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A Brief History: In re FedEx Ground Package Systems, Inc. Employment Practices Litigation, MDL No. 1700, Case No. 3:05-md-527 RM The ABA Labor and Employment Section National Conference on Equal Employment Opportunity Law April 6- 9, 2011 New Orleans

Beth Ross Estelle Pae Leonard Carder, LLP 1330 Broadway, Suite 1450 Oakland, California 94612 Tel: 510 272 0169 email: [email protected] [email protected]

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A Brief History: In re FedEx Ground Package Systems, Inc. Employment Practices Litigation, MDL No. 1700, Case No. 3:05-md-527 RM

In 1984, Roadway Package Services, Inc. (RPS) opened for business as a direct competitor of UPS in the small package delivery market. To that point, UPS and the USPS were the only large scale providers of ground transportation for small packages. UPS and the USPS both had in place well established and formidable infrastructures. Their local pick-up and delivery drivers who deliver packages to and from the network terminals are Union employees. The founders of RPS included several former UPS managers who were confident they could successfully compete with UPS with innovative business methods and an entirely different business model. RPS was the first Company to develop and deploy use bar-code scanning technology for package tracking, a concept that was viewed as visionary at the time. And, instead of investing in a fleet of delivery trucks and hiring a workforce of package car drivers, like UPS, RPS's enticed a generation of drivers to join RPS as "independent contractors" with the promise that they would achieve the American Dream of operating their own businesses. RPS's founders claimed that independent operators would have greater incentive to work hard and more efficiently than employee drivers. And, RPS garnered a substantial competitive advantage by eliminating from its operating budget employment taxes, workers' compensation liability as well as many of the substantial costs associated with operating its own fleet of trucks and vans. The RPS drivers were required to sign lengthy Operating Agreements obligating them to purchase specialized trucks adequate to RPS's business and to pay all expenses associated with operating that equipment and performing their assigned work duties. RPS assigned to each driver a geographically defined service route to which, according to Operating Agreement, they had a proprietary interest, although RPS reserved to itself substantial control over how that right could be exercised.

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For example, the contract allowed RPS to reconfigure the geographic boundaries of any route as the volume of business increased as well as to reassign stops and accounts within a driver's route to meet RPS's business needs. The contract also reserved to RPS the right to grant or deny approval to a proposed transfer or sale of the route (or parts of it) by the assigned driver. The contract allowed only drivers in good standing to sell their routes, so that routes of drivers whose contracts were terminated by RPS reverted to RPS for assignment to someone else. Drivers were not free to turn down pick-up and delivery any work assignments. RPS required the drivers to represent themselves to the customers and the public as RPS drivers by branding their trucks with the RPS logo, wearing RPS uniforms, and so on. RPS sold or rented to them literally everything they needed to do their jobs: uniforms, communication equipment and devices, insurance, forms, labels, tags and stickers. In the earliest years, the drivers had to obtain their trucks from a leasing company associated with RPS and their lease payments were deducted from their pay. After the first legal challenge to the RPS's classification of its drivers as independent contractors, the Operating Agreement was revised to permit drivers to obtain their trucks from other sources, although few if any did because the credit and leasing terms offered by RPS's vendor could not be matched. In the late 1990s (and perhaps earlier) FedEx Corp. became interested in breaking into the ground delivery market. To that point, FedEx was in the business of overnight package delivery by air courier. The pickup and delivery drivers who service its air courier business have al0ways been classified as employees. FedEx owns (or leases) the air courier's trucks and has always paid all of the costs associated with the operation. The FedEx air couriers are paid an hourly wage and have a full array of employee benefits. In 1998, FedEx purchased RPS and ran it as a separate operating division. FedEx adopted the RPS business model without modification and continued to engage its local drivers as independent contractors using the RPS Operating Agreement. FedEx re-branded RPS as FedEx Ground in 2000. While FedEx Ground had a new look, its fundamental business model and relationship with the drivers remained intact. All of the substantive terms of the contract, and the terms and conditions of the drivers' employment, remained exactly the same. RPS's early business decision to conduct its core business operation with the services of workers classified as independent contractors has been under continuous legal scrutiny since almost the beginning. In 1988 and 1989, the NLRB decided two cases case finding the RPS

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drivers to be employees under the common law agency test in Roadway Package Service, Inc. 288 NLRB 196 (1988) and Roadway Package Service, Inc.292 NLRB 376, 378 (1989) enf'd 902 F.2d 34 (6th Cir. 1990). Soon afterwards, RPS's business practice was investigated by both the IRS (as well as the California Employment Development Department) in the early 1990s and concluded that the drivers were, in fact, misclassified employees. In 1994, to avoid a complete restructuring of the business, RPS presented the IRS with a modified the Operating Agreement and a settlement was reached as to RPS's past tax liabilities. Shortly thereafter, the Teamsters again attempted to organize the drivers at two of RPS's Southern California terminals. The organizing cases were decided by the full NLRB in Roadway Package Service, Inc. 326 NLRB 842 (1998) with a renewed finding that the RPS drivers employed under revised 1994 operating were misclassified employees under the NLRA's common law agency test.1 Since acquiring RPS, FedEx had steadfastly stood by and defended the independent contractor model in every conceivable state and federal legal forum, including a group of class action cases filed between 2004 and 2009 asserting various statutory and common law claims under the laws of over 40 states as well as federal claims arising under the FLSA, ERISA and the FMLA.2 The first of the court cases to go to trial was Estrada v FedEx Ground Package Systems, Inc. was filed in California in 2000. Liability issues were tried in 2004, and the litigation was finally completed nine years after it started following a merits appeal and completion of the damage computation in early 2009. The plaintiffs' primary claim was for reimbursement of employment related expenses under California Labor Code §2802. In the nine year litigation, a

1 The NLRB again concluded that the FedEx pick-up and deliver drivers were employees under the common law agency test in 2007 in FedEx Home Delivery, 351 NLRB No. 16 (2007). The Board's order was denied enforcemebt by the D.C. Circuit in FedEx Home Delivery v. NLRB, 563 F.3d 492 (D.C. Cir. 2009). These decisions and the developments in Board cases regarding FedEx and the courier industry are discussed comprehensively in Dilger, Pay No Attention to the Man Behind the Curtain: Control as a Nonfactor in Employee Status Determinations Under FedEx Home Delivery v. NLRB, 26 Journal of the ABA Section of Labor & Employment Law 1 at 123 (2010). 2

There are dozens and dozens of summary administrative decisions from all over the country passing on the employment status of individual workers. In addition, there have been a significant number of State Attorney General actions filed challenging the FedEx system ­ which will be addressed in a separate paper. The IRS opened a new investigation into the propriety of the FedEx system in which the IRS isssued Notices of Proposed Assessment in 2007 and 2009 premised on the view that the FedEx drivers were employees under the common law agency test. Administrative actions have also been initiated against FedEx for various tax years by a number of state tax agencies including but not limited to California resulting in administrative decisions adverse to FedEx that are believed to have been settled as well.

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class was certified (over FedEx's objection that its relationship with every driver was different precluding class adjudication), the drivers were held to be employees by the trial and appellate courts under California's Borello standard (a common law agency test with an "economic realities" overlay), and a judgment was entered awarding substantial damages to each class member. The liability issues are discussed in Estrada v. FedEx Ground Package System, Inc. 354 Cal. App. 4th 1 (2007). In its Opinion, the California Court of Appeal detailed the substantial right of control reserved to FedEx in the drivers' operating agreement taking account of the substantial class-wide evidence presented by the plaintiff drivers of the actual control FedEx exercised ­ in conformance with its written policies and procedures ­ over every "exquisite detail" of the drivers' work. While Estrada was wending its way through the courts, drivers all over the country filed employment law class actions, as well as individual discrimination and wrongful termination claims in over 40 states. These cases all posed the identical threshold legal question: are the FedEx Ground drivers FedEx's employees, or are they independent contractors who have their own and run their own businesses? On FedEx Ground's initiative - over the Plaintiffs' strong objections ­ in 2005 these cases were coordinated into a multi-district litigation docket entitled In re FedEx Ground Package System, Inc. Employment Practices Litigation, MDL 1700 and transferred for all pretrial proceedings to Judge Robert Miller in the Northern District of Indiana. Except for the nationwide ERISA claim pleaded in the Kansas case, and a nationwide FMLA claim pleaded in the California case, virtually all of the claims in these cases were asserted on behalf of statewide classes and pleaded state claims. The major rulings entered in the MDL docket ­ which has now concluded ­ are cited and briefly summarized below. In broad strokes, Judge Miller certified claims governed by the common law of agency as class actions and granted summary judgment to FedEx in connection with certified class claims asserted under ERISA and the laws of 26 states, finding the plaintiff drivers are independent contractors under the common law of agency. By contrast, in cases asserting federal claims governed by the federal economic realities test or various formulations of the statutory ABC test, Judge Miller denied class certification, granted summary adjudication to the plaintiff drivers in two of the dozen cases in this category and remanded the rest to the transferor courts. Last, Judge Miller made no procedural or substantive rulings in more than a dozen cases filed by individual plaintiffs in a variety of states that were transferred to the MDL

