Tag Archives: employee classification

Will Cajio v. Agra Transport make it easier for Nebraska employers to avoid workers comp.?

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The Nebraska Court of Appeals upheld a trial court ruling against a trucker that held he was an independent contractor rather than an employee, thus ineligible to receive workers compensation benefits for an on-the-job injury.

The decision, Cajio v. Agra Transport,  turned on what the court found to be the employers lack of control over the details of how the injured worker did its job on a day-to-day basis. If the decision remains controlling law, it could mean that more workers in Nebraska get classified as contractors and lose the protections of the Nebraska Workers’ Compensation Act.

A tough decision on worker classification

From an employee-advocate point of view, this decision is tough for a lot of reasons. The court held that decisions about employment status are mixed questions of law and fact, however the court did not cite to decisions that hold legal questions should be interpreted in favor of the injured worker under the beneficent purpose of the act. The absence of a beneficent purpose analysis may have reflected in the court citing to a tort case rather than a workers compensation decision for guidance as to why the workers was a contractor rather than an employee. Finally the court cited to Omaha World-Herald v. Dernier to support their conclusion without noting Dernier was largely overturned by the Legislature in 1999.

In his blog post about the decision, Thomas Robinson implied the case could have been decided differently under an ABC Test rather than Nebraska’s ten factor common law test. Robinson, who thought the case was correctly decided, stated approvingly that “states are free to allow greater contract flexibility between purported employers and those who perform the work.

I respectfully disagree with Robinson’s paean to the alleged intelligent design of federalism in workers compensation. Nebraska applies an ABC Test to unemployment benefits under Neb. Rev. Stat. 48-604(5). The decision about legal standards to apply are policy-driven in the courts and political in the legislative branch

In a blog about worker misclassification in general, Professor Michael Duff made the point I made above in more detail. He pointed out that the common law test was originally developed in tort law without any reference to workers’ compensation or guidance from the legislative branch.

Statutory employer laws to remedy misclassification?

While the so-called beneficent purpose doctrine isn’t per se guidance from the legislature, the Nebraska legislature has expressly provided guidance on the use of contracting to avoid workers’ compensation liability. Neb. Rev. Stat. §48-116 can make employers “statutory employers” if they engage in a “scheme, artifice or device” to avoid workers compensation. Judges seem to willing to find statutory employer liability in schemes involving multiple layers of contractors.

The Nebraska Supreme Court appeared to weaken statutory employer protections through the Aboytes case. My problem with the Aboytes case is that it applies the ten factor test at the bottom of the scheme where it may be more difficult to prove employment status. But I have read trial court decision, post-Aboytes that hold that “at-will” contract status can create the control necessary to prove control. I think this is sound logic, because the at-will doctrine does give employers vast control over their workers.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Does the decline of 24-hour retail mean a safer workplace?

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The Lincoln Williamsburg Hy-Vee, just north of our Lincoln office, joined other Hy-Vee stores in ending 24-hour operations

Hy-Vee Stores ended 24-hour operations in most of their stores throughout the Midwest . Did Hy-Vee’s move help workplace safety for their workers?

Maybe.

24-hour retail and workplace violence

Retail workers are increasingly subjected to violence on the job. Violence at stores increases during overnight hours and in stores where alcohol is sold. Some police departments believe 24-hour retail establishments are public safety risks. So by closing at midnight, Hy-Vee may be lowering the risk of injury from violence for their overnight employees.

However Hy-Vee failed to mention worker safety as a reason for ending 24 hour operations. (The reasons sound like a lot of corporate speak for reducing staff.) In my view, Hy-Vee deserves criticism for some workplace safety practices. I noticed Hy-Vee has implemented a light duty program where injured employees literally sit and/or stand and do nothing. In my experience, these programs are borderline abusive and usually force employees to return to work too soon.

Online shopping and the gig economy

Customer convenience drove the expansion of 24-hour retailing. But many shoppers skip the store all together for the convenience of online shopping and delivery.

Online retail has increased warehousing and delivery jobs that have safety risks of their own. Companies looking to save money contract out delivery to gig economy companies like Shipt and Door Dash Shipt and Door Dash classify their workers as contractors. These contractors lack employment protections like workers’ compensation.  California recently enacted Assembly Bill 5 (AB5) to extend employment protections to gig economy workers. California codified the employee-friendly ABC test in AB5. New Jersey and New York are looking at following California’s lead by classifying gig economy workers as employees rather than independent contractors.

Gig economy workers in Nebraska

Nebraska lawmakers have remained silent on whether gig economy workers should be defined as employees or independent contractors. Our state’s workers’ compensation law uses a more employer-friendly “economic reality” test to decide whether a worker is an employee or contractor.

But even using the economic reality test, the Nebraska Supreme Court defined taxi drivers as employees rather than contractors for the purposes of workers compensation. Under that case law, I believe you can argue credibly that most gig economy employees should be deemed employees under the Nebraska Workers Compensation Act.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Federal legislation may make it easier for injured workers to change jobs

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A Jimmy John’s franchise subjected sandwich makers to non-compete clauses

Recently introduced federal legislation could make it easier for injured and disabled workers to switch jobs without fear of having to fight a non-compete agreement.

The Freedom to Compete Act, introduced by Florida Senator Marco Rubio, would ban non-compete agreements for all employees deemed to be non-exempt employees under the Fair Labor Standards Act. Non-exempt employees tend to be hourly and blue-collar workers.

The Freedom to Compete Act was prompted by reports of low-paid hourly workers being subjected to non-compete agreements. Most notably,  a Jimmy John’s franchise in Illinois subjected sandwich makers to non-compete agreements.

In October, I wrote about how the threat of a non-compete agreement may deter an injured worker from seeking work with another employer that is easier for them to do physically.

Non-competes in Nebraska

Nebraska outlaws restraints of trade by statute  and by case law. But non-compete agreements can be enforceable if they are reasonable in scope – for a limited time and geographic area – and ancillary to a contract of employment.

The general test of whether a non-compete is enforceable in Nebraska is that it is 1) not harmful to the public 2) not greater than necessary to protect employer’s legitimate interest and 3) not unduly harsh or oppressive to employee.

Courts in Nebraska tend to focus on whether the compete is too broad to protect the employer’s legitimate interest. A non-compete would likely to be held to be unenforceable under this clause if the employee had no personal or business contact with customers or prospective customers, didn’t know or have access to confidential information, has no skills or knowledge different than what they would have acquired in another business and the employer had no trade secrets regarding their industry.

The issue of whether a non-compete is unduly harsh is a separate issue. My feeling is that a good argument could be made that changing jobs as a way of essentially self-accommodating a work injury would fall into that category. I believe the Zweiner v. Becton-Dickinson East  case would bolster such an argument, but litigation is almost always uncertain and it can be costly. An injured worker looking at the prospect of a workers’ compensation claim may not be willing to take on a non-compete fight as well.

Other questions about Freedom to Compete

Other commentators have pointed out that Freedom to Compete could make already contentious non-compete cases even more contentious by turning them into employee classification cases.

Back in October, I wrote that non-competes need to be fixed legislatively. Some states have began introducing legislation to further limit non-compete agreements, I question whether Freedom to Compete would pre-empt state laws on non-compete clauses for white collar FLSA exempt employees. I wonder if Freedom to Compete isn’t a federal effort to head off state level reforms and even federally preempt some favorable state laws on non-compete clauses for white collar employees..

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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