And so, dear readers, the story picks up just where it left off – there I sat in my dear Uncle Olaf’s kitchen as he ground his hooks into his wooden table, nervously watching the man he hired to clean his prize-winning clams for his Clam sale business, who he thought was his independent contractor but was actually allegedly (your humble blogger is a zealous defense attorney, after all) an employee, place his hands inside the snappiest of Uncle Olaf’s prize-winning clams.  “Scrub from the outside!” he shouted, but the young gentleman cleaning the clams couldn’t hear him…

The California Supreme Court issued its opinion in the case of S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989), outlining the proper analysis for determination of the question of employment or independent contractor status.  S. G. Borello & Sons owned farmland near Gilroy (a place with a wonderful Garlic Festival).  Although they kept regular employees for the various crops grown on these farms, for cucumbers, the nature of the market dictated another approach.  Cucumber harvesting was contracted out to various migrant farm-worker families.

The families were provided with the opportunity to lay claim to a certain amount of plots of cucumbers, were provided with crates into which to harvest the cucumbers, but were otherwise left to their own devices.  The cucumbers were sold to a pickle company in the area, and the profits were shared between the land-owners and the harvesters.

For the multi-week cucumber harvesting season, the harvesters were responsible for taking care of the cucumbers, picking only those ripe and ready for picking, and generally seeing about maximizing profits.  The most aggressive task-masters in S.G. Borello & Sons employ found themselves absolutely powerless at the edge of the cucumber plots, for no employees dwelt there – only independent contractors.

That is, until, the Department of Industrial Relations issued a stop-work order.  Finding that the independent-contractors were actually employees, and uninsured employees at that, the DIR went on the war path against poor Mr. Borello and his sons (as well, effectively, against all other farmers in the Gilroy area that adopted the same practices).

Borello’s argument before the Supreme Court was simple – unlike other crops, cucumbers required a degree of knowledge and skill for harvesting, and the harvest workers were compensated for the final product and not the means of rendering service.  But the Supreme Court found that other factors, primarily found in the Restatement Second of Agency, play into the analysis as well, among them:

1. The right to discharge at will, without cause;
2. Whether the workers is engaged in a distinct occupation or business;
3. Whether the occupation, in that locality, is typically performed by a specialist without supervision;
4. The skill required in the particular occupation;
5. Whether the worker supplies the instrumentalities, tools, and the place for doing the work;
6. The length of time for which services are performed;
7. The method of payment (hourly or by task);
8. Whether the work is part of the regular business of the principal; and
9. The intent of the parties.

The Borello Court noted that “under the [Workers’ Compensation] Act, the “control-of-work-details” test for determining whether a person rendering service to another is an ‘employee’ or an excluded ‘independent contractor’ must be applied with deference to the purposes of the protective legislation.”

The Court also noted that the workers made minimal investment in their work – no heavy equipment but just basic tools.

Other cases followed too.

In the case of Jose Luis Lara v. Workers’ Compensation Appeals Board (2010), for example, the Court of Appeal examined whether a garden-variety handy-man could be an independent contractor.  Lara sustained a pretty serious injury while doing work for a small shop called Metro Diner.  Metro Diner didn’t have Lara covered by its workers’ compensation policy because he had no regular employment – he was called up to do odd work such as trimming bushes along Metro Diner’s roofline.

Lara provided his own equipment, paid his own taxes, and, although he was paid by the hour, was hired by the job rather than on a general basis.  Nor did Metro Diner set Lara’s hours – he was just told to come early or late to avoid interfering with the operation of the Diner.

The workers’ compensation Judge found that Lara was an employee, and the Workers’ Compensation Appeals Board reversed.  In affirming the WCAB’s finding that Lara was a contract employee, the Court of Appeal cited Borello.  Specifically, the Court noted that gardening was Lara’s line of work (and not the Diner’s), that Diner could not control the manner of Lara’s work, Lara had his own clients (other than Diner), and Lara had a substantial investment in his business (lots of tools, equipment, etc.).

As Uncle Olaf scratched his head (very carefully, mind you, as those razor sharp hooks hurt!), I could see that he wasn’t convinced.  His prize-winning-hand-eating-giant-clam-raising mind was working.  What else did Uncle Olaf think he had up his sleeve?