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docket at FedEx's request between 2005 and 2009 ­ and remanded these cases back to the transferor courts to be litigated. Some of these cases were files as early as 2002, long before the MDL docket was created.3 In 2009 and 2010, while the MDL docket was still active, the Eighth Circuit and the D.C. Circuit were both called on to decide cases addressing the employment status of FedEx drivers who worked under a nearly identical operating agreement as the Plaintiffs in the MDL docket. The two Circuit courts reached different conclusions. The first case, FedEx Home Delivery v. National Labor Relations Board, 563 F.3d 492 (D.C. Cir. 2009) was a petition to enforce an NLRB order directing FedEx bargain with a Teamsters local that had been certified to represent drivers at FedEx's Wilmington, Massachusetts terminal. In the administrative proceedings, the NLRB again concluded that the FedEx drivers are employees. The D.C. Circuit denied the enforcement petition. A divided panel of the court agreed with FedEx that the drivers are properly classified as independent contractors. To get there, the majority applied a novel ­ and now controversial - formulation of traditional common law agency test. Rather than focusing on FedEx's reserved right to control the method and means of the drivers' work, the Circuit instead focused on the drivers' asserted "entrepreneurial opportunities". The dissenting judge filed a lengthy opinion disagreeing with the majority's conclusion and harshly criticizing the majority's re-formulation of the common law agency test to focus on the driver's right to engage in entrepreneurial activity instead of the company's right to control their work performance as clear departure from binding and established precedent. As one would expect, decision has been as widely condemned by the Union and plaintiffs' bar as it has been celebrated by management attorneys and employers. Whether or not the D.C. Circuit's novel formulation of the common law agency test will survive further legal scrutiny is uncertain. The second case, Huggins v. FedEx Ground Package Systems, Inc. 592 F.3d 893 (8th Cir. 2010), was a negligence case arising from a trucking accident in which FedEx was sued by the injured plaintiff. The Eighth Circuit reversed the trial court's grant of summary judgment, finding that a triable issue of fact existed under Missouri's common law agency test as to whether the over-the-road driver who caused the accident was a FedEx employee so that liability

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A complete recitation of the final disposition of all the cases coordinated in the MDL docket can be found in four Orders entered between June and December 2010 cited at pps. 7-8 below.

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could be imputed to FedEx under the respondeat superior doctrine. The court's analysis is straightforward and is founded on the traditional premise that the "touchstone" of the test is "the right of control." The court noted at the outset that contractual labels are not dispositive, and found that there was sufficient evidence in the record from which a jury could find many of the same facts that supported the employee status finding in Estrada : i.e. that the driver performed work that was "the essence of FedEx's business" and performed his duties in FedEx's "place of work", that the agreement requires the drivers to "look and act like FedEx employees" and follow FedEx customer service standards and package handling procedures. While the court noted that the driver who caused the accident did not have a direct relationship with FedEx but instead was employed by a FedEx contractor, it concluded that there was sufficient evidence in the record to support a reasonable inference that FedEx had a right to control his performance and was therefore his employer under the common law test. Whether the RPS/ FedEx Ground business model will live to see another day once the MDL cases are finally resolved is uncertain and may well be decided by the U.S. Supreme Court. The final outcome of these cases ­ whatever that may be ­ should provide a more definitive set of legal signposts for distinguishing between employees and independent contractors in cases where the workers who perform an employer's core business function, as well provide guidance as to whether the economic benefits associated with the independent model are justified or outweighed by the counter-veiling legal, social and economic risks.

In re FedEx Ground Package Systems, Inc. Employment Practices Litigation Class Certification: In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, Case No. MDL 1700, Case No. 3:05-MD-527 RM (N.D. Ind. October 15, 2007): Opinion and Order Granting the Kansas Plaintiffs' Motion for class certification, and certification of a national ERISA class.

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In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, Case No. MDL 1700, Case No. 3:05-MD-527 RM (N.D. Ind. March 25, 2008) ­ 2008 WL 7764456 ­ Opinion and Order granting in part and denying in part Plaintiffs' motions for class certification in multi-district litigation cases). The district court granted plaintiffs' class certification motions as to the claims in which common law agency principles ­ as developed in the common law of each state ­ would determine the drivers' employment status. Judge Miller reasoned that whether FedEx reserved to itself the "right of control" the manner and means of the drivers' work performance could be decided by reference to common proof (including the drivers' contracts and common corporate policies and procedures). In certifying the class claims, the court indicated that it would not consider any evidence that FXG in fact exercised actual control over performance of the drivers' work as one available source of proof to establish the company's reserved right of control. By contrast, Judge Miller denied plaintiffs' class certification motions as to the claims in which the drivers' employment status would be determined under the more liberal "ABC" test. The court reasoned that these claims were not appropriate for class treatment.4 The district court found that FedEx had a right to develop individualized proof that it did not in fact exercise control over the details of each drivers' work to satisfy prong A of the test. The Plaintiff drivers argued that class-wide adjudication was in fact a superior method for resolving claims subject to the ABC test. Plaintiffs showed that because the second prong of the test could be decided based on common undisputed evidence, the court would have no occasion to consider any individualized proof FedEx might choose to offer to meet its burden on the other elements. Judge Miller rejected these arguments. Summary Adjudication/ Summary Judgment Between April and July 2008, the parties filed cross-motions for summary adjudication/ summary judgment on the employment status question in nearly all of the cases collected in the

4 Under the ABC (or an AB) test , a service providers like FedEx is presumed to be an employer unless it can show: (A) the agent was and will be free from the principal's control in performing his/her job duties; (B) the agent performs services that are outside the usual course of the principal's business and outside the principals' place of business; and (C) the agent is customarily engaged in an independently established trade, occupation, profession or business of the sort in the service provided. The test is conjunctive so that the presumption cannot be overcome if only one of the elements cannot be established.

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MDL docket. Judge Miller ruled on these motions in four separate orders dated May 28, 2010, August 11, 2010, August 12, 2010 and December 13, 2010. In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, Case No. MDL 1700, Case No. 3:05-MD-527 RM (N.D. Ind. May 28, 2010), 2010 WL 2243246 (Illinois: uncertified Wage Payment Act claim ­ under ABC test drivers are employees). In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, 734 F.Supp.2d 557 (N.D. Ind. August 11, 2010) (Kansas ­ Lead Class Action case: certified ERISA and state law statutory and common law claims ­ under Restatement's common law agency test, drivers are independent contractors). In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, Case No. MDL 1700, Case No. 3:05-MD-527 RM (N.D. Ind. August 12, 2010) 2010 WL 3239330 (uncertified cases in turning on ABC and other unique state law formulations of common law test: triable issues of fact exist ­ remanded to transferor court's by JPML following suggestion of remand by trial court). In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, Case No. MDL 1700, Case No. 3:05-MD-527 RM (N.D. Ind. December 13, 2010), 2010 WL 5094230 (certified statutory and common law claims in all remaining cases: rulings in individual cases consistent with prior rulings in similar cases). (1) Summary Judgment for FedEx Under the Common Law of Agency:

In orders entered August 11, 2010 and December 13, 2010, Judge Miller granted summary judgment to FedEx as to all of certified the statutory and common law claims in which the threshold employment status question is governed by a common law right-to-control agency test. These opinions are hundreds of pages in length and can only be summarized in the briefest terms here. Judge Miller recited detailed factual findings premised solely on the terms of the operating agreement signed by FedEx drivers and FedEx policies and procedure to support the conclusion that no reasonable trier of fact could find the drivers to be employees. The court declined to consider plaintiffs' evidence of evidence of FedEx's exercise actual control as proof of FedEx's reserved right to control on the basis that evidence of actual control is inherently

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individual and therefore incompatible with the class action procedure. Importantly, Judge Miller acknowledged that the cases could well come out differently if actual control evidence were considered. 5 Judge Miller analyzed the employment status separately under the common law test as it has been applied of each jurisdiction, as well as under federal law in connection with the nationwide ERISA claim, reaching the same conclusion. Judge Miller did not cite or discuss the D.C. Circuit's opinion in FedEx Home Delivery v. National Labor Relations Board, 563 F.3d 492 (D.C. Cir. 2009) but his analysis is strikingly similar, with significant focus on the drivers' perceived "entrepreneurial opportunities." Although Judge Miller did find that a variety of the common law factors generally favor a finding of employee status ­ such as their days and hour of work, driver and vehicle appearance standards, training, supervision and monitoring of the drivers' work in connection with FedEx's customer service requirements and "best practice"­ he ultimately concluded that all of these controls were limited by the general contract term stating restricting FedEx from controlling the manner and means of the drivers' performance. Additionally, Judge Miller gave substantial weight to the fact that the agreement permits the drivers to hire helpers and replacement drivers, gives them a proprietary interest in their routes, and offers "entrepreneurial opportunities" to those drivers who service multiple routes. In its decision, the court rejected Plaintiffs' core argument that the contractual restriction on FedEx's right to control is contracted by the more specific contract terms as implemented by FedEx policy, procedure and practice. It is noteworthy that Judge Miller's December 13, 2010 Opinion and Order begins with a discussion of the implications of his rulings in future personal injury cases. Surprisingly, Judge Miller opines that the independent contractor status finding in the MDL cases is "not expected to preclude injured persons from seeking respondeat superior liability or workers' compensation" because "[s]uch personal injury cases would surely involve the review of much extrinsic and individualized evidence of a particular driver's relationship with FedEx." This discussion

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The court's discussion of the reasons for limiting the evidence as he did can be found in its published opinion, In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, 734 F.Supp.2d 557 at 577-579 (N.D. Ind. August 11, 2010) are reiterated in its December 13, Opinon and Order at 2010 WL 5094230 *2-3. Not suprisingly, this aspect of the court's rulings will be the subject of appeal.

