the administration department performed various clerical tasks at the drop-in center, including general office work. See Grunberg Dep. at 85-86. At the drop-in center’s Assessment and Referral Center or “self-help center,” PTE administrative participants assisted homeless clients — who were not PTE participants — in finding resource materials on file and distributed paper and pencils. See Mandelker Dep. at 313. Some performed even more substantive work. For example, James Moore was a PTE administrative participant from Spring through Fall of 1994. Moore’s administrative duties included significant interaction with homeless clients at the drop-in center who were not participants in the Work Program. Among other things, Moore ran orientation sessions, informed homeless clients who had arrived at the center about welfare and social security benefits, and helped clients look for temporary or permanent jobs outside the center. See Moore Aff. ¶¶ 13-14, 16.

69. PTE participants also worked in a clerical capacity at the 34th Street SP. See Mandelker Dep. at 541, 543-44.

70. PTE participants in the outreach department acted as either stationary or roving patrol guards for ATM vestibules in and around the Grand Central Station area and the Pennsylvania Station area in midtown Manhattan, as well as many other parts of Manhattan, and parts of Queens. See Flynn Dep. at 64; Brown Aff. ¶ 14; Del Valle Aff. n 25-26; Hart Aff. ¶ 32.

71. Stationary patrol guards stayed inside the same site — either a vestibule, a building or premises such as Penn Station— for an entire shift. By contrast, roving or “mobile” guards were responsible for monitoring several ATM vestibules in one shift. See Del Valle Aff. ¶¶ 25-26; Hart Aff. ¶32; Brown Aff. ¶¶ 14, 27. In addition to their monitoring and protection duties, PTE outreach participants were responsible for monitoring and cleaning ATM vestibules. See Hart Aff. ¶ 33; Brown Aff. ¶ 18.

72. Vincent Flynn, the Director of Outreach, testified that the terms “stationary guards” and “regular patrol guards” in Plaintiffs’ Exhibit 40 refer to PTE participants. PE 40; see Flynn Dep. at 158-60. The schedule lists each Chemical Bank branch location outreach participants were responsible for guarding, whether the location was to be guarded by stationary guards or mobile patrol guards, and the hours and days of coverage. See PE 40.

73. As explained in marketing letters sent out by senior SSC officers Grunberg *515 and Sehiazza, the objective of the outreach program was to “present a safe environment” for customers at these premises. See PE 31; PE 35.

74. The SSC monitored premises in addition to bank ATM vestibules. It contracted to perform similar monitoring services for, among others, the National Railroad Passenger Corporation at Penn Station, the Tudor City Residents Association, the New York Community Trusts Parks Projects and certain corporations, such as the Philip Morris building, and buildings managed by the Edward S. Gordon Company. See Answer ¶ 25; Berger Aff. ¶¶ 7-10. The SSC assisted these and other corporations with their “homeless problems” by hiring PTE participants and staff workers to clear homeless persons from their vestibules and buildings. See PE 35. PTE participants were instructed to clear homeless people out. PTE participants were told to ask homeless persons to voluntarily leave ATM vestibules and buildings. Nevertheless, if a homeless person refused to leave voluntarily, the PTE participant was to remove the homeless person “by any means necessary” including through physical intimidation and violence. See Brown Aff. ¶25; Del Valle Aff. ¶¶ 25-26; PE 77 (Review of Findings of U.S. H.U.D. Investigation of the SSC) at 9 (H.U.D. noted, among other things, that defendants’ “outreach efforts were carried out by formerly homeless individuals with minimal training. Supervision was also seriously lacking. The GCP’s outreach methodology evidenced a reckless disregard for the inherent dangers resulting from this type of operation”).

75. PTE participants in “mobile” outreach were responsible for approaching homeless persons and informing them that they could obtain shelter at a drop-in center operated by the SSC. If a homeless contact at first refused to leave, the outreach participant called for additional outreach participants to persuade the homeless person into leaving. See Brown Aff. ¶¶ 17, 25, 57. On the other hand, if the guard’s first approach proved successful, the homeless contact was escorted to the drop-in center. See Brown Aff. ¶ 30.

76. PTE outreach participants sometimes drove the vans used to transport homeless contacts from the mobile site to the SSC’s offices. See Brown Aff. ¶ 30; Flynn Dep. at 71.

77. Some PTE participants worked in the outreach base office,' located at the SSC’s headquarters. Those PTE participants helped to coordinate the outreach routes for PTE participants and staff members. They also were responsible for ensuring that all routes were adequately covered by SSC personnel, including PTE participants, and for keeping track of work hours, overtime, and absences of both participants and staff. See Del Valle Aff. ¶ 17-18; Hart Aff. ¶¶ 37-41, 47-49; Brown Aff. ¶ 32.

78. A few PTE participants, including Tracey Randall, Leonard West, Crystal Henderson and Walter Brown, also worked as base supervisors in the outreach base office. According to Mandelker, “[a] base supervisor was an employee that was stationed at the home base of the Outreach Program.” See Mandelker Dep. at 414. PTE participants in the outreach base office also took calls on a “hotline” from banks and stores that had a “homeless problem of people hanging out inside or hanging in front of the[ir] place.” See Flynn Dep. at 68.

