Why a Wrongful Termination Claim Will Not Apply to an Independent Contractor
Under the law, a worker who is illegally discharged can file a wrongful termination lawsuit against an employer. The law defines the acts, which constitute wrongful termination of an employee.
However, not all employees or workers may file claim. A worker who is classified as independent contractor has no legal standing to file a wrongful termination lawsuit, or other causes of action that are dependent of his employee status such as certain discrimination claims.
Hence, a worker improperly classified as an independent contractor can refute the classification during litigation and may succeed in enforcing his rights.
Take the recent case (Varisco v. Gateway Science and Engineering, Inc.) decided by the California Fourth District Court of Appeal wherein an independent contractor sued a construction consulting firm for wrongful termination claims.
Based on case records, Gateway, a professional firm engaged in project management, planning and design management, inspection, and quality assurance to the construction industry, hired Varisco as project inspector.
Varisco was assigned with the Los Angeles Unified School District. After about 11 months, Gateway offered Varisco a new contract, but he refused to sign. Gateway terminated Varisco, and he sued for wrongful termination.
During litigation, Gateway filed a motion for summary judgment, arguing that as an independent contractor, Varisco could not assert employee claims. The trial court found that Varisco had no evidence that he was an employee and it granted the motion in favor of Gateway.
On appeal, the Fourth District Court of Appeal agreed with the trial court.
Factors in Determining Who is an Employee or Independent Contractor
- Control is a primary element in determining whether an individual worker is an employee or an independent contractor. According to the court, “an independent contractor is ‘one who renders service in the course of an independent employment or occupation, following his employer's desires only in the results of the work, and not the means whereby it is to be accomplished.”
Other factors depend of the nature of the relationship and these includes the following:
- the length of time for which the services are to be rendered or performed
- the method of wage payment, whether by the time or by the job
- whether the worker performing services is engaged in a distinct occupation or business
- whether the kind of occupation is done under the direction of the principal or by a specialist without supervision
- the skill required in the particular occupation
- whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work
- whether or not the work is a part of the regular business of the principal
- whether or not the parties believe they are creating the relationship of employer-employee
The appellate court determined that Varisco was an independent contractor. It considered the following factors:
In addition, the courts also consider and place increased importance on one’s skills. In this case, Varisco is engaged in skilled work, in a distinct occupation.
Further, he supplied his own clothes and equipment. He did not receive incentives and benefits from the company and therefore cannot be considered an employee.
Varisco also testified that he believed he was an independent contractor. This information and the fact that Varisco was paid an hourly rate did not make him an employee led the court to conclude that Varisco was an independent contractor. The court noted that these days it is common for independent contractors to work by the hour, not by the job.
The court therefore ruled that under these circumstances, Varisno cannot file a wrongful termination claim because he is considered as an independent contractor under the law.