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suggests that Judge Miller expects that the MDL decisions would not be followed in most of if not all, cases filed by third party plaintiffs in a personal injury context because evidence of actual control by FedEx would be admissible ­ following the Eighth Circuit's reasoning in Huggins but not in future employment cases where the policies and equities, in Judge Miller's view, differ. (2) Summary Adjudication and/or Remand for Trial for Plaintiff Drivers under the ABC Test: In the May 28, 2010 and December 13, 2010 orders, Judge Miller granted summary adjudication to the plaintiff drivers in two cases -- Illinois and New Hampshire ­ with respect to uncertified statutory wage payment claims governed by the more liberal ABC test. By contrast, in its August 12, 2010 order, the court denied summary adjudication to the plaintiff drivers in all of the other cases asserting claims governed by ABC or AB tests. In the May 28, 2010 Opinion and Order, Judge Miller explained that the court did not need to reach any question except that posed by the second prong of the ABC test ­ whether the plaintiffs perform their work outside of all places of FedEx's business and perform work that is part of FedEx's usual course of business. The court concluded, as a matter of law, that FedEx could not meet its burden, reasoning:

FedEx can't satisfy its burden of showing that the plaintiffs' work was outside all the places of FedEx's business. The terminals where drivers pick up packages and the drivers' delivery routes are considered FedEx's places of business under Illinois law. Contractors report to the terminals daily or have someone on their behalf report to the terminals, so they can retrieve their packages. The drivers represent FedEx when making deliveries and picking up packages. All drivers are required to wear FedEx uniforms and their trucks must contain FedEx's logo. FedEx has processes in place to determine whether drivers are providing suitable customer service during their deliveries and FedEx managers provide drivers with suggestions to better serve customers while representing FedEx

In the August 12, 2010 Opinion and Order, Judge Miller declined to apply the same analysis and instead concluded remand to the transferor courts was more appropriate with this explanation:

The court acknowledges that it decided the Illinois plaintiffs' Wage Act claims controlled by the "ABC" test on summary judgment. Doc. # 2068. The court found that FedEx couldn't show the second prong of the exemption-that the drivers' work is performed outside FedEx's usual course of business or outside FedEx's place of business-was met. The court determined this prong could

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be addressed summarily given Illinois case law on the issue and noted that it would address the plaintiffs' common law claims by separate motion. The court isn't inclined to similarly address the remaining cases involving the "AB" or "ABC" test to first determine if they can be resolved by common evidence.

All of these cases have been, or are in the process of being, remanded to the transferor courts for further proceedings. (3) Summary Adjudication for Plaintiff Drivers under Unique Statutory Employment Tests In the December 13, 2010 order, Judge Miller also granted summary adjudication to the plaintiff drivers in the Kentucky and Nevada cases with respect to claims governed by statutory definitions of the term "employee" that, in the court's view, were intended to apply more broadly than the common law agency test. In re FedEx Ground Package Systems, Inc, Employment Practices Litigation, Case No. MDL 1700, Case No. 3:05-MD-527 RM (N.D. Ind. December 10, 2010): 2010 WL 5094230 at *30-33 (Kentucky) and *41-45 (Nevada). Current Status of the FedEx Ground MDL Cases As of this writing, the certified class action cases which the district court resolved in favor of FedEx and against the Plaintiff drivers are pending in the Seventh Circuit. Appeals have been filed by both sides. These include cases filed in: Alabama, Arizona, Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, West Virginia and Wisconsin. The cases involving claims which were not certified for class adjudication, that include ca mixture of certified and uncertified claims, or that pleaded individual claims only but which were transferred to the MDL docket have been ­ or in the process of being ­ remanded to the transferor courts for trial or other further proceedings. These include cases that pleaded class claims which were not certified by the Court such as California, Colorado, Connecticut, Kentucky, Massachusetts, Missouri, Montana, Nevada, New Hampshire, Ohio, Oregon, South Dakota, Texas, Vermont, and Virginia.

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Appeals are pending in the 21 cases in which judgment has been entered. The parties are gearing up to conclude the remanded cases in proceedings that could last several more years.

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APPENDIX In re FedEx Ground Package System, Inc. Employment Practices Litigation Representative Summary of the State Law and Decisions Addressed in the MDL Docket I. Alabama a. Governed by the common law "right to control" test; reserved right to control rather than its actual exercise that determines the relationship i. 4 principal factors: (Dickinson) 1. Direct evidence of the right or exercise of control 2. Method of payment used 3. Whether the alleged principal had the right to terminate employment 4. The right to control another's time b. Key cases: i. Dickinson v. City of Huntsville, 822 So.2d 411, 416 (Ala. 2001) ­ fraud, fraudulent misrepresentation, negligence, and wantonness claims; common law right to control test; private detective agency is an independent contractor with emphasis on burden of proof for proving agency relationship; the party claiming the existence of an agency relationship has the burden to present sufficient evidence to prove the existence of that relationship; plaintiff failed to meet that burden. ii. In re Curry v. Interstate Express, Inc., 607 So.2d 230, 232-33 (Ala. 1992) ­ workers' compensation claim; common law right to control test; truck driver is an employee with emphasis on employer's control as to the particular loads the driver picked up and the pickup/drop-off location; employer also controlled payment and supplied equipment, fuel/mileage taxes and permits, oversize permits, and Public Service Commission-type permits, in addition to liability, cargo, and "bobtail" insurance. iii. Weeks v. C.L. Dickert Lumber Co., 121 So.2d 894, 895 (Ala. 1960) ­ workers' compensation claim; common law right to control test; log loader is an employee with emphasis on employer's right to control both the means/manner and result of work; employer instructed loader when and where to cut timber and furnished part of the equipment to be used in the job. iv. Tyson Foods, Inc. v. Stevens, 783 So.2d 804, 808 (Ala. 2008) ­ nuisance, negligence, and trespass claims; common law right to control test; hog farm operator is an agent with emphasis on employer's control as to the size and location of hog houses, financing for the hog houses, the waste management

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system on the property, and almost weekly site inspections; the employer also provided food, veterinary supplies and veterinary care for the hogs; the operator's primary responsibility was to feed, water, and otherwise care for the animals. v. Butler v. Aetna Fin. Co., 587 So.2d 308, 310-11 (Ala. 1991) ­ fraudulent misrepresentation, deceit, fraudulent concealment, wantonness, and outrageous conduct claims; common law right to control test; salespersons at appliance store are not agents of finance company with emphasis on common procedures for receiving a credit line vi. White v. Henshaw, 363 So.2d. 986, 988 (Ala. Civ. App. 1978) ­ workers' compensation claim; common law right to control test; cotton haul driver is an independent contractor with emphasis on broker's control only as to the end result of driver's work; moreover, driver was paid only for loads he delivered and received 90% of the gross for each haul; driver could decline loads as he wished; driver owned his truck and paid for all related expenses such as maintenance, fuel, and insurance; finally, broker did not have the right to terminate driver. Arkansas a. Governed by the common law "right to control" test; right to control, not actual control, that is determinative b. Arkansas courts also sometimes consider the various secondary factors set forth in the Restatement (Second) of Agency §220. Two of these secondary factors, the nature of the worker's occupation and whether it is a part of the regular business of the employer, are jointly referred to as the "relative nature of work" test. c. Key cases: i. ConAgra Foods v. Draper, 276 S.W.3d 244, 248 (Ark. 2008) ­ personal injury case; common law right to control test and relative nature of work test; trucking company is an employee with emphasis on employer's exertion of control as to how to safeguard its goods; also, company lacked a distinct occupation or business. ii. Cloverleaf Express v. Fouts, 207 S.W.3d 576, 582 (Ark. Ct. App. 2005) workers' compensation claim; common law right to control test; truck-trailer driver is employee with emphasis on employer's payment of maintenance, repair, and fuel fees, control of pickup/delivery times, and provision of equipment; employee was also unable to hold any other jobs because the necessity of his round-the-clock availability to employer. iii. Ark. Transit Homes, Inc. v. AETNA Life & Cas., 16 S.W.3d 545, 547 (Ark. 2000) ­ workers' compensation claim; common law right to control test and

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relative nature of work test; truck drivers are employees with emphasis on, inter alia, drivers' agreement to use their trucks exclusively for employer, their inability to use their trucks for a "trip lease" without employer's consent, the significant tenures they worked for employer, and employer's right to sublease the drivers' trucks; moreover, drivers did not engage in a distinct occupation or business and the work they performed was integral to employer's business. iv. Massey v. Poteau Trucking Co., 254 S.W.2d 959,961 (Ark. 1953) ­ workers' compensation claim; common law right to control test; truck driver is an independent contractor with emphasis on driver's ownership and maintenance of truck; furthermore, company paid driver per load without any deductions and had no control as to driver's route and speed. California a. Governed by the common law "right to control" test formulated by California Supreme Court with special focus on economic realities; whether the employer retains the right to control "all meaningful aspects of the business relationship" is principal test with emphasis on integration of workers into employers' overall business operations. (Borello) b. "Right to terminate at will, without cause" and the various secondary factors enumerated in the Restatement (Second) of Agency §220 also serve as guidelines c. Key cases: i. S.G. Borello and Sons, Inc. v. Dep't. of Industrial Relations, 48 Cal.3d 341, 349 (1989) ­ workers' compensation claim; common law right to control test and analysis of secondary factors set forth in Restatement; court focused on overall process rather than details; cucumber harvesters are employees with emphasis on employer's "pervasive control over the operation as a whole"; employer controlled price, crop, cultivation, fertilization and insect prevention, payment, and right to deal with buyers; harvesters did not require any special skill to perform the work and did not partake in a distinct trade; they did not represent to be in business nor did they have any meaningful entrepreneurial opportunity; they invested only their labor and hand tools; special emphasis on the permanent integration of harvesters into employer's overall business by fact of ongoing relationship through the years. ii. Air Couriers Int'l et. al. v. Employment Dev. Dep't., 59 Cal.Rptr.3d 37, 43 (2007) ­ statutory tax refund claim; common law right to control test as modified by California Supreme Court in Borello; pickup and delivery drivers are employees with emphasis on company's right to control the overall

