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One of the leading issues for unanticipated independent contractor misclassification liability is the scenario in which a company outsources a function to a subcontractor which, in turn, uses independent contractors to render the service.  When those independent contractors seek counsel who alleges a misclassification, he or she may also allege that the company that is indirectly receiving its benefits is a joint employer with the subcontractor.  This type of claim is more likely to succeed when the independent contractor provides the service to a single client or customer or a limited number of customers of the subcontractor on an ongoing basis. 

A recent federal district court case in which plaintiffs sought to hold Home Depot liable as a joint employers with respect to a delivery company which retained drivers to deliver Home Depot goods is instructive.  The court, in ruling that Home Depot was not jointly liable, based its conclusion on the following facts:

1. Home Depot did not have the power to hire or fire the drivers;

2. It did not supervise and control work schedules or conditions of employment;

3. It did not control the rate or method of pay;

4. It did not maintain employment records of the drivers;

5. It did not own the trucks;

6. The subcontractor and the driver provided uniforms;

7. Driver’s profits were determined based on his own time management skills.

Plaintiffs’ counsel in this case were undoubtedly going after Home Depot’s deep pockets.  However, many companies could be exposed to joint employment claims unwittingly based on the manner in which their subcontractors have structured relationships with their independent contractors.  In order to mitigate against this risk, companies should require their vendors to indemnify them as well as to provide detailed contractual representations that they have appropriately classified their workers.