The Epidemic Of Employer Misclassification Of Employees As Independent Contractors Under The Fair Labor Standards Act, And The Courts' Response
Justin M. Swartz, and Mariko Hirose, and contributions by Piper Hoffman, 2009
The Fair Labor Standards Act (FLSA)’s compensation requirements, such as minimum wages and overtime pay, apply only to “employees.” Chao v. Mid-Atl. Installation Servs., Inc., 16 F. App'x 104, 105 (4th Cir. 2001). Employers can get around these requirements and lower their tax bills at the same time by classifying workers as “independent contractors” instead of “employees.” Employers classify as independent contractors many workers who do not meet the legal definition: the Department of Labor estimates that up to 30% of U.S. employers misclassify workers. Courts have found rampant violations across certain industries.
Justin Swartz and Rachel Bien, Section of Labor & Employment Law, American Bar Association, Vol. 35, Number 4, Summer 2007
Few doubt the merits of diversity in the workplace. Indeed, a host of organizational leaders from chief executive officers to top military brass have recently touted the importance of a diverse labor force. As a result, an entire industry has emerged, geared toward eradicating workplace inequality.
Many thoughtful ideas have made their way onto "best practices" lists that identify methods to increase the representation of historically underrepresented groups in corporations and firms. (See, e.g., Equal Employment Opportunity Committee Diversity Task Force web page, which links to several lists of "best practices," http://apps.americanbar.org/dch/comadd.cfm?com=LL104000&pg=2
Despite all of this attention, however, the challenge of actually achieving diversity remains. As Alexandra Kalev, Frank Dobbin, and Erin Kelly wrote in a recent article examining the effectiveness of employers' efforts to promote diversity, "We know a lot about the disease of workplace inequality, but not much about the cure." "Best Practices or Best Guesses? Assessing the Efficacy of Corporate Affirmative Action and Diversity Policies," 71 Am. Soc. Rev. 589, 590 (August 2006).
At the 2007 National Conference on Equal Employment Opportunity Law in Charleston, South Carolina, the Section's Equal Employment Opportunity Committee (EEOC) presented two panels that focused on efforts to increase diversity in private sector workplaces, including law firms. The consensus that emerged from both panels was clear: truly overcoming inequality in the workplace requires more than changing hearts and minds. It demands a structural, top-down approach with incentives for meeting concrete diversity goals.
Ethics Corner: Third Circuit Vindicates Plaintiff's Attorney
Justin M. Swartz and Cara E. Greene. July, 2007. Ethics Corner is a regular contribution by the ABA, Labor & Employment Law Section’s Ethics and Professional Responsibility Committee.
The Third Circuit recently overturned a district court order disqualifying a plaintiff’s attorney who had conducted an ex parte interview of the defendant’s administrative assistant. EEOC v. HORA, Inc., No. 05-5393, 2007 U.S. App. LEXIS 15705 (3d Cir. June 29, 2007) (unpublished decision). Characterizing the disqualification as “draconian,” the Circuit held that the district court abused its discretion because the lawyer did not violate any ethics rules, and, even if she had, there was no prejudice to the defendant.
The plaintiff’s lawyer, Jana Barnett, represented Manessta Beverly in a sex harassment and retaliation case against a Days Inn franchise and its management company. During discovery, Barnett conducted an ex parte interview of Debbie Richardson, an administrative assistant at the Days Inn. The district court disqualified Barnett for conducting the interview, finding that she violated Pennsylvania Rules of Professional Conduct (“PRPC”) Rules 4.2, 4.4, and 5.7.
The Third Circuit reversed, holding that Barnett did not violate Rule 4.2 because the administrative assistant was not a member of the organization with whom ex parte contact was forbidden. The Third Circuit recently overturned a district court order disqualifying a plaintiff’s attorney who had conducted an ex parte interview of the defendant’s administrative assistant.
Counseling Multinational Employees: Their Rights And Remedies Under US Law
This article by Outten & Golden partner Wendi S. Lazar sketches a map through the convoluted terrain of representing multinational and expatriate employees. Simply determining whether there may be a cause of action can require careful parsing of the laws of multiple jurisdictions and the employer's corporate structure as well as the usual inquiries into the employee's and employer's conduct and relevant contracts. Using a case study of one employee's circumstances and potential legal claims, Lazar outlines the important issues an attorney must resolve in order to best counsel a client. (2006, with significant contributions from Wayne Outten and Anjana Samant.)
