Today’s online edition of New York Magazine’s “Daily Intelligencer” includes a comprehensive article on how Silicon Valley start-up tech companies using “the 1099 model” may be exposed to employment, tax, and benefit law liabilities that could drive them out of business or cause them to change to a W-2 model.…

The news from Washington, D.C. yesterday is that the U.S. Department of Labor is funding 19 states’ efforts to crack down on businesses that unwittingly or intentionally fail to make unemployment contributions for individuals misclassified as independent contractors. While class actions in court continue to receive the most attention, unemployment…

This month’s headline developments are the seismic decisions, issued on August 27, 2014 by the U.S. Court of Appeals for the Ninth Circuit, concluding as a matter of law that FedEx Ground had misclassified over 2,300 drivers in California and a smaller group of drivers in Oregon. The appellate decision…

FedEx Ground has been at the epicenter of the crackdown on IC misclassification by government regulators, state legislators, and plaintiffs’ class action lawyers since 2007, when a California appellate court found single-route FedEx Ground delivery drivers to have been misclassified as independent contractors (ICs) instead of employees.[1] But in 2009[2]…

The leading development this month in the area of independent contractor compliance and misclassification is an Arizona case that deals with a commonplace event – but  one that carries with it the potential for unanticipated independent contractor misclassification liability – where a company outsources a function to a subcontractor, who …

JUNE 2014

In the Courts (10 Cases)

• FEMALE FOOTBALL PLAYERS SUE LINGERIE LEAGUE FOR IC MISCLASSIFICATION. A former Lingerie Football League player has filed a class action lawsuit in a California state court against the all-female, professional league (now called the Legends Football League). The lawsuit claims that current and

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The use of independent contractors in the logistics and home delivery industry has suffered another legal setback. Earlier this week, the United States Court of Appeals for the Ninth Circuit, applying California law, concluded that 300 drivers who were retained by Affinity Logistics Corp. to make home deliveries and…

APRIL/MAY 2014

In The Courts

• ARIZONA DRYWALL COMPANY TO PAY $600,000 TO SETTLE ALLEGATIONS THAT ITS LABOR SUBCONTRACTOR MISCLASSIFIED IC’S.

Paul Johnson Drywall, Inc. agreed to pay $600,000 in back wages and liquidated damages to 445 current and former employees as result of the U.S. Department of Labor investigation into…