Category Archives: Independent Contractors

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SCOTUS Holds Independent Contractor Truck Drivers Exempt from Arbitration Under FAA

Amy HarwathBy Amy Harwath on Posted in Arbitration Agreements, Federal Arbitration Act (FAA), Independent Contractors, Labor and Employment, SCOTUS, Wage and Hour
On January 15, 2019, the Supreme Court issued its decision in New Prime Inc. v. Oliveira, where it decided independent contractor truck drivers cannot be forced into arbitration.  The Court’s decision is based on Federal Arbitration Act § 1, which excepts from coverage disputes involving “contracts of employment” with “workers engaged in foreign or interstate … Continue Reading

California Court of Appeal Affirms That Dynamex’s ABC Independent Contract Test Is Limited To Claims Arising Under Wage Orders

Patricia JengBy Patricia Jeng on Posted in Independent Contractors, Labor and Employment, Wage and Hour
In Jesus Cuitlahuac Garcia v. Border Transportation Group, LLC, et al, the California Court of Appeal, Fourth Appellate District has held that the ABC test set forth in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018) applies only to causes of action brought under wage orders. Plaintiff Garcia was a taxicab driver … Continue Reading

The Dynamex Decision: The California Supreme Court Restricts Use of Independent Contractors

Timothy KimBy Timothy Kim on Posted in Class Actions, Employment Work, Independent Contractors, Labor and Employment, Wage and Hour
On Monday, April 30, 2018, the California Supreme Court issued a landmark decision in the matter of Dynamex Operations West, Inc. v. Superior Court of Los Angeles. In a voluminous, 82-page decision, the California Supreme Court reinterpreted and ultimately rejected the Borello test for determining whether workers should be classified as either employees or independent … Continue Reading

Uber Drivers’ Class Action Lawsuit Hits Permanent Red Light

Stephen FoxJonathan ClarkBy Stephen Fox and Jonathan Clark on Posted in Class Actions, Fair Labor Standards Act (FLSA), Independent Contractors
Last week, the ridesharing giant, Uber, secured a resounding legal win when a federal judge dismissed a putative class action lawsuit alleging the company violated the Fair Labor Standards Act by failing to pay drivers overtime. The ruling is enormously important, not simply for Uber, but for the growing rideshare technology industry as a whole. … Continue Reading

UPDATE: NYC Adopts New Rules Implementing Freelance Law

Lisa LewisDanielle ThompsonBy Lisa Lewis and Danielle Thompson on Posted in Independent Contractors, New York Employment Legislation, Payroll, Retaliation
Earlier this year, we reported that New York City adopted The Establishing Protections for Freelance Workers Act, also known as the Freelance Isn’t Free Act, (the “Freelance Law”). As explained in our prior blog, under the Freelance Law, a company must: (1) provide a written contract when it contracts with a freelance worker for services … Continue Reading

The U.S. Department of Labor Rolls Back Obama-Era Guidance on Joint Employers and Independent Contractors

James HaysJason BrownBy James Hays and Jason Brown on Posted in Fair Labor Standards Act (FLSA), Independent Contractors, Joint Employment, Wage and Hour
The U.S. Department of Labor (“DOL”) announced today that it was rolling back an Obama-era policy that attempted to increase regulatory oversight of joint employer and contractor businesses. Courts and agencies use the joint employer doctrine to determine whether a business effectively controls the workplace policies of another company, such as a subsidiary or sub-contractor. … Continue Reading

New Freelancer Law Imposes Additional Requirements For NYC Companies Contracting With Freelancers

Lisa LewisDanielle ThompsonBy Lisa Lewis and Danielle Thompson on Posted in Independent Contractors, New York Employment Legislation, Payroll, Retaliation
The Establishing Protections for Freelance Workers Act, also known as the Freelance Isn’t Free Act, (the “Freelance Law”), which was touted by New York City Mayor Bill de Blasio as the first law in the nation aimed at protecting wage payment rights of freelance workers, became effective last Monday, May 15, 2017. The Freelance Law … Continue Reading

NLRB Releases Advice Memorandum Affirming Misclassification Constitutes Unfair Labor Practice

