Question: Can employers fire employees for their activities off duty, such as attending a controversial rally?

Answer:

Yes, if an employee is at-will, generally he can be fired for any or no reason, with or without cause, with or without notice.  But there are various considerations to keep in mind.  This topic has been on a lot of people’s minds after the recent upheaval in Charlottesville, Virginia and its aftermath.

As an employer, you may not like or condone your employee’s off duty conduct, but is it really your business what they do off duty?  It may be if the off duty conduct at issue goes against your company’s mission and values (such as fostering an environment of mutual respect) or if the fact that your employee engaged in this off duty conduct is causing unrest and tensions during the work day.  For these reasons, employers may fire employees for what they do in their spare time, if it reflects negatively on the business.

Before doing so, employers should keep in mind that some states have laws (often referred to as lifestyle discrimination laws) that prohibit employers from discriminating against employees for engaging in lawful conduct while they are off duty. Federal law does not offer protections to private sector employees for their political views or for engaging in political activities, whereas public sector employees generally cannot be terminated for their political views.  Despite arguments by the Klu Klux Klan (KKK) to the contrary, courts have rejected the argument that participation in the KKK is religious activity that should be accommodated under Title VII.

Aside from possible laws that may be implicated, employers also should consider the precedent being set.  Employers should strive to be consistent in their approach, which can be difficult when it comes to employees’ personal activities during non-working hours.  Assessing what personal activity may make others uncomfortable in the workplace is not a straightforward task. Preferably employers do not have to wade into this area but, in extreme circumstances, employers may feel compelled to do so.  (For example, read about a hot dog shop’s reaction to an employee’s participation in the “Unite the Right” rally here.)

About the Author:  Laura Liss (lliss@pfs-law.com) is Chair of Patzik Frank and Samotny’s Employment Law Practice Group. She provides both legal and practical business advice on all phases of employment-related decisions. She regularly serves as a sounding board for business owners, executives and human resources professionals and assists them in successfully and efficiently navigating the various employment laws that impact their businesses.

Question: Should our company classify a new hire as an employee or independent contractor?

Answer:

Employee.  While it’s difficult to answer without the particulars of the situation, given the heightened scrutiny in recent years surrounding the misclassification of employees as independent contractors, I usually start with the premise that most individuals who provide services for businesses these days probably should be classified as employees.  Nonetheless, many businesses continue to use independent contractors.

If your business intends to engage an independent contractor, here are some things to keep in mind:

• The term “1099 employee” is an oxymoron.  If an individual is paid via a Form 1099 (without tax deductions) rather than a Form W-2 (where standard payroll deductions are taken), then that individual is an independent contractor or consultant.  The fact that independent contractors often are called “1099 employees” tends to suggest misclassification.  (If you have used this term, if it’s any consolation, you are in good company – it’s a common misnomer.)
• Having an independent contractor agreement will not save the day.  On the other hand, having a strong independent contractor agreement that is carefully drafted can help provide a good faith basis for your classification decision.
• Avoid terms in an independent contractor agreement that are indicative of an employment relationship, such as an at-will provision, termination for Cause and severance.
• Engaging an entity, rather than an individual will not carry the day, but directly engaging an individual, rather than an entity can be fatal under some of the independent contractor tests.
• Providing the individual with office space, supplies, your company’s business card, vacation time and expense reimbursements are all facts that suggest an employment relationship.
• Just because someone is part-time does not make them any less an employee.  If the individual performs the same duties as other employees, but just does so on a part-time basis, then that individual probably is a part-time employee.
• The fact that the individual you are engaging prefers to be an independent contractor will not carry the day.

Determining the proper classification of an employee or independent contractor is a very fact-specific endeavor.  Be sure to do an in-depth analysis and consider the above concepts, as well as the often critical: who has the right to control when, where, and how the worker performs the job. The more control the business has, the more likely the individual should be classified as an employee.

About the Author:  Laura Liss (lliss@pfs-law.com) is Chair of Patzik Frank and Samotny’s Employment Law Practice Group. She provides both legal and practical business advice on all phases of employment-related decisions. She regularly serves as a sounding board for business owners, executives and human resources professionals and assists them in successfully and efficiently navigating the various employment laws that impact their businesses.