An important preliminary question in employment cases is: Is the plaintiff an employee or an independent contractor? This question is important because it determines what rights the plaintiff has. For example, an independent contractor cannot bring a cause of action for wrongful termination in violation of public policy, while an employee can.
The primary way to differentiate between an employee and an independent contractor is based upon control. An employer has the right to control the manner and means by which an employee accomplishes the result desired. On the other hand, the independent contractor follows the employer’s desires as to the work to be accomplished, but can accomplish this work in whatever manner he or she desires.
Because the finding of an independent contractor versus employee relationship is sometimes difficult under the “primary factor,” the courts have created a number of secondary indicia to examine. These can be found in the case of S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. These include, “(a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of a principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.” S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 351. The determination between employee and independent contractor is typically a question of fact.
In Varisco v. Gateway Science and Engineering, Inc. (2008) __Cal.App.4th __ (B200339), the Court of Appeals gave another example of what is not sufficient to establish an employee-employer relationship.
Al Varisco was a certified construction inspector. Varisco signed an agreement with Gateway to perform inspection services on several projects at the Los Angeles Unified School District. The primary factor and several secondary factors indicated that Varisco was an independent contractor. For example, he provided all of his own tool and equipment; he was a skilled worker; the School District’s architect, not Gateway, directed when he would work; if he had any questions he would direct them to the School District, not Gateway; and Gateway did not give him any direction on how to perform his duties. In fact, when asked at his deposition, Varisco admitted that he believed he was an independent contractor, not an employee. Thus, the factors indicate that he was an independent contractor and not an employee.
But, on appeal, Varisco argued that he was an employee because of the agreement he had signed with Gateway. This agreement indicated that either Gateway or Varisco could terminate their employment agreement at will. Varisco argued that this “at-will employment” language created an employee-employer relationship, citing to the cases of Burlington v. Gary (1943) 22 Cal.2d 87 and Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal.App.3d 864. The Court disagreed. While the Court agreed that the ability to terminate the relationship at will is indicative of an employee-employer relationship, it is just one factor and is not determinative.
Thus, the Court found that Varisco was an independent contractor and affirmed a grant of summary judgment for Gateway.
--Michael Sachs
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