Information and Commentary on Class Action Cases Affecting Employers

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My father grew up in Nazi-occupied Europe during World War II and would tell the story of how an official would come to his family’s home to modify their radio so they could not receive BBC broadcasts. Shortly after the official left, the family would open the radio box and fix the clumsy modifications that had been made so they could continue to receive outside news from a source not controlled by a fascist government.

In like fashion, during the Cold War, America broadcast its own messages behind the Iron Curtain through Voice of America. In response, some then-Communist countries tried to counter these broadcasts with jamming technologies. I hadn’t heard much about Voice of America since the fall of the Soviet Union, but it still exists as an independent federal agency. It has roughly a thousand employees and currently broadcasts the news in scores of languages around the world, drawing criticism from countries such as Russia and North Korea.



But how it actually does its work was the subject of a recent class action involving the classification of many of its workers. In <a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2018/07/Lee-V-United-States-071318.pdf">Lee v. United States</a>, Case No. 2017-1643 (Fed. Cir., July 13, 2018), the plaintiffs worked for the VOA under a series of contracts that provided they were to perform services as independent contractors. These workers contended that they and hundreds like them should have been classified as federal employees and received the requisite level of benefits, asserting a range of contract-based claims. But after reviewing the contracts, the Court of Claims disagreed and dismissed their claims. The Federal Circuit affirmed.

The court noted that the plaintiffs had made a series of allegations to support their misclassification claim, but also found that the facts they alleged were insufficient to establish that claim. For example, they argued that they had to work in federal offices chosen by the broadcaster, had to use VOA equipment, could not set their own hours, came under at least some supervision and were limited in their ability to work for other clients. The court found these facts more consistent with responsible oversight than with creating an employer relationship. It similarly found that the contracts expressly made the contractors responsible for their own management and administration. The court also rejected the plaintiffs’ efforts to side-step their express contracts through implied contract or quantum meruit claims, finding that they could not exist in the face of an express contract.

The VOA case is worth reading for the application of general concepts of law to an unusual employer in a case involving novel contract-based claims. As the underlying claims failed, there was no class to certify and no case.

The bottom line:

Class action claims premised on written agreements may be subject to early dismissal if the contract terms don’t adequately support the plaintiffs’ theory.

Federal Circuit Affirms Dismissal of Independent Contractor Misclassification Claims