AUGUST 2014

Independent Contractor or Employee?  Softrock's and Western Logistics' Effect

CBA-CLE Legal Connection Program

Program Description:

Since 1992, Colorado courts have required employers to establish that their independent contractors are simultaneously performing work for other similar businesses.  Employers that failed to meet that requirement had to reclassify those contractors as employees. In short, courts and the Colorado Department of Labor, one of the administrative agencies charged with auditing employers on the independent contractor issue, were treating whether the contractor worked for others as a one-factor test. Then, in May this year, the Colorado Supreme Court issued its decisions in ICAO v. Softrock and Western Logistics v. ICAO. In these two cases, the court rejected the stringent, single-factor test and, in the process, reversed decades of case law that held that the single factor of outside employment was dispositive. The court further held that the answer to the question of “independent trade” can only be resolved by applying a “totality of the circumstances” test that evaluates the particular set of circumstances and dynamics of the relationship between the worker and the company engaging the services. Michael Santo, the lead attorney in the Softrock case, will present a one-hour seminar to discuss the Softrock decision and its implications for employers still facing questions regarding whether to classify certain workers as independent contractors or employees.