Employee or Independent Contractor?

Referees Settle Independent Contractor FLSA Action: No “Penalty” For Either Side 

From JDSupra, Mark Tabakman discusses a settlement from a case alleging that referees were misclassified as independent contractors. Mark writes:

The issue of whether athletic referees are independent contractors has surfaced a few times in the last few years. Here, in Pennsylvania, the Pennsylvania Interscholastic Athletic Association (the PIAA) that engages these referees has agreed to settle with a group of these individuals for $260,000 to close out a FLSA action, based on misclassification. The case is entitled Ruslavage et al. v. PIAA, and was filed in federal court in the Western District of Pennsylvania.

The Judge signed off on the settlement. The referees were used to participate in high school football, basketball, baseball and lacrosse matches. The case would have been long and expensive to try and the recent issuance of a DC Circuit decision holding that lacrosse referees were independent contractors under the National Labor Relations Act (NLRA)(and therefore could not unionize) also played a role in the decision to settle, no doubt.

More than four-hundred referees opted in to the suit and they will share most of a $262,500 fund. In an unusual provision, the settling workers will also receive a free registration for one Association annual convention over the next four years. The lawyers will receive fees equal to 35% of the settlement fund as augmented by the value of the conference attendance.

Each share will hinge on how many sports an individual refereed from 2015-2018.  The refs worked at more than 1,500 schools statewide. The lawsuit alleged numerous violations, e.g. working off-the-clock, not being paid for required training or meetings and pre and post-game work. All of these alleged violations flowed from the referees’ alleged misclassification as independent contractors.

The employer had two arguments. The refs were independent contractors or even if they were employees, they were nevertheless exempt from FLSA rules under the seasonal and recreational employee exemptions. If either argument prevailed, the plaintiff’s case would all but collapse. There was also an employer contention that there was a uniform industry practice that governed referee status across the nation.

Read the full story at Referees Settle Independent Contractor FLSA Action: No “Penalty” For Either Side | Fox Rothschild LLP – JDSupra

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