March 2011 Update of Employee/Independent Contractor ... · March 2011 Update of Employee/Independent Contractor Misclassification Case Law, 2010-11 ... ABA Mid-Winter EEO ... Test,”

March 2011 Update of Employee/Independent Contractor Misclassification Case Law, 2010-11

Prepared by:

Andrew S. Rosenman Partner [email protected] 71 S. Wacker Dr. Chicago, IL 60606 Ph: +1 312 701 8744 Fax: +1 312 706 8775

Christopher S. Comstock Associate

[email protected] 71 S. Wacker Dr.

Chicago, IL 60606

Ph: +1 312 701 8386 Fax: +1 312 701 7711

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ABA Mid-Winter EEO Conference Employee/Independent Contractor Classification 2010-11 Case Law Update

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Introduction In 2010 and throughout the first few months of 2011, a number of courts have issued important and interesting decisions in cases involving worker misclassification claims. A multitude of tests have evolved for determining whether a worker is an employee or an independent contractor. Courts throughout the country have applied different tests in different contexts. Several courts have recently suggested that these tests are functionally similar or that they can be consolidated into one overarching rule. However, as the following case summaries demonstrate, courts still interpret this issue in different ways. The idiosyncratic tests and factors that may apply in one context or jurisdiction may receive less weight or may be disregarded in another context or jurisdiction. Therefore, it is critical to pay careful attention to the facts and applicable test in any particular case. The various decisions from 2010 involving FedEx’s classifications will be discussed separately.

Contents • Rohn Padmore, Inc. v. LC Play Inc., 679 F. Supp. 2d 454 (S.D.N.Y. 2010) ....................... 4

• Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853 (8th Cir. 2010) .................... 4

• Kravis v. Karr Barth Associates, No. 09-485, 2010 WL 337646 (E.D. Pa. Jan. 26, 2010) . 5

• U.S. v. Crabbe, 364 Fed. App’x. 412, 2010 WL 318399 (10th Cir. Jan. 28, 2010) ............ 6

• Injured Workers' Ins. Fund v. Orient Exp. Delivery Service, Inc., 190 Md. App. 438, 988 A.2d 1120 (2010) ............................................................................................................................ 6

• Khaksari v. Chairman, Broadcasting Bd. of Governors, 689 F. Supp. 2d 87 (D.D.C. 2010) ............................................................................................................................................... 7

• Creel v. U.S., 598 F.3d 210 (5th Cir. 2010) ........................................................................... 7

• Ruiz v. Affinity Logistics Corp., 697 F. Supp. 2d 1199 (S.D. Cal. 2010) ............................. 8

• Lewis v. D. Hays Trucking, Inc., 701 F. Supp. 2d 1300 (N.D. Ga. 2010) ........................... 9

• Awuah v. Coverall North America, Inc., 707 F. Supp. 2d 80 (D. Mass. 2010) ................... 9

• Awuah v. Coverall North America, Inc., No. 07-10287-WGY, 2010 WL 3766486 (D. Mass. Sept. 28, 2010) ................................................................................................................... 10

• Townsend v. CWS, Inc., No. 08-328, 2010 WL 1382269 (N.D. Ind. March 29, 2010) ..... 10

• Oliveira v. ICLB, Inc., No. 09-10038, 2010 WL 2102992 (Mass. App. March 30, 2010) 11

• Gifford v. Meda, No. 09-13486, 2010 WL 1875096 (E.D. Mich. May 10, 2010) .............. 11

• Mayfield v. National Ass'n for Stock Car Auto Racing, Inc., 713 F. Supp. 2d 527 (W.D.N.C. 2010) .......................................................................................................................... 12

• Holland v. Gee, 719 F. Supp. 2d 1361 (M.D. Fla. June 16, 2010) ..................................... 12

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• Bruecher Found. Servs., Inc. v. U.S., 383 Fed. App’x. 381, 2010 WL 2543471 (5th Cir. June 18, 2010) .............................................................................................................................. 13

• LeMaster v. Alternative Healthcare Solutions, Inc., 726 F. Supp. 2d 854 (M.D. Tenn. 2010) ............................................................................................................................................. 14

• Narayan v. EGL, Inc., 616 F.3d 895 (9th Cir. July 13, 2010) (amended Aug. 5, 2010) .. 14

• Quinteros v. Sparkle Cleaning, Inc., No. 07-0628, 2010 WL 3000865 (D. Md. July 26, 2010) ............................................................................................................................................. 15

• Murray v. Principal Fin. Group, Inc., 613 F.3d 943 (9th Cir. 2010) ................................. 16

• Taylor v. Waddell & Reed Inc., No. 09-2909, 2010 WL 3212136 (S.D. Cal. Aug. 12, 2010) 16

• Solis v. Velocity Exp., Inc., No. 09-864, 2010 WL 3259917 (D. Or. Aug. 12, 2010) ........ 17

• Bulaj v. Wilmette Real Estate and Mgt. Co., LLC, No. 09-6263, 2010 WL 4237851 (N.D. Ill. Oct. 21, 2010) ......................................................................................................................... 17

• In re Empire State Towing and Recovery Ass'n, Inc., 15 N.Y.3d 433, 938 N.E.2d 984, 912 N.Y.S.2d 551 (N.Y. 2010) ............................................................................................................ 18

• Cheryl A. Mayfield Therapy Center v. C.I.R., No. 9156-07, T.C. Memo. 2010-239, 2010 WL 4340111 (U.S. Tax Ct. Oct. 28, 2010) ................................................................................ 19

• Grace v. U.S., No. 08-6006, 2010 WL 4451818 (W.D.N.Y. Nov. 4, 2010) ........................ 19

• Talbert v. American Risk Ins. Co., Inc., No. 10-20355, 2010 WL 5186768 (5th Cir. Dec. 20, 2010) ....................................................................................................................................... 20

• Flint v. Langer Transp. Corp., No. 06-3864, 2011 WL 253646 (D.N.J. Jan. 25, 2011) .... 20

• Ratledge v. Science Applications Intern. Corp., No. 10-239, 2011 WL 652274 (E.D. Va. Feb. 10, 2011) ............................................................................................................................... 21

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Rohn Padmore, Inc. v. LC Play Inc., 679 F. Supp. 2d 454 (S.D.N.Y. 2010) The defendant clothing manufacturer entered into an agreement with the plaintiff in which the plaintiff was to perform a range of public relations, event planning and other coordination services. After several months, however, the defendant terminated the plaintiff’s contract. The plaintiff brought suit under the New York State Human Rights Law (“NYSHRL”), claiming that the defendant had terminated him due to the perception that he was a homosexual. The defendant argued that the plaintiff was an independent contractor and, therefore, was not protected by the NYSHRL. The parties agreed that the appropriate test was the common law agency test, pursuant to which the court examined the defendant’s right to control the manner and means by which the work was accomplished, as well as twelve other relevant factors. Rohn Padmore, 679 F. Supp. 2d at 466. The court held that it was required to disregard the factors that were irrelevant or of indeterminate weight. Id. The court found that there was inconclusive evidence regarding the defendant’s ability to control the plaintiff’s work. Id. at 467. The evidence showed that the plaintiff had obtained media coverage for the defendant’s clothing line, but there was no evidence demonstrating how closely he worked with the defendant in this endeavor. The court found that the remaining factors were either contradictory or inconclusive. Id. at 467-68. The court also declined to place undue weight on the fact that the defendant treated the plaintiff as an independent contractor for tax purposes and the fact that the plaintiff did not receive employee benefits. Id. at 468. The court found that an overemphasis on these two factors could lead firms to deny benefits and tax deductions in order to skirt the antidiscrimination laws. Id. In sum, the court found that the plaintiff had raised a genuine issue of material fact as to whether he was an employee, and the court denied the defendant’s motion for summary judgment. Id.

• Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853 (8th Cir. 2010)

The Eighth Circuit reversed a grant of summary judgment for FedEx in a respondeat superior tort case because the plaintiff had presented sufficient evidence that a driver was a FedEx employee, not an independent contractor. Huggins, 592 F.3d at 861. The plaintiff, Walter Huggins, sued FedEx for negligence. Huggins had been injured while riding in a truck bearing FedEx insignia that was being driven by Esteban Gutierrez. The district court entered summary judgment for FedEx, concluding that Gutierrez was an independent contractor and so his negligence could not be imputed to FedEx. On appeal, the Eighth Circuit applied Missouri law and cited the “principal factors” set out in the Restatement (Second) of Agency. Under this authority, the analysis turned on FedEx’s “right to control” Gutierrez’s conduct. Id. at 858. FedEx had contracted with another organization, ANI Logistics, to provide shipping services. ANI owned the truck that Gutierrez was driving, compensated drivers like Gutierrez, paid their taxes, and provided workers’ compensation. FedEx argued that, under the contract, it had disclaimed any employment relationship with Gutierrez and did not have the right to control his work. In the agreement, the parties stated that ANI was an independent contractor and had sole

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discretion in carrying out the contractual objectives. But the Eighth Circuit found that FedEx had retained the right to control at least some of the conduct of ANI and its drivers. Id. at 859. Specifically, the agreement required the drivers to wear FedEx uniforms, required the ANI trucks to bear FedEx insignia, stated that FedEx would familiarize ANI with FedEx quality service and safety procedures, reserved FedEx’s right to monitor ANI’s safety practices, required drivers to submit fuel receipts and shipping documents to FedEx, and required ANI to provide FedEx with advance notice of routes to be taken and state-by-state mileage reports. The contract also gave FedEx discretion to make determinations of disqualification as to drivers. In addition, while ANI owned the truck, FedEx provided trailers and dollies. Drivers also went to FedEx terminal and package processing facilities to obtain itineraries, depart and return from trips, and drop and hook FedEx-owned trailers. The evidence suggesting that drivers picked up and delivered packages through a network of nationwide FedEx terminals supported the inference that the terminals were part of the drivers’ “place of employment.” Id. at 860. The court also took note of Gutierrez’s three year term of employment. Finally, there were numerous documents bearing the FedEx name and relating to Gutierrez, including a “Record of Strength Test,” a “Fair Credit Reporting Act Disclosure Statement,” and a drug testing form. This evidence supported the argument that Gutierrez was an employee, and the Eighth Circuit reversed the grant of summary judgment in favor of FedEx. Id. at 861.

• Kravis v. Karr Barth Associates, No. 09-485, 2010 WL 337646 (E.D. Pa. Jan. 26, 2010)

The plaintiff, an insurance saleswoman, brought suit against her former employer alleging, among other things, age and gender discrimination and retaliation in violation of federal and Pennsylvania law. The defendant moved for summary judgment, claiming that the plaintiff’s claims were barred because she was an independent contractor. The plaintiff had signed a Sales Agent Agreement which designated her as an independent contractor. The court first took note of the intent of the parties, as evidenced by the agreement. Kravis, 2010 WL 337646, at *3. Noting that the written agreement was not dispositive of the plaintiff’s employment status, the court found that it could still serve as “strong evidence” that she was an independent contractor. Id. Beyond the contract, the court applied a number of factors under the common law agency test. Id. at *4. The court noted that the plaintiff’s job required specialized skills and in-depth knowledge. The plaintiff also used her own car, computer, telephone, marketing materials, and administrative support. She also had almost unlimited discretion over when and how long to work. The only activity that the defendants required of her was compliance with the detailed regulatory schemes impacting sellers of insurance and financial products. The plaintiff had worked for the defendant for nearly 20 years, but either party had the power to terminate the Agreement at any time. Further, the court found that the plaintiff’s title, “Vice President of Karr Barth Associates,” was only a marketing title and did not negate the plaintiff’s independent contractor status. After weighing these factors, the court found that the plaintiff was an independent contractor, and granted summary judgment to the defendant.

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• U.S. v. Crabbe, 364 Fed. App’x. 412, 2010 WL 318399 (10th Cir. Jan. 28, 2010) The Tenth Circuit applied the IRS’s twenty factor test to determine that the vice president of a company had misclassified a number of employees as independent contractors and, therefore, had willfully failed to pay payroll taxes and had willfully filed false tax returns. Crabbe, 364 F. App’x. at 422. The company, Columbine Health Care, Inc., contracted with nurses willing to provide short-term services to healthcare facilities, matched those nurses with healthcare facilities, and negotiated contracts with the facilities to deliver those services. The vice president, Crabbe, took it upon himself to file IRS Form 941s for the company. The 941s and the payments Crabbe made pursuant to them only included Columbine’s corporate employees and did not include any of the nurses. He continued to file these forms throughout 2001 and, on these forms, represented that Columbine employed between 21 and 31 employees. He later admitted that, at the time he filed the forms, he was aware that Columbine had contracts with over 100 nurses. The IRS opened a criminal investigation of Columbine, and Crabbe was indicted for over thirty violations of the federal criminal tax laws. A jury convicted him of failure to pay payroll taxes and filing false tax returns. The district court sentenced him to 37 months in prison. On appeal, Crabbe challenged, among other things, the sufficiency of the evidence supporting the jury’s verdict. Specifically, he argued that the Columbine nurses were independent contractors, not employees. The Tenth Circuit thus examined the IRS’s non-exhaustive list of twenty factors to determine the nurses’ employment status. The court noted that Columbine had contractual authority to control the manner of the nurses’ work (even if that authority was rarely, if ever, exercised), Columbine’s existence depended on the nurses’ work, the nurses had a continuing relationship with Columbine, Columbine paid the nurses by the hour and paid for travel and housing expenses, and both Columbine and the nurses had the mutual right to terminate the relationship at will. Therefore, the Tenth Circuit affirmed the jury verdict and held that there was evidence supporting the jury’s finding of an employer-employee relationship beyond a reasonable doubt. Id. at 419.

