Medical Interpreters Deemed Employees Not Independent Contractors: The Detrimental Effect Of Non-Compete Agreements!

Fox Rothschild LLP

Fox Rothschild LLP

If recent history teaches anything, it is that no industry is immune from attacks on employers who allegedly misclassify workers as independent contractors.  In an offbeat case, this has occurred to a company that utilized medical interpreters.  The case is entitled In Re: Ingrid L. Vega, d/b/a Professional Interpreters of Erie v. Commonwealth of Pennsylvania, Department of Labor and Industry, Office of Unemployment Compensation Tax Services, and was filed in the Commonwealth Court of Pennsylvania

The three-judge panel affirmed an administrative finding by the Department of Labor and Industry that these Interpreters were misclassified.  The Court stated that “the department issued an extensive set of findings of fact that highlight the many policies, procedures, and agreements petitioner utilized in its relationships with the interpreters, which demonstrate that petitioner retained control over the interpreters.”  The Company did not put forth sufficient evidence to alter the conclusion reached below.

The Court focused on the control element and found that the Company exercised sufficient control to label the people as “employees.”  The Company set the pay rates of the people, provided name badges and gave the workers training.  The Company also controlled their work assignments and, significantly, compelled them to sign non-compete agreements.  The Company also evaluated and monitored the work performance of the workers.  The Court succinctly noted that “overall, based upon the supported findings of the department, petitioner maintained significant control over the interpreters, and petitioner did not provide sufficient evidence to rebut the presumption of employment regarding control or direction in the interpreters’ performances.”

The Company argued that the people were independent contractors because they had the right to work for other agencies, allegedly did not receive training and used their own supplies and equipment.  The Pennsylvania DOL, however, found that training was provided and looked at the non-competes as a strong factor in favor of employee status.

The Takeaway

This case is offbeat because usually the putative employer’s defense fails because it cannot show the independent contractor is in their own “independent business.”  Usually, the employer is able to show a lack of control.  Here, that was different—giving training, name badges, setting pay rates, evaluating performance, are all clear indicia of control.  The existence of the non-compete agreements, however, was the death knell to the employer’s defense.

Forget the non-compete…

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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