Security Guards: Employees or Contractors?

security guard employee or independent contractorI never saw the movie Paul Blart: Mall Cop and almost certainly never will. (Do I really need explain that decision?)

The Independent Contractor vs. Employee question often arises in the context of security guards, though. I confess to not knowing how Paul Blart was classified but, for companies who retain security guards, the decision whether to hire them as employees or to contract with a security firm is an important one.

The main advantage of hiring security guards as employees is the ability to retain control over how an individual guard does the job. The company can select who it wants to work and when, and can provide as much supervision and direction as needed.

The biggest disadvantage to using employees for security work, however, is the risk of liability. The very purpose of the role is to guard against dangerous or threatening situations. Where a security guard overreacts, or where someone gets hurt by a guard acting in the normal course, lawsuits are sure to result. And the injuries are likely to involve more than hurt feelings.

A recent Texas case, Henderson v. CC-Parque View, illustrates the benefit of using contractors rather than employees to provide security services. In that case, a management company contracted with a security firm to provide guards at an apartment complex.

One night, an overzealous guard (we’ll call him Blart, because that truly is a great name for an overzealous guard) ordered Henderson (that’s Henderson’s real name), who was sitting in a parked car at the complex, to get out of his car. Henderson got out, but an argument ensued.

In an attempt to proclaim his invincibility, Henderson (I imagine this is how it went down) shouted, “I’m rubber and you’re glue and anything you say bounces off me and sticks to you.”

The guard, an avid fan of MythBusters, did not believe his antagonist’s impromptu physics lesson and shot him in the abdomen with a rubber bullet. It did not bounce. And it hurt.

Henderson sustained injuries. He sued the guard, the security company that employed the guard, and the management company of the apartment complex.

The suit against the guard and security company proceeded, but the management company successfully argued that the guard was not its employee and that it could not be liable for his actions.

The court ruled that the guard was a contractor, not an employee of the management company; and the management company was dismissed from the lawsuit.

Had the guard been hired directly by the management company as its employee, the outcome likely would have been very different, since employers are commonly held liable for the acts of their employees, when in the course of employment.

This case is a good reminder of the benefit of retaining an outside security firm, rather than hiring employees, to provide security services.

And did you hear there’s a Mall Cop 2? I also won’t watch that.

Court Rejects Mandatory Arbitration for Independent Contractor Truckers

truck independent contractor arbitrationArbitration agreements can be an effective way to manage disputes with independent contractors. The Federal Arbitration Act (FAA) and Supreme Court decisions support arbitration as an efficient way to resolve disputes outside of the courtroom.

But what happens when an independent contractor with an arbitration agreement claims to have been misclassified as an employee? Can these disputes be forced into arbitration?

Usually yes, but this blog post by my colleague, John Lewis, highlights the limitations of arbitration agreements when applied to transportation workers. Although federal public policy — as articulated in the FAA — generally favors arbitration as a way to resolve disputes, Section 1 of the FAA lists a few situations where the FAA does not apply. One type of excluded dispute is over “contracts of employment” with transportation workers.

Are independent contractor agreements with owner-operator truckers “contracts of employment” with transportation workers? Continue reading

WhoIsMyEmployee.com named “Featured Blog of the Week” by American Bar Association’s ABA Journal

Thanks to the ABA Journal for recognizing WhoIsMyEmployee.com as its Featured Blog of the Week for the week of May 18, 2017. I appreciate the recognition!

To my readers: I hope you have been enjoying the blog, and I encourage you to email me with ideas for posts, along with any questions or comments.

Thanks!

Todd Lebowitz

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Never Been Sued? Congratulations! Here’s Why You Should Re-Evaluate Your Use of Independent Contractors Now.

IMG_1072Have you ever heard someone say, “The definition of insanity is doing the same thing over and over and expecting a different result“? That’s just wrong. No, it’s insanely wrong. (Irony! Actual definition, click here).

  • If you flip a coin 5 times and it comes up heads each time, is it insane to think it might come up tails next time?
  • If you play golf in a lightning storm five times and never get hit, is it insane to think you might get a nice electrical jolt next time?
  • If you root for the Browns to win a football game and they never do, is it insane to think they never will? [Note to self: Delete that. Bad example. It is true that they might never win a game. Shameful admission: I am a Browns fan.]

My consistent advice to companies that use independent contractors is to be proactive. Review your policies, practices, and documents now — before you get sued or audited. Many take this advice. Those who do not generally give two reasons:

  1. We don’t want to spend the money now; and
  2. We’ve always done it this way and have never been sued.

Folks, that kind of thinking is: n. extreme foolishness; folly; senselessness; foolhardiness.

Here are a few quick facts:

  1. Every company that has been sued for independent contractor misclassification had never been sued before the first time it was sued.
  2. Every company that has been audited for independent contractor misclassification had never been audited before the first time it was audited.

Continue reading

The Myth of “Temporary Employees”

IMG_1067What is a “temporary employee”? I have practiced employment law for 20 years (Note to self: Keep practicing; someday you’ll get good at it.) and I can’t tell you. It’s a state secret. All lawyers have been sworn to secrecy forever.

Either that or, if you really want to know and say “pretty please” (with or without sugar on top, but no artificial sweetener please), that term has no legal significance. Usually the term is used to mean one of two things:

  1. your employee, hired on a trial basis with some sort of probationary period; or
  2. a staffing agency worker, retained to augment staff levels on a temporary basis.

Under option 1, the “temp” is a regular W-2 employee of yours, probably employed at will like your other employees, but whether you call that person “temp” or “permanent” or “regular” or “irregular” (?), none of it matters. A temp worker who is your employee, paid subject to deductions, is your employee.  Temp time counts toward FMLA eligibility. Continue reading

Can an Intern be an Independent Contractor? (Answers revealed in James Bond movies)

IMG_1068Among James Bond films, Rotten Tomatoes ranks Never Say Never Again 18th out of 26, with a mediocre 63% rating. (Bond movie quiz at the end of this post, for patient readers.)

It’s a cliche saying, I know, but my first reaction when asked this question was, “I’d never say never, but it’s hard to imagine a scenario where that would work.” (That was also my second reaction and my third. Let’s just say that’s my reaction.)

Let’s run this through the gauntlet. Remember, it’s not your choice whether an intern is an independent contractor or an employee. The law decides that for you, based on the nature of the relationship.

Test #1: Economic Realities Test. Under federal wage and hour laws, an independent Continue reading

Today’s Tip: Avoid Telling Contractors How to Perform the Work (with Stones lyrics)

IMG_1066The great scholar Mick Jagger reminds his followers that you can’t always get what you want, but if you try sometimes well you might find you get what you need. This is good advice, not just for Mr. Jimmy (who did look pretty ill), but also for companies who use independent contractors.

In a true independent contractor relationship, the hiring entity knows what it needs. It needs results, but the details about how, when, and where to work toward those results are left to the contractor’s discretion. There is no oversight or supervision.

The more direction a company provides a contractor on how to perform the work, the more likely the contractor is misclassified and the relationship will be deemed employment. You might want to control these things, but if they are not necessary to get what you need, then you should try sometimes and you might find you can get what you need without exerting extra control over the contractor. Continue reading