Employment Structures and Legal Considerations: A Comprehensive Analysis

1. Part 1 The Benefits and Burdens of Employment

2. Chapter 1 The Stakes of “Employment”

3. Problem 1.1

4. Problem 1.1 (cont.) • Gardeners • Floral designers • Software engineer/IT expert • Salesperson • Workers for transport, manual labor

5. Δ Wade & WLMGeorgia Pacific Myrick McCary v. Wade K …to provide logs to… …contracted with… π McCary & Fulwiley

6. McCary v. Wade • Issue: Whether Myrick was “employee” of Wade at the time of the accident. • Myrick liable but bankrupt • ∆: Myrick independent hauler • ∆: Wade not liable to π via respondeat superior. • Summary judgment granted • No public policy override • Private ordering reigns

7. McCary v. Wade • Multi-factor balancing test to determine whether Myrick is employee of Wade • Deciding factors: • Myrick owned his own equipment • Wade exercised little control • Ergo: Wade not Myrick’s employer. • Did Wade choose this structure to insulate itself from liability to third parties? • Downsides of Wade being an independent contractor?

8. Fitzgerald v. Mobil Oil Corp. TLI MTL π Fitzgerald Δ Mobil Jerry Reiger …provided drivers to… …received paychecks from… leased trailer from… …had to pass road test given by… …delivered oil to various customers from... …was hired by… …leased tractor to…

9. “Exclusive Remedy” -- Workers’ Comp is employee’s only remedy against employer. Mobil Oil argues that it was Fitzgerald’s employer “Employer” status benefits Mobil in this case Court agrees that Mobil = employer. Fitzgerald v. Mobil Oil Corp.

10. Fitzgerald v. Mobil Oil Corp. • “Economic Realities Test” • (1) control of worker’s duties • (2) payment of wages • (3) right to hire/fire/discipline, and • (4) performance of duties = integral part of business. • Less exacting than McCary test as to degree of control required? • Mobil Oil has conflicting incentives: • “Leases” TLI employees; TLI pays them • yet successfully argues Fitzgerald its employee.

11. π Natkin & Green …were retained as “staff photographers” by… Δ Winfrey …who published photos taken by Natkin & Green without permission Natkin v. Winfrey

12. Natkin v. Winfrey • ∆ claims photos “works for hire” by employees • Court: πs independent contractors, not employees. • Court uses nonexhaustive, 13 factor Reid test. • Critical factors: • (1) highly skilled professionals; • (2) who owned & insured equipment; • (3) who exercised considerable discretion; • (4) not treated by Oprah as employees for compensation/taxes.

13. If private ordering always trumped Then employers would often define workers as independent contractors Why “employ” at all? Worker’s Comp exclusivity nonlegal reasons control over work product Morale Competitiveness Balancing? By employers in private ordering? By courts in implementing public policy? Notes

14. Right to control Skill required Source of tools Location of work Duration of relation Right to give more work Hired party’s discretion over when to work Method of payment Hired party’s role re assistants Is work regular business of hirer? Is hirer in business? Employee benefits Tax Treatment The Reid 13

15. Problem 1.2 • Gardners • Floral designers • Software engineer/IT expert • Salesperson • Workers for transport, manual labor

16. π sues under ADA π = employee Δ = statutory employer? 15-employee threshold Are 4 physician-shareholders “employees” under statute? Court adopts 6 factor EEOC test Remands for decision What should happen below? Clackamas Gastroenterology Associates v. Wells

17. The Clackamas 6 • Can firm hire/fire/set rules for the individual? • Does the organization supervise her work? • Does the individual report to a higher-up? • Is the individual able to influence the firm? • Intention of parties as expressed in contract? • Does individual share firms profits/losses?

18. Clackamas Notes • Not all employers are “statutory employers” • Title VII/ADA = 15 • ADEA = 20 • FMLA = 50 & 50/75 miles • FLSA = broad rule, riddled with exceptions • Not all employees are covered by all laws • ADEA bars discrimination against over 40 • ADA protects “qualified individuals with a disability” • Some statutes impose personal liability on managers (e.g., FLSA); some don’t (e.g., Title VII)

19. Yates = corporation’s president/sole shareholder Profit Sharing Plan bars alienation of plan benefits Benefits outside Bankruptcy Yates’s creditors ask Bankruptcy Court to avoid $50K payments he made to the Plan to put them back in Yates’s estate Yates v. Hendon

20. Yates’ Creditors Benefits Yates $50,000 Yates Profit-Sharing Plan

21. Congress intended working owners to qualify as participants in ERISA employee benefit plan. For most purposes, Yates is sole proprietor of small business For ERISA, he is an employee. Clackamas owners can have their cake and eat it too Yates v. Hendon

22. πs delivered for DR HC paid πs $25-$30/day HC paid #250-300 by DR πs claim FLSA minimum wage/overtime πs New York law claim Ansoumana v. Gristede’s ΔDuane Reade Δ Hudson/Chelsea π

23. ISSUES Whether πs were employees or independent contractors of ∆s H/C? Whether DR was also liable as “joint” employer? HOLDINGS πs were employees; H/C liable to them DR a joint employer, jointly/severally liable Ansoumana v. Gristede’s

24. Note:The Immigration Dilemma • Immigrants often take lower-paying jobs • IRCA bars discrimination against documented workers and mandates it against undocumented ones • UAs unlikely to seek wage/hours protection • Should FLSA protect UAs? • In terms of federal wage/hours policy? • exploitation objectionable • In terms of federal immigration policy? • low wages incentivize employers to hire UAs • higher wages incentive illegal immigration

25. πs classified as non-employees by Microsoft. πs sue for benefits available to employees under (1) SPP (ERISA) (2) ESPP (Washington law) Vizcaino v. Microsoft Corp.

26. HOLDINGS π workers covered under ESPP plan. SPP issue remanded to Plan Administrator Vizcaino v. Microsoft Corp.

27. Plurality’s Opinion: focuses on plan documents, which show an intent to include all employees in plan. O’Scannlain: focuses on particulars of what parties negotiated; no contract for benefits ever formed. Vizcaino v. Microsoft Corp.

28. Microsoft Notes • The semantics of the opinions • Professionals different? • Cf. “free lancers” in Ansoumana • Did Microsoft workers benefit from higher pay? • The Plan Administrator denied the claims • ERISA not very employee-friendly? • Microsoft planning for the future

29. Problem 1.3 • Gardners • Floral designers • Software engineer/IT expert • Salesperson • Workers for transport, manual labor