On Friday, July 22, 2011, the Sacramento Superior Court ruled that 4,000 Sacramento Bee newspaper carriers are entitled to proceed as a class against the Sacramento Bee on claims that they were mislabeled as independent contractors when they truly were employees.
Kathleen Dunham of Callahan & Blaine, which represents the carriers, noted that, “Certification of the carriers as a class is an important step in remedying the mistreatment of hardworking Americans where they are denied their statutory rights and benefits as employees.”
Callahan & Blaine has pioneered class certification for newspaper carriers in California. Callahan & Blaine secured class certification for the newspaper carriers of the Orange County Register which resulted in a $40 million settlement during trial in 2009.
“It is a nationwide trend to recognize delivery personnel, inherent in the conduct of many businesses, to be employees,” said Daniel J. Callahan, founder of the Santa Ana-based firm. “Recent cases include FedEx, pizza and newspaper delivery personnel who were classified as independent contractors but who were determined to in fact be employees and entitled to the rights of an employee.”
Dunham states the primary test for determining whether one is an employee or an independent contractor is whether the employer has the right to control the manner and means of how the worker accomplishes his or her work. If an electrician (who is a true independent contractor) comes to your home, you would not direct the electrician on which wires to connect or the proper voltage. These are decisions that the independent contractor would make based upon experience and training. On the other hand, directing a newspaper carrier about delivery details such as putting the paper behind the screen door, on the front step, or over the fence, and such as assembling the newspaper in a precise manner, are indicative of control and, thus, employment.
The California Employment Department (EDD) has identified the mislabeling of employees as independent contractors to be part of the “Underground Economy”, and it has targeted companies in a crack down on this practice. The EDD has stated that this practice not only violates the law, it also creates unfair business competition for those companies who properly label their workers as employees and pay employment taxes and benefits.
Additional newspaper carrier cases are awaiting class certification rulings in California, involving the Fresno Bee, San Diego Union-Tribune, and Antelope Valley Press newspapers. There have already been appellate decisions in California declaring that newspaper carriers are employees and not independent contractors, as well as California administrative opinions reaching the same result.
Callahan noted, “This ruling was hard fought but worth it, both for the employees and for the public at large, who will benefit by the increased tax revenue. It also enhances competition when all companies are on a level playing field complying with the same laws.”
