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On October 16, 2025, the Eleventh Circuit (“the Court”) rendered its opinion in Galarza, et al. v. One Call Claims, LLC, et al. (No. 23-13205) (11th Cir. Oct. 16, 2025).[1] The workers in Galarza were insurance adjusters assigned by an outsourcing company for insurance claims to assist with investigating claims in the wake of Hurricane Harvey in 2017.[2] The court addressed whether the workers were employees of One Call or independent contractors under the FLSA, as the workers sought overtime pay they alleged they were owed.[3] The court noted that “[w]hen we review the conditions of employment to determine employee status, we consider all the relevant circumstances with an eye toward the economic reality of the relationship and whether the workers are economically dependent on the employer.”[4] To that end, the Eleventh Circuit has “recognized six relevant factors to guide the analysis[.]”[5] This blog post will discuss Galarza and provide guidance regarding the factors used by the Eleventh Circuit to determine whether an individual is an employee or an independent contractor.

By way of background, the workers in Galarza were licensed, certified, and trained insurance adjusters; neither One Call nor the Texas Windstorm Insurance Association (“TWIA”) (who contracted with One Call) “trained the workers on the basic skills or functions of the job; instead, they were licensed by Texas and had previous experience in these roles.”[6] TWIA, however, as a state-created entity, “required the adjusters to complete a certification process to ensure that they were familiar” with additional requirements imposed by the state.[7] According to one of the workers, he was trained on how TWIA wanted him to perform his duties and provided him with a spreadsheet as an aide in performing his duties.[8] Furthermore, the workers insisted that they were required to consult with and get approval from TWIA before making offers and resolving claims.[9] The workers and One Call had agreements that claimed they were independent contractors, but the contract noted that the assignment with TWIA was for “an indefinite duration to be ‘determined by ‘TWIA.’”[10] The workers performed services for One Call and TWIA for one and a half to two years.[11] Although the agreements provided they could market their services to other insurers, the contracts prohibited them from inducing or attempting to induce customers (and others) to cease doing business with One Call.[12] None of the workers at issue performed insurance adjustments for anyone else during the pertinent time.[13]

The workers presented evidence that TWIA set their work schedules, they were required to provide time sheets, and TWIA controlled their day-to-day tasks.[14] The workers were responsible for covering their own expenses related to the work with TWIA, but TWIA provided equipment for the work.[15]  Ultimately, TWIA underwent a shift to remote work.[16] The Eleventh Circuit noted there was a factual dispute whether TWIA could monitor the workers’ computers remotely.[17] If the workers wanted to work on Sundays, they had to request permission from TWIA.[18] The workers had all completed their assignments by August 2019.[19]

Subsequently, the workers filed suit under the FLSA seeking damages for unpaid overtime labor.[20] The workers “alleged that they were misclassified as independent contractors instead of employees and were not paid overtime for any week in which they worked more than 40 hours.”[21] The district court ultimately determined that four of the six factors weighed in favor of independent contractor status.[22]

The Eleventh Circuit disagreed with the district court and thoroughly reviewed each of the six factors set forth in Scantland and related cases.[23] The court explained that “[t]o determine whether a worker qualifies as an ‘employee’ and is thus entitled to overtime wage protection under the FLSA, we assess the economic reality of the relationship and whether the worker is economically dependent on the alleged employer under the totality of the circumstances.”[24] The court noted that the six factors, which are a guideline and not an exhaustive list, are:

(1) the nature and degree of the alleged employer’s control over the manner in which work is performed; (2) the worker’s opportunity for profit or loss depending on managerial skill; (3) the worker’s investment in materials or hiring additional workers as necessary to complete his task; (4) whether the worker’s job requires a special skill; (5) the permanency and duration of the relationship between the worker and alleged employer; and (6) the extent to which the worker’s services are an integral part of the alleged employer’s business.[25]

The court stressed that no one factor dominates and that the factors must reflect the economic reality of a given situation.[26]

Turning to the facts at issue, the court held that “[b]y our count, five factors favor employee status, and only one favors independent contractor status.”[27] The court thus determined that “a jury could reasonably conclude that the workers were employees.”[28] The court provided a detailed analysis of each factor that will not be set forth here. Briefly, the court determined first that the companies had sufficient control over the workers given that facts set forth above related to requiring time sheets, docking pay for absences or tardies, and requiring permission to work on Sundays.[29] The court further stressed that “the companies also controlled how the workers performed their tasks and limited their ability to work for other companies.”[30] The workers had to consult with One Call and TWIA to perform their duties, and the workers did not work for anyone else during the pertinent time.[31]

