Employment law issues may be one of the most common legal barriers that both nonprofit and for-profit urban farms will encounter, especially considering that small-scale and organic agriculture often relies on volunteer labor. These issues are becoming increasingly important as the state’s regulatory bodies step up enforcement. We’ve heard of many examples of small family farms being fined for having volunteers helping with the farm work; some farms have been fined up to $22,000! Even getting occasional volunteer help from family members is considered illegal for a for-profit farm, and that barrier, alone, has made the operation of small farms unviable in some cases. Even consensual contracts between an employer and an intern, worker, or volunteer can be deemed illegal if they do not adhere to statutory and regulatory requirements.
Who enforces employment laws?
Employment law is enforced at both the state and federal levels. For examples, at the CA state level, the Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE) is the primary body that enforces wage and hour laws, child labor laws, etc. The Division of Occupational Health and Safety (Cal/OSHA) and the Division of Workers’ Compensation (DWC) also play a role in enforcing employment-related laws and regulations. The Department of Fair Housing and Employment protects employees from discrimination. In addition to the state-level agencies, agencies operate at the federal level to enforce similar laws.
Any disgruntled individual who provides labor for a farm could bring a claim for back wages, health and safety violations, or some other complaint. In addition, even without a complaint by a worker, the DLSE may audit a farm and fine the farm for violations, sometimes even showing up unannounced.
Disclaimer: The Sustainable Economies Law Center provides periodic updates to this site, however, information presented may be out of date. We encourage you consult with a professional before taking action based on the information here.
What does it mean to have employees?
Having employees comes with a list of obligations and requirements, including:
- Registration with the CA Employment Development Department;
- Compliance with standards for wages, hours, and working conditions;
- Payment of payroll taxes;
- Maintaining workers compensation insurance;
- Complying with occupational safety and health laws. The Division of Occupational Health and Safety (Cal/OSHA) provides free consultations with employers to help develop Injury and Illness Prevention Plans;
- Verifying eligibility to work in the U.S. (by viewing proof of U.S. Residency, for example);
- Posting of certain kinds of notices and posters related to employees rights;
- Recordkeeping requirements.
Who is NOT an Employee?
There are four primary legal categories of workers that are not considered employees. The legal definitions can be very complicated, but here are some basic explanations of what each is:
1) Volunteers = People that do work for charitable, religious, or humanitarian benefit.
2) Interns = People that do work for their own educational or therapeutic benefit.
3) Independent Contractors = People that do work for others in an independent manner.
4) Partners = People that work together as relative equals for their own and mutual benefit.
Who Can Be Considered a VOLUNTEER?
A person who donates services without contemplation of payment for humanitarian, public service or religious purposes is not considered an employee and therefore is not subject to the wage-hour laws. Tony & Susan Alamo Foundation v. Secretary of Labor (1985) 471 U.S. 290, 295. The DLSE considers the intent of the volunteers to be controlling in making this determination of whether someone is a volunteer. Thus, if someone is providing free labor on an urban farm with the intent of eventually getting paid or receiving free food, that person may not meet the legal definition of a volunteer.
As a general rule, you CANNOT volunteer for a for-profit business unless you can be classified under one of the other three categories below (interns, independent contractors, or partners). But as a general rule, you CAN volunteer for nonprofit organizations that are engaged in charitable, religious, or humanitarian purposes. Most cooperatives will not meet the definition of “charitable, religious, or humanitarian,” unless they are nonprofit organizations that are tax exempt under 501(c)(3) or 501(c)(4). Now here are some extra rules and exceptions to the rules:
1) You MIGHT be able to volunteer for a for-profit business if it has a defined and separate charitable project: Let’s say you have a cooperative farm with employees, and once per month it opens up to the public and serves only free food to people in need. This is a grey area, but this may be a situation where members of the public could come in and volunteer. If the farm has regular employees however, those employees probably could not volunteer, because the work may be too similar to the work they normally do for pay.
2) You MIGHT NOT be able to volunteer for a nonprofit if it is operating a commercial enterprise serving the general public. This is also a grey area, because many high profile nonprofits, such as Girl Scouts, allow volunteers to sell things to the public. But the rule stated by the Supreme Court and California law is: People cannot volunteer for “ordinary commercial activities” that “serve the general public,” even if those activities are operated by and for the benefit of charities and religious organizations.1
3) “Paying” volunteers with food or other valuable perks might mean they are employees: The rule expressed by the Department of Labor and in Fair Labor Standards Act (FLSA) is that people are allowed to volunteer so long as it is “without promise, expectation, or receipt of compensation for the services rendered, although a volunteer can be paid expenses, reasonable benefits, or a nominal fee to perform such services.”2 So you can give your volunteers a little something, but not a lot.3
Can a for-profit urban farm have volunteers?
