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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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What rights are given to independent contractors vs. employees.

Customer Question

What right's are given to independent contractors vs. employees. Do they have the same rights under the California Labor Code. More particularly under codes 970, 971 and 972.
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 1 year ago.

Good afternoon and thank you for entrusting me to answer your question. I will do everything I can to assist you.

The difference in terms of legal rights afforded to contractors versus employees cannot be overstated. Virtually the entire California labor code, as well as federal labor protections, simply do not apply to independent contractors. Independent contractor are considered "arms length" parties to a contract. The sole remedy of an independent contractor whose employer chooses not to pay or in any way breaches their agreement is to sue for breach of contract in civil court, or assert a cause of action in tort (i.e., fraud, intentional misrepresentation).

Independent contractors are not entitled to minimum wage, overtime, unemployment benefits, disability benefits, the protects afforded through the Family Medical LEave Act, workers compensation laws, laws governing the timely payment of wages and much more.

Independent contractors also cannot assert a claim for violation of Labor Code 970, 971, and 972.

Despite the inapplicability of section 970 et seq.,, an independent contractor could, at least in theory, assert an equivalent claim for fraud or misrepresentation. In its essence, that is what Labor Code 970 provides for--a claim where an employer intentionally misrepresents the terms of the job and the employee incurs foreseeable damage in trhe form of moving expense.

Such claim essentially amounts to a claim for intentional misrepresentation or fraud, and while an independent contractor asserting such a claim would not be entitled to the double damages which Labor Code 970 entitles to employees, they would be entitled to their actual damages and the inapplicability of section 970 would not entirely deprive them of any legal recourse.

Put another way, Labor Code 970 does not apply to contractors, and neither does most of the labor code. However, an equivalent cause of action can be asserted in tort, with the exception of double damages.

Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you.

Very best wishes to you and thank you so much for coming to Just Answer.

Customer: replied 1 year ago.

Thank you so much for your quick response!


What I didn't get the opportunity to finish is that she recently sent me a letter asking for her moving expenses of $3500 to be reimbursed claiming the above labor codes. How do you think I should reply to her letter?

Expert:  Patrick, Esq. replied 1 year ago.
Jill,

Thanks for your reply.

First of all, even if section 970 did apply, such claims are very difficult to bring because a cause of action brought pursuant to that section requires showing that the employer made "knowingly false representations." This is incredibly difficult to prove, and since employment is by default "at will" in California (see Labor Code 2922), the flexibility to terminate employment or change the terms of employment at any time is presumed. Section 970 does not undermine this basic authority, it only prevents "knowingly false representations."

If I were in your shoes, I'd respond with a letter indicating that section 970 applies only to employees and not to contractors. I would further indicate that section 970 requires a showing of knowingly false representations, which I presume this employee cannot demonstrate, along with a statement for the reasons why I changed the terms of employment or terminated employment and that I did so in good faith and without fraudulent intent. Finally, I'd cite Labor Code 2922, which establishes that employment is "at will" and that I therefore retain the authority to terminate employees and change the terms of employment at my unlimited discretion.

Again, please feel free to let me know if you have any further concerns. If I have answered your question, I would be very grateful for a positive rating of my service so that I may receive credit for assisting you.

Best wishes moving forward.
Patrick, Esq., Lawyer
Satisfied Customers: 6680
Experience: Significant experience in all areas of employment law.
Patrick, Esq. and 4 other California Employment Law Specialists are ready to help you
Customer: replied 1 year ago.

Your information must have been spot on because she just emailed a response to my letter again asking me to pay her relocation costs siting the
Doctrine of Promissory Estoffel and completely dropped any liability to the labor codes. What is this doctrine and how would it apply to this case as she's threatening to sue me in Small Claims court for 10k.
Thanks again in advance!
Jill
Expert:  Patrick, Esq. replied 1 year ago.
Hi Jill,

Sorry to hear that this employee is still pursuing her claim against you.

Promissory estoppel is a legal doctrine which provides that, where one party makes a promise reaonably expected to induce reliance, and another party reasonably relies upon that promise, then the party who made the promise can be held liable for the other party's damages if the promise is reneged upon.

Perhaps that was a bit confusing and wordy. To put this into more concrete terms, say an apartment lease is coming up on its expiration date and the landlord offers to reduce rent by $100 if the tenant continues living there. If the tenant chooses to remain in the apartment and the landlord then tried to raise the rent back, the tenant can invoke the doctrine of promisorry estoppel because they relied upon the landlord's promise, presumably to their detriment by potentially missing out on other less expensive leases.

Promisory estoppel claims have an extremely poor track record of success in the context of agreeements to employ. This is so because such a theory of recovery is fundamentally at odds with the doctrine of "at will" employment at the core of California labor law. Indeed, employment is no longer truly "at will" if employees can claim they detrimentally relied on the agreement to employ and therefore that the employer is estopped from terminating the employment relationship. Where would we draw the line here? A month of employment? Two? If the employer now forced to maintain the employment relationship indefinitely? Recognition of promissory estoppel in this context creates more problems than it solves.

For this reason, promisorry estoppel claims in employment generally only succeed when the employee can demonstrate bad faith. This means the requirements for prevailing on such a claim are essentially those as prevailing on a claim for violation of section 970, so alleging promissory estoppel puts this employee in no better position than they previously were in--that's to say, not a very strong position at all.

The unfortunate thing is that since this employee is threatening to sue in small claims court, you cannot attempt to dospose of their claim through a motion for summary judgment, as small claims proceedings are decided at a single court hearing with no advance discovery or motions conducted. So, this employee can make their case to the judge, and you will have to make the case that "at will" employment controls and that you did not act in bad faith.

The good news is that small claims judgments can be appealed only by the defendant (you) to a "trial de novo," meaning a new legal hearing, which will allow you to submit a brief and give you a second chance to make your arguments with more advance consideration afforded to the legal merits of your defense.

I hope this helps.

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