Alaska Employment Law

The 9th Circuit has held that a jury should typically decide whether someone is an independent contractor or an employee.

In Narayan v. EGL, Inc., ___ F.3d ___ (9th Cir. July 14, 2010), a Texas company had required its California-based employees (freight delivery drivers) to sign a form agreement stating that Texas law applied and that they were independent contractors. Texas law might well have accepted the contractual designation of status, but California law would not. The District Judge applied Texas law and granted summary judgment, holding that the contractual designation of status was dispositive.

The panel vacated, and held that 1) even under Texas law, the contractual designation applied only to contractual claims, and not to the statutory claims asserted by the drivers; and 2) that employment status is typically a fact issue. The opinion author (a visiting District Court judge from out of Circuit) relied heavily on an opinion from 7th Circuit Judge Frank Easterbrook:

Judge Easterbrook has keenly observed in a case under
the Fair Labor Standards Act that:

[i]f we are to have multiple factors, we should also
have a trial. A fact-bound approach calling for the
balancing of incommensurables, an approach in
which no ascertainable legal rule determines a
unique outcome, is one in which the trier of fact
plays the principal part. That there is a legal overlay
to the factual question does not affect the role of the
trier of fact. Sec’y of Labor v. Lauritzen, 835 F.2d 1529, 1542 (7th Cir. 1987) (Easterbook, J., concurring) (internal citations omitted).

The panel concluded:

Under these circumstances, “we cannot readily say . . . that
the ‘ultimate conclusion as to whether the workers are
employees or independent contractors’ is one of law. The
drawing of inferences from subordinate to ‘ultimate’ facts is
a task for the trier of fact—if, under the governing legal rule,
the inferences are subject to legitimate dispute.” Id. at 1543.

The inferences here are subject to legitimate dispute.

* * * *

Ultimately, under California’s multi-faceted test of
employment, there existed at the very least sufficient indicia
of an employment relationship between the plaintiff Drivers
and EGL such that a reasonable jury could find the existence
of such a relationship.