Generally, volunteers may work on nonprofit urban farms and community gardens, but not on for-profit urban farms. What many people are surprised to learn is that a for-profit farm could be fined thousands of dollars for having volunteers take part in work on the farm, even if the volunteers are friends or family members, and even if they are volunteering for a very short period of time. Generally, anyone working on a for-profit farm would be legally considered an employee, unless that person is an owner/officer of the farm (with some exceptions) or meets the definition of an intern or independent contractor. There are otherwise very few examples of situations where people have been able to legally work on for-profit farms without pay. For example, spending an hour picking berries on a U-Pick farm does not seem to make you an employee.
How can nonprofit urban farms use volunteers?
The rule that nonprofits may have volunteers does not apply across the board. For example, there is a DLSE opinion that states that “when religious, charitable, or nonprofit organizations operate commercial enterprises which serve the general public, such as restaurants or thrift stores, or when they contract to provide personal services to businesses, such enterprises are subject to the Industrial Welfare Commission Orders and volunteers may not be utilized.” (See: DLSE opinion here)
Interpreting this DLSE opinion will be very important for urban agriculture nonprofits, since many such organizations operate related businesses (selling plants and produce). In particular, it will be necessary to determine what the DLSE means by “commercial.”
In addition, someone who is an employee of a nonprofit organization may not also volunteer to for the nonprofit, unless the volunteer activities are separate from what the employee does on a day-to-day basis. For example, someone who is a grant-writer and fundraiser for a community garden many not volunteer to help with a fundraising event for the nonprofit; however, that person may volunteer to help in the gardens from time to time, so long as helping in the gardens is not part of that person’s normal job description.
Also, to the extent that volunteers also come to economically depend on a charitable, religious, or non-profit farm in some manner — being paid in food, given shelter — they may also be deemed workers under federal labor law.
Who Can Be Considered an INTERN?
For-profit businesses can have unpaid interns, so long as the arrangement in which the intern is working meets the criteria for a valid internship. In California and in most jurisdictions, the following criteria are considered in determining who is an intern (also known as trainee or student):
1) “The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
2) The training is for the benefit of the trainees or students;
3) The trainees or students do not displace regular employees, but work under their close observation;
4) The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded;
5) The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6) The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.”4
The Importance of Being Unhelpful
Most businesses struggle especially with fourth criteria in the internship test, which is the requirement that “the employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded.” Some businesses do seek interns for the sole purpose of providing an educational experience, but let’s be real: Most employers hope that interns will also be helpful to the enterprise, and the framing of this law makes that hard. It’s difficult to know where courts will draw the line, and we are left to wonder: can’t an intern be just a little bit helpful? Fortunately, one case decided by the 9th Circuit Court of Appeals seems to indicate that intern can be helpful, as long as the intern is the true beneficiary in the relationship.5 Note, however, that this remains a grey area, and if your cooperative would like to have interns, it’s best to focus primarily on teaching them.
How to Have an Intern
Given the limitations on how interns can work in enterprises, here are some recommendations on how to create an internship program:
1) Create a curriculum to accompany the work: This helps to meet the requirement that the training be “similar to that which would be given in a vocational school.”
2) Implement a systematic training program whereby interns will be exposed to nearly every aspect of running the business: If an intern is exposed to multiple aspects of running the business, it means that they will not spend a significant amount of time repeatedly doing one task. This helps to undermine any argument that the employer is benefiting from the intern’s work, since the intern never has the opportunity to be that helpful on any one task, and the employer is constantly training the intern in a different facet of the business.
3) Limit the amount of time that interns spend doing mindless tasks or work normally done by employees: In the case of a farm, for example, an intern should not spend a significant amount of time planting, weeding, or harvesting a field, but may do this work on a limited basis, for the purpose of developing basic skills. It is better to engage the intern in projects somewhat separate from the day-to-day work of the business. This helps to prevent any argument that the intern is displacing an employee.
4) Create an affiliation with an educational institution or nonprofit: If a business serves as an educational laboratory for school or university students, this helps to create a clearer educational purpose to the work an intern does with the enterprise.
