Employee or independent contractor: Write it right!

Eternal truth: The way to stay out of trouble is to stay out of situations that can cause trouble. Picking up from the previous article (see “Texas employer dodges payment of $350,000 in overtime” on page X), this was the problem for the Texas Farm Bureau. It classified Jerry Merritt as an independent contractor when he should have been classified as an employee. This decision is what led to the jury trial where it beat the rap, but isn’t it much better never to have faced the vagaries of a jury trial? Here’s an article on a prophylactic approach.

Key issue

Calling a worker an employee or an independent contractor doesn’t get you very far. These are only words and empty conclusions.

Here’s the key legal touchpoint: An employee economically depends on the company’s paycheck to pay for the needs of daily life—rent, house payments, groceries, school tuition, and so forth. By contrast, independent contractors are in business for themselves, relying on money from various sources rather than a single source. As the court put it, Merritt was “captive” for his livelihood to the Texas Farm Bureau. And to make its position even worse, it required him to sign a noncompete. Merritt v. Texas Farm Bureau, (W.D. Tex., 2023).

Provisions to include