July 27, 2011

When it quacks like a duck, it’s a duck: why independent contractor titles don’t matter much

Posted in Discrimination, Fair Labor Standards Act, Independent Contractors, Independent Contractors, Leaves of Absence, Personnel Records, Unemployment Benefits tagged , , at 10:29 am by Tom Jacobson

I often hear employers and employees describe their relationship as an “independent contractor” arrangement, as opposed to an employer/employee relationship.  When I ask why they believe that, a typical response is that they have agreed to call it that.  A recent Minnesota Court of Appeals decision re-affirms that when it comes to independent contractor status, titles don’t matter much.

The case is Haugtvedt v. FJF Enterprises of Ramsey, Inc.  FJF is a tax preparation and accounting services firm, and Cara Haugtvedt was a CPA for the firm from 2005 until 2009.  At the beginning of their relationship Haugtvedt and FJF agreed that she would be considered an independent contractor.  Haugtvedt was terminated when negotiations for her to buy the business failed.  Haugtvedt applied for unemployment benefits.  The Minnesota Department of Employment and Economic Development (DEED) then performed and audit of FJF and concluded that despite her “independent contractor” title, Haugtvedt was an employee of FJF, and an unemployment law judge (ULJ) ultimately awarded unemployment benefits to Haugtvedt.

FJF appealed the ULJ’s decision to the Minnesota Court of Appeals, which affirmed the ULJ’s decision.  In its review of the ULJ’s decision, the appellate court went through a detailed analysis of the actual working relationship between FJF and Haugtvedt.  The court specifically reiterated that “The nature of the relationship of the parties is to be determined from the consequences which the law attaches to their arrangement and conduct rather than the label they might place on it.”  The court then applied the following five factors to the FJF/Haugtvedt relationship:  (1) FJF’s right to control the means and manner of Haugtvedt’s performance; (2) the mode of payment; (3) FJF’s furnishing of materials or tools; (4) FJF’s control over the premises where Haugtvedt’s work was done; and (5) FJF’s right to discharge Haugtvedt.  The court also applied a laundry list of other criteria found in the Minnesota rules for unemployment claims.  After applying all of these factors, the court agreed that despite her independent contractor title, Haugtvedt was indeed an employee of FJF.

This problem is not limited to claims for unemployment.  A misclassification of an employee as an independent contractor can also result in claims for unpaid wages, overtime, and taxes.  It can also mean that the worker is protected by other laws such as the multitude of laws that provide for leaves of absence, reasonable accommodations for disabilities, maintaining of personnel records, etc.

The Haugtvedt case is another reminder that when it comes to employer/employee relationships, if it quacks like a duck, it’s a duck, even if you call it a goose.  So, make sure you know your ducks from your geese.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

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July 16, 2011

Verizon to pay $20 million to settle EEOC disability lawsuit over attendance policy

Posted in Absenteeism, Attendance, Disability, Discrimination, Interactive Process, Job Abandonment, Leaves of Absence, Leaves of Absence, Reasonable Accommodation, Sick Leave tagged , , at 11:11 pm by Tom Jacobson

One size does not fit all when it comes to sick leave and attendance policies.  Verizon Communications recently learned that $20 million lesson in a nationwide disability discrimination lawsuit filed by the Equal Employment Opportunity Commission under the Americans with Disabilities Act.

At issue was Verizon’s “no-fault” attendance policy.   Under this policy, Verizon employees who accumulated “chargeable absences,” were placed on a disciplinary step, and that could eventually result in more serious disciplinary action, including discharge.  According to the EEOC, the problem was that when applying this policy, Verizon failed to make exceptions for employees with disabilities, and this lead to a failure to reasonably accommodate them under the ADA.

In the consent decree (which is still pending court approval), Verizon agreed to pay $20 million.  In addition, Verizon agreed to a number of other non-monetary concessions.  For example, Verizon agreed to revise its attendance policies, provide mandatory training on the ADA, post a notice about the settlement, appoint an internal consent decree monitor to ensure its compliance, and report to the EEOC about all employee disability discrimination complaints relating to the attendance policy or Verizon’s compliance with the consent decree.

The case illustrates that employers who are subject to the ADA must not overlook leaves of absence as a reasonable accommodation.  According to Spencer H. Lewis, Jr., Director of the EEOC’s Philadelphia District Office, “This [Verizon] settlement demonstrates the need for employers to have attendance policies which take into account the need for paid or unpaid leave as a reasonable accommodation for employees with disabilities.”  And, as noted by EEOC General Counsel P. David Lopez, “Hopefully this nationwide decree will further public awareness of the importance of engaging in an individualized interactive process to determine whether a disabled employee must be accommodated under the ADA.”

For more information about this article, see Verizon to Pay $20 Million to Settle Nationwide EEOC Disability Suit, or please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

July 7, 2011

Mean guys finish last: temperament as a job qualification

Posted in Color, Discrimination, Interviewing, National Origin, Race tagged , , , , , , , , , , , at 9:10 am by Tom Jacobson

Bad temperament during the application process can be used as the reason to reject a candidate, according to the United States Court of Appeals for the Eighth Circuit.

Last August I commented the case of Amini v. City of Minneapolis.  The case centers around Hamid Amini, who was a police officer candidate at the Minneapolis Police Department.  The hiring process at the MPD included oral and written examinations, fitness and psychological testing, background checks, and interviews.  During an interview, Amini became agitated, argumentative, frustrated, and demanding.   Because of its concerns over Amini’s temperament, the city did not hire him.

Amini sued the city under Title VII of the Civil Rights Act of 1964, claiming that he was discriminated against on the basis of his national origin, race, and color.  He also claimed race discrimination under 42 U.S.C. Section 1981.

Last summer, the United States District Court for the District of Minnesota, Judge Donovan W. Frank presiding,  dismissed Amini’s lawsuit.  Judge Frank held that while Amini may have been minimally qualified for the job, the city’s reason for rejecting him (his apparent bad temperament) was a legitimate non-discriminatory reason.  Judge Frank also rejected Amini’s argument that the city’s reason was a pretext for discrimination.

Amini appealed his case to the Eighth Circuit Court of Appeals, and in a July 5, 2011 decision authored by Circuit Judge Roger Wollman, the appellate court affirmed Judge Frank’s decision.

While the Amini case reinforces the principle that an employee’s or applicant’s temperament can be considered when making decisions about that person’s employment, personality traits should be considered with great caution.  Such traits tend to be subjective and are difficult to prove.  Indeed, Judge Wollman cautioned against the use of subjective criteria because they can be easily fabricated.  And, what might be an important personality trait in one job might be irrelevant in another.  Without solid evidence, relying on temperament may not be a good defense to a discrimination claim.  However, in situations where candidates’ objective qualifications are comparable, the mere use of subjective criteria, such as temperament, does not create an inference of discrimination.

For more information about this post, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

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