FMGT 4710

Financial analysis for facilities managers II

Richard Granados
Professor Lisa Bradley
3/20/19

Short essay-

Carl is a carpenter/handyman. For 15 years, he has worked for company A when they need
him, usually several months at a time. At the start of each job, Carl signs an agreement
stating that he is an independent contractor, and that he waives any rights he would have as
an employee (overtime, benefits, etc.). Company A tells Carl what they need built or repaired
and the time frame for completion, and provides Carl with tools and all necessary materials.
After that, it does not control or monitor his performance, attendance, etc. At the end of the
job, as long as it was done correctly and on time, Carl gets paid. Company A’s insurance
covers Carl’s work. Carl also works as a handyman and carpenter for other companies.

Under the law, is Carl an “employee” or an “independent contractor”? Explain your analysis,
including any factors indicating he is one or the other.

Let specialties be therefore drawn between us

That covenants may be kept on either hand
- William Shakespeare, The Taming of the Shrew

Courts are tasked to interpret and define the law. Consequently, Carl’s status has to be
positioned as either a question of employment law or contract law. In law about jobs,
employment law governs the relationship between employers and their employers. Carl’s case,
as such, may fall within the scope of employment law as the parties in question involve what
seems to be Carl, the worker, and company A, the employer. However, an issue that must be
clarified is whether even Carl is an employee in the first place in regards to his relationship with
company A. Can it possibly be defined and classified as an employee-employer relationship?
Should Carl’s case be filed under employment law?
Let’s see.
Here, Carl signed an agreement explicitly stating he was an independent contractor. It follows
then Carl’s predicament should be seen through the lens of contract law (see quote above)
before continuing any further. The greatest determining factor in his case would be to interpret
the contract itself. What better way to determine whether someone is a contractor than
ascertaining what constitutes a contractor/contractee relationship anyways?
According to the textbook, when contracts eliminate the discretion of the contractor
and result in a “to-do” list instead of an agreement for professional services, courts interpret
the relationship as an employer/employee one. In Carl’s case, there is no ambiguity. The
stipulation of Carl’s relationship with company A is that Carl build and repair what they need
done in their facility within a defined time frame and, presumably, for a lump sum. Carl does
the job competently and within schedule and is paid for it but is not told explicitly told how to
do his job. For example, there are no flow charts or direct orders regulated to him by a
supervisor. Carl’s contract is not hindered by regulation and oversight, which would be the case
if he were an employee. This is perhaps the most technical cause why he is best classified as an
independent contractor.
Granted, the fact that independent contractors typically use their own equipment and
materials and Carl does not, the bottom line remains that Carl controls the means of method of
his work assignments. Semantically, his independence in the contract is salient. Carl takes on
the most risk and liability for his work, even in spite of the fact that company A insures his work.
As such, he must be considered an independent contractor and not an employee. Which is not
to say that Carl’s position is clear-cut and obvious. It is not and there are factors (see below in
post note) that make it clear Carl cannot easily be put into either category without some
consideration and forethought. As is often the case, however, the reality and unpredictability of
the work place often makes contractors ride the line between the duties and obligations of a
contractors and an employee.
In another factor that goes against Carl’s standing as an employee, Carl is not a FTE and does
not work for company A full-time as he divides his labor working for other companies. An
independent contractor usually works in a limited fashion for the company that contracted
them, which surely applies to Carl’s case who has not worked continuously but rather
periodically and non-exclusively for company A for 15 years. Furthermore, he did knowingly and
willingly waive his rights which must be perceived as his acceptance that although theoretically
his relationship with company A overlaps from contractor to employee, he consciously agrees
to relinquish his claims to employeeship and all the rights that that title entails. For all these
reasons, a court would likely agree that Carl is an independent contractor.

P.S. Shakespeare’s quote implies that the specifications of the contract define the relationship
of the parties involved and what rights (specialties) they should enjoy. As the devil is in the
details, courts look toward the stipulations of the contract between the parties exchanging
services to define who is who and what is what, under the law. The stipulations of Carl’s
contract have him pushed him in some aspects as an independent contractor (his contracts
with other companies and work discretion) and others as an employee (his use of the
company’s equipment and materials, and his work insured by company A). As a result, his
status must be weighed on a scale. As Carl works on a limited basis for company A and as he
waived his rights and takes the most risk, this makes his status as an independent contractor
outweigh his status as an employee.