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delivery operation; drivers worked regular schedules and regular daily routes, performed "integral and entirely essential aspect" of the business, worked for the employer for significant durations, were practically unable to decline jobs, and were encouraged to wear uniforms. Estrada v. FedEx Ground Package System, Inc., 154 Cal.App.4th 1 (2007) ­ statutory expense reimbursement claim; common law right to control test as modified by California Supreme Court in Borello; pickup and delivery drivers are employees with special emphasis on integration of drivers' work functions into employers' overall operations, employer's right to unilaterally reconfigure drivers' routes, "flex" packages away from drivers, reject helpers or replacement drivers, and terminate drivers without cause, in addition to its requirement that drivers wear uniforms and use designated specified trucks and scanners; drivers also lacked entrepreneurial opportunity, were paid weekly, needed no special skill and worked exclusively for the employer. JKH Enterprises, Inc. v. Dep't. of Industrial Relations, 48 Cal.Rptr.3d 563, 579 (2006) ­ workers' compensation claim; common law right to control test as modified by California Supreme Court in Borello; local delivery drivers are employees with emphasis on employer's retention of "all necessary control" over the operation as a whole, the integral part the drivers' work played in the business, and drivers' regular paydays, long tenure, and low degree of skill required for performing job. Toyota Motor Sales, USA, Inc. v. Superior Ct., 220 Cal.App.3d 864, 873 (1990) ­ personal injury case; common law right to control test and analysis of secondary factors set forth in Restatement; pizza delivery driver is an employee with emphasis on the employer's total control as to all aspects of the job including, inter alia, the number, nature, type and price of pizzas to be delivered, the time of the deliveries, the individuals and locations to whom they would be delivered, and when the relationship could be terminated; the only discretion vested in driver was with regards to the route to follow. Grant v. Woods, 71 Cal.App.3d 647, 652 (1977) ­ statutory tax refund claim; common law right to control test; newspaper carriers are employees with emphasis on employer's requirement that the papers be delivered at a specified time; employer handled customer complaints, advised the carriers on methods of operation, required carriers to maintain subscribed lists, and retained the right to terminate carriers; additionally, carriers were not engaged in a skilled profession and a distinct occupation of their own, in fact, they were "essential" to employer's business and many were employed for

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vii.

viii.

ix.

x.

long periods of time; finally, carriers were paid for their service regardless of whether the customers paid their bills. Gonzalez v. W.C.A.B., 46 Cal.App.4th 1584, 1593 (1996) ­ workers' compensation claim; common law right to control test as modified by California Supreme Court in Borello; newspaper carrier is an employee with emphasis on carrier's minimal control over the mode and manner in which he accomplished his work; for example, employer specified the time the newspapers were to be picked up and delivered, provided the customers and routes, handled subscriptions, payments, and complaints, and retained right to terminate carriers at will; carrier had no real choice of any terms of employment or contract. Yellow Cab Coop., Inc. v. W.C.A.B., 226 Cal.App.3d 1288, 1296 (1991) ­ workers' compensation claim; common law right to control test as modified by California Supreme Court in Borello; taxicab driver is an employee with emphasis on the employer's control over assignments; employer instructed drivers on, inter alia, personal appearance and cleanliness of cab; drivers were not truly free to decline assignments, were prohibited from driving cabs for other companies, and were given assigned schedules; moreover, they were "a regular and integrated portion" of the employer's business. Santa Cruz Transp., Inc. v. Unemployment Ins. App. Bd., 235 Cal.App.2d 1363, 1370 (1991) ­ statutory disability benefits claim; common law right to control test as modified by California Supreme Court in Borello; taxicab driver is an employee with emphasis on indicia of control contained in the lease agreement; driver "was not blessed with his freedom" and was instead totally dependent on employer for his livelihood; analysis of secondary factors revealed, inter alia, that driver was not engaged in entrepreneurial venture and that cab driving is not inherently a skilled occupation that would justify a finding of independent contractor status. Narayan v. EGL, Inc., 616 F.3d 895, 900-01 (9th Cir. 2010) ­ statutory wage and reimbursement claims; common law right to control test as modified by California Supreme Court in Borello; summary judgment in favor of the company improper where there was "sufficient indicia of an employment relationship between the plaintiff Drivers and EGL"; the delivery services provided by the freight pickup and delivery drivers were an essential part of the regular business of the company; moreover, the company instructed its drivers on, inter alia, proper conduct when receiving assignments and packages, handling of damaged freight, how to communicate with dispatch, and when to arrive for work; it also controlled other details of the drivers'

17

602

xi.

xii.

xiii.

xiv.

performance as it related to uniforms and vehicles; furthermore, the work did not require a high level of skill and many of the relationships were of long duration; finally, and of great importance, the contracts signed by both parties contained automatic renewal clauses and could be terminated by either party upon 30 days' notice or breach of the contract. Arzate v. Bridge Terminal Transport, 2011 WL 285856 at *4 (Cal. Ct. App. Jan. 31, 2011) ­ statutory wage and hour claims; common law right to control test as modified by California Supreme Court in Borello; genuine issue of material fact as to whether truck drivers are employees with emphasis on CBA's use of the term "employee" in describing the drivers; company issued W-2 forms to drivers, withheld taxes, and offered health plan benefits; company also paid hourly rates for certain parts of the drivers' workdays; company could terminate the contract with 24 hours' notice; finally, the drivers' work was an integral part of the company's business. Messenger Courier Assn. of the Americas v. Cal. Unemployment Ins. Appeals Board, 175 Cal.App.4th 1074, 1082-83 (2009) ­ third party declaratory action on issue of statutory unemployment insurance liability; common law right to control test as modified by California Supreme Court in Borello; courier drivers are employees with emphasis on the straightforward nature of their work, the integral nature of their work to the employer's business, their lack of any "real choice" as to whether to sign the independent contractor agreements; finally, the drivers' work as "independent contractors" was indistinguishable from the work they had previously performed when characterized as "employees." Antelope Valley Press v. Poizner, 162 Cal.App.4th 839, 852-53 (2008) ­ petition for writ of administrative mandamus; common law right to control test as modified by California Supreme Court in Borello; newspaper carriers are employees with emphasis on the contract entered into by the parties that is "filled with manner and means provisions regarding the task of delivering AVP's publications"; employer retained the right to terminate at will; further, carriers are not involved in a distinct occupation or business, did not require any special skill to perform their work, and worked for employer for 1 year terms; employer provided many of the materials for the job in addition to the facilities (e.g., loading dock); finally, the carriers' work was "part and parcel" of the newspaper business. Ali v. U.S.A. Cab Ltd., 176 Cal.App.4th 1333, 1347-48 (2009) ­ statutory wage and hour, tax liability, and tort claims; taxicab drivers are independent contractors with emphasis on drivers discretion in regards to whether to use

18

603

the principal's dispatch service and to charge the metered rate; drivers provided many instrumentalities for their work including maps, flashlights, took its, jumper cables, cell phones, GPS systems, computers, and credit card processing machines; moreover, some of the drivers handled their own marketing and distributed business cards with their personal cell phone numbers printed on them. xv. Cristler v. Express Messenger Systems, Inc., 171 Cal.App.4th 72, 77 (2009) ­ statutory wage and hour claims; common law right to control test as modified by California Supreme Court in Borello; delivery drivers are independent contractors with emphasis on right to control details of the work performed. IV. D.C. a. Key case: i. FedEx Home Delivery v. N.L.R.B., 563 F.3d 492 (C.A.D.C. 2009) ­ N.L.R.A. case; traditional Restatement test with weight of inquiry on entrepreneurial opportunity; delivery drivers are independent contractors with emphasis on their proprietary interest in delivery routes, ownership of equipment, and constraints imposed by consumer demands and government regulations (as opposed to the alleged employer). Florida a. Governed by the common law "right to control" test; it is the right to control, not actual control, that is significant b. Florida courts also systematically consider the additional factors set out in the Restatement (Second) of Agency §220 c. Key cases: i. Cantor v. Cochran, 184 So.2d 173, 174 (Fla. 1966) ­ workers' compensation claim; common law right to control test and analysis of secondary factors set forth in Restatement; grocery loader is an employee with emphasis on employer's control of loader's work schedule and which customers he would assist, provision of tools and workplace, and particularly employer's right to terminate loader at will; loader was not engaged in a distinct occupation or business, did not require special skill and worked a lengthy tenure (7 years); moreover, the work was part of the regular business of the employer. ii. Adams v. Dep't. of Labor & Employment Security, 458 So.2d 1161, 1162-63 (Fla. 1st Dist. Ct. App. 1984) ­ statutory unemployment benefits claim; common law right to control test; carpet cleaners are employees where employer selected the equipment and cleaning agents used, the method for using them, and the customers the cleaners would serve.

