1099 independent contractors do not enjoy the same protections as employees since they are in charge of the performance of their work. They provide their tools and are a separate entity by themselves. As such, they cannot legally sue employers for wrongful termination. However, the law identifies various scenarios in which an independent contractor can sue an employer for wrongful termination, especially where the employer violates the terms of the contract. Another scenario involves employers misclassifying employees as independent contractors to circumvent their legal obligations to their employees.
The key to addressing the challenges above lies in identifying the relationship between the employer and the employee/independent contractor. Stop Unpaid Wages helps 1099 independent contractors in California identify cases of wrongful termination and helps them in building a strong case to their defense. When successful, wrongful termination lawsuits have several damages that are reimbursed to the contractor.
What is Wrongful Termination?
When an employer ends an employment relationship in violation of your legal rights, employment contract, or public policy, they are engaged in wrongful termination. The existing laws and the required proof to show that the dismissal was unjustified can complicate wrongful termination cases. Some of these laws include the California employment-at-will law.
California is an employment-at-will state, meaning that the employer can choose to fire you at any time without providing a reason. It also means that you can stop working for the employer at any time. Whenever you sign an employment contract or an independent contractor’s one, make sure that you understand the terms and conditions of termination.
Even with such laws, other critical legal protections prevent employers from taking advantage of the employment-at-will provision. These include public policy, contractual terms, and employment rights.
Your employer is expected to respect your rights and act within them. However, when they violate them through committing illegal acts such as retaliation, violation of public policy, or discrimination, then you can successfully sue them in court.
It is important to note that independent contractors are not allowed to bring lawsuits against employers. However, in some exceptional circumstances, the suits are allowable. The typical scenario is when an employer negligently or intentionally misclassified employees as independent contractors to avoid paying benefits or filing taxes on their employee’s behalf.
When you are misclassified as an independent contractor but are an employee, the employer transfers the business costs to you. When he or she terminates you, you suffer the same challenges as an employee would upon being fired.
Identifying a misclassification could include looking for factors such as control and independence in conducting your work. The common characteristics of independent contractors include:
- You are hired and paid on a project to project basis.
- You are free to offer similar services to other businesses.
- The hiring agency does not control your work environment, the tools you use, or the process through which you achieve results. The agency only has control over the desired result.
- You provide your tools and cover the costs associated with the business, meaning that you have the chance to make a profit or loss.
- The service you offer to the hiring agency differs from their core business.
- You work for a specified period; since you are hired on a project-to-project basis, you work with the employer for a shorter period unless you keep renewing your contract.
Here are situations under which you can bring a lawsuit against an employer:
- Violation of Contractual Terms
The most common way to file a lawsuit against an employer if you are an independent contractor is to file a breach of contract lawsuit. Independent contractors work under a contract, which stipulates the project, expectations, and responsibilities. Besides, it provides additional information about termination and the conditions thereof.
Employers who violate these contractual terms cause undue financial suffering to the independent contractor. In such a situation, you can sue the employer for breaching the contract.
A contract can be either oral or written and may contain statements that imply or indicate that an employer cannot fire you without cause.
When you enter into a relationship with the employer, you have to sign a contract that specifies your terms of service, the project you are handling, and the terms of termination. Such an agreement protects you from wrongful termination since the employer cannot decide to fire you outside the terms of the contract. In most cases, the employer can legally terminate the agreement if you fail to deliver the expected result or uphold your end of the bargain.
In such a case, the employer should follow the procedure stipulated in the contract on how to proceed when terminating you. The process might include activities like arbitration measures to give the contractor a chance to correct their misconduct and a notice of termination. The hiring body should also pay the dues for work done.
If the employer violates the terms of your contract, then you can have a lawsuit against him or her for breach of contract.
In some cases, the employer reclassifies you as an employee by making you sign a non-compete agreement. A non-compete agreement prevents you from providing similar services to competing businesses. Non-compete agreements are a form of control exercised on the employer on the independent contractor. A non-compete contract with an independent contractor is also unenforceable by the courts.
As an independent contractor, California’s labor laws do not protect you from discrimination. However, if you are misclassified as a 1099 independent contractor, then you have a case against an employer who terminates you on a discriminatory basis. The fair Employment and Housing Act prohibits workplace discrimination based on:
- Age (for employees aged 40 and above),
- Race, color, nationality, ancestry,
- Mental or physical disability,
- Religion or political affiliation,
- Medical condition,
- Marital status,
- Gender, gender identity, gender orientation, sex, sexual orientation,
- Military and veteran status,
- Genetic information, and
- Your status as a victim of crimes such as assault, domestic violence, or stalking.