For more details, see the definition of an intern in CA here.
Who Can Be Considered an INDEPENDENT CONTRACTOR?
If someone meets the definition of an independent contractor, they may set the terms of their work arrangement with an urban farm, which may include working for free. For example, an attorney providing services for an urban farm may choose to provide those services free of cost. However, this is because the attorney’s relationship to the farm is as an independent contractor, not an employee.
Many businesses have tried to get around compliance with employment standards by classifying workers as independent contractors. However, in the agricultural context, it is risky to classify workers as independent contractors. We were recently told by one farmer that a DLSE officer told her that if you hire an electrician without a business license, they are considered an employee. She said that it pretty much means that everyone working on your farm, except for people who clearly work for another legitimate business that has other clients and is performing a task that is not a part of the main production of your farm, is an employee, not an independent contractor. It sounds like the DLSE is mostly assuming that anyone working on a farm is an employee, and making it extremely hard to prove otherwise.
The test for who is an independent contractor looks a little different, depending on your jurisdiction, but one U.S. Supreme Court6 opinion summed up the factors that are weighed together in determining who is an employee versus who is an independent contractor:
1) The hiring party’s right to control the manner and means by which the product is accomplished.
2) The skill required;
3) The source of the instrumentalities and tools;
4) The location of the work;
5) The duration of the relationship between the parties;
6) Whether the hiring party has the right to assign additional projects to the hired party;
7) The extent of the hired party’s discretion over when and how long to work;
8) The method of payment;
9) The hired party’s role in hiring and paying assistants;
10) Whether the work is part of the regular business of the hiring party;
11) Whether the hiring party is in business;
12) The provision of employee benefits; and
13) The tax treatment of the hired party.
Here is more information from the from CA Department of Industrial Relations website to help understand the definitions of employees versus independent contractors:
How do I know if I am an employee or an independent contractor?
There is no set definition of the term “independent contractor” and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor. In handling a matter where employment status is an issue, that is, employee or independent contractor, DLSE starts with the presumption that the worker is an employee. Labor Code Section 3357. This is a rebuttable presumption however, and the actual determination of whether a worker is an employee or independent contractor depends upon a number of factors, all of which must be considered, and none of which is controlling by itself. Consequently, it is necessary to closely examine the facts of each service relationship and then apply the law to those facts.
For most matters before the Division of Labor Standards Enforcement (DLSE), depending on the remedial nature of the legislation at issue, this means applying the “multi-factor” or the “economic realities” test adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341. In applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Additional factors that may be considered depending on the issue involved are:
- Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
- Whether or not the work is a part of the regular business of the principal or alleged employer;
- Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
- The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
- Whether the service rendered requires a special skill;
- The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
- The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
- The length of time for which the services are to be performed;
- The degree of permanence of the working relationship;
- The method of payment, whether by time or by the job; and
- Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary.7
Who Can Be Considered a PARTNER?
It is highly likely that many urban farms operate much like cooperatives. Employment law often does not apply when there is truly no master/servant relationship. It is widely accepted that if you start a sole proprietorship and work for yourself, you are not your own employee. Now how does that apply when two people own, manage, and work for their own business in partnership with one another? How about when 100 people own, manage, and work for their own business? And does it matter what kind of business entity it is – a partnership, LLC, cooperative corporation, or other corporation?
Let’s start with the question of what is a master/servant relationship. Strong precedent was created in answer to the question when the U.S. Supreme Court decided the case of Clackamas Gastroenterology Associates, P.C. v. Wells in 2003.8 There, the Court was asked to decide whether the Americans with Disabilities Act applies to working shareholders of a small professional corporation. The Court then adopted the following guidelines for determining when a master-servant relationship exists:
1) Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work;
2) Whether and, if so, to what extent the organization supervises the individual’s work;
3) Whether the individual reports to someone higher in the organization;
4) Whether and, if so, to what extent the individual is able to influence the organization;
5) Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts;
6) Whether the individual shares in the profits, losses, and liabilities of the organization.