79. In addition to distributing uniforms to outreach participants, quartermaster room PTE participants cleaned, ironed, and issued uniforms and retrieved them at the end of each shift. See Flynn Dep. at 88; Hart Aff. ¶ 34.

80. Most of the outreach participants employed by the SSC were PTE participants. According to a November 1993 memorandum from Vincent Flynn, then Director of Outreach, to Frank Sehiazza, PTE participants constituted 63 of the 85 outreach participants responsible for guarding ATM vestibules and the like. See PE 41; Flynn Dep. 186-94 (explaining PE 41). Sixty to seventy percent of outreach participants were trainees. See PE 32 at 40. There were not enough staff participants to cover all the outreach locations. Accordingly, PTE outreach participants were assigned to all three 8-hour shifts, including the “graveyard shift” from midnight to 8 a.m. See Flynn Dep. at 83-84; *516 Del Valle Aff. ¶¶ 25, 28; Brown Aff ¶¶ 37, 55; Hart Aff. ¶ 67.

81. PTE participants who performed stationary and patrol outreach and who worked at the outreach base office performed the same job tasks as their co-participants who were staff members in the outreach program. See Hart Aff. ¶ 57-58; Del Valle Aff. ¶27; Brown Aff ¶ 51.

82. PTE participants also worked at the World Trade Center recycling program. Like staff workers who worked in the recycling program, their responsibilities induded collecting and sorting papers that were to be picked up for recycling. See West Aff. ¶ 8.

83. On occasion, PTE participants were employed to work on non-outreach and nonadministrative “special assignments” for outside companies. These special assignments arose out of agreements pursuant to which the GCP, the SSC or the 34th SP agreed to provide temporary laborers at a per hour rate. For example, in 1993 and 1994, the SSC entered into an agreement with Seventh on Sixth, Inc. (“7th on 6th”), a corporation that sponsors biannual fashion shows in Bryant Park in Manhattan. Each year 7th on 6th requested, and the SSC agreed to provide, “homeless outreach participants” to employ before and during the fashion show. See PE 42 (1993); PE 43 (1994); PE 44. The laborers’ tasks involved “heavy labor,” including unloading chairs, setting up barricades for the show and unloading and transporting boxes of fashion products. See PE 42, 43; Hart Aff. ¶ 40. Most of the laborers who performed these tasks were PTE participants. See Hart Aff. ¶ 40; Brown Aff. ¶ 47. The SSC also provided two outreach participants both before and during each show who were responsible for clearing the park of homeless persons. See Brown Aff. ¶ 47; PE 42; PE 43. In 1993 and 1994, the SSC paid PTE participants only $1 per hour for providing services to 7th on 6th in connection with the fashion show. In at least one case in 1994, the SSC had assured PTE participants that they would be paid $4.25 per hour, the then minimum wage, on- the fashion show assignment but later reneged and paid them the lesser PTE wage. See Hart Aff. ¶40; PE 2. By contrast, according to a letter from the SSC to 7th on 6th which sets forth billing rates for providing services, the SSC was paid $5.50 per hour per participant by 7th on 6th in 1994. See PE 44.

84. PTE participants were sometimes sent on special assignments in circumstances unrelated to their regular departmental work. For example, some PTE participants were sent to work at Bryant Park in Manhattan to pick up garbage. See Mandelker Dep. at 322-23; PE 45 (expense signature sheet for PTE participant dated 6/15/93 stating that participant “worked six days this week in Bryant Park taking out garbage”). One PTE participant worked as a doorman/outreach guard for the Oyster Bar. See Archie Aff. ¶¶ 10-16.

C. Supervision of PTE Participants

85. According to both PTE participants and SSC’s staff members, PTE participants often received little or no supervision while they performed their tasks. In testimony before the City Council of the City of New York’s Committee on General Welfare in May 1995, Jeffrey Grunberg, the SSC’s executive director, stated the following with regard to supervision and training of participants engaged in outreach: “Once they were out in the street, they would be supervised or monitored by someone. They would stick with someone for two or three days, depending on the person. That would be it.” PE 47 (City Council Transcript) at 137-38.

86. Vincent Flynn, the Director of the Outreach Program, testified that PTE outreach participants typically were accompanied and supervised by either a staff member or another PTE outreach participant for their first three tours before they conducted outreach alone. See Flynn Dep. at 76-79. PTE outreach participants confirm that they received supervision from a staff member or another PTE participant for at most the first few days of their outreach work. Thereafter, other than periodic short visits from shift or “field” supervisors once or twice each shift, they were left alone. See Brown Aff. ¶¶ 18, 25; Del Valle Aff. ¶¶ 21-24, 27-28.

87. PTE outreach participants in the base office and the quartermaster room received *517 little oversight from staff. See Hart Aff. ¶ 37; Brown Aff. ¶ 32.

