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.
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.
Non-Compete Agreements: Emerging Issues From The Perspective Of Employee's Counsel
Co-authored by Wayne N. Outten, Anne Golden, and Nantiya Ruan, 2001.
Today more than ever, trained employees are valued by employers who want to do everything in their power to keep them from leaving and taking their skills and knowledge with them. Undoubtedly, this is due in part to our nation's unemployment rate reaching a thirty-year low. Add the current business environment of increased mobility, decreased loyalty, and the tremendous amount of capital resources spent in creating intellectual property, and companies are increasingly requiring key employees to sign harsh non-compete agreements to discourage employee defection or "corporate raiding."
The law still favors free mobility of employees. But along with an increased number of employers requiring employees to sign non-competition agreements comes an increased number of suits to enforce these restrictive covenants. Consequently, the body of law governing this area has been changing. This outline will give practical advice to employee advocates on ways to best protect their clients' interests when confronted with non-competition agreements and will examine the emerging trends in this narrow, but increasingly pertinent, area of employment law.
Retaliatory Counterclaims: Turning The Tables On The Overly Aggressive Defendent
Authored by employment attorneys Justin M. Swartz, Tarik F. Ajami, and Mark R. Humowiecki. This article sets forth the advantages and disadvantages of these different options and the basic legal principles that are common to retaliatory counterclaims no matter what course you choose.
Twenty days after filing your class action complaint, you receive defendant’s Answer. Curiously, not only does the company deny each and every allegation, it also asserts counterclaims alleging that it is entitled to the disgorgement of salary paid to the named plaintiff because of his “crude, improper, and disruptive conduct” while an employee. Not only is this counterclaim entirely baseless as a legal and factual matter, it is also a form of retaliation against the plaintiff that aims to intimidate him and other employees from enforcing their rights.
Recently, we have seen a spate of frivolous, retaliatory counterclaims asserted against our clients in both individual and class employment actions. Such counterclaims present an opportunity for the smart plaintiff’s attorney to take the offensive with respect to her adversary and to appear the more reasonable party before the court (while also showing how nefarious her adversary is). Your options for responding to such counterclaims are myriad. Factors such as the strength of the counterclaim, the nature of the underlying litigation, the actual chilling effect of the retaliation, and the dispositions of the adversary and the judge will dictate the most appropriate strategy.
You may simply amend the complaint to assert a retaliation claim or seek to convince the opposing counsel to withdraw the counterclaims. Alternatively, you may want to aggressively litigate the retaliation from the beginning by moving to dismiss the counterclaims or even seeking to enjoin further retaliation and to impose other measures to repair the chilling effect of the retaliation. This article sets forth the advantages and disadvantages of these different options and the basic legal principles that are common to retaliatory counterclaims no matter what course you choose.