Note that not every court or labor law agency will apply the same test, and there are many tests that have been developed for determining who is a partner to an enterprise. Another case that summarized the factors courts consider is Simpson v. Ernst & Young, decided by the 6th Circuit in 1996.9 The court named the following factors as relevant to the determination:
1) The right and duty to participate in management;
2) The right and duty to act as an agent of other partners;
3) Exposure to liability;
4) The fiduciary relationship among partners;
5) Use of the term ‘co-owners’ to indicate each partner’s ‘power of ultimate control;’
6) Participation in profits and losses;
7) Investment in the firm;
8) Partial ownership of firm assets;
9) Voting rights;
10) The aggrieved individual’s ability to control and operate the business;
11) The extent to which the aggrieved individual’s compensation was calculated as a percentage of the firm’s profits;
12) The extent of that individual’s employment security; and
13) Other similar indicia of ownership.
Does it make a difference if you form a partnership, LLC, or cooperative corporation?
In some jurisdictions and under some statutes, courts have leaned heavily toward the assumption that shareholders of corporations are employees when they work for the corporation they co-own.10 This assumption has caused stress for California worker cooperatives, which are generally formed as cooperative corporations. If there is an assumption of an employer/employee relationship from the moment of incorporation, this means that cooperatives must have enough start-up capital to pay members minimum wage, obtain workers compensation, and so on. The Catch-22 is that most workers cooperatives have great difficulty raising that much start-up capital, due to the reluctance of banks to loan or of individuals to invest. This means that most worker cooperatives must bootstrap their business, and work for little or no pay in the beginning, like most partners to a start-up business do. Some worker “cooperatives” choose to form instead as partnerships or limited liability companies (LLCs)11 in order to avoid application of employment law to members.
The simple fact of incorporation, in the eyes of some courts and agencies, is enough to establish a presumption that the shareholder is separate from the entity, and therefore cannot be considered a partner. California attorney Neil A. Helfman has written about this in his 1992 article “The Application of Labor Laws to Workers’ Cooperatives.”12 Mr. Helfman writes:
“As the law presently stands, it looks at form over function. The fact of incorporation may have more bearing upon the determination of an employment relationship, than the actual relationship between the parties. A worker in an incorporated cooperative who has managerial authority, for example, may be considered an employee just because the business is incorporated; while a junior partner of a thousand-partner accounting firm, who is under the control of others, is not. The rationale for this distinction is not entirely clear; one explanation is that in the former, worker members are providing services to an entity. For example, in the Matter of Construction Survey Cooperative (Case No. T-62-3) (1962)) before the California Unemployment Insurance Appeals Board, members of a workers’ cooperative were held not to be employees. In that case, member workers received compensation on the basis of their contributed labor. By common consent, the activities of the cooperative were directed by a manager, although ultimate authority for managerial decisions rested with the membership. The appeals board found the workers to be principals of the cooperative, and held that under California law that it was incompatible for them to be employees of their own organization. When presented to the Employment Development Department, EDD representatives took the position that if the entity were incorporated, workers should be considered employees even if no other facts had changed.”13
The good news is that the U.S. Supreme Court, in the Clackamas case, has since rejected the de facto assumption that the formation of a corporation should determine employment status.14 The Clackamas Court’s rejection of the presumption acts as powerful precedent, which may even serve to relieve California worker cooperatives of the automatic presumption of employment relationships, at least for the purpose of some employment laws (see more below). Be careful, however; it is not clear whether Clackamas is mandatory precedent in all areas of employment law.
The Clackamas ruling is not unique; other courts have found that a “partnership” relationship exists even when the entity is a corporation.15 The court in Godoy v. Rest. Opportunity Ctr. of New York, Inc. also held that the members of a worker-owned cooperative were “partners,” in spite of the fact that they were working under a corporation.16 Many courts may ultimately consider the incorporation status of an entity as relevant, but only as one factor among many in determining whether an employment relationship exists.
The lesson here is: If you are planning to form and work for a cooperative corporation in California or a state that has applied similar rules, tread very carefully in determining whether you are an employee, and talk to a lawyer.
How much control must each cooperative member have in order to be considered a “partner” under employment law?
If all members of a small worker cooperative serve on the Board of Directors and take part in collective decision-making process, then, arguably, each member could be considered a “partner” for the purpose of some employment laws. But where do courts draw the line? How much control do the workers need to have in order to be considered partners?
One case that examined the question of who is a “bona fide partner” is Wheeler v. Hurdman, decided by the 10th Circuit in 1987.17 In that case, the court actually de-emphasized the need for each partner to have a significant amount of control, noting that the practical needs of the business may result in partners giving up a certain amount of control over the day-to-day, and abdicating such control to managers, teams, or committees. The court essentially recognized the following practical reality: Any time a group of people voluntarily works together, each individual gives up a certain amount of control to the group or to members of the group.
