Are the drivers who deliver Sleepy's mattresses employees or independent contractors? The outcome of a case argued Monday in New Jersey Supreme Court could have major ramifications for businesses and workers.
"This argument is about more than my three
drivers," said Anthony L. Marchetti Jr., the Cherry Hill lawyer who filed a
lawsuit in 2010 on behalf of Sam Hargrove, Andre Hall, and Marco Eusebio.
That's because appellate judges in federal court, where the
case was originally filed, have asked New Jersey's Supreme Court to devise a
test to be used to determine, in general, whether workers are employees or
independent contractors under New Jersey state wage laws.
"The issue presented here is of great practical
importance for small-business owners," the National Federation of
Independent Business said in a friend-of-the-court brief supporting Sleepy's
L.L.C.
Hargrove, of Willingboro, delivered for Sleepy's in 2008.
Hall, of Pennsauken, handled Sleepy's mattresses from 2005 to 2008. Eusebio, of
Bergen County, did the work from June 2003 through September 2009.
The lawsuit said drivers sign documents asserting that they
are independent contractors. As such, they must buy or lease trucks and pay for
maintenance, fuel, and insurance.
But they are treated like employees, the suit said, required
to wear Sleepy's uniforms and adhere to its delivery schedule, which changes on
short notice.
Sleepy's sets the rates, and, as a practical matter, the
drivers cannot haul other customers' merchandise until they finish all the
Sleepy's deliveries.
"There is no independent entrepreneurial opportunity
for the drivers and no business to grow," the suit said.
In its court brief, the federation pointed out that Hargrove
and Hall filed new-business registration forms with the State of New Jersey.
Eusebio also set up a business.
The federation and Sleepy's argue that the court cannot
ignore "business formalities," such as registering a new business, in
deciding whether the men were employees.
"A test ignoring business formalities would discourage
companies from contracting with smaller businesses," the federation said
in its brief.
Marchetti said the New Jersey Supreme Court needs to look
beyond formalities and into actual work conditions.
Sleepy's "proposed rule would create a system where a
company can force a worker to create an L.L.C. [limited liability company] and
work through it, and therefore be covered by none of the various protective
laws" involving employees," Marchetti said.
Even though Sleepy's describes the men as independent
contractors, "the drivers exercise virtually no independent control over
their own work life and therefore are employees," the lawsuit said.
Improperly classified, the suit said, the drivers lose out
on benefits, including workers' compensation, and are forced to pay costs that
should really be paid for by Sleepy's.
Sleepy's is being represented by Elizabeth Clement, of
Littler Mendelson P.C., of Philadelphia.
Source: Philly.com
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