Employment attorney, Wayne N. Outten, with Douglas C. James, discusses the ethical obligations of law firms and departing partners and how they must handle this situation in a way that is consistent with the principle of client choice. This article originally appeared in Law Journal Newsletters' Law Firm Partnership & Benefits Report, September 2004. For more information, visit www.ljnonline.com.
The answer is, nobody.
When a partner leaves a law firm, the parties have to allocate various partnership rights, assets, and other interests. They may allocate most of these interests in any way that they choose. They may not, however, allocate clients, perhaps the most valuable of partnership “assets.” The client alone decides whether to remain a client of the firm, to leave with the departing partner, or to choose another attorney. Law firms and departing partners have an ethical obligation to handle these situations in a way that is consistent with the principle of client choice.
Mediation Advocacy: An Employees' Attorney Perspective
Employment attorney Wayne N. Outten, Georgetown University Law Center, CLE, Employment Law and Litigation Institute: Legal Trends and Practice Strategies, Thursday-Friday, April 15-16, 2004, Washington, DC.
This paper addresses negotiation approaches and dispute resolution procedures that are well-suited for dealing with the problems and disputes often encountered by employees and their counsel.
The opportunities are legion for problems and disputes to arise out of the employment relationship – during and after the period of employment, and involving non-legal as well as legal issues. Counsel for employees should, of course, be familiar with the legal issues that may arise and with the traditional legal procedures for addressing such legal issues. But familiarity with such legal matters is not enough. Counsel for employees should also be familiar with tactics, strategies, and methods for solving legal and non-legal problems and resolving disputes that do not necessarily depend on the assertion of legal rights and that do not necessarily employ formal legal procedures. This paper addresses negotiation approaches and dispute resolution procedures that are well-suited for dealing with the problems and disputes often encountered by employees and their counsel.
Can Law Firm Partners Sue The Firm For Employment Discrimination?
Employment attorneys Wayne Outten and Justin Swartz. This article originally appeared in Law Journal Newsletters' Law Firm Partnership & Benefits Report, February 2004. For more information, visit www.ljnonline.com.
This article will first discuss reasons that law firms, especially large firms, are susceptible to discrimination suits by their partners. Next, it will explain two threshold requirements for law firm partners to sue their firms for employment discrimination. Both of these requirements turn on whether certain partners are deemed employees. Third, the article will discuss the Supreme Court’s Clackamas decision and lower court decisions that preceded Clackamas but used similar analyses. Finally, it will note that,under some federal and state laws, law firms are vulnerable even if their partners are not deemed employees.Discussion of: reasons law firms may be susceptible to discrimination suits by their partners; two required thresholds for filing such a suit; Supreme Court's Clackamas decision; and finally a note on why some law firms are vulnerable even if their partners are not deemed employees.
Developments In Harassment Law: Update For 2002-2003
Wayne N. Outten and Piper Hoffman, the 20th Annual Upper MidWest Employment Law Institute, May 28-29, 2003, St. Paul, MN.
The standard for employer liability depends on whether the harasser was a co-worker or a supervisor of the victim. If the former, the employer is liable only if it was negligent; if the latter, the employer is strictly liable, subject to the affirmative defenses discussed [within].
The Supreme Court observed that Title VII was enacted not only to provide redress for unlawful discrimination, but also to prevent such discrimination. The goal of preventing discrimination would be promoted, the Court held, by imposing on employers strict liability for the conduct of their supervisors under certain circumstances, because, as between employers and employees, the employers are better able to prevent discrimination by such supervisors. Specifically, the Court held that an employer is strictly liable for a supervisor’s sexually harassing behavior whenever the supervisor is the employer’s “alter ego” or the supervisor has taken a “tangible employment action” against the employee; examples of such actions include “hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” Ellerth at 761. The Court found that the occurrence of a tangible employment action justified holding an employer liable for its supervisor’s harassment because the action could not have been taken absent the agency relation.
When Your Employer Thinks You Acted Disloyally: The Guarantees And Uncertainties Of Retaliation Law
Wayne N. Outten, Scott Moss and Piper Hoffman, April 1, 2003
Extensive statutory and case law prohibits various forms of employer retaliation against employees who engage in legally proper, necessary, or desirable activities. The law on retaliation is not unified, however; as discussed in Part I, it is spread among many federal and state statutes typically organized by subject matter – e.g., retaliation against opposition to discrimination, retaliation against government employee whistleblowing, etc. Many basic principles of retaliation law are well-established, as the survey of federal law in Part I elaborates. Numerous issues in retaliation law remain unresolved, however, with different courts openly disagreeing on the limits of employee protections, as Part II discusses.