Vermont Supreme Court
The Legal Foundation filed an amicus brief on behalf of Bonny Dutton owner of a small home-based apparel firm in Vermont. Dutton outsources sewing work to a half-dozen women whom she has classified as independent contractors. The state contends the women are employees. In 2003 the state demanded about $1,000 in unpaid unemployment insurance and penalties. The claim was made because one of her knitters, Ruthie Nichols, filed for unemployment after losing an unrelated job – and the state set out to determine what Ms. Nichols was owed, and by whom. Dutton contends that she does not exercise substantial direction or control over the knitters’ work.
Classification of employees is an extremely tough challenge for small businesses – a point emphasized in our brief. While the risk of misclassification faces employers in all sectors, for small businesses it poses a particularly costly one.
Status: DECIDED. Amicus brief filed on behalf of Bonny Dutton Nov. 7, 2005. On May 4, 2007, the court affirmed the state's classification as "employees" on a 3-2 vote.