V.

19

604

iii. Farmers & Merchants Bank v. Vocelle, 106 So.2d 92, 95 (Fla. 1st Dist. Ct. App. 1958) ­ statutory tax liability claim; common law right to control test; janitor is an independent contractor where the bank neither attempted to, nor exercised, control or supervision over her work; her only instructions were to do a good cleaning job and she had absolute freedom to do the work as she saw fit; she could get others to do the work and even work for others herself; the bank furnished supplies but only to the extent she requested them. iv. Parker v. Domino's Pizza, Inc., 629 So.2d 1026, 1027 (Fla. 4th Dist. Ct. App. 1993) ­ personal injury case; common law right to control test; genuine and material question of fact raised as to whether franchisee is an employee where franchisor provided to franchisees a "veritable bible" for operations; the operating manual contained "prescriptions for every conceivable facet of business" from the elements of making the perfect pizza to sanitation. v. Harper v. Toler, 884 So.2d 1124, 1130 (Fla. 2nd Dist. Ct. App. 2004) ­ personal injury case; common law right to control test and analysis of secondary factors set forth in Restatement; genuine and material question of fact raised as to whether substitute newspaper carrier was (sub)employee with emphasis on provision of employee benefits. vi. Kane Furniture Corp. v. Miranda, 506 So.2d 1061,1064 (Fla. 2nd Dist. Ct. App. 1987) ­ wrongful death claim; common law right to control test and analysis of secondary factors set forth in Restatement; carpet installers are independent contractors with emphasis on their "unbridled discretion in the physical performance of their tasks", distinct and skilled occupation, provision of their own installation equipment, lack of set schedule, payment per installation rather than by time, and lack of exclusivity in their dealings. VI. Illinois a. Common law claims: governed by the common law "right to control" test; the right to control the manner of work is the single most important factor in determining the parties' relationship b. Key cases: i. Mitchell v. Dep't of Corr., 856 N.E.2d 593, 598 (Ill. App. Ct. 2006) ­ statutory civil rights claim; common law right to control test supplemented by factor of "remuneration" as found in the Illinois Human Rights Act; administrator of correctional facilities is not an employee with emphasis on element of control; the principal was "merely exercising his contractual right to regulate" the claimant's schedule, absences, coming and going from the facility, and his minimum level of performance; moreover, the principal did not control the manner in which administrator performed his duties; the

20

605

VII.

court also found significant that the control exerted over the claimant was primarily to "ensure the safety and security of the inmates, the facility and the workers therein." ii. Warren v. Williams, 730 N.E.2d 512, 517-18 (Ill App. Ct. 2000) ­ legal malpractice action; common law right to control test; city attorney is an independent contractor with emphasis on his non-exclusive relationship with the city; he was paid a retainer and thereafter billed by the hour; he used his own office and equipment; finally, the city did not control the manner of attorney's work. c. Statutory wage claims: governed by the Illinois Wage Act, which defines an "employee" as "any individual permitted to work by an employer in an occupation," but excludes any individual: (all three prongs must be satisfied) i. Who has been and will continue to be free from control and direction over the performance of his work, both under his contract of service with his employer and in fact; and ii. Who performs work which is either outside the usual course of business or is performed outside all of the places of business of the employer unless the employer is in the business of contracting with third parties for the placement of employees; and iii. Who is an independently established trade, occupation, profession or business. d. Key statutes and codes: i. Illinois Wage Act, 820 Ill. Comp. Stat. 115/2 ii. Ill. Adm. Code tit. 56 §300.460(a)(1) (2004) ­ defines "control" iii. Ill. Adm. Code tit. 56 §2732.200(3) (2001) ­ discussing the third prong of the Illinois Wage Act Indiana a. Governed by the common law "right to control test"; the right to control is the single most important factor in determining the existence of an employer-employee relationship b. Indiana courts also systematically consider the additional factors set out in the Restatement (Second) of Agency §220, with a focus on the following: (GKN Co.) (citing Hale v. Kemp, 579 N.E.2d 63, 67 (Ind. 1991)) i. The right to discharge ii. Mode of payment iii. Supplying tools or equipment iv. Belief o f the parties in the existence of an employer-employee relationship v. Control over the means used in the results reached

21

606

VIII.

vi. Length of employment vii. Establishment of work boundaries c. Key cases: i. Mortgage Consultants, Inc. v. Mahaney, 655 N.E.2d 493, 495-96 (Ind. 1995) ­ statutory claim for damages stemming from failure to pay wages; common law right to control test; genuine and material question of fact raised as to whether mortgage broker was employee with emphasis on "Independent Contractors Agreement" signed by both parties, firm's control over methods used to obtain new clients, and method of payment (commissions). ii. GKN Co. v. Magness, 744 N.E.2d 397, 402 (Ind. 2001) ­ hybrid workers' compensation claim and personal injury case; dual employers; truck driver is independent contractor where he was paid directly by the trucking company (as opposed to the general contractor), neither party believed an employment relationship existed, lack of control over means used in the results reached, and short duration of employment (3 months). Kansas a. Governed by the common law "right to control" test; it is not actual control, but right or authority to control that is determinative b. Key cases: i. Wallis v. Sec'ty of Kansas Dep't of Human Resources, 236 Kan. 97, 102, 689 P.2d 787 ( 1984) ­ statutory tax liability claim; common law right to control test; vacuum cleaner dealers are employees because, inter alia, employer maintained direction and control with respect to the training of the dealers and price of products, retained the right to terminate at will, and shadowed dealers in the early stages of their employment. ii. Crawford v. Dep't of Human Resources, 845 P.2d 703, 710 (Kan. App. 1989) ­ statutory tax liability claim; common law right of control test with consideration of 20 additional factors promulgated by the Kansas Department of Human Resources; demonstrators (promoters) are independent contractors where demonstrators received instructions from the manufacturers and stores, not the principal; principal had no involvement in creating instructions nor did she supervise the demonstrators to ensure compliance; she also did not supply any equipment to the demonstrators, did not provide any training, did not set the order or sequence of work, and did not dictate work hours; no work was done onsite; finally, payment was by the job and there was no exclusivity to the arrangement.

22

607

IX.

iii. Brillhart v. Scheier, 243 Kan. 591, 594, 758 P.2d 219 (1988) ­ personal injury case; common law right to control test; parish pastor is an independent contractor with emphasis on control; the diocese had no control over the daily activities of parish pastor; pastor has discretion over his duties and is required to make only annual reports of status to the diocese; pastor controls the parish and provides his own supplies and salary form parish proceeds; furthermore, the work requires a high level of skill and experience and is not generally supervised. Kentucky a. Common law claims: governed by the common law right to control test as articulated in the Restatement (Second) of Agency b. Key cases: i. Ky. Unemployment Ins. Comm'n v. Landmark Comm. Newspapers of Ky., Inc., 91 S.W.3d 575, 579 (Ky. 2002) ­ statutory tax liability case; common law test without emphasis on control as the determinative factor, rather, "every case, where it must be determined whether an individual is an employee or an independent contractor for unemployment insurance purposes, needs to be resolved on its own facts" (emphasis added); newspaper carriers are employees with emphasis on employer's control with regards to time of delivery, placement of newspapers and their condition; ongoing relationship between employer and carriers; moreover, the employer was in business and the carriers' work was a regular part of the business of employer. ii. Mazzei v. Rock-N-Around Trucking, Inc., 246 F.3d 956, 963 (7th Cir. 2001) ­ statutory employee benefits claim; right to control test with a 5 factor analysis; truck drivers are independent contractors with emphasis on the "little more than the basic level of supervision" exerted by the company; drivers owned and drove their own trucks, provided storage for their trucks, and paid for their own maintenance, fuel, and insurance; they could decline work at any time; likewise, they could work for other companies at any time, and they could terminate their lease with the company at any time, for any reason without penalty; they were paid without deductions; and finally, the relationships were not necessarily of lasting duration, as the drivers could cancel their lease at any time and also choose to work whenever or for whomever they wanted. c. Statutory wage claims: the principal test is the "right to control the work to be done...to the extent of prescribing how the work shall be performed" with additional considerations for "the method of payment and how free the possible employer is to

23

608

X.

replace the possible employee with another." 803 Ky. Admin. Reg. 1:005; §4(1)-(4). Other "significant" secondary factors courts may consider are: (§4(2)-(3)) i. The extent to which the services in question are an integral part of the employer's business; ii. The amount of the alleged contractor's investment in facilities and equipment; iii. The alleged contractor's opportunities for profit and loss; and iv. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent enterprise. d. Key statutes: i. 803 Ky. Admin. Reg. 1:005; §4(1)-(4) ii. Ky. Rev. Stat. §337.010 et. seq. Maryland a. Governed by the common law "right to control" test; right to control is decisive b. 5 factors: (L.M.T. Steel Prods.) i. The power to select and hire the employee ii. The payment of wages iii. The power to discharge iv. The power to control the employee's conduct v. Whether the work is part of the regular business of the employer c. To determine whether an individual is an employee covered by the Maryland Wage Payment and Collection Act, the Court of Appeals of Maryland recently indicated that it would consider the following factors from the Restatement Second of Agency: (Balt. Harbor Charters) i. Whether the employer actually exercised or had the right to exercise control over the performance of the individual's work ii. Whether the individual's service is either outside all the usual course of business of the enterprise for which such service is performed; iii. Whether the individual is customarily engaged in an independently established trade, occupation, profession, or business; iv. Whether it is the employer or the employee who supplies the instrumentalities, tools, and location for the work to be performed; v. Whether the individual receives wages directly from the employer or from a third party for work performed on the employer's behalf; and vi. Whether the individual held an ownership interest in the business such that the individual had the ability and discretion to affect the general policies and procedures of the business