• Injured Workers' Ins. Fund v. Orient Exp. Delivery Service, Inc., 190 Md. App. 438, 988 A.2d 1120 (2010)

The Maryland appellate court reversed an order granting summary judgment to a company as to claims that the company had misclassified its workers. Orient Exp., 988 A.2d at 1134. The defendant company operated a messenger delivery business and entered into a subcontract with another company that provided the actual messenger and delivery personnel. The defendant company also contracted with the plaintiff insurance company to provide workers’ compensation insurance. The insurance company sued, claiming that the defendant had misclassified its delivery personnel as independent contractors, which caused the insurance company to be underpaid according to the contract. The trial court granted summary judgment for the defendant, but the appeals court reversed and held that factual disputes prevented summary disposition of the case. Id. at 1130-34.

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The delivery personnel had each executed a “sole proprietor election form” and submitted the form to the state workers’ compensation commission. The appeals court, however, held that the forms were insufficient to establish independent contractor status. In addition, the agreements signed by the workers were also inadequate to establish that they were not employees. Rather, the trial court was required to consider the traditional common law factors. Id. at 1133. The appeals court also noted cases from other jurisdictions in which courts found drivers to be employees of a courier when they reported to the courier’s office each day. Id. Thus, the appeals court reversed the grant of summary judgment and remanded the case. Id. at 1134.

• Khaksari v. Chairman, Broadcasting Bd. of Governors, 689 F. Supp. 2d 87 (D.D.C. 2010)

The plaintiff was a translator who worked as a contract employee for the Broadcasting Board of Governors (“BBG”). About a year after she had started working, the BBG sent the plaintiff a letter informing her that her contract would not be renewed. The plaintiff then sued the BBG claiming that she was subjected to a hostile work environment under Title VII. The BBG moved for summary judgment, claiming that the plaintiff could not bring suit under Title VII because she was an independent contractor, not an employee. The court held that, in order to evaluate plaintiff’s employment status, it had to apply the twelve-factor test developed in Spirides v. Reinhardt, 613 F.2d 826 (D.C. Cir. 1979). Khaksari, 689 F. Supp. 2d at 91. Under this test, the most important factor is the extent of the employer’s right to control the means and manner of the worker’s performance. Id. Evaluating the factors, the court noted that the plaintiff was a contract employee, used specialized language skills, did not receive medical insurance, did not accrue annual leave, was paid on a per-assignment basis, and treated as an independent contractor for tax purposes. Id. On the other hand, the plaintiff performed her work on the BBG premises and she used equipment furnished by the BBG. Id. at 91-92. However, the court focused on the fact that the plaintiff was not supervised closely and that her relationship with the BBG ended after a year and a half with no notice. Id. at 92. Weighing these factors, the court held that the plaintiff was an independent contractor and granted summary judgment for the BBG. Id.

• Creel v. U.S., 598 F.3d 210 (5th Cir. 2010) In a medical malpractice case, the Fifth Circuit found that an orthopedic surgeon was an independent contractor of the federal government and therefore not entitled to immunity under the Federal Tort Claims Act (“FTCA”). Creel, 598 F.3d at 215. The surgeon, Mercer, performed knee surgery on a patient at a Veterans Affairs Medical Center (“VAMC”). The patient sued both Mercer and the federal government alleging medical malpractice. Under the FTCA, if Mercer were a federal employee, he would be immune from suit, but if he were an independent contractor, the government would be immune. The district court found that Mercer was a federal employee, and thus entitled to immunity under the FTCA. On appeal, the Fifth Circuit analyzed the relationship between Mercer and the VAMC, stating that the “critical factor” was “the power of the federal government to control the detailed

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physical performance of the individual.” Id. at 213. The court also considered the factors enumerated in the Restatement (Second) of Agency. The court found that several factors weighed in favor of independent contractor status: Mercer was engaged in a distinct occupation requiring a high degree of skill, the U.S. retained no control over professional aspects of Mercer’s services, the VAMC did not intrude on the daily rendition of those services or override Mercer’s medical judgment, Mercer’s contract was for a maximum of one and a half years, the contract stated that Mercer was an independent contractor, and Mercer was required to provide liability insurance to himself and whomever he hired. Other factors, however, favored an employer-employee relationship: VAMC provided the instrumentalities, tools, and place of work; Mercer was paid an estimated yearly income that was based on his being present at the VAMC Monday through Friday between 8:00 a.m. and 4:30 p.m.; and the VAMC was in the business of providing medical services. Weighing all of these factors, the Fifth Circuit found that Mercer was an independent contractor. Id. at 215. Therefore, the court found that Mercer was not immune from the malpractice suit under the FTCA. Id.

• Ruiz v. Affinity Logistics Corp., 697 F. Supp. 2d 1199 (S.D. Cal. 2010)

The defendant, Affinity, provided regulated, for-hire home delivery and transportation services to home furnishing retailers. The plaintiffs were a class of drivers who made deliveries for the retailers through Affinity. Under Georgia law, because the contract between the drivers and Affinity designated the drivers as independent contractors, the court presumed this designation was true. Ruiz, 697 F. Supp. 2d at 1204-05. The plaintiffs therefore had the burden to rebut the presumption that they were, in fact, independent contractors by showing that the employer had assumed the right to control the time, manner, and method of their work. Id. In the court’s view, the most important consideration was the fact that the drivers were free to hire others to perform the actual work at issue. Affinity did not control who the drivers hired, and any restrictions placed on that process were primarily dictated by federal regulations and the retailers. Another important consideration was the fact that the drivers were required to establish their own business. Additionally, Affinity did not control the actual hours worked. The drivers had to show up to meetings or risk losing their routes, but they could control the exact time they showed up at the warehouse and the roads to take to make deliveries. The end of the day also depended on how quickly and efficiently the route was completed. The court also examined numerous common law factors and found that they weighed in favor of an independent contractor relationship. The court focused on the independent contractor language in the agreement, the fact that the drivers established their own businesses, the lack of supervision of drivers’ work, the specialized skill required of drivers, the fact that Affinity did not provide the tools or place of work, the fact that drivers were occasionally able to negotiate payment for difficult deliveries, and the parties’ belief as to the drivers’ independent contractor status. Weighing these factors, the court found that the drivers had not met their burden of rebutting the presumption of independent contractor status, and the court entered judgment for Affinity. Id. at 1220.