When an employee terminates you based on discriminatory intent, you can sue him or her to recover your damages. In such a lawsuit, you are required to provide evidence of your employer’s discrimination.
- Employer Retaliation
At some point, an independent contractor may question the relationship with the employer. If he or she realizes the relationship is an employer-employee one, the independent contractor may file a wage and hour lawsuit for missed wages, meals, and rest breaks. If you make a claim or report a violation of labor laws against the misclassification of employees, your employer might retaliate against you.
Employer retaliation refers to negative actions such as firing, demotion, or adverse performance reports. Some situations that may result in employer retaliation include:
- Refusal to participate in unlawful activities,
- Disclosing a legal violation by the employer to a law enforcement agency,
- Filing a claim against your employer for missed or unpaid benefits, and
- Complaining about unsafe or unlawful work conditions
If your wrongful termination was a result of illegal retaliation, you could file a complaint with the Department of Fair Employment and Housing within six months of the violation. The period within which to file a claim may increase to twelve months for victims of domestic violence or two to three years for violation of the Equal Pay Act. If you miss the deadlines, you could file a private lawsuit in court.
- Violation of Public Policy
Retaliation and violation of public policy are closely related concepts. The two differ in that retaliation is based on negative employment actions after the employee attempts to assert their rights and benefits provided for in the employment law. Violation of public policy, on the other hand, refers to wrongful termination based on an employee's choice not to participate in unlawful or unethical behavior.
- Termination for Political Activities
The law prohibits employers from:
- Formulating policies that prevent employees from engaging in political activities, including running for a political office,
- Controlling or attempting to control the political activities through threats of retaliation, or
- Retaliating against an employee for his or her political activities
You can also file a lawsuit if your employer fires you for joining a labor union or engaging in its activities. If you are fired for expressing your political beliefs or engaging in political discussions, then you can sue your employer under the violation of public policy or for constructive wrongful termination. You can sue your employer either through the California Labor and Workplace Development Agency or through the courts.
When you go through the agency, you will file a notice of violation with the agency and submit a copy of the notice to the employer. The agency may investigate your case and will notify you within 65 days. The agency will take between 120 and 180 days to investigate your claim, and may then decide whether to file a citation against your employer.
If the agency does not investigate or chooses not to issue a citation to your employer, you can go to court. You might need the help of an attorney to improve the chances of your success.
- Wrongful Constructive Termination
You can successfully sue an employer even when you voluntarily quit your job. Constructive termination lawsuits apply when the employer intentionally creates intolerable working conditions so that your only choice is to resign. When suing your employer for constructive wrongful termination, you have to prove that:
- Your employer intentionally or knowingly creates intolerable working conditions through acts of workplace retaliation, and
- Your employer could not have fired you legally. If they terminated your contract, you would have had a valid claim for wrongful termination.
The elements of constructive wrongful termination include:
- Your employer intentionally created or knowingly allowed intolerable or aggravated conditions. For example, if you work in the construction industry, but your employer neglects or allows a harmful situation to persist so that you resign in fear for your safety, you might successfully file a wrongful termination lawsuit against your employer. A reasonable employer would realize that the conditions leave any reasonable employee experiencing the circumstances with no option but to resign.
If you choose to bring a lawsuit against your employer, you should do so within the stipulated statute of limitations, which depends on the type or cause of wrongful termination. The statute of limitation is as follows:
- One year for wrongful constructive termination that violates FEHA regulations,
- Two years for unlawful termination that violates an implied, oral contract or one resulting from a violation of public policy, and
- Three years for wrongful constructive termination in violation of whistleblower protection laws.
The statute of limitations begins on the day you resign. Note that staying in the job too long while undergoing the intolerable or aggravating conditions could imply that the working conditions were not so aggravating that you had to leave. However, the court might still look at your risk of losing employment, including the financial responsibilities you have to meet – some people hold onto a job for lack of better means to survive.
- Wrongful Termination in Violation of WARN Act
The California Worker Adjustment and Retraining Notification Act requires that employers provide their employees with a sixty-day notice of an impending mass layoff, plant closure or relocation. If your employer fires you without complying with the act, you can sue for wrongful termination.
A mass layoff refers to the termination of at least 50 employees within thirty days. A relocation occurs when the employer moves their significant operations to a different location that is at least 100 miles away. When an employer terminates or closes a plant, it means that he or she ceases the major or all of the industrial or commercial operations of the business.
If an employer fires you in violation of the WARN Act, then you can sue for compensation for the number of days the notice did not cover. For example, if a firm announces its closure and closes after thirty days, the employees are eligible for 30-days compensation.
