California Labor &
Employment Law Blog

Oct. 6 2010

Class Certified in Independent Contractor Misclassification Case

Topics: Class Actions, Court Decisions, Wage & Hour Issues

Business owners with relationships withindividuals they believe to be legitimate independent contractors may wish to monitor the pending federalcase of Vonda Norris-Wilson v. Delta-T Group, Inc. in theSouthern District of California. Last week, on cross-motions seeking and opposing class certification (filed almost one year ago in November 2009) the Court awarded class certification to the plaintiffs who claimed that they were employees, not independent contractors.
Defendant Delta-T holds itself out as a referral agency for independent contractors in the behavioral healthcare business. In other words, Delta-T’s clients are clinics, hospitals, treatment facilities and other healthcare related organizations for which it provides referrals to any of 1200 independent contractors of different education, training, experience, qualifications and other distinctions. Delta-T does not train or supervise the individuals. It sets up an introduction and then the individuals and Delta-T’s clients negotiate and enter in working relationships and agreements. The Plaintiffs contend, however, that Delta-T provides temporary staffing solutions and that the persons with relationships to Delta-T are employees (not independent contractors) of Delta-T who were deprived of overtime pay, rest and meal breaks, and reimbursement for expenses.

Delta-T employed a variety of tactics to attempt to defeat class certification, including retention of expert testimony in support of its position. Unfortunately, a month or so prior to class certification motions, Delta-T had attempted to move for summary judgment in the matter in an attempt to dispose of the entire case. This proved to be Delta-T’s undoing on class certification as it had attempted to defeat the claims, in their entirety, by demonstrating that all employees were independent contractors. Delta-T likely had originally retained its expert in conjunction with its summary judgment. Indeed, the Court remarked as to the similarity between Delta-T’s briefs relating to class certification and summary judgment. And, in the end, that similarity skewered most of Delta-T’s claims against certification. Essentially, Delta-T’s papers and arguments were focused on the underlying merits and showing the court that its relationships were universally with independent contractors. Thus, it failed to provide argument or evidence that would have allowed the court to reach any other conclusion pertaining to commonality and typicality. As the court wrote, “It can’t be true that Plaintiffs are categorically ‘independent contractors’ and that it would take an individual-by-individual analysis to make that determination.

As state and federal taxing and labor authorities increase their focus to locate employees misclassified among the ranks of today’s independent contractors, decisions on the merits of independent contractor questions, such as in this case, will be instructive to help organizations ensure that their independent contractor relationships stand up to any challenge.

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For over 20 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor

Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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