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• Lewis v. D. Hays Trucking, Inc., 701 F. Supp. 2d 1300 (N.D. Ga. 2010)

In another case arising under Georgia law, the court found that a truck driver was an independent contractor for respondeat superior purposes, based on the presumption arising from the independent contractor agreement between the driver and a chemical corporation. Lewis, 701 F. Supp. 2d at 1306-09. The chemical corporation had been sued for negligence based on an accident in which the driver had hit another automobile while delivering pine stumps to the chemical plant. In analyzing the driver’s status, the court stated that “the chief test lies in whether the contract gives, or the employer assumes, the right to control the time, manner, and method of executing the work as distinguished from the right merely to require certain definite results in conformity to the contract.” Id. at 1306. The contract denoted the driver as an independent contractor, which created a presumption that this designation was true. Also, nothing in the contract purported to subject the driver to the corporation’s rules or policies. Deposition testimony from fellow drivers established that the driver never believed that he was obligated to follow recommendations from the chemical corporation. Also, the fact that the corporation might have taken a security interest in the driver’s equipment did not create an employer-employee relationship, because Georgia law specifically provided that the “existence of a security interest . . . without more, does not subject a secured party to liability in contract or tort for the debtor’s acts or omissions.” Id. at 1307. Because the driver determined the time, manner, and method of his work, the court held that he was an independent contractor. Id. at 1308.

• Awuah v. Coverall North America, Inc., 707 F. Supp. 2d 80 (D. Mass. 2010)

The court found that workers who performed cleaning services as franchisees had been misclassified as independent contractors under the Massachusetts Independent Contractor Statute because the franchisees did not perform services outside the normal course of the franchisor’s business. Awuah, 707 F. Supp. 2d at 84. Under the Massachusetts law, the franchisor, Coverall, had the burden of proving that (1) the franchisees were “free from control and direction in connection with the performance of the service”; (2) “the service [was] performed outside the usual course of the business of the employer”; and (3) the franchisees were “customarily engaged in an independently established trade” of the same nature as that involved in the franchise agreement. Id. at 82. Coverall argued that it met the test because, among other things, it was in the franchising business, not the commercial cleaning business, it did not clean establishments, and it did not employ anyone who cleaned. The court disagreed with these arguments and found that “franchising is not in itself a business, rather a company is in the business of selling goods or services and uses the franchise model as a means of distributing the goods or services to the final end user without acquiring significant distribution costs.” Id. at 84. The court noted that Coverall “trains its franchisees and provides them with uniforms and identification badges.” Id. Coverall also contracted with all customers, billed all customers, and received a percentage of revenue earned on every cleaning service. Therefore, the court found that Coverall sold cleaning services, the same services provided by

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the franchisees. Id. For this reason, the court granted summary judgment against Coverall and held that the franchisees had been misclassified as independent contractors. Id. at 85.

• Awuah v. Coverall North America, Inc., No. 07-10287-WGY, 2010 WL 3766486 (D. Mass. Sept. 28, 2010)

Massachusetts’ misclassification statute provides treble damages to misclassified employees for any lost wages and other benefits. In August 2009, the Supreme Judicial Court of Massachusetts held that the law imposed strict liability on employers and entitled misclassified workers to recovery even if they had been paid more as independent contractors than they would have lost in wages and benefits. Somers v. Converged Access, Inc., 911 N.E.2d 739, 749 (Mass. Aug. 21, 2009). In this supplemental decision in Awuah, one of the franchisees argued that, under Somers, franchise fees amounted to “damages incurred” if they were not something that an employee would have to pay. But the court sided with Coverall, finding that fees paid pursuant to a freely undertaken contractual obligation were not damages under the misclassification statute. Awuah, 2010 WL 3766486, at *2. The court held that “damages incurred . . . must relate to the misclassification” and therefore only include “certain statutory costs that an employer must bear.” Id. Because the franchisee had agreed to pay franchise fees, royalty and management fees, and supply and equipment payments, those costs were not damages resulting from misclassification. Id. There was no statute that required an employer to bear those costs, so Coverall was free to contractually shift them to the franchisees. Coverall had also required the franchisee to obtain liability insurance covering personal injuries. However, Massachusetts law required employers to contribute to workers’ compensation insurance. Thus, the court explained that Coverall was required to reimburse the franchisee for any insurance premiums that Coverall was statutorily mandated to provide. Id. at *3. The court also required Coverall to pay interest on wages that were paid outside of the statutorily required timeframe. Id. at *4.

• Townsend v. CWS, Inc., No. 08-328, 2010 WL 1382269 (N.D. Ind. March 29, 2010) The plaintiff, a truck driver, initially worked for Chuck’s Express, an owner-operator that leased trucks to CWS as an independent contractor. CWS qualified the plaintiff as a driver and the plaintiff signed an acknowledgement of his independent contractor status, which informed him that he was not a CWS employee. The plaintiff interviewed with CWS, which also gave him a drug test. The plaintiff also submitted a CWS job application. Later, the plaintiff stopped working for Chuck’s Express and began working for Gorgki Krstov Trucking, another owner-operator. After Krstov terminated him, the plaintiff contacted CWS about becoming an owner-operator himself but never applied for it. The plaintiff subsequently brought suit against CWS alleging racial discrimination and a failure to hire. In order to determine the plaintiff’s employment status, the court considered a six-factor test. Townsend, 2010 WL 1382269, at *4. The court noted that, of these factors, the most important

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was the extent of the employer’s control and supervision over the employee. Id. Under the relevant test, the court took note of the independent contractor agreement, which informed the plaintiff that he was not an employee. Id. at *5. Further, the plaintiff never received a paycheck from CWS, but was paid by the owner-operators for whom he drove. Similarly, CWS never subsidized the cost of the maintenance, repairs, or fuel for the trucks. Finally, the owner-operators retained the right to terminate the plaintiff’s employment. Therefore, the court found that the plaintiff was an independent contractor and not an employee, so the court granted summary judgment for CWS. Id. at *6.

• Oliveira v. ICLB, Inc., No. 09-10038, 2010 WL 2102992 (Mass. App. March 30, 2010)

The Massachusetts appellate court held that a worker’s classification must be determined by examining the Massachusetts Wage Act and not the parties’ contract. Oliveira, 2010 WL 2102992, at *4. The defendant company solicited homeowners for paving jobs and then hired subcontractors to do the actual work. The plaintiff had been hired pursuant to a subcontractor’s agreement to perform paving and installing work. He owned his own landscaping company, supplied his own equipment, carried his own liability and vehicle insurance, and competed with the defendant for paving work after he had stopped performing work under the subcontractor’s agreement. The plaintiff sued the defendant under the Wage Act, claiming that it had retained money from him for a year. The trial court, apparently using a straightforward contract analysis, found that the plaintiff was an independent contractor. The appellate court vacated that decision, holding that the trial court needed to evaluate the plaintiff’s claim under the Wage Act. Id. The appeals court stated that the plaintiff would have been properly classified as an independent contractor under prior Massachusetts law. However, the law had been amended in 2004 to provide that workers would count as employees unless their work was performed “outside the usual course” of the employer’s business. Id. at *3. The appeals court also cited to an Advisory issued by the Massachusetts Attorney General, which stated that workers “performing an essential part” of the company’s business would be found to be employees. This authority raised an issue as to whether the plaintiff was properly classified as a subcontractor. The appellate court remanded the decision to the trial court, finding that the lower court’s analysis was insufficient because “the statute trumps the contract.” Id. at *4.