24

609

XI.

d. Key cases: i. Balt. Harbor Charters, Ltd. V. Ayd, 780 A.2d 303, 317-18 (Md. 2001) ­ statutory wage reimbursement claim; right to control test based on 6 criteria enumerated above; issue of whether boat captain was an employee under the Maryland Wage Payment and Collection Act was improperly withheld from the jury by the trial court's dismissal; questions remained as to, inter alia, whether captain's services were within the usual course of operating a charter boat business (evidence at trial showed that boat captain performed administrative services, repairs, maintenance, sales and captaining); whether captain used any of his own equipment (testimony at trial indicated that captain used some of his own equipment for repairs and maintenance, but also used company's computer and software for bookkeeping); whether there was a pattern of payment (captain received a monthly administrative salary and a weekly salary). ii. Whitehead v. Safway Steel Products, Inc., 497 A.2d 803 (Md. App. 1985) ­ personal injury/workers' compensation claims; common law right to control test; unskilled temporary worker is an employee with emphasis on employer's control with respect to the task to be performed, supervision of his work, and assignment to other tasks; employer could also terminate him at any time. iii. L.M.T. Steel Prods., Inc. v. Peirson, 425 A.2d 242, 244 (Md. App. 1981) ­ personal injury case; common law right to control test; construction foreman is an employee with emphasis on overall job responsibility; he hired and supervised the other installers and determined their compensation; he was authorized to sign payroll checks on behalf of the employer; he also paid himself from the same account. Massachusetts a. Governed by the Massachusetts independent contractor statute which provides that any "individual performing any service...shall be considered to be an employee" unless the alleged employer can prove that such individual meets all of the tests set forth in Mass. Gen. Laws ch. 149, §148B. Also known as the "ABC" test, it requires the alleged employer to prove each of the three prongs in order to properly classify a worker as an independent contractor. If the alleged employer cannot satisfy any one of the prongs, the individual in question is an employee. i. 3 prongs of the "ABC" test: 1. The individual must be "free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact."

25

610

2. The service that is performed must be "outside the usual course of business of the employer." 3. The alleged employer must prove that the individual "is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed." XII. Minnesota a. Governed by the common law "right to control" test; focus is on the right to control, as opposed to the exercise of that right b. 5 factors: (Pettis) i. Right to control the means and manner of performance ii. Mode of payment iii. Furnishing of materials or tools iv. Control of the premises where the work is to be done v. The right of the employer to discharge the employee or contractor c. Minnesota courts have also looked to the Restatement Second of Agency as persuasive authority d. Key cases: i. Hunter v. Crawford Door Sales, 501 N.W.2d 623, 624 (Minn. 1993) ­ workers' compensation claim; common law right to control test; garage door installer is an employee with emphasis on required training, set schedule, and employer's mandated exclusivity of arrangement; characterization of relationship at time of hire as "subcontractor" was given undue weight by lower courts. ii. Pettis v. Harken, Inc., 263 Minn. 289, 291 (1962) ­ workers' compensation claim; common law right to control test; fertilizer sales representative is an employee with emphasis on employer's instructions regarding sales methods, application of fertilizer, and procedures for taking orders; employer provided product price list and promotional material and required that employee keep certain records. iii. Spannaus v. Mecca Enterprises, Inc., 262 N.W.2d 152, 154 (1977) ­ civil fraud action; common law right to control test; solicitors (door-to-door sales representatives) are employees with emphasis on employer's right to terminate at will; employer furnished order forms and barred employees from soliciting magazines for other clearinghouses; finally, the crews in the field were not isolated from one another and in fact were "mutually interdependent and supportive."

26

611

XIII.

XIV.

New Hampshire a. Governed by the common law "right to control" test as articulated in the Restatement Second of Agency b. Key cases: i. Boissonault v. Bristol Federated Church, 138 N.H. 476, 478 (1994) ­ workers' compensation claim; common law right to control test and analysis of secondary factors set forth in the Restatement; volunteer church worker is an independent contractor because the church had no right to control the physical performance or the details of the accounting services she rendered. ii. LaVallie v. Simplex Wire & Cable Co., 135 N.H. 692, 694 (1992) ­ workers' compensation claim; common law right to control test and analysis of secondary factors set forth in the Restatement; engineer is an employee per the "borrowed servant rule" with emphasis on employer's right to control and direct his work; at the time of his injury, he was operating under a foreman's direction and control. iii. Merchants Ins. Group v. Warchol 132 N.H. 23 (1989) ­ declaratory judgment action; common law right to control test and analysis of secondary factors set forth in the Restatement; laborer is an employee where he was subject to employer's immediate control; laborer was not operating a distinct business nor was he engaged in a skilled profession; he was employed exclusively by employer and paid an hourly rate; employer also supplied the worksite and tools. c. Key statutes: i. N.H. Rev. Stat. §275:4 II(b) New Jersey a. Governed by the common law "right to control" test; control test is satisfied whenever the employer retains the right of control, even if it is not exercised b. Key cases: i. Lowe v. Zarghami, M.D., 731 A.2d 14, 19 (N.J. 1999) ­ Tort Claims Act case; common law right to control test and relative nature of work test; university clinical professor is a public employee with emphasis on relative nature of work; doctor was "totally economically dependent" on the university and his work formed an integral part of the university's business. ii. MacDougall v. Weichert, 144 N.J. 380, 389 (1996) ­ wrongful termination claim; common law right to control test; genuine and material issues of fact as to whether real estate salesperson was an independent contractor or employee where firm exerted "substantial control" over him through supervision, requirement that he enroll in its training program, and share of

27

612

XV.

commission profits; however, facts suggesting he was an independent contractor include the agreement both parties entered into, payment by commissions, individual liability for expenses including license, trade dues, and health insurance, and right of termination by either party. iii. Mavrikidis v. Petullo, 153 N.J. 117, 131 (1998) ­ personal injury case; common law right to control test and analysis of secondary factors set forth in the Restatement; masons are independent contractors with emphasis on skill required for job, furnishing of own tools and materials, duration of employment lasting only the length of the project; furthermore, their work did not involve the regular business of the principal. iv. Tofani v. Lo Biondo, 83 N.J. Super. 480, 484-85 (1984) ­ workers' compensation claim; control test and relative nature of work test with weight on the latter as the decisive factor; truck driver is an employee because he was economically dependent on employer; he was not conducting a separate and independent business during the time period at issue; and his work formed an integral part of the employer's regular and continuous business. New York a. Governed by the common law "right to control" test; right of control over means is the most important test b. Key cases: i. Bynog v. Cipriani Group, 1 N.Y.3d 193 (N.Y. App. 2003) ­ statutory wage reimbursement clam; common law right to control test; professional banquet waiters are independent contractors because they worked at their own discretion, worked freely for other caterers, and were under the "exclusive direction and control" of the temporary agency that interviewed, hired, and paid them and provided 1099 forms. ii. Chaiken v. VV Publishing Corp., 119 F.3d 1018 (2nd Cir. 1997) ­ IIED and defamation claims; common law right to control test and analysis of secondary factors set forth in the Restatement; journalist is an independent contractor where he chose his own topics and conducted own research, wrote articles absent any direction from the newspaper, received outside funding for research, and wrote for other publications; in addition, he was paid only for articles that were published, was not provided fringe benefits or an office at the newspaper, did not have taxes withheld, and was not listed as a staff writer; finally, the newspaper reviewed his articles only after he had finished a draft and made sparing substantive changes. iii. Smith v. CPC Int'l, Inc., 104 F.Supp.2d, 272, 275 (S.D.N.Y. 2000) ­ statutory employment benefits claims; common law right to control test; distributors

28

613

XVI.

are independent contractors with emphasis on failure of plaintiffs to apply the correct test to their claims. iv. Kreinik v. Showbran Photo, Inc., 400 F.Supp.2d 554, 565 (S.D.N.Y. 2005) ­ statutory employment benefits claims; common law right to control test; jury's finding that sales representative was an independent contractor is entitled to preclusive effect. v. In re Morton, 30 N.E.2d 369, 371 (N.Y. 1940) ­ statutory unemployment insurance claim; common law right to control test; corsetiere is an employee with emphasis on employer's required methods of corsetry and salesmanship; corsetiere was expected to begin her work at a certain time and to work a minimum number of hours a week; employer supplied the medeling garments used for measuring, samples, and the marketing materials; further, employer required her to file a "report card" each week describing her daily activities in detail and strongly encouraged her to attend a weekly school of instruction hosted by the employer. vi. Abouzeid v. Grgas, 295 A.D.2d 376, 377 (2002) ­ personal injury case; limousine driver is an independent contractor with emphasis on franchise arrangement; drivers own or lease their own vehicles, set their own hours, and can work for other services; they are responsible for their own gas, EZ passes, and insurance and are responsible for the maintenance of their limos; they retain 100% of cash payments from customers and pay a processing free and percentage to the company for payment by credit cards or vouchers; the company makes no deductions from drivers' compensation and does not monitor drivers' conduct. c. Key statutes: i. Article 6 of New York Labor Law Oregon a. Governed by the common law "right to control" test; proper inquiry is the right to interfere, not actual interference b. 4 factors: (Rubalcaba) i. The right to, or the exercise of, control ii. The method of payment iii. The furnishing of equipment iv. The right to fire c. The Oregon Bureau of Labor and Industries identified additional factors: (Chard) i. Whether the worker was retained for a relatively long or indefinite time period or on a job-by-job basis, and whether work was full-time, part-time or intermittent