By Sheppard Mullin on Posted in Independent Contractors, National Labor Relations Act, National Labor Relations Board, NLRB
At the end August, the National Labor Relations Board released an advice memorandum, originally drafted in December 2015, concluding that a group of drivers who worked for a drayage company called Pacific 9 Transportation were misclassified as independent contractors and that this misclassification constituted a violation of the National Labor Relations Act. This advice memorandum … Continue Reading

New Year, New Rules For Employers Doing Business in California

Lisa HarrisMarlene NicolasLindsay HollomanBy Lisa Harris, Marlene Nicolas and Lindsay Holloman on Posted in California Employment Legislation, California Legislative Update, Discrimination, E-verify, Educational Updates, Employee Benefits, Employment Authorization Verification, FEHA, Hiring, Discipline, Termination, Independent Contractors, Leaves of Absence, Reasonable Accommodation, Religion, Retaliation, Wage and Hour
This year the California Legislature added over a dozen new employment laws, many of which take effect on January 1, 2016.  Some of these laws impose new prohibitions on employers, while others provide positive benefits such as safe harbors, cure provisions, and employer incentives for reclassification of certain independent contractors.  This update highlights key provisions … Continue Reading

NLRB Broadens its Test for Determining Joint-Employer Status

Paul BerkowitzBy Paul Berkowitz on Posted in Independent Contractors, National Labor Relations Act
On August 27, 2015, the National Labor Relations Board (“NLRB”) issued its highly anticipated decision in Browning-Ferris Indus. of California, et al. v. Sanitary Truck Drivers, 362 NLRB No. 186. In deciding to “revisit and revise” its joint-employer standard, the NLRB held in a 3-2 decision that Browning Ferris (BFI) was a joint employer of … Continue Reading

DOL Says Most Independent Contractors Actually Employees

By Sheppard Mullin on Posted in Employment Agreements, Fair Labor Standards Act (FLSA), Independent Contractors, Wage and Hour
In furtherance of its agenda to extend minimum wage and other wage-hour protections as broadly as possible, on July 15, 2015, the Department of Labor issued a far-reaching interpretive memorandum expressing the DOL’s belief that “most workers [classified as independent contractors] are employees under the FLSA’s broad definitions.”… Continue Reading

NLRB Weighs-In on Franchise Joint Employers

Kevin SmithBy Kevin Smith on Posted in Independent Contractors, National Labor Relations Act, Union Issues
In late April, the National Labor Relations Board (“NLRB” or the “Board”) General Counsel’s office issued an Advice Memorandum (“Advice Memo”) (No. 177-1650-0100, available here) addressing whether a franchisor (Freshii Development, LLC) was a joint employer with one of its franchisees (Nutritionality, Inc.).  The General Counsel’s office determined that the franchisor was not a joint … Continue Reading

Uber, Lyft Decisions Highlight Difficulty of Classifying Workers in the Modern Economy

Evan MixBy Evan Mix on Posted in Class Actions, Independent Contractors, Wage and Hour
“The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing . . . 21st Century problem[s].”  So concluded the court in Cotter v. Lyft, Inc., one of two opinions handed down by the U.S. District Court for the Northern District of California on March 11, 2015, … Continue Reading

Supreme Court of New Jersey Rules on Test for Independent Contractors

By Sheppard Mullin on Posted in Independent Contractors, Wage and Hour
On January 14, 2015, the Supreme Court of New Jersey decided which independent contractor classification test should be used in determining a person’s employment status under the New Jersey Wage Payment Law (WPL) and Wage and Hour Law (WHL).  In Hargrove v. Sleepy’s, LLC, No. A-70-12 (072742) (N.J. Jan. 14, 2015), the court concluded that … Continue Reading

Cal. Supreme Court Clarifies Standards for Class Certification of Independent Contract Class Actions

Thomas KaufmanBy Thomas Kaufman on Posted in Class Actions, Independent Contractors, Wage and Hour
On Monday, the California Supreme Court issued yet another decision on class certification; this time in an action challenging the independent contractor (“IC”) classification of a proposed class of Antelope Valley News newspaper deliverers, Ayala v. Antelope Valley Newspapers, Inc.  Although much of the case addresses the proper standards for evaluation of whether a person … Continue Reading