• Gifford v. Meda, No. 09-13486, 2010 WL 1875096 (E.D. Mich. May 10, 2010)

In this case, the district court dismissed claims by a group of plaintiffs alleging that a painting and refinishing company had committed mail and wire fraud in a continuing pattern of racketeering in violation of RICO by fraudulently classifying them as independent contractors rather than employees and failing to deduct employment taxes from their pay. Gifford, 2010 WL 1875096 at *23. Most of the plaintiffs had painted houses and commercial properties and refinished furniture, but one of the workers performed accounting services and prepared tax returns for the company. In evaluating their claims, the court first found no preclusive effect in a state workers’ compensation commission decision that held one of the plaintiffs to be an independent contractor. The court held that the commission’s findings on issues of law were

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subject to review and that the definition of an employee for purposes of federal taxation was different from the definition under the state workers’ compensation act. Id. at *8. Plaintiffs’ claims rested on the allegation that the defendants had fraudulently deprived them of their portion of contributions under FICA in violation of RICO. However, the court found that the resolution of such misclassification claims had been firmly vested in the comprehensive administrative enforcement scheme embodied in both the Internal Revenue Code and the Social Security Act. Id. at *10. Examining the case law, the court found that the exhaustive regulatory framework of the IRC, FICA, and the SSA foreclosed a private right of action for claims by employees alleging that their employer wrongfully failed to withhold and remit payroll taxes to the federal government. Id. at *10-16.

• Mayfield v. National Ass'n for Stock Car Auto Racing, Inc., 713 F. Supp. 2d 527 (W.D.N.C. 2010)

A race car driver brought suit against NASCAR under the North Carolina Persons with Disabilities Protection Act (“PDPA”). The driver claimed that NASCAR discriminated against him by discharging or suspending him on the basis of a disabling condition. NASCAR had suspended the driver after he reportedly failed a drug test. In evaluating his case, the court initially noted that the PDPA explicitly prohibits discrimination against a current or former employee. Mayfield, 713 F. Supp. 2d at 539. Because the statute did not define “employee,” the court looked to common law principles and cited the twelve factors set forth in Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751-52 (1989). Id. The court noted that the list was non-exclusive and that no one factor was determinative. Id. In evaluating the factors, the court noted that the driver owned his own business and hired his own employees. He did not allege that NASCAR controlled the daily operations of that business. Further, the driver and his company provided their own race car and crew for NASCAR events. The driver also did not appear to receive a “wage” from NASCAR, as the contract at issue stipulated that awards would be given to car owners in certain circumstances. NASCAR also did not withhold taxes from the driver’s prize earnings, so he was responsible for paying his own social security taxes, unemployment insurance taxes, workers’ compensation insurance, income taxes, and withholding taxes. Further, the court noted the fact that the parties had set out the terms of their relationship in a contract that stated that the driver was not an agent or employee of NASCAR. Weighing these factors and the presence of the contractual language, the court found that the driver was not a NASCAR employee. Id. at 540. Therefore, the court granted judgment on the pleadings to NASCAR with respect to the driver’s PDPA claim. Id.

• Holland v. Gee, 719 F. Supp. 2d 1361 (M.D. Fla. June 16, 2010) The district court held that a terminated female technician who had filed suit against the county alleging pregnancy discrimination was an employee of the county despite the fact that she had signed an independent contractor agreement. Holland, 719 F. Supp. 2d at 1365. The court laid

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out an eleven factor test but noted that “[n]o one factor is controlling, nor is the list exhaustive.” Id. The court focused on the fact that the plaintiff was doing the same job as other technicians who had been considered employees by the county. Specifically, the county’s expectations of the plaintiff were the same as that of other techs, and the job description and title were the same. Plaintiff received work orders from her supervisors and was required to report the results of her work to her supervisor. She was required to work eight hours a day, Monday through Friday. She also was required to wear the same uniform as other techs. She worked for the county for four years, and the job was her only source of income. Given the many similarities to her co-workers, the court found that the county had “created the independent contractor position to circumvent the Civil Service temporary employee requirements.” Id. The court therefore held that the plaintiff was an employee of the county. Id.

• Bruecher Found. Servs., Inc. v. U.S., 383 Fed. App’x. 381, 2010 WL 2543471 (5th Cir. June 18, 2010)

The Fifth Circuit affirmed the imposition of employment taxes against a corporation that provided foundation repair, grading, and landscaping services where the corporation had not filed Form 1099s until after the IRS assessed taxes against the corporation as a result of misclassified workers. Bruecher Foundation Services, 383 Fed. App’x. at 387. The corporation treated its manual laborers as independent contractors. In 2002, the IRS conducted a general audit of the corporation, but it did not notify the corporation of the audit or the statutory worker classification safe harbor of IRC Section 530 as it was required to do by law. In 2003, the IRS concluded that the workers had been misclassified and were really employees of the corporation. Further, the IRS found that the corporation was not entitled to protection under Section 530’s safe harbor rule because it had failed to file Form 1099s for the workers at issue. Therefore, the IRS assessed back employment taxes against the corporation. In response, the corporation filed Form 1099s for the workers, paid the taxes for two workers, and filed suit in federal court in Texas. The district court upheld the IRS’s determination and the Fifth Circuit affirmed. Id. at 391. The Fifth Circuit held that the corporation could not take advantage of Section 530’s safe harbor for misclassified workers when it had failed to file Form 1099s until after the IRS had assessed the taxes in dispute. Id. at 387-88. Further, the court found that it could not shift the burden of proof to the IRS even though the IRS failed to notify the corporation of Section 530’s safe harbor. Id. at 388. Finally, the court affirmed the finding that the workers were employees, not independent contractors. Id. at 391. The court applied a number of factors, finding that the workers had no risk of loss, virtually no investment in the facilities, and were not in business for themselves. The moderate degree of control and relatively low level of skill required only “weakly” supported employment status. Id. Therefore, the court affirmed the holding that the manual laborers were employees, not independent contractors.

