- A dispute over classification can arise in an unexpected context. In this case, for example, the issue arose from a claim of unlawful termination. Had the plaintiffs in this case not been fired, they likely would never have opposed the classification. Often, a contractor’s status becomes an issue because the contractor files a claim for unemployment benefits and not because the contractor was unhappy with the classification arrangement.
- Misclassification can lead to a variety of problems and liability. The plaintiffs’ complaint in this case alleges multiple causes of action including: age discrimination under federal and New York state law; wage theft under federal and New York state law; and alleged violations under ERISA.
- Proper classification of an individual as an independent contractor can be difficult to determine and is the source of major litigation. There is no universal test that the courts and agencies use to determine independent contractor classification. Federal agencies such as the NLRB, EEOC and DOL all use different tests. State laws also vary and change. For example, the California Supreme Court recently issued an opinion that rejected an independent contractor test it used for decades for a new rigid test that will make it more challenging to classify an individual as an independent contractor.
Nine former NFL security representatives recently filed a federal lawsuit against the NFL claiming they were misclassified as independent contractors and unlawfully fired by the league because of their age. They also claim they were unlawfully denied compensation and overtime pay. As security representatives, the plaintiffs were responsible for providing game day services, as well as stadium inspections, prescription drug audits, background checks, and investigative services as directed by the NFL. According to the complaint, the plaintiffs were between the ages of 61 and 74, were qualified for their positions, and were replaced by younger and less qualified individuals. The complaint alleges that the NFL announced that the plaintiffs were terminated because the NFL was “moving in a different direction.” The plaintiffs claim that this explanation was phony and actually meant the league wanted to hire younger people as security representatives. The league could have a challenge proving that the plaintiffs were not qualified. One plaintiff, for example, claims that he is “an avid gym-goer and weight lifter, he has a second degree black belt in Karate, a brown belt in Tai Kwon Do, and celebrated his 70th birthday by doing shoulder shrugs with 600 pounds.” The case is intriguing beyond the underlying discrimination allegations and the fact that the NFL is a party. It highlights the ongoing battle over independent contractor classification. To have standing to sue for discrimination and unpaid overtime, the security representatives must establish that they were actually employees and not independent contractors. This is because independent contractors are not covered by state and federal employment laws. This case highlights some of the key risks an employer should consider when thinking about classifying workers as independent contractors: