- A lower court did not err in leaving intact a jury's finding that two barbers were not entitled to back overtime pay because they were independent contractors exempt from the Fair Labor Standards Act's (FLSA) overtime requirements, the 11th U.S. Circuit Court of Appeals has ruled (Romero v. Razzle Dazzle Barbershop, Inc., No. 18-12689 (11th Cir. Oct. 29, 2019)).
- The barbers had confidentiality and non-compete agreements that described them as "employees" but there were factual disputes about the employer's degree of control regarding uniforms, schedules and more. There also were disputes about whether the provisions in a staff handbook were merely advisory, as well as the barbers' opportunity for profit.
- Because there was at least "some evidence" supporting a jury's finding that the barbers were independent contractors rather than employees, the 11th Circuit found that the district court did not err in refusing the barbers' motion for a new trial: "The jury was entitled to choose between conflicting evidence, and the district court did not abuse its discretion by respecting the jury's decision."
There are various tests for determining whether a worker is an independent contractor or an employee, but they generally boil down to how much control an employer exerts — or has the right to exert — over the person's work and working conditions. In general, as the level of control increases, so does the likelihood that the worker will be considered an employee.
As Romero illustrates, there is no one single factor courts look at, and sometimes the determination comes down to a jury's interpretation.
The parties' intents and preferences have almost no bearing on the determination, even if both parties agree that the worker should be considered an independent contractor. In one recent case, an appeals court ruled that the actual amount of control 7-Eleven exerted over its franchisees carried more weight than a signed agreement. Similarly, a federal court in Alabama concluded a delivery driver was an employee even though he had signed a form confirming his independent contractor status.
HR likely needs to stay informed about the various laws and tests governing independent contractor status, especially because the law in this area continues to evolve. In California, for example, a new worker classification test first adopted by the state supreme court was recently signed into law. The test has a three-part standard that makes it more difficult for California employers to establish that workers are independent contractors. Gig economy heavyweights, however, are working to chip away at that law.