But while his attempted job classification didn’t withstand the smell test, it turns out that his secretary won’t be getting unemployment after all.
Robert J. Hickey thought he had it all figured out. The D.C. solo needed a secretary, but he didn’t want to deal with the red tape and obligations of being an employer.
He had been paying a temporary agency $24 per hour for office help, but decided he could save some money by hiring Mary Bomers as his legal secretary at $18 an hour.
Hickey hired Bomers on Jan. 16, 2006, doing everything he could think of to make clear that she was an independent contractor rather than his employee. Although Bomers’ work schedule was nominally 8:30 a.m. to 5:00 p.m. with a half-hour for lunch, Hickey said that she could set her own schedule “as long as she got the work done.”
Hickey paid Bomers twice a month in accordance with billing statements she submitted that reflected her hours work during the pay period. Hickey provided no benefits to Bomers, nor did he take taxes out of her paycheck.
With regard to taxes, Bomers was required to file quarterly tax returns with the IRS. In fact, she prepared her own IRS Form 1099 for 2006 and 2007. On the office monthly financial forms, Bomers listed her salary under the category “contract compensation.” In preparing Hickey’s IRS Form 1040 for tax years 2006 and 2007, Bomers reported her own salary as a “contract labor” expense.
On the surface, everything was set up to support Bomers’ classification as an independent contractor. So Hickey thought it would be relatively painless when in January 2009 he decided to replace Bomers with someone else.
When Bomers applied for unemployment compensation, Hickey trotted out the claim that his erstwhile secretary was an independent contractor ineligible for benefits.
The District of Columbia Department of Employment Services accepted Hickey’s independent contractor argument and denied Bomers’ claim.
So that was that.
Well, not really.
To the good fortune of Bomers, an administrative judge decided that she was in fact an employee of Hickey and the door was opened for her to receive unemployment compensation.
A dismayed Hickey appealed to the D.C. Court of Appeals, thinking that real judges would understand that Bomers was indeed an independent contractor.
Yesterday, the court introduced Hickey to the harsh truth that form does not always prevail over substance, and that no matter what the lawyer intended, Bomers had in fact been his employee.
“We … agree that the critical ‘right to control [the] employee in the performance of [her] tasks’ factor supports a conclusion that Bomers was not an independent contractor, despite Hickey’s intention to treat her as such. Accordingly, upon ‘consideration of all of the circumstances surrounding the work relationship,’ we affirm the ALJ’s ruling that Bomers was an employee,” the court said.
Fortunately, Hickey had another card to play. The lawyer argued that, even if Bomers was his employee, she was ineligible for unemployment compensation because he had terminated her for misconduct.
In particular, Hickey complained that Bomers had worked only 181 out of 241 possible work days from December 2007 through November 2008.
The court of appeals concluded that excessive absenteeism was a valid ground for Bomers’ termination when paired with Hickey’s evidence that she did not keep him properly informed of underlying medical reasons for her missing work.
“We are constrained to agree with Hickey that, taken together, Bomers’ repeated failure timely to (1) apprise Hickey about days of expected absence throughout her employment and (2) respond meaningfully to his request for information about the expected duration of her absence following her December hospitalization constituted a breach of Bomers’ duty to Hickey as her employer, and thus constituted simple misconduct,” the court said. (Hickey v. Bomers)
So Hickey is off the hook after all, even though the lawyer’s independent contractor strategy didn’t survive close scrutiny.
– Pat Murphy