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A worker who receives no benefits and is treated as an independent contractor for tax purposes may still be considered an employee under federal and state anti-discrimination laws, the 2nd U.S. Circuit Court of Appeals has ruled. A three-judge panel said that judges should place special emphasis on “the extent to which the hiring party controls the manner and means by which a worker completes her assigned tasks,” when determining whether a plaintiff is an “employee” under Title VII and New York’s Human Rights Law. The “core substantive protections of anti-discrimination laws were not intended to be skirted by terms of individual employment contracts even if on their face those terms concern only the compensation of a worker,” Judge Jose Cabranes said in the opinion. The decision in Eisenberg v. Advance Relocation & Storage Inc., 00-7216, reversed a lower court judge and reinstated a claim of discriminatory and retaliatory termination brought by a woman who had complained of a hostile work environment. Julianne Eisenberg was hired by Peter White and Mike Ewing to work on a “permanent, full-time” basis loading and unloading furniture at an Advance warehouse in 1998. She punched a time clock, was paid an hourly wage and received her “orders” from White. White, she said, would sometimes send employees home if there was little to do or instruct them to work on weekends if needed. On some occasions Eisenberg and other workers would be instructed to go to another location, where a supervisor, sometimes Ewing, would direct the loading and unloading of material. Shortly after starting at Advance, Eisenberg complained about sexual harassment on the job to Joan Isaacson, the company’s office manager. She also told Isaacson that she had seen several employees using cocaine at the warehouse. The warehouse was closed down the day after Eisenberg lodged her complaint with Isaacson. In a subsequent conversation with Isaacson, Eisenberg was allegedly told that she would not be asked to return to work if she filed a complaint or hired counsel to pursue allegations of sexual harassment. Eisenberg retained a lawyer anyway and filed a complaint under Title VII and New York’s Human Rights Law, Executive Law �� 290 et seq. She was not asked to return to work. Southern District Judge William C. Conner granted summary judgment for advance, finding that Eisenberg was not an “employee,” but rather an independent contractor. His decision was based in part on the fact that Eisenberg did not receive benefits and was not treated as an employee for tax purposes. On the appeal, Judge Cabranes said the lower court gave undue weight to two of the several factors that the U.S. Supreme Court said must be balanced in analyzing whether a hired person is an employee under the common law of agency in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). Judge Conner, he said, applied Reid as interpreted in Aymes v. Bonelli, 980 F.2d 857 (1992) a work-for-hire copyright case where the Second Circuit said benefits and tax treatment deserved special consideration in determining whether a worker was an employee or an independent contractor. However, while that special consideration “may make sense” in the copyright work-for-hire context, Judge Cabranes said, “its wholesale importation into anti-discrimination law” would invite abuse. “This is impermissible,” he said. “Accordingly we hold that in anti-discrimination cases such as this one, courts should not ordinarily place extra weight on the benefits and tax treatment factors enumerated in Reid, and should instead place special weight on the extent to which the hiring party controls the ‘manner and means’ by which the worker completes her assigned tasks.” Here, he said, “Advance exercised a great deal of control over the ‘manner and means’ by which Eisenberg accomplished her tasks,” and Eisenberg was not involved in a job that “required relatively specialized skills.” By comparison, he said, other cases that have found that the level of skill required of architects, computer programmers and photographers suggested they were independent contractors. Eisenberg was told where to go, when to show up and was supplied with all the material needed to do her job, he noted, and she was paid on an hourly basis and was not hired simply for a specific move or project. “Most importantly, Advance exerted close, pervasive control over Eisenberg she does not appear to have had any substantial discretion over how to complete her assigned tasks,” Judge Cabranes said, adding that the “only evidence” to suggest independent contractor status was her tax and benefit treatment. “These facts, which have little to do with the day-to-day reality of Eisenberg’s relationship to Advance, cannot counter-balance, much less outweigh, the combined weight of the remainder of the evidence,” he said. Judge Fred I. Parker and Southern District Judge Miriam Goldman Cedarbaum, sitting by designation, joined in the opinion. Daniel J. Schneider of Newburgh represented Eisenberg. Vincent Toomey of Lake Success represented Advance. Barbara L. Sloan of the Equal Employment Opportunity Commission filed an amicus curiae brief for the EEOC.

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