29

614

d.

e.

f.

g.

h.

ii. The worker's right to hire assistants iii. Whether the worker could perform work for others while working for the employer iv. Who determines the worker's hours of work v. Whether it is common practice in the relevant industry to retain workers as employees or independent contractors Nordling v. Johnston, 205 Or. 315, 332 (1955) ­ statutory wage reimbursement claim; common law right to control test; logger is an employee with emphasis on employer's right to terminate at will. Stamp v. Dep't of Consumer and Business Services, 9 P.3d 729, 732 (Or. Ct. App. 2000) ­ workers' compensation claim; common law right to control test; tile installer is an employee with emphasis on employer's control as to work assignments and supervision of the work; employer, not installer, was accountable for quality of the work; moreover, installer worked almost exclusively for employer and never declined a project during the relevant audit period. Perri v. Certified Languages Int'l, LLC, 66 P.3d 531 (Or. Ct. App. 2003) ­ statutory wage and overtime claims; right to control test and economic realities test; triable issues of material fact as to whether telephone operator is an employee with emphasis on control company exercised over the manner in which the operators performed their work; company selected the interpreters and provided all equipment needed for the job; company retained right to terminate telephone operators and determined the rate and method of compensation; finally, the company controlled the operators' work schedules and determined their working conditions. Chard v. Beauty-N-Beast Salon, 941 P.2d 611, 613 (Or. Ct. App. 1997) ­ statutory wage claim; right to control test; triable issues of material fact as to whether salon associate is an employee where salon owner determined the associate's working hours, owned and controlled the tanning bed, was responsible for routine maintenance, provided the information cards for the tanning customers, and collaborated with associate to create an advertisement for the local paper; also, the salon used its phone for tanning-related business and the duration of the relationship was "open-ended." Wallowa Valley Stages, Inc. v. The Oregonian Publishing Co., 235 Or. 594, 598 (Or. 1963) ­ personal injury case; right to control test and analysis of secondary factors set forth in Restatement; newspaper carrier is an employee with emphasis on frequent supervisory visits by employer; carrier was also required to furnish employer with lists of all subscribers he served, which employer asserted ownership

30

615

XVII.

of; finally, the employer also retained the right to terminate the relationship on thirty days' written notice with or without cause. i. Rubalcaba v. Nagaki Farms, Inc., 43 P.3d 1106 (Or. 2002) ­ workers' compensation claim; common law right to control test; harvest truck driver is an employee with emphasis on employer's right to terminate at will; employer exercised control over the procedures for loading and which loads driver would take; moreover, driver's work was "an essential and regular part" of employer's business. Pennsylvania a. Governed by the common law "right to control" test; existence of right or authority to control is the critical factor b. Key cases: i. JFC Temps, Inc. v. W.C.A.B., 545 Pa. 149, 153, 680 A.2d 862 (1996); 680 A.2d 862 ­ workers' compensation claim; common law right to control test; truck driver is an employee with emphasis on employer's direction as to the "specifics" of the deliveries to be made; driver was required to report to employer at the beginning and end of the workday and performed miscellaneous non-driving related jobs at the behest of the employer; employer controlled the daily operations of the vehicles and retained the right to select routes taken by driver. ii. Sarver Towing v. W.C.A.B., 736 A.2d 61, 63 (Pa. Commonwealth Ct. 1999) ­ workers' compensation claim; common law right to control test; tow truck driver is an employee with emphasis on right to control driver; employer trained driver anf furnished all equipment for the job; employer also exercised "substantial control" over driver and the manner in which he performed his work since driver was not allowed to use the truck to work for other parties and was on call 24/7; moreover, driver's injury occurred when he was moving a computer for employer at employer's request; this was a non-driving related duty and was "clearly indicative of the fact that [Sarver Towing] had the control over Claimant to tell him what to do and the manner of how he was to do it." iii. Shay v. Flight C Helicopter Services, Inc., 822 A.2d 1, 13 (Pa. Super. Ct. 2003) ­ wrongful death claim; common law right to control test; helicopter mechanic is an employer with emphasis on employer's supervision and inspection of the mechanics' work; also, employer handled customers, assigned work to the mechanics, billed customers, paid mechanics an hourly rate, provided manuals and parts to the mechanics, stored the mechanics' tools, and assisted with the work on occasion.

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iv. Lynch v. W.C.A.B., 123 Pa. Commonwealth Ct. 299, 302, 554 A.2d 159 (1989) ­ workers' compensation claim; common law right to control test; high school football referee is an independent contractor with emphasis on lack of evidence that the school district had or exercised "any control whatsoever" over the manner in which the claimant and other official performed their duties during the game; officials were not on the district's payroll and taxes were not withheld; furthermore, officials were not given the benefits that the other district employees received; they bought their own uniforms, shoes, hats, whistles, and penalty markers and furnished their own medical insurance. v. Romanski v. Prudential Property and Casualty Insurance Co., 514 A.2d 592, 594 (Pa. Super. Ct. 1986) ­ insurance liability case; common law right to control test; taxi driver is an independent contractor with emphasis on the terms of the lease agreement entered into by both parties; the company did not control nor did it retain the right to control the manner in which the driver worked; the driver set his own hours, routes and operating practices, kept all of his fares and tips, and paid his own taxes. XVIII. Rhode Island a. Governed by the common law "right to control" test; it is the right, not the exercise, that matters b. Key cases: i. Absi v. State Dep't of Admin., 785 A.2d 554 (R.I. 2001) ­ declaratory action; common law right of control test; dentists and dental hygienists are independent contractors with emphasis on the state's lack of control as to the methods of dental treatment; while there was evidence that a chief of dentistry generally supervised the workers, the state did not instruct the workers on what types of dental treatment were necessary or on the methods they should use in their work. ii. Pasetti v. Brusa, 98 A.2d 833, 834 (R.I. 1953) ­ workers' compensation claim; common law right to control test; carpenter is an independent contractor because he never agreed to work for principal; he made no contract with principal as to the terms of employment or compensation since the arrangements were entirely the charge of his father; both he and his father used their own and equipment in performing the job, purchased their own materials, and did the work without any control by principal as to the means and method of their performance. iii. Estate of Perry v. Green Card, Inc., 2006 WL 3479056 at *3 (R.I. Super. Ct Dec. 1, 2006) ­ wrongful death claim; common law right to control test and

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analysis of secondary factors set forth in Restatement with addition of opportunities for profit or loss factor; pizza delivery driver is an employee with emphasis on employer's extent of control over details of driver's work (arranged for driver to make his deliveries, took food orders, prepared the food, determined its price, assigned the delivery to a particular driver); driver's lack of distinct occupation or business or skill required; method of payment (by the job and commissions); lack of opportunity for personal profit or loss "in any real sense"; moreover, delivery service was a regular part of employer's business. South Carolina a. Governed by the common law "right to control" test; crucial test is the right of the employer to control the details of employee's work b. 4 factors: (Wilkinson) i. Direct evidence of right to or exercise of control ii. Method of payment iii. Furnishing of equipment iv. Right to fire c. Key cases: i. Dawkins v. Jordan, 341 S.C. 434, 439, 534 S.E.2d 700 (2000) ­ workers' compensation claim; right of control test; fence installer is an employee with focus on employer's right to control and direct the fence project; employer dictated his coming and going and paid him hourly. ii. Young v. Warr, 252 S.C. 179, 189, 165 S.E.2d 797 (1969) ­ personal injury case; common law right to control test; driver is an independent contractor with emphasis on contract entered into by parties; moreover, principal had right to designate only results; driver was paid a lump sum for his services and principal did not withhold taxes from his paycheck. iii. Nelson v. Yellow Cab Co., 349 S.C. 589, 594, 564 S.E.2d 110 (2002) ­ workers' compensation claim; common law right of control test; cab driver is an employee with emphasis on employer's right to control (employer required driver to use his meter on all runs except charge accounts and/or flat rate runs; employer set fares to be charged and required driver to maintain a manifest sheet; employer also required driver to keep his radio on; employer did all the marketing, procured the annual business license, and purchased insurance on the cabs); furnishing equipment (employer furnished cabs and insurance); and right to fire (employer had right to fire driver for many reasons).