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• LeMaster v. Alternative Healthcare Solutions, Inc., 726 F. Supp. 2d 854 (M.D. Tenn. 2010)

A group of licensed practical nurses (“LPNs”) who provided home healthcare services through a home healthcare company successfully established that they had been misclassified as independent contractors for FLSA purposes. LeMaster, 726 F. Supp. 2d at 859-63. Relying heavily on previous Sixth Circuit case law regarding LPNs, the court applied the economic realities test to determine the proper classification. Specifically, the court found that the LPNs’ employment was not especially transient, they were not capable of finding their own clients, they had not invested heavily in the business (especially compared to the defendants’ investment), they worked for a fixed hourly rate, their work schedules were subject to control by the defendants, and their services were an integral part of the defendants’ business. The defendants included the home healthcare company, a staffing company, and a payroll company. The staffing company provided LPNs to the home healthcare company so that the LPNs could work in the homes of the healthcare company’s clients. The payroll company processed the staffing company’s payroll. The court held that, to the extent any of the defendants were liable, any liability was joint and several. Id. at 864. Again applying an economic realities test, the court found that the staffing company was the LPNs’ employer for FLSA purposes because it had the power to hire and fire LPNs, supervised and controlled their schedules and conditions of employment, determined the rate and method of payment, and maintained employment records. Id. The court granted summary judgment against the staffing company. Id. at 865. But the court found that there were factual issues as to whether the payroll company had willfully violated the FLSA. Id. at 866. If the violation was not willful, then the statute of limitations precluded suit against the payroll company. Factual issues also existed as to whether the home healthcare company was the LPNs’ employer. Id. at 867-68. The plaintiffs had not shown that the company had the power to hire or fire LPNs, control their schedules, or determine their pay. The court thus granted in part and denied in part the LPNs’ motion for summary judgment. Id. at 868.

• Narayan v. EGL, Inc., 616 F.3d 895 (9th Cir. July 13, 2010) (amended Aug. 5, 2010) The Ninth Circuit reversed a grant of summary judgment for a shipping company in a misclassification case, holding that California law governed the plaintiffs’ California Labor Code claims despite a contrary choice-of-law provision in the parties’ agreement. Narayan, 616 F.3d at 899, 904. The plaintiffs were drivers who had each signed contracts with the company in which they had agreed that (1) the driver was an independent contractor and (2) the contract would be interpreted in accordance with Texas law. The district court held that, under Texas law, the declarations in the agreements compelled a finding that the drivers were independent contractors even though California did not regard such declarations as controlling. The Ninth Circuit reversed, holding first that the drivers’ claims were governed by California law. Id. at 899. The court found that the claims involved entitlement to benefits under the

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California Labor Code. Whether the drivers were entitled to those benefits depended on whether they were “employees” of the company, which in turn depended on the definition that governing law — not the parties — gave to the term “employee.” Therefore, California law defined the boundaries of liability under the labor code. The Ninth Circuit went on to hold that questions of fact precluded summary judgment for the company. Id. at 904. Under California law, once a plaintiff shows that he or she provided services to the employer, the burden shifts to the employer to prove by a preponderance of the evidence that the plaintiff was an independent contractor. Here, the company had not met that burden. The court cited the test laid out in the Restatement (Second) of Agency and a number of other factors used by California courts. The court noted that there was evidence that the company controlled many details of the drivers’ performance and supplied equipment to the drivers. The court therefore reversed summary judgment and remanded the case. Id. at 904.

• Quinteros v. Sparkle Cleaning, Inc., No. 07-0628, 2010 WL 3000865 (D. Md. July 26, 2010)

In this case, a group of janitorial workers brought suit against a janitorial services company, alleging that the company failed to pay overtime under the FLSA and Maryland state law. The court first found that the question of a worker’s employment status was a legal question for the court to decide. Quinteros, 2010 WL 3000865, at *2. The court then found that the FLSA definition of employee stretched the meaning of the term to cover some workers who might not qualify as such under a strict application of traditional agency or contract law principles. Id. Under the standards of the FLSA, the court considered the “economic reality” of the relationship and held that the crux of the analysis is whether the worker is economically dependent on the business to which he renders service or is, in reality, in business for himself. Id. at *3. Next, the court evaluated the relationship under the six factors outlined in United States v. Silk, 331 U.S. 704 (1947). Id. at *3-5. First, the court found that the employer controlled the manner in which the work was performed because it set the schedules, instructed and directed plaintiffs to the work sites, and directed how they would perform their cleaning activities. Second, the court found that the plaintiffs did not have an opportunity to increase their pay by exercising or honing their managerial skills. Third, the parties disputed whether or not the employees bought materials and equipment, so the court held that the factor was neutral. Fourth, the court took judicial notice of the fact that janitorial services are not considered highly-skilled labor. Fifth, the court found that the relationship was more permanent than temporal, based mainly on plaintiffs’ pay stubs. Sixth and finally, the court found that the plaintiffs’ work was an integral part of the defendant’s business. For this factor, the court relied on the fact that 60% of defendant’s costs were compensation to subcontractors. Therefore, the court found that the totality of the test weighed in favor of finding the workers to be employees. Id. at *5. The court thus granted summary judgment in favor of the plaintiffs. Id.

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• Murray v. Principal Fin. Group, Inc., 613 F.3d 943 (9th Cir. 2010) The plaintiff, an insurance agent, sued the defendant under Title VII. The Ninth Circuit, joining “virtually every other Circuit to consider similar issues,” held that insurance agents are independent contractors and not employees for purposes of federal employment law. Murray, 613 F.3d at 944. The court also summarized three common tests used to determine whether an individual is an independent contractor or employee. First, the “common law agency” test focuses on the hiring party’s “right to control the manner and means by which the product is accomplished.” Id. at 945. Second, the “economic realities” test “requires a fact-specific inquiry which depends on the economic realities of the situation.” Id. But the “primary factor” is still the “extent of the employer’s right to control the means and manner of the worker’s performance.” Id. Third, the “common law hybrid” test combines the two other tests. The court held that “there is no functional difference between the three formulations,” but if there were a difference, the common law test would control. Id. Under that test, a number of factors determine whether the employer had the right to control the manner and means of the work at issue. Examining the factors in light of the facts of the case, the court found that the plaintiff was an independent contractor. She decided when and where to work each day, maintained her own office, and paid rent. She scheduled her own time off, was paid on commission only, reported as self-employed to the IRS, and occasionally sold products other than those offered by the defendant. Therefore, the defendant did not control the “manner and means” of the plaintiff’s work. Id. at 946.

• Taylor v. Waddell & Reed Inc., No. 09-2909, 2010 WL 3212136 (S.D. Cal. Aug. 12, 2010)

A financial advisory firm failed in its attempt to dismiss a misclassification class action case because the court found that the firm’s control over the workers may have exceeded FINRA’s general requirements. Taylor, 2010 WL 3212136, at *4. A group of financial advisors brought suit against the firm alleging that they were misclassified as independent contractors under the FLSA, the California Labor Code, and California’s Unfair Competition Law (“UCL”). The court outlined both the FLSA’s “economic realities” test as well as California’s test, under which the predominant factor is the employer’s “right to control the manner and means by which the worker accomplishes the work.” Id. at *3. The plaintiffs had alleged that the firm controlled their work in numerous ways, including assigning the advisors’ clients, requiring the advisors to return client files upon termination, and requiring advisors to work a specified number of hours and generally adhere to a schedule. The firm also encouraged advisors to work at the firm’s offices; required them to explain out-of-office activities; and provided telephones, offices, and fax machines to advisors. Advisors had to attend meetings, be subject to periodic performance reviews, and meet quotas concerning many aspects of their jobs. In response, the firm claimed that these indicia of control were all mandated by state and federal regulations. For instance, FINRA required the firm to “maintain a system to supervise” the

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advisors’ activities. The court agreed that “compliance with legal requirements is not indicative of control.” Id. at *3. But the court found the specific allegations of control in the complaint suggested that the firm might have gone beyond the general requirements of FINRA and created an employer-employee relationship. The court thus denied the motion to dismiss. Id. at *4.

