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1099 Risk Blog
Lawsuits
June, 30 2010
If you think IRS reclassification is the only dimension of 1099 risk, think again. According to Garry Mathiason of the noted employment law firm Littler Mendelson*, there were 5,786 class action lawsuits for wage and hour violations filed in 2009, a 40% increase over the prior year and representing over 80% of all class actions. The cases include overtime, meal breaks and rest breaks, and minimum wage requirements. If you have misclassified workers as independent contractors instead of employees, then your risk exposure for wage and hour is undeniable . . .
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June, 4 2010
According to a press release issued yesterday by Leonard Carder, LLP, the first summary judgement on the multi-district class action lawsuit over the worker classification of FedEx Ground and Home Delivery drivers has been issued. The judge presiding over the 63 cases issued an Opinion and Order on May 28, 2010 granting summary judgement to the drivers in Illinois. The class action lawsuit, which has been developing over the past five years, centers on whether the delivery drivers are true independent contractors (as FedEx maintains) or are actually misclassified employees of FedEx.
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January, 11 2010
It must have been a happy holiday season for Lynn Rossman Faris, Partner at Leonard Carder and viritually a rock star in the world of class action independent contractor misclassification lawsuits, after the news broke in mid-December. A federal judge in California approved a mediated $12.8 million settlement for a class of 660 UPS drivers denied benefits and overtime due to misclassification as independent contractors. If you follow the FedEx independent contractor misclassification case, you may recognize Faris' name . . .
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August, 31 2009
It’s easy to get bogged down in the details of 1099 reclassification risk. Sometimes, the minutiae of contractor classification fade into the background, and the essence boils down to a far simpler directive: don’t hate. To explain what I mean, for today’s installment of the 1099 Risk Blog I’d like to highlight the recent Baby Trend misclassification and wrongful termination case. A California superior court entered an $8.4 million jury verdict against Baby Trend Inc. and the owner, Denny Tsai, for misclassifying and wrongfully terminating Robert Gardner . . .
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August, 11 2009
In a case that brings vivid new meaning to the “three areas of control,” the Boston Globe reported today that a judge has ruled in favor of about 70 exotic dancers who were misclassified as independent contractors by Chelsea establishment King Arthur’s Lounge. The class action case will now proceed to trial on damages, estimated to come to thousands of dollars per stripper. With such a misclassification finding, the club may now also be exposed to the full monty of independent contractor reclassification risks, including wage and hour law, immigration law, discrimination laws, payroll tax penalties, and more.
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March, 18 2009
Healthcare workers that were classified as independent contractors by the Delta-T Group filed a lawsuit on February 17th claiming they were misclassified, according to a news item in MSNBC today. If the court agrees with their position -- that they should have been classified as employees -- then they have been unjustly denied overtime compensation, unemployment, benefits, payroll taxes, and worker's comp. The company could be forced to
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September, 9 2008
In our news of the weird for today, as reported by the Connecticut Law Tribune, attorneys for three wrestlers have filed a federal "legal smackdown" against the WWE for misclassifying the performers in independent contractor status, and denying them employee benefits. While seemingly absurd, the lawsuit is yet one more example of increased awareness around the issue of employee misclassification, and raises serious questions of Federal tax evasion. Beyond all that, as a writer for the Advocate quipped, "When you get hit in the face with metal chairs for a living, it's a good idea to have a dental plan."
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