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Employee Prevails in Claim for Misclassification as Independent Contractor

A jury empaneled in a federal district court has returned a verdict of over $1.2 million in an employment lawsuit brought by a former employee (Employee) against a corporate employer (Employer).

Employee, who worked as an outside salesperson, alleged that Employer intentionally misclassified him as an independent contractor. He further alleged that Employer terminated his employment in retaliation for his complaints about the misclassification and Employer’s failure to pay him wages owed. Employee also sought pre- and post-termination wages and commissions he had earned, but which Employer had not paid.

The jury agreed with Employee, awarding him over $1.2 million against Employer, plus his attorney’s fees and costs.

The verdict included $252,729 for Employee’s back pay and $609,153 for future economic loss on the retaliation claim and $335,000 in unpaid wages and benefits. In addition, Employer was ordered to display a notice in a prominent portion of its website with an admission that it has violated the law by misclassifying employees as independent contractors.

California law forbids the willful misclassification of employees as independent contractors. California law also prohibits employers from retaliating against workers who say they intend to make a claim with any government or law enforcement agency about their employer’s illegal employment actions.

Employers cannot skirt California employment laws by classifying would-be employees as independent contractors.. Nor can they simply fire an employee who exercises his right to complain about unlawful practices.

During the three-day trial, Employee presented evidence that Employer terminated his employment one week after he voiced his complaints of illegal activities to Employer’s Human Resource Manager. In that email, Employee said he intended to file a claim with the California Labor Commissioner regarding Employer’s failure to pay him a bonus he had earned. The bonus was available to Employer’s employees, but Employee, classified as an independent contractor, was ineligible. Employer swiftly terminated Employee’s employment and denied him the bonus and ongoing commissions from sales he had made prior to his termination.

Employee may now move for his attorney’s fees and costs, which are available under California law.