• Solis v. Velocity Exp., Inc., No. 09-864, 2010 WL 3259917 (D. Or. Aug. 12, 2010)

The court denied a national shipping company’s motion for summary judgment against the Secretary of Labor in a driver misclassification case partly because the court followed Ninth Circuit law and considered only what the drivers actually did in practice rather than what they could have done under their contracts. Velocity Exp., 2010 WL 3259917, at *6 n.5. Analyzing claims under the FLSA, the court found disputed issues of material fact regarding whether the company controlled the manner in which the drivers performed their work. Id. at *7. The company argued that the drivers had discretion over the manner in which they made deliveries, citing the fact that the drivers were free to refuse on-demand deliveries, were free to make stops in any order, were responsible for finding their own replacements if they were unable to drive, did not receive an employee code of conduct, were not prohibited from working for other shippers, drove their own vehicles, were free to negotiate their rates of pay and number of stops, and were authorized to hire substitutes and helpers. The drivers argued in response, however, that they were assigned routes to drive and were required to work 12 to 14 hour workdays which prevented them from taking breaks or working for other companies. They also claimed that few drivers actually negotiated their rates of pay. The court first noted that it was difficult to determine whether certain facts suggested that the company controlled the employees or whether those facts merely evinced the parties’ contractual expectations. For example, the company policy requiring the drivers to check in with the company could have been a means by which the company controlled the drivers or could have reflected the company’s right to verify that the drivers were performing their contractual obligations. Additionally, the long work days could have evinced control or merely an unprofitable contractual bargain. Further, the court noted that the Ninth Circuit, unlike other jurisdictions, requires an examination, not of what the individual could do under the contract, but what in fact the individual does do. Id. at *6 n.5. Because the drivers did not negotiate their pay in practice, the contractual right to negotiate pay did not control the analysis. Weighing the disputed facts, the court found sufficient evidence to deny summary judgment. Id. at *9.

• Bulaj v. Wilmette Real Estate and Mgt. Co., LLC, No. 09-6263, 2010 WL 4237851 (N.D. Ill. Oct. 21, 2010)

The court granted summary judgment against a real estate management company and found that the company’s janitor was an employee rather than an independent contractor under the FLSA and the Illinois Minimum Wage Law (“IMWL”). Bulaj, 2010 WL 4237851, at *10. The court first noted that the FLSA’s “economic realities” test was broader than the criteria set forth in the Restatement (Second) of Agency. The Restatement would have required the court to consider whether the company controlled the details of the janitor’s work. Following the FLSA test

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instead, the court held that the company had control over the janitor’s work even though he had exercised discretion in performing his duties and no one had told him “how” to do his job. Id. at *5-6. The court found the company had exercised sufficient control over the janitor’s work because the company set the janitor’s work schedule, monitored the quality of his work, and disciplined him when his work did not meet its expectations. Id. Additionally, the company had increased the janitor’s workload without additional compensation on a “take-it-or-leave-it” basis and mandated the hours that he report to work each day. Further, the janitor had no opportunity for profit or loss as a result of his work because he was paid a fixed, bi-weekly salary. The majority of his tasks entailed rudimentary janitorial and building maintenance skills. Further, he had worked for the company for twelve years. The company had also listed him as an “employee” on tax forms and had provided him with payroll checks and a letter attesting to his employment. Weighing these facts, the court granted summary judgment against the company on the FLSA and IMWL claims. Id. at *10.

• In re Empire State Towing and Recovery Ass'n, Inc., 15 N.Y.3d 433, 938 N.E.2d 984, 912 N.Y.S.2d 551 (N.Y. 2010)

In October 2010, the New York Court of Appeals held that the state Department of Labor had not presented sufficient evidence to find that the defendant company’s executive director was an employee. Empire State Towing, 938 N.E.2d at 987. The defendant company had hired Peter O’Connell, an attorney, to provide legal and lobbying services. The company later agreed that O’Connell would also perform administrative services as the executive director. O’Connell maintained a telephone and computer database in the name of the association, mailed dues and membership materials, mailed periodic financial statements to board members, and coordinated publication of a journal. He also had check writing authority up to $500 and was assisted by a part-time employee of the defendant. However, he worked out of his law office, was free to set his own schedule, and was not working exclusively for the defendant. The Department of Labor investigated the defendant, determined that O’Connell was an employee, and assessed unemployment insurance payments. The state Unemployment Insurance Appeals Board upheld that assessment and the Appellate Division concurred. On appeal, the New York Court of Appeals stated that “[a]n employer-employee relationship exists when the evidence shows that the employer exercises control over the results produced or the means used to achieve the results.” Id. at 986. The court also noted that “substantial evidence of control over important aspects of the services performed other than results and means” may be sufficient where “the details of the work performed are difficult to control because of considerations such as professional and ethical responsibilities.” Id. at 987. Under either test, the court found that there was insufficient evidence to support the existence of an employer-employee relationship. Id. The fact that O’Connell could not write checks over $500 was merely a form of “incidental control over results” that was “a necessarily wise business decision.” Id. Further, the fact that he had to submit reports and attend meetings was “a condition just as readily required of an independent contractor as of an employee and not conclusive as to either.” Id. Therefore, the court reversed the Appellate Division and held that the defendant had properly classified O’Connell as an independent contractor. Id.

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• Cheryl A. Mayfield Therapy Center v. C.I.R., No. 9156-07, T.C. Memo. 2010-239, 2010

WL 4340111 (U.S. Tax Ct. Oct. 28, 2010) The Tax Court found that a group of massage therapists, cosmetologists, and nail technicians (“service providers”) operating at a spa were independent contractors rather than employees of the spa for tax purposes. Cheryl A. Mayfield Therapy Center, 2010 WL 4340111, at *7. The Commissioner of Internal Revenue had determined that the service providers were employees and that the spa owed employment taxes and penalties. The tax court stated that, under the common law, the “most important consideration” is “whether the person for whom the services are performed has the right to direct and control the method and manner in which the work is to be done.” Id. at *4. The court also recited the IRS’s twenty factor test. Several factors weighed in favor of independent contractor status: the service providers generally paid weekly rent to use the spa’s facilities, they were compensated on a straight commission basis with no guaranteed level of payment, they received no employee benefits such as vacation or sick leave, the spa did not pay their business or travel expenses, many massage therapists outfitted and decorated their massage rooms, the providers bore the risk of suffering net losses and had opportunity for profits, and many providers believed they had a nonemployee relationship with the spa. Additionally, the spa did not tell the providers how to provide their services, the providers were all licensed professionals, they set their own hours, and they occasionally worked after the spa’s posted hours. On the other hand, the providers’ services were integrated into the spa’s operations, the providers worked mostly on spa premises, the spa provided some training, and clients directly paid the spa rather than the providers. Weighing these facts, the court determined that the “factors indicating the service providers' autonomy predominate over factors indicating petitioners' control over them.” Id. at *7.

