FEHA Employment Discrimination Claims Against “Contracting Employer” May Be Valid

Independent contractors are entitled to far fewer rights under California employment law than employees or in some cases even job applicants. In filing an employment lawsuit against a company, one must establish they are an employee or prospective employee.employee misclassification Los Angeles

But as our Los Angeles employment attorneys know well, misclassification of employees as independent contractors is rampant. It’s often left to the court’s to decide.

Recently, a California appellate court ordered a new trial in the case of a worker who was technically a temp agency employee, but who took on a supervisory position for five years at the shoe care manufacturing company with which the temp agency contracted. Although the temp agency cut her checks, it was the manufacturer that had the direction and control of her day-to-day work. This, the court ruled, made her an employee for purposes of relief for alleged discrimination and wrongful termination under California’s Fair Employment and Housing Act.

Independent Contractor v. Employee

There is no set definition of the term “independent contractor,” which is why courts and enforcement agencies are often asked to consider the fact pattern of each case where employment status is a possible issue. The Division of Labor Standards Enforcement begins with the presumption that a worker is an employee, but it is one that can be rebutted by the employer.

The distinction mostly has to do with the degree of control a company has over someone’s work.

  • Is the worker performing services distinctive from that of the company?
  • Is the work integral to the regular business of the company?
  • Does the employee invest in his or her own equipment/materials?
  • Does the service require some special skill?
  • In what location is the work done?
  • What’s the degree of permanence in the working relationship?
  • How are workers paid?
  • Did parties believe they were creating an employee-employer relationship?

Even if a company doesn’t micromanage all the details of a worker’s daily duties, there are still situations wherein an employer/employee relationship can be established. That’s why it’s important to speak to an experienced employment attorney before deciding how best to proceed.

Misclassification Central to Riverside Discrimination Claim

In Jimenz v. U.S. Continental marketing Inc., none of the relevant facts were disputed. Defendant was a manufacturing company relying heavily on temporary workers and contracts for employee services. Plaintiff worked at the facility for five years. At the time she was fired, she was in a supervisory role as a line lead in the company’s production department overseeing 30 other workers, both temporary and direct employees. Her supervisor was a direct employee of the company. She, like other temporary employees, was assigned a role through the contracted temp company, which tracked her time and paid wages and benefits. The manufacturer still retained the ability to fire workers, same as it would direct employees.

In many cases, temp employees would become direct employees (sometimes several times over) and these workers carried out their duties alongside each other. Temp and direct employees supervised and trained each other, were expected to abide the manufacturer’s policy handbook. There was no difference in day-to-day work experience between temporary and direct employees.

Issues with plaintiff arose when someone made a complaint of bullying against her, which was investigated by the manufacturer pursuant to policies and procedures outlined in the company handbook. However around this same time, plaintiff also filed complaints of harassment against a coworker – first to the manufacturer and then to the temp agency. The temp company launched an investigation, but could not find there to be enough evidence and decided to take no disciplinary action against anyone.

The manufacturer then terminated plaintiff, and soon after, so did the temp agency.

She filed a complaint against the manufacturer and several co-workers under FEHA, alleging gender discrimination and retaliation.

Jurors decided the case in favor of the defendants, and also found that plaintiff was not an employee of the manufacturer with respect to the claim it had failed to prevent harassment or retaliation.

The appellate court reversed and ordered a new trial. The court noted that while FEHA doesn’t define “employee,” the Fair Employment and Housing Council does – as “any individual under the direction and control of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written.” A relationship is required, but it need not be a direct one. In this case, the level of control the company exerted over the employee was sufficient to establish the “employee” relationship as a matter of law, and jurors weren’t properly instructed on this.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 714-937-2020.

Additional Resources:

Jimenz v. U.S. Continental marketing Inc., Oct. 17, 2019, California Court of Appeal, Fourth Appellate District, Division One

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