California Supreme Court Limits Employers’ Ability to Characterize Workers as Independent Contractors

JohnQuieroLE - resized [45] 170504_0034_1a_square2Guest Commentary

By John F. Querio, a Partner, and Lacey L. Estudillo, an Appellate Fellow, with Horvitz & Levy LLP.

California courts and administrative agencies have long used a multi-factor common-law test, as summarized by S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989), to determine whether workers are independent contractors or employees under California law.  The employee-independent contractor distinction is important because employee status brings with it a host of burdensome wage and hour and other legal obligations with which the employer must comply, multiplying costs exponentially.

The key factor under the Borello common-law test for determining employment status has traditionally been the right to control the manner and means by which the work is to be performed.  Despite decades of settled jurisprudence on this issue, in Dynamex Operations West, Inc. v. Superior Court, No. S222732, 2018 WL 1999120 (Cal. Apr. 30, 2018), the California Supreme Court adopted a new test for determining independent-contractor status for purposes of wage and hour obligations under California law. Continue reading “California Supreme Court Limits Employers’ Ability to Characterize Workers as Independent Contractors”

Solicitor General Inveighs Against Antitrust-Law Revolution in SCOTUS “Apple v. Pepper” Amicus Brief

app storeEd. Note: With this post we welcome WLF’s newest attorney, Corbin K. Barthold, as a WLF Legal Pulse author.

Many legal disputes pit the affective and sometimes utopian thinking of lawyers against the statistical and efficiency-oriented thinking of economists. The archetypal lawyer subscribes to the maxim ubi jus ibi remedium—“where there is a right, there is a remedy.” The archetypal economist is more likely to agree with Oliver Wendell Holmes, Jr.’s view that “such words as ‘right’ are a constant solicitation to fallacy.”

In antitrust cases, at least, the Supreme Court often sides with the economists. Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), is a good example. It says that only the direct purchaser of an abusive monopolist’s goods or services may sue the monopolist for violating the antitrust laws. Someone who buys a product only indirectly—someone who, say, buys from a retailer who buys from an antitrust-law-violating manufacturer—is out of luck. She may not sue even if the retailer incorporated some of the supracompetitive wholesale price into the retail price. It would be too difficult, Illinois Brick concludes, to accurately apportion damages among distributers, retailers, and consumers. Continue reading “Solicitor General Inveighs Against Antitrust-Law Revolution in SCOTUS “Apple v. Pepper” Amicus Brief”

FTC Enforcement Powers Face Serious Challenge

FTC_Man_Controlling_TradeThe Federal Trade Commission (FTC) has long asserted broad authority to sue businesses for engaging in unfair or deceptive acts or practices.  But a recent federal court decision (Federal Trade Commission v. Shrire Viropharma Inc.) calls that authority into serious question.  If upheld on appeal, the decision could lead to major changes in the way FTC carries out its enforcement responsibilities.

The decision focused on § 13(b) of the Federal Trade Commission Act (FTCA).  That statute authorizes FTC to seek injunctive relief in federal court against anyone who “is violating, or is about to violate” a law enforced by FTC.  FTC has long contended that § 13(b) also authorizes actions against entities based on past violations, even in the absence of evidence that the entity “is about to” commit new violations.  A Delaware federal district judge’s rejection of that contention has thrown a monkey wrench into FTC’s enforcement apparatus. Continue reading “FTC Enforcement Powers Face Serious Challenge”

Bigger than a Bread Box? Defendants’ Shelf of Equipment Isn’t Enough for Patent Venue

bread boxFor years, patent owners, especially those that have never “performed” the patent, used the U.S. Court of Appeals for the Federal Circuit’s broad interpretation of the patent venue statute to force infringement lawsuits into favorable jurisdictions.  The U.S. District Court for the Eastern District of Texas was the model; often referred to as the “patent district,” patent holders most frequently—and non-practicing entities (aka “patent trolls”) overwhelmingly—filed suit in the Eastern District of Texas, regardless of where the allegedly infringing party conducted business.  Patent trolls leaned on sympathetic (and self-interested) judges to bully easy settlements out of defendants and force end consumers to pay more for all sorts of products. Continue reading “Bigger than a Bread Box? Defendants’ Shelf of Equipment Isn’t Enough for Patent Venue”

False Claims Act Enforcement Tea Leaves Read at WLF Webinar

Fried Frank Of Counsel and author of the leading False Claims Act treatise, John T. Boese (on left), and his partner Douglas W. Baruch, offered insightful analysis on two recent Department of Justice policy documents (the “Granston Memo” and the “Brand Memo”) and their impact on FCA actions by both qui tam relators and federal prosecutors.

The slide presentation Boese and Baruch followed can be downloaded here.

The speakers also authored a February 2018 Working Paper for WLF on three new possible constitutional challenges to the FCA’s qui tam provisions, which can be found here.

Ruling on Philly Taxis’ Suit vs. Uber, Third Circuit Reaffirms Antitrust Focus on Competition, not Competitors

swisherFeatured Expert Column: Antitrust & Competition Policy — U.S. Department of Justice

By Anthony W. Swisher, a Partner in the Washington, DC office of Squire Patton Boggs (US) LLP.

A recent decision from the U.S. Court of Appeals for the Third Circuit (Philadelphia Taxi Association v. Uber Technologies) reinforces the longstanding principle that antitrust laws protect competition, not competitors. The case involved a claim of attempted monopolization levied against Uber, brought by the Philadelphia Taxi Association and a number of individual taxi drivers. The essence of the plaintiffs’ claim was that Uber entered the Philadelphia taxi market without complying with existing municipal regulations, and that as a result, Uber obtained “a stronghold in the Philadelphia taxicab market.”

The Third Circuit upheld the trial court’s ruling that plaintiffs failed to state a monopolization claim because they failed to allege a harm to the competitive process, as opposed to individual competitors. Continue reading “Ruling on Philly Taxis’ Suit vs. Uber, Third Circuit Reaffirms Antitrust Focus on Competition, not Competitors”

Novel Theory of NLRA Liability Would Trample Employers’ Free Speech Rights

NLRBThe independent-contractor model has been an important catalyst for improving the nation’s economic vitality. Because individuals often provide services for others while maintaining independent control over the means and methods of their own work, the use of independent contractors fosters an entrepreneurial spirit while giving firms that contract with such individuals an increased flexibility that promotes efficiency and innovation.

In recent years, however, federal regulators have increasingly pressured businesses to move away from the use of independent contractors, who are not legally entitled to unionize under federal law. Among federal agencies, the National Labor Relations Board (NLRB) has led this charge. Beginning with the last administration, the NLRB has intensely scrutinized and second-guessed companies’ worker-classification determinations, often deeming independent contractors to be “employees” under the National Labor Relations Act (NLRA). At great expense in time and resources, some companies have successfully appealed from the NLRB’s employment-classification rulings in federal court. Continue reading “Novel Theory of NLRA Liability Would Trample Employers’ Free Speech Rights”