Labor & Employment Law Daily Inconsistencies between independent contractor agreement and actual working relationship keep claims alive
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Wednesday, February 13, 2019

Inconsistencies between independent contractor agreement and actual working relationship keep claims alive

By Marjorie Johnson, J.D.

While an independent contractor acknowledgment was relevant to the parties’ relationship, a delivery driver presented conflicting evidence suggesting that a logistics company actually exercised a significant degree of control over the driver’s work.

Even though a delivery driver signed an independent contractor acknowledgment with a subcontractor, triable issues existed as to whether he was an employee of the logistics company under the ADEA and Title VII, a federal district court in Alabama ruled in denying the company’s motion to dismiss and for summary judgment. Among other things, the driver presented evidence indicating that a supervisor directed the work of drivers in a variety of ways, the logistics company provided a program that drivers had to use to make deliveries, and the driver was provided “payroll” checks. Under each of the different tests utilized for analyzing the employment relationship, the employer was not entitled to judgment as a matter of law (Nemo v. RR Donnelley Logistics Services, February 8, 2019, Haikala, M.).

The driver claimed that he was employed by RR Donnelley Logistics Services (RRD) for only about three months before it decided to fire him based on his race, gender, and age. The company filed both a motion to dismiss and motion for summary judgment arguing that he was not an employee of the company for purposes of either Title VII or the ADEA.

Which test applies? The Eleventh Circuit approved the use of the common law analysis in determining whether a Title VII plaintiff was an independent contractor in Cobb v. Sun Papers, Inc., thus in Title VII cases courts examine, “the economic realities of the relationship viewed in light of the common law principles of agency and the right of the employer to control the employee.” However, because the appeals court had not yet approved the Cobb test in ADEA cases, district courts evaluate the nature of parties’ working relationship under other federal law tests, which include the common-law agency test, the FLSA economic realities test, and a blended or hybrid approach.

Plausibly alleged employee status. First denying the company’s motion to dismiss, the court found that the pro se plaintiff alleged sufficient facts indicative of an employer/employee relationship. For example, he alleged that the “hub supervisor” knew how much he earned, assigned delivery routes, told another driver to get ready to take over a certain delivery route because the plaintiff “had to go,” fired another driver “for opposing discrimination,” and replaced plaintiff and the other driver with white drivers. The supervisor’s boss also purportedly had the authority to overrule decisions concerning route assignments. Moreover, the company required drivers to use a “real time delivery program” on their cellphones.

For purposes of his Title VII claims, these allegations plausibly established that he was an “employee” under the Cobb test. He alleged that the hub supervisor supervised his work, furnished the program that he had to use to perform his work, and selected drivers and their routes. He also alleged that the company had the power to terminate drivers. A jury could also reasonably infer that drivers were an integral part of a delivery business. As to his ADEA claim, these factual allegations also supported a finding that he was an employee under the common-law agency and economic realities tests.

Texts create triable issues. The court also denied the company’s motion for summary judgment the driver backed his allegations up with evidence that created a triable issue as to the nature of the parties’ relationship. This included text messages with the supervisor concerning compensation, such as the supervisor answering his question as to what day was pay day and requesting his Social Security number and address to process payments to him. In addition, payroll checks from the company’s home office were directed to him as payee. Other text messages concerned general oversight, such as asking him to send a picture for an ID badge and instructing him to report for a drug test. A string of texts between the supervisor and another driver also contained specific instructions for deliveries.

Independent contractor agreement. In arguing that he was an independent contractor, the company relied heavily on its client service agreement with the subcontracting company and the independent contractor acknowledgment form which the plaintiff signed for that company. According to the independent contractor form, he was required to cover expenses like fuel and provide his own equipment and tools. The form also stated he would “receive no supervision about how to perform agreed upon delivery services.” RRD further contended that it decided to replace the subcontracting company for financial reasons and notified the company’s contractors “that they were no longer needed.”

Inconsistencies. The court found that while these two documents were relevant to the analysis of the nature of the plaintiff’s relationship with RRD, they only told part of the story as several inconsistencies existed concerning the degree of control that RRD actually exercised over the driver’s work. For example, while the independent contractor form stated that he would receive “no instruction about how to perform a particular delivery” and “no supervision about how to perform agreed upon delivery services,” other evidence indicated that the hub supervisor directed the work of drivers in a variety of ways.

Similarly, though the form stated that drivers must provide their own equipment and tools, other evidence indicated that the company provided a program that drivers had to use to make deliveries. The form also said that drivers would be paid on a “per contract basis” but the driver provided “payroll” checks that he received from RRD. The supervisor also instructed the drivers that they had to make certain deliveries even though the form stated that they could reject any delivery opportunity and had “no obligation to offer delivery work continually.”

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