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IRAC Brief Essay

According to United States District Court District of Massachusetts Civil Action 11-10313-GAO (2013), Anderson, Silva, Johnson and Funches contracted through a limited liability company by the name of SLS to perform delivery services work on behalf of HDA (United States District Court District of Massachusetts, 2013).

Plaintiffs Case
Each driver was provided with their truck
Trucks provided to the contractors bore Sears Logo
Uniforms bore both Sears and HDA logos
Each driver hired their helpers and paid their helpers directly Drivers worked full-time and solely for HDA (while under contract) (United States District Court District of Massachusetts, 2013)

HDAs Argument
Plaintiffs contracted through SLS and not directly with HDA as individuals; therefore, HDA should not be a litigant in this case Mass. Gen. Laws ch. 149, § 148B is preempted by the Federal Aviation Administration Authorization Act, 49 U.S.C (See Case 1:11-cv-10313-GAO Document 99 Filed 12/30/13 Page 3 of 5) (United States District Court District of Massachusetts, 2013) IRAC

Issue:
The issues below are the reasons this case has been brought to court. The court must provide the answers to these reasons in order to begin the rule assessment portion of IRAC (1) Were the plaintiffs (Anderson, Silva, and Funches) misclassified as independent contractors by HAD? (2) Were deductions taken from plaintiff’s wages in violation of wage laws?

Rules
Below are the rules found in Mass. Gen. Laws ch. 149, § 148B. These rules must be applied to the facts of the case to assess the fault or culpability of the litigants. Below is cited via United States District Court District of Massachusetts Civil Action 11-10313-GAO (2013). (1) The individual is free from control and direction in connection with the (2) Performance of the service, both under his contract for the performance of service and in fact; and the service is performed outside the usual course of the business of the employer; and (3) The individual is customarily engaged in an independently established trade, occupation; profession or business of the same nature as that involved in the service performed. (United States District Court District of Massachusetts, 2013)

Application
When looking at the mass general law 149 subsection 148B, we can apply the three stipulations of the law to the case against HDA violating this law. The plaintiffs in the case were acting solely for the purposes of HDA as a delivery service wearing both the seniors and HDA logos on uniforms provided to them. None of the drivers worked outside of the scope of work on subcontracts for any other provider other than HDA, and finally, each driver performed these duties under the direction of HDA’s vision. It is clear in this case that circumstances are such that every appearance and performance of duties was done in a way to appear that they were solely employees of HDA in that HDA has violated Mass General Law on salary and wages (United States District Court District of Massachusetts, 2013).

When applying this to business setting the business entity hiring subcontractors must stipulate in a written contract as to whether the employee is to be treated as a subcontractor under a 1099 tax form or as a subcontract employee for the business. Under the assumptions made in mass general law 149 subsection 148B, subcontractors are deemed employees if they meet certain criteria within the law. This criteria is easily determined under general operating practices and business owners should be aware of these criteria before hiring subcontractors (United States District Court District of Massachusetts, 2013).

Analysis/Conclusion
Plaintiffs (Anderson, Silva, and Funches) were misclassified as independent contractors by HDA. It was found that deductions were taken from plaintiff’s wages in violation of wage laws. Thus, findings were established through determining that HDA violated the law in place (Mass General Law on Salary and Wages). For the foregoing reasons, the plaintiffs’ Motion for Partial Summary Judgment as to liability against HDA (dkt. no. 65) is GRANTED. It is SO ORDERED.

Business Managerial Setting Application
There are numerous torts to consider when reviewing Anderson v HDA: (1) Intentional Tort a civil matter resulting in an intentional act of damages. (2) Unintentional Tort civil matter unintentional acts that results in economic loss, property damage, or physical injuries. (3) Property Torts occur when one’s enjoyment of their private property is interfered with by either acts of trespass or illegal conversion of the private property. (4) Negligence a civil matter resulting damages due to the lack of care or duty that is owed. (5) Strict Liability Torts can be criminal or civil and culpability or finding of fault is not a factor, to name a few. The tort that is evident in the case of Anderson v HDA is an Unintentional Tort resulting in an act of economic loss. The wage deduction and mis-classification of employment status have led to the loss of wages and possible benefits to the plaintiffs and their helpers.

The issues that arose in the Anderson v HDA civil lawsuit could have been avoided by utilizing an effective risk management process for contracts review and management. Co-employment issues arise in the third party relationships due to the unknown, so it is beneficial to know as much as possible about all relationships that are encompassed for the work at hand. Understanding the Torts liabilities that can arise in the areas of contract language and negotiations will ensure that liabilities are managed early in the relationship building process. An effective way to manage this risk is to identify the gaps that may exist with employment status classification, ensure that necessary tax forms are completed, monitor direct partnership and obtain direct partnership attestations regarding their direct relationship with their contractors. The next step is to have an ongoing control mechanism in place to monitor regulations and update business checklist and standard operation procedures.

Reference

United States District Court District of Massachusetts. (2013). Civil Action 11-10313-GAO. Retrieved from United States District Court District of Massachusetts, website.


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