88. Robert Hayes, the agent retained by the defendants to evaluate the PTE program, concluded that “the recruitment, training and supervision of SSC outreach participants was inadequate.” Hayes Report at 4 (PE 32). He also conceded that “detailed training was not provided in specific methods of engaging individuals,” id. at 38, and that “training for [SSC’s] outreach participants was often rudimentary ... and at times was partially sacrificed because of the need to have sufficient numbers of outreach participants to satisfy bank contracts.” Id. at 45. Hayes even quoted an “outreach director” as admitting that “the pressure to fill outreach posts under contract with banks at times forced reliance on untested trainees to work one-on-one with homeless persons” and that “training was haphazard.” Id. at 46.

89. PTE participants in maintenance similarly received little supervision from staff members. See' Archie Aff. ¶ 17. Several PTE participants in other departments observed PTE participants in maintenance working alone in the center without a supervisor. See Hart Aff. ¶¶ 62, 65; Moore Aff. ¶ 24; Brown Aff. ¶ 54.

90. Defendants also provided PTE participants in food service and administration with little meaningful, close supervision. See Springer Aff. ¶ 15; Moore Aff. ¶ 19.

91. Some staff members received extensive supervision and “training,” and received minimum wages. For example, as a staff member in the summer of 1994, Felicia Hart received considerable supervision from Lisa Davis, then the SSC’s Church Bed Coordinator and Employment Coordinator and Hart’s immediate superior. See Davis Dep. at 67-68. Hart was also taught how to use a computer. Both experiences were in stark contrast to Hart’s experience in the PTE program. See Hart Aff. ¶¶ 59, 61. Although Davis testified that she provided “training” when Hart was a PTE participant, see Davis Dep. at 85-88, Hart was in fact a staff participant by that summer. See Hart Aff. ¶ 56.

D. Evaluation of PTE Participants

92. Each PTE participant was to receive a written performance evaluation variously entitled a “Pathway to Employment Weekly Personnel Evaluation,” ‘Work Program Weekly Personnel Evaluation” or a “Pathway to Employment Monthly Participant Performance Rating.” See PE 48 (miscellaneous evaluations); Mandelker Dep. at 467, 469-71. In or around May 1993, the PTE participant evaluations were required to be completed on a biweekly rather than a weekly basis due to the large number of PTE outreach participants. See PE 51. Despite the formal requirement, several PTE participants never or rarely received a written job performance evaluation. See Brown Aff. ¶ 48.

93. PTE personnel evaluations were completed by departmental managers. Tellingly, the evaluation form referred to the PTE member as a “worker,” and the form called for an evaluation of the “worker’s” job performance. The evaluation required the manager to note the department in which the PTE participant worked. Each PTE participant was rated based on seven categories. The performance categories included “attendance,” “compliance with rules and authority,” and “productivity.” See PE 48. With respect to each category PTE participants could be rated as either “below,” “fair,” “average,” or “excellent.” Each of these ratings in turn had a corresponding range of numerical scores. A rating of “fair” warranted a score of five to seven, while a rating of “excellent” in any category corresponded to a score ranging from 15 to 20. The highest possible total performance score was 140. Later, the form was changed to reflect the point average. The highest possible point average was 20. See PE 50.

94. The evaluations for PTE participants make no reference to training or to the PTE participant’s ability to learn new skills. Although the evaluations provided for additional written comments, none of the comments on the evaluations produced by the defendants refer to “training” of PTE participants or to a PTE participant’s ability to develop new skills necessary to function in jobs with outside entities or at the SSC. See PE 48.

*518 E. Time Cards and Time Sheets

95. Typically, the PTE Program day was divided into three eight-hour shifts. PTE participants were expected to work on an assigned shift at least eight hours per day, five days per week, for a total of forty hours per week. PTE participants were paid based on their total number of hours of work each week. As noted, for the first 40 hours of work per week, all PTE participants were paid $1 per hour, although for a time PTE participants were paid $1.25 per hour, or $50 per week. As a general matter from 1992 until the late fall of 1993, PTE participants were paid “time and a half’ — or $1.50 — for overtime hours beyond 8 hours per day. See Brown Aff. ¶ 36; Del Valle Aff. ¶ 15. After 1993, however, the overtime was credited to the total'hours needed to be promoted to a staff job paying minimum wage.

96. Since PTE participants’ weekly pay was based on the number of hours worked, the SSC attempted to record accurately the number of hours that each PTE participant worked each day. In order to do so, the SSC distributed weekly time cards to PTE participants in each department. PTE participants were informed that they were required to use.the time cards while they worked in the Work Program. See Hart Aff. ¶ 43; Del Valle Aff. ¶¶ 17,19; Brown Aff. ¶ 11; Springer Aff. ¶¶ 10-11; Moore Aff. ¶ 18.

97. Each time card noted the PTE participant’s name, department and shift. At the start of a shift, each PTE participant was required to use his or her time card to “punch in” to a time clock, which noted the date and time the PTE participant arrived. Similarly, PTE participants “punched out” using a time clock at the end of their shift. The date, start time and end time were noted on the card’s right-hand column. When the time clock malfunctioned, departmental managers were responsible for writing in the start time and end time. They were supposed to initial each entry to verify that the PTE participant had in fact arrived for his or her shift. The PTE participants’ total hours for the week were usually written down and circled in the left column. In some instances, time cards indicated the number of hours that were “overtime