In another case, Fountain v. Metcalf, Zima & Co., the court focused on certain voting rights as the indicator of control, and not on the actual realities of management in the firm. There the court ignored the argument that a managing partner was running the firm autocratically, and focused instead on the fact that the plaintiff partner “had a right to vote his thirty-one percent ownership on member/shareholders’ amendments to the agreement, on admission of new member/shareholders, on termination of relationship with member/shareholders, on draws, and on distribution of profits and income.”18
In contrast to Wheeler and Fountain, however, other courts have focused heavily on the issue of control, and found that factor to be a deal-breaker. For example, the court in Caruso v. Peat, Marwick, Mitchell & Co. examined the employment status of a partner in a 1350-member accounting firm, and the court looked at three primary factors:
1) the extent of ability to control and operate the business
2) the extent to which compensation is calculated as a percentage of the firm’s profits
3) the extent of employment security.19
On the question of “ability to control and operate the business” in the Caruso case, it was significant that the firm was “managed by a board of directors separated from plaintiff by six levels of hierarchy” and that the plaintiff tended to seek approval of management-level partners in decisions about his own work. The court held that the plaintiff was, indeed, an employee.
The Court in Clackamas also focused heavily on the question of control and common law definitions of the master-servant relationship. The Court wrote:
“[i]f the shareholder-directors operate independently and manage the business, they are proprietors and not employees; if they are subject to the firm’s control, they are employees.”20
Another case that examined this issue specifically in application to a worker cooperative was Wirtz v. Construction Survey Cooperative, decided by a federal district court in Connecticut in 1964.21 In that case, the court emphasized numerous elements in support of a finding that the cooperative members were not employees.22 Even though two members of the cooperative exercised management over the others:
“It is true [that two members] exerted some measure of leadership over the [other members]. But the Court finds this was due to their longer experience, more extensive knowledge, and driving interest rather than due to positions of control or power. What little guidance they supplied was by consent not authority.”23
The lesson with all these cases is: there is no clear set of rules to determine when members of a worker cooperative are employees. Some of the cases described above indicate that, even with somewhat hierarchical management structures, working co-owners of a business may still avoid classification as employees. However, if you want to argue that members of your worker cooperative are not employees, then the safest thing to do is to:
1) Have all members serve on the Board of Directors.
2) Make decisions by a consensus process or with supermajority voting; this arguably gives each member a strong voice in each decision.
3) Give each member a lot of control over their own work, or create many semi-autonomous departments or committees that control their own work, procedures, and hours.
4) Make it somewhat difficult to fire people, by requiring a vote of a large number of members.
5) If you put some people in a position to manage and supervise others, ensure that they can easily be moved out of their supervisory roles by a proposal brought to the cooperative by the people they supervise.
You Should Really Check With a Lawyer!
Now that you’ve read all of the information above, you probably feel like you’ve gone to law school! But even with the detailed lists we’ve provided above, it can sometimes be very hard to determine who is an employee versus who is a partner, volunteer, intern, or independent contractor. And it can be hard to determine who exactly needs to be covered by workers compensation insurance or subject to overtime rules. The ultimate answer may lie in a grey area and the best way to answer it is to look at court cases that have examined similar situations. That is where a lawyer can be helpful to you in determining how to legally categorize someone working in your urban farm.
