Employment law can be confusing. Several federal and state statutes define “employee” differently, which can make it hard for employers to correctly classify their workers.
A current New Jersey Supreme Court case—Hargrove v. Sleepy’s LLC—demonstrates just how convoluted employment law can be. The case concerns contracts between a mattress retailer, Sleepy’s, and several small delivery companies. Although Sleepy’s contracted the companies to deliver mattresses to its customers, the owners of the delivery companies argue their workers are Sleepy’s employees and not independent contractors.
The NFIB Small Business Legal Center led an amicus brief in the case to encourage the court to clarify that judges cannot convert legitimate service contracts between independent businesses into employment contracts. Doing so could raise various problems for small businesses. Namely, it could discourage companies from entering into service agreements with smaller companies for fear that such contracts might result in unintentional incorporation of the smaller companies’ employees.
NFIB has always called for more clarity in employment law. Courts should provide bright-line rules for businesses that enter into mutually beneficial agreements—and without discouraging companies from contracting with small business.
For a free guide to help you navigate this area of employment law, download the Small Business Legal Center’s “Guide to Independent Contractors.”
