Reference no: EM131870576

Question: Employment relations

Brad began working at Lay-Z-Guy in 1981 as a customer service manager. In 1995 his employer started requiring him and other salespeople to sign a series of one-year agreements that stated they could be terminated on 60 days' notice. Three years later it required Brad to incorporate, and from that point forward, the agreements were between Lay-Z-Guy and Brad's corporation. The agreements defined Brad, and later his corporation, as an "independent marketing consultant" and expressly stated that the relationship was not one of employment, but rather of an independent contractor-principal. Brad paid for his own office space and remitted his own income taxes and workers' compensation premiums. At the same time, Lay-Z-Guy set prices, territory, and promotional methods and Brad was limited to servicing Lay-Z-Guy exclusively. In 2003, Lay-Z-Guy terminated the agreement with 60 days' notice. Brad sued for wrongful dismissal damages, alleging that he was an employee.

a. What five tests are used by the courts to establish whether an EE-ER or an independent contractor relationship exists? Identify each and describe in a sentence or two. Use an example if it adds to your explanation.

b. What arguments could Brad make to support his position that he was an EE?

c. What arguments could Lay-Z-Guy make to support its position that Brad was an independent contractor?

d. Which side do you think would be successful? Explain your reasons fully.

e. Do you think that Lay-Z-Guy could successfully argue that even if Brad was an employee, the contractual 60 days' notice provision should govern its responsibilities with respect to Brad's termination?