The employer is, however, exempted from the WARN Act if:
- He or she has less than 75 employees,
- The employer lays people off in response to war or calamity,
- The employer was working on a temporary job, and the employees were aware of it,
- You are a seasonal employee, or
- At the time when the employer was to give the notice, they were looking for capital that if gotten, would have prevented a closure or relocation
If your lawsuit is successful, you will receive compensation for lost benefits and wages. In some cases, you may recover attorney fees.
Damages in a Wrongful Termination Lawsuit
Wrongful termination can be hard on you. It could be unanticipated and result in difficult financial times for you. Therefore, if you are wrongfully terminated, contact an attorney immediately.
Usually, the settlement for wrongful termination can be quite substantial. When you win a wrongful termination lawsuit against your employer, you are entitled to damages such as:
You are likely to lose substantial wages after a wrongful termination. The court calculates lost wages from the date of termination to the present. The court may award additional future lost wages if you have been unable to secure employment since the termination. However, if you found a job after being terminated, the damages may be reduced up to when you got the new job.
In calculating the wages owed to you, the court considers the value of your wages and adjusts for inflation. The court also determines the period the job would have continued in calculating lost wages.
As an independent contractor, the employer does not provide you with benefits. However, if they misclassified you, then you are entitled to any lost benefits during the time of employment and after termination.
The benefits you may get include meal breaks, rest breaks, health insurance, worker’s compensation, and other benefits to which employees are legally entitled.
While calculating the value of lost wages and benefits, the court will also include the damages resulting from a breach of contract for firing you.
Wrongful termination can result in undue emotional stress and suffering. For example, it can result in stress about how to support yourself and your family and how other potential employers will perceive the termination.
The courts allow compensation for such damage by calculating the value of emotional distress. Some of the conditions that show emotional distress include depression and anxiety.
In other cases, the court will compensate you for damage done to your professional reputation because of the termination. Note that, you will only recover damages for emotional suffering if the wrongful termination resulted from a violation of public policy, whistleblower retaliation, FEHA retaliation, and WARN Act violations.
Punitive damages are a form of punishment to the employer for wrongfully terminating an employee. Punitive damages are awarded on a case-to-case basis, depending on whether the offense rose to the level of oppression, malice, or fraud.
You may recover attorney fees for wrongful termination cases due to whistleblower retaliation under the federal Sarbanes-Oxley Act, FEHA and Wage, and Hour laws.
Where you have a legitimate case against the employer, they may prefer to settle outside court. Most wrongful termination lawsuits settle outside the court.
In addition to the monetary compensation for damages you suffer for wrongful termination, filing a lawsuit can bring you a sense of justice and closure. In other cases, you may get closure as it might prevent the employer from engaging in forms of wrongful termination to other independent contractors.
Gathering Evidence for Your Claim
Evidence is the backbone of your wrongful termination case. You require a lot of documentation to prove the termination. If you are a 1099 independent contractor, suing for wrongful termination, you will need to have the written contract. The contract should indicate the relationship you have with the employer and the terms of termination. If the employer violated these terms, then you will have an easier time proving it. Also, carry the documentation notifying you of your termination. If the termination was given orally, you could present witnesses.
Before you are fired, you might have noticed changes in your employer's conduct. Make a record of everything they say to you regarding your employment. You should also make documentation of changes that happen after you report a violation or suspected violation.
One common scenario happens when you file a claim for misclassification, or your employer realizes that you are questioning your status as an independent contractor.
For wrongful termination, you can show proof of previous positive performance reviews that suddenly become negative, the introduction of intolerable work conditions, and negative employment actions such as demotions.
Keep documentation of correspondence between you and the employer. This includes documentation of the reasons for your termination. You should listen to these reasons and note them down later. You can then examine the situation to identify any wrongdoing.
Hire an employment attorney as soon as you detect foul play in your termination. An attorney who is familiar with California employment laws can help make the evidence gathering more relaxed and more focused. They are familiar with the legal exceptions and implications of various actions by employers.
While choosing an attorney, take your time to identify one who is qualified and has a successful record of dealing with wrongful termination for 1099 independent contractors.
Find an Los Angeles Employment Law Attorney Near Me
When an employer wrongly terminates you after misclassifying you as an independent contractor or through violation of a contract, then you can successfully bring a lawsuit either against him or her. However, you will need the assistance of an experienced employment law attorney. Employment law in California is complicated and relies on various statutes and provisions. In other cases, your lawyer may refer to past cases with similar circumstances as your own to back your defense against the employer. Therefore, the representation of such a lawyer will increase the chances of success.
Stop Unpaid Wages has years of experience in handling matters of wrongful termination and breach of contracts. We understand California’s employment law as well as the loopholes employers use to terminate their independent contractors and misclassified employees. Contact us at 424-781-8411 for an evaluation of your case. After the assessment, we will inform you about the validity of your claim and the options you have.