Chapter 20: AgencyChapter 20: Agency

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• Is person an employee or independent contractor.

• Lots of new issues with temp services

Agency Relationships Agency Relationships

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• Why does it make a difference

TRAP #1: TREATING AN EMPLOYEE AS AN INDEPENDENT CONTRACTOR

TRAP #1: TREATING AN EMPLOYEE AS AN INDEPENDENT CONTRACTOR

Why it is imp if employee or independent contract?

Why it is imp if employee or independent contract?

• Discrimination Laws

• Workers compensation

• Torts

• FLSA - overtime laws

• Taxes

• Unions

• Unemployment4

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Liability for Agent’s Negligence:Liability for Agent’s Negligence:

• Applies only to Employer-Employee relationships.

• Doctrine of Respondeat Superior: Employer is vicariously liable for Employee’s negligent torts committed within the Agent’s “course and scope of employment.”

• Walmart will pay expenses for the victims in the crash that left Tracy Morgan in critical condition.

• Prosecutors have already charged the driver, Kevin Roper, with death by auto ... among other charges.

• Why is Wal-Mart liable?

• What if driver was an independent contractor

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Tort claim against Employer because of Employees’ Negligence

Tort claim against Employer because of Employees’ Negligence

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Factors: EE v. ICFactors: EE v. IC

YesNoIs there a great degree of skill required?

YesNoIs the worker paid at the end of the job?

NoYesDoes Employer control hours worked?

NoYesDoes Employer provide the tools?

NoYesIs the work usually done under Employer’s supervision?

NoYesDoes the Employer exercise a great degree of control over the details of the work?

I.C. Emp.Factors Courts Consider:

Fed ExFed Ex• Thirty-one lawsuits have been filed against FedEx Ground and/or

FedEx Home.• The lawsuits challenge FedEx's classification of pick up and delivery

drivers as independent contractors. FedEx requires drivers to purchase or lease their trucks and pay for all operating expenses.

• Drivers presented documents and testimony that demonstrated constant micro-management of drivers by FedEx.

• FedEx alleged that they only offers “suggestions and best practices” but does not dictate delivery requirements.

Fed ExFed Ex

• The Internal Revenue Service has also tentatively concluded that the contractors at FedEx Ground should be reclassified as employees and that the company owes more than $319 million in taxes and penalties for 2002.

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• 141 drivers classified as independent contractors by FedEx Ground will receive $5.8 million in settlement of their misclassification lawsuit brought under federal and Maine wage and hour laws.

• The federal court lawsuit in Maine alleged that the FedEx Ground improperly denied the drivers' overtime pay for hours worked over 40 in a workweek.

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Another Company - Lowe’sAnother Company - Lowe’s• The plaintiffs in this case are home

improvement contractors.

• They allege that Lowe's Home Centers offered its customers the opportunity to hire contractors to install products and services purchased from Lowe's.

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• The complaint alleged that Lowe's had the right to control, and did control, all aspects of installation jobs by, among other things, requiring that the installers:

• identify themselves as "installers for Lowe's" or "I work for Lowe's";

• wear Lowe's hats and shirts at work sites;• use signs stating "Lowe's Installation";• attend training by Lowe's; and• comply with Lowe's production requirements;

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• The complaint also alleged:• 1. That Lowe's Production Office managed each

installation project; • 2. Lowe's set the fees to be earned by each

home improvement contractor; • 3. Imposed a non-compete covenant on

installers; • 4. Marketed the contractors' services on its

website on an "Installation" page that provided "Let Us Do The Installation For You" with our "trained installers," who services were "guaranteed by Lowe's warranty."

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• The installers alleged that Lowe's failed to provide them with benefits that were available to employees, including comprehensive group medical insurance, prescription drug coverage, vision care, group life insurance, paid sick leave, paid vacation, employee discounts for purchases, short and long term disability coverage, a stock purchase plan, and a matching 401(k) savings plan. 

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• Lowe’s – yes or no?

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• On Friday, May 23, 2014, Lowe's Home Centers agreed to settle a class action brought by its home improvement contractors who allege that they were misclassified as independent contractors instead of employees. The maximum settlement amount, depending on the number of contractors who file claims, is $6,500,000,

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IC or EmployeeIC or Employee

• Jane works for you delivering flowers. You just give her the flowers and tell her where to go and that she must have the flowers delivered by 2pm. Jane uses her own car – can set her route, her hours and gets paid per delivery.

• Is Jane an IC or Employee?

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Liability For Agent’s Torts and CrimesLiability For Agent’s Torts and Crimes

• 1. Is Jane IC or Employee

• 2. If Jane is an Employee • Was Jane in the scope and course of employment.

• Jane from previous slide – runs a red light and hits Joe.

• 1. What claim does Jane have

• 2. What claim does Joe have

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• Joe’s claim – who is it against?– 1. Is Jane an employee or IC?

– 2. If Jane is an employee – was she in the scope and course of her employment

– Was she delivering flowers or shopping?

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Employer Liability Employer Liability

• Negligent hiring – Discuss in Ch 21

– 1. Was Jane IC or EE– 2. If EE was Jane in the course and scope

Joe is paid the job which is delivering products to customers for Company A. Joe controls his own hours so long as every delivery is made by 3pm. Company A pays Joe $50 for each delivery. While delivering the product, Joe runs a red light and hits Alice. Is Joe or Company A responsible.

Joe is an employee and he runs a red light hitting Alice. Discuss the claims that Joe has and Alice has.

Click here: Tennessee Department of Labor and Development