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iv. Wilkinson v. Palmetto State Transp. Co., 371 S.C. 365, 373, 638 S.E.2d 109 (2006) ­ workers' compensation claim; common law right of control test; truck driver is an employee with emphasis on employer's control as to exclusivity of arrangement; employer instructed driver on when, where and how to pick up the load and when to deliver it; employer also required driver to affix the company logo to his truck; driver purchased his own tractor but employer supplied the trailer and prohibited him from using the tractor to carry loads for any other company; finally, employer retained great discretion in his ability to fire driver. v. Gamble v. Stevenson, 406 S.E.2d 350, 352 (S.C. 1991) ­ negligence claim; common law right to control test; jury question presented as to whether construction company is an employee or independent contractor with emphasis on contract entered into by both parties. Tennessee a. Governed by the common law "right to control" test b. 7 factors: (Masiers) i. The right to control the conduct of the work ii. The right of termination iii. The method of payment iv. The freedom to select and hire helpers v. The furnishing of tools and equipment vi. Self scheduling of working hours vii. Being free to render services to other entities c. The right to control and the right to terminate can in themselves support a finding that a worker is an employee and not an independent contractor d. Key cases: i. Bargery v. Obion Grain Co., 785 S.W.2d 118, 119 (Tenn. 1990) ­ workers' compensation claim; common law right to control test; truck driver is an independent contractor with emphasis on principal's sole aspect of control in specifying the location of the grain delivery; payment was based on the amount of grain hauled, and no taxes were deducted; principal did not furnish any equipment and driver was free to provide services to others. ii. Masiers v. Arrow Transfer & Storage Co., 639 S.W.2d 654 (Tenn. 1982) ­ workers' compensation claim; common law right to control test; truck driver is an independent contractor where principal's right of control pertained only to results; driver supplied the tractor and was responsible for all fuel, maintenance, materials, and tools for the tractor; he was also accountable for cargo shortages and damages to his loads; he reported his income and

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paid his taxes; he could set his own hours and hire workers at his discretion; he could also choose to accept or decline a load; finally, the principal did not have the right to terminate the relationship at will. iii. Blake v. Auto Owners Insurance Co., W2005-01545-WC-R3-CV (Tenn. 2006) ­ workers' compensation claim; right to control test; handyman is an employee with emphasis on employer's control over his work and right to termination at will; handyman was paid an hourly rate and was not free to to select and hire helpers. iv. Starflight v. Thoni, 773 S.W.2d 908, 910 (Tenn. 1989) ­ workers' compensation claim; common law right to control test; commercial co-pilot is an employee with emphasis on employer's right to termination at will and right to control the details of the work; co-pilot was subsidiary to the pilot and subject to his direction; co-pilot was not required to supply any equipment, and the employer was engaged in the regular business of chartering planes. e. Key statutes: i. Tenn. Code. Ann. §50-6-102 (11) Texas a. Governed by the common law "right to control" test; it is the right of control, not its exercise, that is conclusive b. Factors: (Limestone Prods.) i. The independent nature of the worker's business ii. The worker's obligation to furnish necessary tools, supplies, and materials to perform the job iii. The worker's right to control the progress of the work except about final results iv. The time for which the worker is employed v. The method of payment, whether by unit of time or by the job c. The Texas Workforce Commission identified additional factors: i. Whether hiring party instructs the worker about when, where, and how work is to be performed ii. Whether hiring party provides training for the worker iii. Whether the worker must provide services personally iv. Whether worker has the right to select and supervise assistants v. Whether the parties are engaged in an ongoing relationship month after month, year after year vi. Who sets the hours of work vii. Whether the employer requires regular oral or written reports

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Whether worker may realize business profits or losses Whether the worker may work for more than one firm at a time Whether work must work full-time Whether employer has the right to mandate where services are performed Whether the employer may mandate the order or sequence of work Whether the worker may make his services available to the public without the employer's company d. Key cases: i. Weidner v. Sanchez, 14 S.W.3d 353, 373 (Tex. Ct. App. 2000) ­ personal injury case; common law right to control test; cab driver is an employee with emphasis on employer's control as to who to pick up, when to pick them up, where to pick them up, where to take them, the sequence of pickups, time allotted for the route, and general dress code; driver was also paid an hourly rate; employer owned the cab and the cab radio; employer required strict compliance with the manifest and could assess a large fee against driver if he deviated from it. ii. Continental Insurance Co. v. C.F. Clark, 450 S.W.2d 684, 686 (Tex. Ct. App. 1970) ­ workers' compensation claim; common law right of control test; trial court found that he was an employee; appellate court reversed, citing a defective jury instruction defining employee as a relationship based on the "exercise" of control rather than the right of control. iii. Durbin v. Culberson County, 132 S.W.3d 650, 658-59 (Tex. Ct. App. 2004) ­ wrongful death claim; common law right to control test; handyman is an independent contractor with emphasis on contract entered into by the parties; the agreement stipulated that he was performing the work on a contract basis; he was to perform one job; he was to complete the job without any control or direction from the county; he was not an employee, servant, or agent of the county; he did not receive benefits of the type given to county employees; and he was to be an "independent contractor." iv. Pitchfork Land & Cattle Co. v. King, 346 S.W. 598, 602-03 (Tex. 1961) ­ negligence claim; common law right to control test; crop duster pilot is an independent contractor with emphasis on principal's lack of control as to how pilot performed his job; principal did not have the right to terminate the pilot; pilot determined his hours, altitude and the chemical to be used; further, pilot was involved in independent business that required a high degree of skill; finally, pilot provided all tools, supplies and materials for the job.

viii. ix. x. xi. xii. xiii.

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v. Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002) ­ wrongful death claim; truck driver is an independent contractor with emphasis on driver's "broad discretion" in how to do everything with two exceptions: the locations of his pickups and drop-offs and the requirement that he submit his load tickets to get paid. e. Key statues: i. 40 Tex. Admin. Code §821.5 West Virginia a. Governed by the common law "right to control" test; power of control is determinative b. Factors: (Paxton) i. Selection and engagement of the servant ii. Payment of compensation iii. Power of dismissal iv. Power of control c. Key cases: i. Paxton v. Crabtree, 400 S.E.2d 245, 252 (W.Va. 1990) ­ wrongful termination claim; common law right to control test; magistrate is not an employee of the Administrative Director of Courts because he is elected by the voters; he can only be removed from office by a proceeding brought under statute or a proceeding initiated upon the motion of a judge in the circuit court of the county; moreover, the West Virginia Constitution gives the general supervisory control of the magistrate court to the circuit court, not the Administrative Director. ii. Shaffer v. Acme Limstone Co., 524 S.E.2d 688, 695 (W.Va. 1999) ­ wrongful death claim; common law right to control test; truck driver is an independent contractor with emphasis on the minimal control exerted by company; the company merely suggested the most economic route to travel but the drivers were not required to follow it; neither did it specify when the drivers had to return to the company once deliveries were made. iii. Teter v. Old Colony Co., 441 S.E.2d 728, 736 (W.Va. 1994) ­ negligence claim; common law right to control test; civil engineering firm is an independent contractor with emphasis on absence of evidence demonstrating that the broker retained any control over the manner in which the engineering firm performed its inspection of the premises. iv. Sipple v. Starr, 520 S.E.2d 884 (W.Va. 1999) ­ wrongful death claim; common law right to control test; genuine issue of material fact regarding control of convenience store attendant where the company propagated specific

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instructions regarding the store's hours of operation, the cleanliness of its bathrooms, the appearance of the store and the signs used to sell its gasoline; the company retained ownership of the gas until sold to its customers, determined the price of the gas, and required the convenience store to pay workers' compensation and unemployment insurance premiums for all store employees; it also required the convenience store to carry liability insurance, prohibited illegal activities on the premises, demanded compliance with local laws, required "courteous personnel," and required the store to respond promptly customer complaints; finally, the company retained "significant control" over the store's daily operations above and beyond the operating agreement. XXIII. Wisconsin a. Governed by the common law "right to control" test; right of control is always paramount b. Key cases: i. Madison Newspapers, Inc. v. Wis. Dep't of Rev., 599 N.W.2d 51, 60 (Wis. Ct. App. 1999) ­ statutory tax exemption case; common law right to control test; newspaper carriers are agents with emphasis on employer's substantial control over the carriers and assumption of expense and risk involved with the sale of newspapers. ii. Pamperin v. Trinity Mem. Hosp., 423 N.W.2d 848, 852 (Wisc. 1988) ­ medical malpractice case; common law right to control test; radiologist is an independent contractor because the hospital neither reserved the right to control, nor exercised such a right, over the radiological services provided; the parties also entered into a contract characterizing the radiologist as an independent contractor; furthermore, both the radiological service company (for which the radiologist worked) and the hospital were independently responsible for billing and collecting; the radiological service company had final authority in establishing its costs and fees and was responsible for its own malpractice insurance; finally, the radiological service company was allowed to serve other hospitals or patients. iii. Stafford Trucking, Inc. v. Dep't of Labor & Human Relations, 306 N.W.2d 79, 83 (Wis. Ct. App. 1981) ­ statutory unemployment insurance claims; statutory definition of "employee"; owner/operators of semitractors are employees with emphasis on employer's right and power to direct and control the drivers' conduct; the employer was entitled to, inter alia, "complete possession and control" of the truck per the terms of the lease and barred the owner-operators from using the truck for anyone other than

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the company; employer could terminate the lease if drivers damaged the equipment and did not repair it; the drivers also received training from the employer and were required to seek permission before using the employer's equipment to haul for other trucking companies; finally, the employer could require drivers to work nights and weekends and to deliver freight within a specific time frame.

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A Brief History: In re FedEx Ground Package Systems, Inc. Employment Practices Litigation, MDL No. 1700, Case No. 3:05-md-527 RM

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A Brief History: In re FedEx Ground Package Systems, Inc. Employment Practices Litigation, MDL No. 1700, Case No. 3:05-md-527 RM