Next, the court turned to whether the workers had an “‘opportunity for profit or loss depending on [their] managerial skill.’”[32] The court determined that “[b]ecause the workers could do nothing to influence wages, this factor indicates that they were likely employees.”[33] The court stressed that “nothing in the record suggests that the workers had an ability to influence their income based on their own managerial skills.”[34]

The court next addressed the workers’ “‘investment in equipment or materials required for [their] task[s], or [their] employment of workers.’”[35] The court held that”[t]he workers had no ability to employ others, nor did they heavily invest in the equipment and materials necessary for the job compared to the companies,” thus suggesting “that the workers were employees.”[36] The workers were supplied with computers, telephones, ID badges, and other items to perform their duties.[37] Even when the workers worked remotely, the companies “provided the necessary software, networks, and accounts.”[38]

Turning to whether the job required a “‘special skill,’” the court determined the factor weighed “in favor of classifying the workers as independent contractors.”[39] The court noted that the workers “came to the relationship with special training and a lice from the state to work in this field.”[40]

Next, the court examined “‘the degree of permanency and duration of the working relationship.’”[41] The court held that this factor also weighed in favor of finding that the workers were employees and noted that “the companies retained the workers for an indefinite and extendable period of time during which the workers did not service any other companies[.]”[42] The court stressed that although the contracts stated that the workers were “‘temporarily engaged,’” the economic reality of the situation controlled the analysis.[43]

Finally, the court determined that the workers performed services that were “‘an integral part of the alleged employer’s business’” and thus the factor weighed in favor of finding that they were employees.[44] The court held that “without the workers’ services, the outsourcing company has nothing to sell and the insurers can’t perform their central function of resolving insurance claims.”[45]

The court thus held that “when we view the facts in the light most favorable to the workers, the factors support the workers’ claim that they are ‘employees’ under the FLSA.”[46] The court reversed the district court’s judgment and remanded the case for further proceedings.[47]

As Galarza demonstrates, the determination of whether a worker is an employee or independent contractor under the FMLA is a fact-intensive endeavor, and it is vital to understand the factors relied upon by the courts in the Eleventh Circuit in answering that question. Whether you are a worker who believes you have been underpaid or an employer facing a claim under the FLSA, you can turn to the experienced attorneys at Jill S. Schwartz & Associates to assist you.

If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

[1] The opinion is available on the court’s website at https://media.ca11.uscourts.gov/opinions/pub/files/202313205.pdf (last visited Nov. 25, 2025). The citations in this blog post are to that version of the opinion.

[2] Galarza, at *2-3.

[3] Id., at *2.

[4] Id.

[5] Id. (citing Scantland v. Jeffrey Knight, Inc., 721 F.3d 1308, 1311-12 (11th Cir. 2013)).

[6] Id., at *3. As noted by the court, Texas Windstorm Insurance Association was created by the Texas legislature “to provide wind and hail insurance to the Texas coast.” Id.

[7] Id.

[8] Id.

[9] Id., at *3-4.

[10] Id., at *4.

[11] Id.

[12] Id.

[13] Id.

[14] Id., at *5.

[15] Id.

[16] Id., at *5-6.

[17] Id., at *6.

[18] Id., at *6-7.

[19] Id., at *7.

[20] Id.

[21] Id.

[22] Id.

[23] Id., at *8.

[24] Id.

[25] Id., at *10 (citation omitted).

[26] Id., at *8.

[27] Id., at *12.

[28] Id.

[29] Id., at *13.

[30] Id., at *14.

[31] Id.

[32] Id., at *15 (quoting Scantland, 721 F.3d at 1312).

[33] Id.

[34] Id., at *18.

[35] Id. (quoting Scantland, 721 F.3d at 1312).

[36] Id., at *19.

[37] Id.

[38] Id.

[39] Id., at *20-21 (quoting Scantland, 721 F.3d at 1312).

[40] Id.

[41] Id., at *21 (quoting Scantland, 721 F.3d at 1312).

[42] Id., at *22.

[43] Id.

[44] Id., at *23 (quoting Scantland, 721 F.3d at 1312).

[45] Id.

[46] Id., at *24.

[47] Id., at *25.

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