Publications
Second Circuit Finds Worker Classified as an Independent Contractor to be an Employee
The Second Circuit recently ruled in Eisenberg v. Advance Relocation &
Storage, Inc. that an individual classified by her employer as an
independent contractor was nevertheless an "employee" for purposes of
relevant anti-discrimination laws. In determining whether a worker is an
employee within the meaning of state and federal anti-discrimination
laws, the Court held particular weight should be placed on the extent to
which the employer controls the manner and means by which the worker
completes his/her tasks.
Storage, Inc. that an individual classified by her employer as an
independent contractor was nevertheless an "employee" for purposes of
relevant anti-discrimination laws. In determining whether a worker is an
employee within the meaning of state and federal anti-discrimination
laws, the Court held particular weight should be placed on the extent to
which the employer controls the manner and means by which the worker
completes his/her tasks.
The Factual Background Julianne Eisenberg had been hired to load and
unload furniture from trucks at Advance Relocation & Storage Inc.'s
("Advance") warehouse and at residences. She was paid on an hourly basis
and was required to punch in and out. While working, she followed the
directives of an Advance employee. Eisenberg did not receive company
benefits such as medical insurance or vacation days, and she was treated
as an independent contractor for tax purposes.
unload furniture from trucks at Advance Relocation & Storage Inc.'s
("Advance") warehouse and at residences. She was paid on an hourly basis
and was required to punch in and out. While working, she followed the
directives of an Advance employee. Eisenberg did not receive company
benefits such as medical insurance or vacation days, and she was treated
as an independent contractor for tax purposes.
Eisenberg claimed that during the time she worked for Advance she was
sexually harassed and that she was terminated in retaliation for
complaining about the harassment. The first court to hear the case
determined that Eisenberg was not an "employee" of Advance and thus
could not bring claims under Title VII of the Civil Rights Act of 1964
or under the New York State anti-discrimination law. The district court
reached its conclusion in large part because Eisenberg was not treated
as an employee for benefit or tax purposes.
sexually harassed and that she was terminated in retaliation for
complaining about the harassment. The first court to hear the case
determined that Eisenberg was not an "employee" of Advance and thus
could not bring claims under Title VII of the Civil Rights Act of 1964
or under the New York State anti-discrimination law. The district court
reached its conclusion in large part because Eisenberg was not treated
as an employee for benefit or tax purposes.
Factors to Consider On appeal the Second Circuit stated that in
determining whether a person is an employee for purposes of the
anti-discrimination laws the facts must be analyzed under the common law
of agency. A common law analysis, in turn, requires an examination of
the 13 factors discussed by the United States Supreme Court in Community
for Creative Non-Violence v. Reid. The 13 factors to consider are: (1)
the hiring party's right to control the manner and means by which the
product is accomplished; (2) the skill required; (3) the source of the
instrumentalities and tools; (4) the location of the work; (5) the
duration of the relationship between the parties; (6) whether the hiring
party has the right to assign additional projects to the hired party;
(7) the extent of the hired party's discretion over when and how long to
work; (8) the method of payment; (9) the hired party's role in hiring
and paying assistants; (10) whether the work is part of the regular
business of the hiring party; (11) whether the hiring party is in
business; (12) the provision of employee benefits; and (13) the tax
treatment of the hired party. Although no single factor is dispositive,
the greatest emphasis should be placed on the first factor.
determining whether a person is an employee for purposes of the
anti-discrimination laws the facts must be analyzed under the common law
of agency. A common law analysis, in turn, requires an examination of
the 13 factors discussed by the United States Supreme Court in Community
for Creative Non-Violence v. Reid. The 13 factors to consider are: (1)
the hiring party's right to control the manner and means by which the
product is accomplished; (2) the skill required; (3) the source of the
instrumentalities and tools; (4) the location of the work; (5) the
duration of the relationship between the parties; (6) whether the hiring
party has the right to assign additional projects to the hired party;
(7) the extent of the hired party's discretion over when and how long to
work; (8) the method of payment; (9) the hired party's role in hiring
and paying assistants; (10) whether the work is part of the regular
business of the hiring party; (11) whether the hiring party is in
business; (12) the provision of employee benefits; and (13) the tax
treatment of the hired party. Although no single factor is dispositive,
the greatest emphasis should be placed on the first factor.
The Court's Holding Under the circumstances of this case, the Court
found that Eisenberg was an employee and thus could bring suit under the
relevant anti-discrimination laws. In particular, the Court found that
factors one, two, three, four, six and eight tipped the scales
decisively towards a conclusion that Eisenberg was an employee. The fact
that she did not receive benefits and was treated as an independent
contractor for tax purposes was not sufficient to reach an opposite
conclusion.
found that Eisenberg was an employee and thus could bring suit under the
relevant anti-discrimination laws. In particular, the Court found that
factors one, two, three, four, six and eight tipped the scales
decisively towards a conclusion that Eisenberg was an employee. The fact
that she did not receive benefits and was treated as an independent
contractor for tax purposes was not sufficient to reach an opposite
conclusion.
Practical Considerations As this case illustrates, simply labeling a
worker an independent contactor does not necessarily make it so. Before
making such an assessment an employer needs to perform a close, factual
examination of the relationship. The failure to properly classify a
worker can have wide range implications, including those involving
taxes, benefits and wage and hour issues.
worker an independent contactor does not necessarily make it so. Before
making such an assessment an employer needs to perform a close, factual
examination of the relationship. The failure to properly classify a
worker can have wide range implications, including those involving
taxes, benefits and wage and hour issues.