A group of service technicians sued a cable company alleging they were misclassified as independent contractors.

What happened. The technicians performed installations and repairs for Jeffry Knight, Inc., a service contractor for the Bright House Networks (BHN) cable company in Florida. They reported daily around 7:00 a.m. to receive job routes and frequently worked more than 40 hours per week. Their contract provided that they could reject assignments, but the technicians alleged that doing so could result in loss of further work. The technicians were required to log in and out of a workforce management service on their cell phones at the start and end of each job.

Knight set the pay for each job, which ranged from 40 percent to 50 percent of proceeds. Technicians were effectively barred from working for other companies and were barred from employing helpers who were not BHN technicians. The company assessed “chargebacks” averaging $100 to $150 for failing to meet job specifications, failing to maintain contact, losing inventory, or being late, and frequently fired technicians for misconduct ranging from fraudulent billing to rude behavior.

A district court found that the technicians were properly classified as independent contractors, and the technicians appealed.

What the court said. The 11th Circuit Court of Appeals, which covers Alabama, Florida, and Georgia, overturned the ruling, finding that the workers were “economically dependent upon Knight.” Knight “controlled what jobs the plaintiffs did, how much they were paid … their daily work schedule, whether they could work for others, [and] whether they could earn additional income,” the court found.

They had “no discretion” in performing a job and were required to maintain “constant, not periodic” communication with Knight. While the technicians were “clearly skilled workers,” they gained most of their skills through unpaid training from BHN, and their opportunity for profit “was largely limited to completing more jobs.”

Citing the U.S. Supreme Court’s decision in Rutherford Food Corp. v. McComb, the court concluded that “a job whose profits are based on efficiency is ‘more like piecework than an enterprise that actually depends for success upon the initiative, judgment, or foresight of the typical independent contractor.’” Scantland, et al. v. Jeffry Knight, Inc., 11th Cir., No. 12-12614 (7/16/13).

Point to remember. Knight argued that its policies stemmed from the “nature of the business.” The court countered, “If the nature of a business requires a company to exert control over workers to the extent that Knight has allegedly done, then that company must hire employees, not independent contractors.”