Court of Appeal Affirms Summary Judgment in Favor of Farmers Insurance on Independent Contract Issue

Thomas KaufmanBy Thomas Kaufman on Posted in Independent Contractors, Wage and Hour
By Thomas Kaufman and Anna Stancu On July 11, 2013, the Second Appellate District in Beaumont-Jacques v. Farmers Group Inc.concluded as a matter of law that a worker’s ability to exercise meaningful discretion in her job-related efforts rendered her an independent contractor, regardless of Farmers’ input regarding the “quality and direction of her efforts.”  The … Continue Reading

Sotelo Decision is Packed With Class Action Goodness

Thomas KaufmanBy Thomas Kaufman on Posted in Class Actions, Independent Contractors, Meal Periods, Wage and Hour
By Thomas Kaufman; (follow me on Twitter) A First Appellate District decision from May 31, 2012, Sotelo v. Medianews Group, Inc.; was published yesterday.  The opinion contains an in-depth discussion on class action concepts arising out of a case alleging misclassification of newspaper carriers as independent contractors.  The opinion cuts back on some pro-certification precedents, sets forth some anti-certification law for independent contractor cases, … Continue Reading

California Legislature Passes “Worker Misclassification” Bill Creating Civil Penalties For Willful Misclassification Of Independent Contractors

By Sheppard Mullin on Posted in Independent Contractors
On September 8, 2011, the California legislature passed Senate Bill 459 prohibiting the willful misclassification of individuals as independent contractors. Labeled by some as the "Job Killer Act," this new legislation creates civil penalties of between $5,000 and $25,000 per violation. In addition to making it illegal to willfully misclassify individuals as independent contractors, the … Continue Reading

California Court Of Appeal Extends Armendariz To Cover Independent Contractors

By Sheppard Mullin on Posted in Arbitration Agreements, Independent Contractors
In the seminal case Armendariz v. Foundation Health Psychcare, the Supreme Court of California established the standard for determining the enforceability of mandatory arbitration agreements for employees. Armendariz generally held that mandatory arbitration agreements were enforceable if they were mutual and did not "serve as a vehicle for the waiver of statutory rights." Armendariz set … Continue Reading

Ninth Circuit Applies California Law Despite Choice-Of-Law Clause in Independent Contractor Agreement

By Sheppard Mullin on Posted in Independent Contractors, Wage and Hour
In Narayan v. EGL, Inc., the employer, EGL, Inc. (“EGL”), is a global transportation company that provides “air and ocean freight forwarding, customs brokerage, [and] local pickup and delivery service.” EGL is incorporated and headquartered in Texas, but it operates through a network of over 400 facilities in 100 countries. The case was brought by … Continue Reading

Ninth Circuit Extends Rehabilitation Act to Independent Contractors

By Sheppard Mullin on Posted in Americans With Disabilities Act ("ADA"), Disability, Discrimination, Independent Contractors
On November 19, 2009, the Ninth Circuit handed down its opinion in Fleming v. Yuma Regional Medical Center, 07-16427. The court faced the difficult task of interpreting the interplay between Section 504 of the Rehabilitation Act (29 U.S.C. § 794) and Title I of the Americans with Disabilities Act. The Sixth and Eighth Circuits had … Continue Reading

The Ninth Circuit Reminds Employers That A Good “Independent Contractor” Is Hard To Come By

By Sheppard Mullin on Posted in Independent Contractors
The existence of an employer-employee relationship is a necessary precursor to wage and hour protection under California law.  With its recent decision in NLRB v. E. Bay Taxi Drivers Ass’n et al., the Ninth Circuit reminded employers that they cannot simply avoid their wage and hour obligations by self-anointing individuals as "independent contractors" despite the … Continue Reading

Caution: Take A Second Look At Your Independent Contractors

By Sheppard Mullin on Posted in Independent Contractors
In a suit filed by Air Couriers International ("Sonic") against the Employment Development Department ("EDD"), to recover employment taxes paid for drivers who operated as independent contractors, the California Court of Appeal rejected Sonic’s claim that the drivers were independent contractors and instead found that the drivers acted as Sonic’s employees.… Continue Reading
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