• Grace v. U.S., No. 08-6006, 2010 WL 4451818 (W.D.N.Y. Nov. 4, 2010)

In this case, the plaintiff was a veteran who alleged medical malpractice stemming from his treatment at the University of Rochester (“Rochester”) pursuant to a contract between Rochester and the Department of Veteran’s Affairs (“VA”). That contract stated that Rochester would provide services to veterans as an independent contractor and provided that the federal government could evaluate the quality of professional and administrative services provided, but that the government retained no control over the medical or professional aspects of the services rendered. The plaintiff had seen a doctor at the Rochester clinic in order to have his right eye examined. At that time, the doctor scheduled a follow-up appointment, but the VA clinic cancelled the follow-up when the doctor went on vacation. The plaintiff later was told that he was blind in his right eye. He sued the government and the VA for failing to diagnose the problem. The government moved to dismiss the complaint, arguing in part that the doctor was an independent contractor, not an employee, so the Government was not liable for any torts that she had committed. The court held that the “strict control test, as well as principles of agency, govern this inquiry.” Grace, 2010 WL 4451818, at *8. The court noted that the test is not

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satisfied merely because a doctor provides medical services pursuant to detailed federal guidelines. Id. at *9. Rather, the court had to look to whether the doctor’s “day-to-day operations” were supervised by the government. Id. The government had directed when and where the doctor would work, scheduled her appointments, and provided general guidelines for her to follow. However, no government employee supervised her day-to-day work because none of the VA supervisors were familiar with ophthalmology. In addition, the court considered a number of common law factors. For example, the doctor was engaged in a distinct, highly-skilled and specialized job and all of her pay and benefits were provided by Rochester. Therefore, the court found that the doctor was an independent contractor and dismissed the claims against the government and the VA that were based on the doctor’s negligence. Id.

• Talbert v. American Risk Ins. Co., Inc., No. 10-20355, 2010 WL 5186768 (5th Cir. Dec. 20, 2010)

The Fifth Circuit affirmed a finding that an insurance claims adjuster, hired by an insurance company on a temporary basis after Hurricane Ike, was an independent contractor under the FLSA. Talbert, 2010 WL 5186768, at *7-8. The plaintiff worked for the defendant for approximately twelve weeks and then sued for unpaid overtime compensation. The Fifth Circuit set out a five factor “economic reality” test and analyzed the plaintiff’s classification. Id. at *6. The court noted a number of factors suggesting that the plaintiff was an independent contractor. The plaintiff had worked as an independent contractor adjuster for multiple companies prior to working for the defendant. The plaintiff was also a licensed professional who bore the cost of her licensing. She was expected to handle the files assigned to her with little or no day-to-day supervision. She was also aware that her position was expressly temporary. The plaintiff argued that she had been required to sign a confidentiality agreement and an employee code of conduct. She was also subject to discipline and expected to be at work from 9:00 a.m. until 6:00 p.m., at a minimum. She argued that, because of the number of hours that she worked, she was effectively not permitted to work for another insurance company. Weighing this evidence, the Fifth Circuit affirmed the holding that the plaintiff was an independent contractor and affirmed a grant of summary judgment for the defendant. Id. at *7.

• Flint v. Langer Transp. Corp., No. 06-3864, 2011 WL 253646 (D.N.J. Jan. 25, 2011) The plaintiff, a truck driver, sued a fellow driver in an attempt to recover damages for injuries that he sustained when he fell from his trailer while trying to transfer a load from the other driver’s trailer. Both the defendant and the plaintiff drove for the same carrier and each had signed an Owner/Operator Mutual Lease Agreement with the carrier. The Agreement provided for worker’s compensation and the plaintiff collected worker’s compensation after his injury. Based on these facts, the defendant moved for summary judgment on the plaintiff’s claim, arguing that the “fellow servant” bar of the New Jersey Worker’s Compensation statute, N.J. Stat. Ann. § 34:15-8, barred the plaintiff’s claims. The plaintiff argued that the “fellow servant” bar did not apply because both the plaintiff and the defendant were independent contractors. The court disagreed. Flint, 2011 WL 253646, at *7-8.

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The court noted that, under New Jersey law, there were two tests used to determine employment status: the “control test” and the “relative nature of the work test.” Id. at *7. The court found that the control test was satisfied because the carrier told the plaintiff and the defendant where to go and when. Id. at *8. They also both worked exclusively for the carrier. They were issued clothing with the carrier’s logo and the jobs they performed were an integral part of the carrier’s business. Additionally, under the relative nature of the work test, both the plaintiff and the defendant were “employees” of the carrier because the work they did was an integral part of the carrier’s regular business. Id. at *7. Therefore, the court found that the “fellow servant” bar precluded the suit and granted the defendant’s motion for summary judgment. Id. at *8.

• Ratledge v. Science Applications Intern. Corp., No. 10-239, 2011 WL 652274 (E.D. Va. Feb. 10, 2011)

The court found that an engineer who had worked on a government subcontract for over a year was not an employee of the government contractor, the Science Applications International Corporation (“SAIC”). Ratledge, 2011 WL 652274, at *4. The plaintiff began working at GH Engineering in January 2007. He was assigned to work on the SAIC contract at the Central Intelligence Agency. The plaintiff suffered from narcolepsy and migraines, and she occasionally fell asleep at work and during meetings. In February 2008, SAIC made a request to GH Engineering that the plaintiff be removed from the CIA project. The plaintiff then sued SAIC under the ADA and Title I of the Civil Rights Act of 1991, alleging that SAIC was her individual or joint employer. The court analyzed the claim under the common law test, evaluating the degree of control that SAIC exercised over the manner and means of plaintiff’s production along with a number of other factors. Id. at *3. The plaintiff argued that she was a de facto employee of SAIC because of the control that SAIC exercised over her work. But the court found that the plaintiff had offered no evidence that she was under any SAIC supervisor’s direct control. Id. The court mentioned that the plaintiff was working in a skilled position, that she worked at a CIA site with agency tools, and that CIA employees chose her work assignments. Further, the court took note of the subcontract between SAIC and GH Engineering and found that the contract “indicates SAIC’s intent to refrain from treating its GH Engineering contractors as employees.” Id. at *4. The court also mentioned the fact that GH Engineering paid plaintiff, withheld taxes from her pay, and gave her a raise. Because of SAIC’s lack of control over the manner in which the plaintiff performed her work, the court granted SAIC’s motion for summary judgment. Id.

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