Acknowledgement of Contribution:
- Tony & Susan Alamo Foundation v. Sec’y of Labor, 471 U.S. 290, 302 (1985). See also California Division of Labor Standards Enforcement Opinion Letter, dated October 27, 1988, available at DIVISION OF LABOR STANDARDS ENFORCEMENT , which states, “when religious, charitable, or nonprofit organizations operate commercial enterprises which serve the general public, such as restaurants or thrift stores, or when they contract to provide personal services to businesses, such enterprises are subject to the Industrial Welfare Commission Orders and volunteers may not be utilized.” ↩
- See Department of Labor Opinion Letter, “Volunteer emergency crew as separate and independent agency under section 3(e)(4)(A),” FLSA 2008-13, December 18, 2008, and FLSA, which notes that volunteers may receive “nominal fees” and “reasonable benefits” (29 U.S.C. § 203(e)(4)(A)). ↩
- If you want to know more about what kinds of benefits you can provide volunteers, see Hoste v. Shanty Creek Management, Inc., 592 N.E.2d 360 (Mich. 1999), and Department of Labor Opinion Letter, “Nonexempt employees who volunteer as coaches/advisors and nominal fees under section 3(e)(4)(A),” FLSA 2005-51 (November 10, 2005). ↩
- From Department of Labor Non-Administrator Letter, “Internship program and employment relationship under FLSA” FLSA2004-5NA, dated May 17, 2004. See also the April 7, 2010 Opinion Letter from the California Department of Labor Standards Enforcement, available at. ↩
- See Williams v. Strickland, 87 F. 3d 1064 (9th Cir. 1996), where the Ninth Circuit looked at a case involving a man that volunteered for a long time for a Salvation Army store, primarily for the purpose of his rehabilitation. Even though he participated in and benefited a business activity, and even though he may have done work typically done by employees, the court still decided that he wasn’t an employee, arguing that he was a beneficiary of the opportunities Salvation Army offered him for his rehabilitation. ↩
- Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751-752 (1989). ↩
- See Yellow Cab Cooperative v. Workers Compensation Appeals Board, 226 Cal.App.3d 1288 (1991). ↩
- Clackamas Gastroenterology Associates, PC v. Wells, 538 U.S. 440 (2003) ↩
- Simpson v. Ernst & Young 100 F.3d 436, 443-444 (6th Cir. 1996) ↩
- For an examination of this issue, see McGinley, Ann C. “Functionality or Formalism – Partners and Shareholders as Employees under the Anti-Discrimination Laws” 57 S.M.U. L. Rev. 3 (2004). ↩
- Note that, for employment law purposes, LLCs and partnerships are generally treated the same. ↩
- See http://sfp.ucdavis.edu/files/143807.pdf. ↩
- As a source of this info, Mr. Helfman cites: Interview at California Employment Development Department (E.D.D.), November4, 1991, with David Johnson (Senior Tax Counsel), Terry Savage (Section Chief Auditor and attorney), and Noreen Vincent (tax auditor). ↩
- See Clackamas Gastroenterology Associates, PC v. Wells, 538 U.S. 440, 443 (2003), where the Court rejected the Ninth Circuit’s reliance on a Second Circuit decision that held that “the use of any corporation, including a professional corporation, ‘precludes any examination designed to determine whether the entity is in fact a partnership.’” 271 F. 3d 903, 905 (2001) (quoting Hyland v. New Haven Radiology Associates, P. C., 794 F. 2d 793, 798 (CA2 1986)). It saw “no reason to permit a professional corporation to secure the ‘best of both possible worlds’ by allowing it both to assert its corporate status in order to reap the tax and civil liability advantages and to argue that it is like a partnership in order to avoid liability for unlawful employment discrimination.” 271 F. 3d, at 905. ↩
- See EEOC v. Dowd & Dowd, Ltd., 736 F.2d 1177 (7th Cir. 1984). ↩
- Godoy v. Rest. Opportunity Ctr. of New York, Inc., 615 F. Supp. 2d 186, 195 (S.D.N.Y. 2009). ↩
- Wheeler v. Hurdman, 825 F. 2d 257, 276, (10th Cir. 1987). ↩
- Fountain v. Metcalf, Zima & Co., PA, 925 F. 2d 1398, 1401 (11th Cir. 1991). ↩
- Caruso v. Peat, Marwick, Mitchell & Co., 664 F. Supp. 144, 149-150 (S.D.N.Y 1987). ↩
- Clackamas Gastroenterology Associates, PC v. Wells, 538 US 440, 448 (2003), quoting the EEOC’s Amicus brief in the case. ↩
- Wirtz v. Construction Survey Cooperative, 235 F.Supp. 621 (D. Conn. 1964). ↩
- See Wirtz at 624, where the court described: “The members of the Cooperative constitute a small, closely-knit partnership of intelligent technicians, working together as a unit to improve their economic lot as a unit. It was not organized to avoid the application of the Act but existed in the same form long before the Act. The members are not regimented and conduct themselves as self-employed, independent craftsmen. They come and go as they please and work or not work at will. No corporate structure is involved and the Cooperative has no officers, officials or board of directors. All the members share the losses as well as the profits on a monthly basis. No member receives a salary; the terms of remuneration are determined by vote of the entire membership. No one may be expelled. Each member has an equal voice in management and unanimous consent is necessary on all decisions.” ↩
- See Wirtz at 624-625. ↩