Sunday, January 21, 2018

Employee Under Right to Control, but Not Economic Realities?

Ken Dau-Schmidt asks the following question--if anyone has a case that comes to mind you can email Ken or, better yet, post a comment, as I couldn't think of an example but would love to see one:

Are there any cases where a worker is an employee under the right to control test, but NOT an employee under the economic realities test?  You’d need a worker who was controlled, but not economically dependent. It’s not hard to find cases where workers are employees under the economic realities test but not an employee under the right to control test (the news boys case under the NLRA or the pickle picker cases under the FLSA) but I’m not sure I’ve ever seen a case the other way around.

-Jeff Hirsch

Employment Common Law | Permalink


I recall that the Microsoft worker misclassification case back in the early 1990's was filed by the IRS and I think there might have been a conflicting interpretation of the worker's status with the DOL. In any event, the fact that the main case was about misclassification under the IRS control test at least suggests that the issue was not been litigated under the DOL economic realities test.

Posted by: Stacy Hawkins | Jan 22, 2018 5:16:49 AM

Take a look at Seattle Opera v. NLRB, 292 F.3d 757 (D.C. Cir. 2002). The majority and the NLRB applied the right to control test to employees who received an honorarium. The point of the dissent was that under the FLSA these individuals were not paid the minimum wage. The FLSA applies the economic realities test. You may find similar analysis in the intern cases and the volunteer cases which I wrote about a number of years ago. 9 U of Pa J of Labor and Emp. Law 147 (2006).

Posted by: Mitchell H Rubinstein | Jan 22, 2018 5:41:08 AM

Although this does not directly respond to Ken's question, the Fourth Circuit recently decided two significant joint employment cases in the FLSA context -- Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir. 2017) and Hall v. DirecTV, 846 F.3d 757 (4th Cir. 2017) -- which make it substantially easier to establish joint employment. In short, the court held that joint employment exists when (1) two or more persons or entities share, agree to allocate responsibility for, or otherwise codetermine – formally or informally, directly or indirectly – the essential terms and conditions of a worker's employment and (2) the two entities' combined influence over the essential terms and conditions of the worker's employment render the worker an employee as opposed to an independent contractor.

Posted by: Brian Clarke | Jan 24, 2018 10:33:50 AM

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