"When it absolutely, positively, has to be decided within a decade."By http://profile.typepad.com/1237764140s22740 // July 24, 2012 in Courts, Employment
Startups, emerging companies, and even behemoths like Microsoft and Amazon have to watch the legal line drawn between "independent contractors" and "employees." It's a subject the comes up a lot in startup law and other legal blogs, and it will continue to come up.
Last week the Washington State Supreme Court published a decision that interprets the Washington Minimum Wage Act. For purposes of that statute, the Court decided that "employee" status was to be determined by an "economic dependence" inquiry, rather than a probing of the employer's "right to control" the activities of the person-in-question.
I'm not going to take this occasion to write a post about the perils of misclassifying an employee as an independent contractor. The case adds learning to that subject, but there are probably better judicial opinions to cite that contain broader discussions of the various factors to consider.
Rather, I'd like to mention two things that struck me about the opinion:
(1) It took a long, long time for the case to be resolved (if in fact it is now finally resolved). The opinion says that the case was brought in 2004 by FedEx pickup and delivery drivers who "handled a single route over the three-year period preceding the filing of the complaint." So it appears to have taken about a decade to resolve this fundamental question about whether the drivers were either employees or bona fide independent contractors.
(2) It's fascinating, almost like archeology, to see language from a bygone political era serving to parse legal distinctions that yet have impact on today's decidely more corporate society. Take this passage from the opinion as an example:
'The right-to-control test serves to limit an employer’s liability for the torts of another. By contrast, minimum wage laws have a remedial purpose of protecting against “‘the evils and dangers resulting from wages too low to buy the bare necessities of life and from long hours of work injurious to health,’” United States v. Rosenwasser, 323 U.S. 360, 361, 65 S. Ct. 295, 89 L. Ed. 301 (1945) (quoting S. Rep. No. 884, at 4, 75th Cong., 1st Sess. (Wash. 1937)), and “to insure that every person whose employment contemplated compensation should not be compelled to sell his services for less than the prescribed minimum wage,” Walling, 330 U.S. at 152.'
The quotes from the 1930s and 40s strike me as language that the two political parties in America today would absolutely shun.
Photo: Whitewolf Photography / Flickr.