Turns Out You Can Be Discriminated Against At Work. Here's How.

This is a Block Club Chicago podcast, and it's our sidebar edition. Every other Saturday or so, we invite two esteemed lawyers to the program. Two other lawyers usually show up, though. It's Patrick Dolan and Mike Leonard. Patrick's an employment lawyer. Mike Leonard's a federal defense attorney, and we talk about things that matter to Chicagoans from a legal lens. Mike didn't show up today. Were we expecting him to show up? No, I mean, he told us he couldn't this week. Oh, okay. I don't remember that. Yeah, we'll roll on without him anyways. Okay, well, I think we can do it. Yeah. I feel pretty good about it. We could also just make fun of him here for the next 20 minutes or so. We could always do that. He's an easy target. For sure. Patrick Dolan, you're an employment lawyer. What does that mean? It means I help people with workplace issues. If they have a question about compensation or a new job that they're looking to secure, talk about an offer letter, an employment agreement, they have a question about a non-compete. which are still enforceable in most cases in Illinois. They can talk to me about that. So anything related to the job, John, is what I help folks with. You help out, obviously, employees who work and get a W-2. Yes. But you help out with independent contractors as well, right? I do. I talk to folks all the time who are consultants or independent contractors, depending on how they use that term. And I talk with them about their agreements, what they can expect with... regard to compensation where they're protected and where they're not in the job and how that all works in the workplace because it is different. Folks have different responsibilities and rights and obligations that the employer has to them depending on whether they're a debut to employee or an independent contractor. I wanted to just like hone in and dive in in that topic today. Does that sound good? That sounds great. Because I think that this comes up a lot for people or they have been misclassified one way or the other, usually one way, for a long time, and they just kind of take it, and maybe they shouldn't have to. So let's start with just some definitions. Paint me a picture of what's different between an employee and an independent contractor. Yeah, so let's start just generally speaking. So when someone is... hired to do work and they can either be a W-2 employee or an independent contractor. So what they're focused on really is the nature of their job. Oftentimes folks think, well, I have a consultant or an independent contractor agreement. That's what I am. That's not the case. That is not even, that is not the definitive determination about whether you are an independent contractor. It really has to do with control. So the employee. The employer, excuse me, doesn't write the rules. They do not. They try to, and oftentimes they would prefer that someone to be a consultant because then you don't have to provide benefits. You don't have to provide workers' compensation insurance. A lot of benefits, frankly most, if not all benefits, don't go to consultants. And so oftentimes employers try to slot folks into...

consultant or independent contractor positions when frankly they shouldn't be because they control what that person is doing when they're doing it how they're doing it whether they're getting paid for expenses while when they show up where they work all those sorts of things and in john it's sort of You know, it's complex in this sense that you have to look at the full picture to determine whether someone should be a consultant versus a W2 employee. But what the law says very clearly is the default is folks are W2 employees. And unless you don't fit within a whole bunch of different aspects of that employment relationship. you will be an employee. So some telltale signs that you are legitimately classified as an independent contractor would be you're hired for a short period of time to do this one particular thing and you kind of determine the hours in which you work, the mechanisms in which you do it. It's usually maybe your equipment or your... stuff that you are bringing to the table, right? Am I getting hit the right things? Yeah, that's exactly right. And where you do it, who you report to, how often you report to them. So when you look at a true legitimate consultants agreement, it's going to say, here's the project. You're going to be paid not every other week. You're going to be paid once a month for certain deliverables. You're not going to have to show up at a job nine to five, report to supervisor, do X, Y, and Z within, you know, their parameters at their office or even at home. All those sorts of control issues will, you know, slot someone into a W2 employee position. But if you don't have all that... You could be a consultant. But again, the law, because there's so many more protections for employees, the law really wants you to be an employee. Okay. There are some benefits to being a contractor, though, too. Sure, for sure. Without the benefits, you essentially can control your whole life. You say, you can say, no, I'm not doing it that way. And there's nothing you can do to force me. I mean, you could not hire me as a contractor anymore. But. this is what I do, take it or leave it almost, right? Yeah, and you can also work other jobs. I mean, you know, so long as there's not a conflict, you know, things like confidential information and all that kind of stuff, so long as none of that applies, you can do whatever you want. So long as you get the work done that you're supposed to get done within the scope of the project, you should be okay to do whatever you want. Now, a lot of consultants think, oh, well, my agreement has a non-compete agreement. How can I be an independent contractor? and be prevented from working for somebody else. That is absolutely the case in Illinois. You can be a consultant and be prevented from doing that. Okay. So they can restrict where you go. Absolutely. Under certain circumstances. But it's all going to be spelled out on the contract you have with the company, right? Yes. It's all going to be spelled out. And that is something that will define the parameters of the relationship, but will not necessarily determine whether you're actually a consultant under the law.

Wait, say that last part again. That agreement. That you between you and the bosses. Yes, yes. That consultant agreement is not going to be the end determining factor and whether you are a consultant. Okay. How that relationship exists, that's the most important thing. When you say consultant, you're using it interchangeably with independent contract. I am. There's only no difference under the lot. You're one or the other. Okay. So employees are people that get time off. They're mandated time off either through state or city law now in Chicago or just an agreement that the company already has, usually entitled to severance depending on company policies. Right. depending on the size of the company they work for entitled to health insurance and other things too, right? Like those are the telltale signs that you're an employee. Yeah. Those are those. And the benefits. Yeah, those are certainly some of them. And you're entitled to none of it as a consultant. You're not going to get separation pay or benefits or overtime or frankly minimum wage. None of that stuff applies to. You have none of those protections. So those are all things that factor into it. So you could see why some employers. Sometimes try to classify people as independent contractors or consultants when in reality they are functioning more like an employee. That happens a lot. And folks ask me all the time to determine whether they're properly consultants for purposes of compensation. Now, what I think people don't. typically understand is that there are a bunch of employment protections under the Illinois Human Rights Act that do not apply to them as consultants, but some that do. So let me be really clear. If you're properly labeled as a consultant or an independent contractor, you really only have two protections. under the Illinois Human Rights Act. Before we go any further, I just want to say that as employees were saying you have the full protections of federal and state law for discrimination, harassment, a bunch of other things. There are suspect classes or certain groups. You can't be discriminated based on age and race. Gender identity. It depends on the state, obviously, but here in Illinois, it's pretty robust protections. There's a lot of them. There's almost 20 of them, John, separate protected categories. So we're not talking about those folks. What we're talking about is what protections a consultant or an independent contractor have under the Illinois Human Rights Act. That's all we're talking about. Okay. Because people think, well, wait a minute, shouldn't I be protected from discrimination, et cetera? The short answer is no. There's only two instances under the Illinois Human Rights Act where you're protected as a proper consultant. And what are they? One is harassment. If you're being harassed because of any of those protected categories, and it could be...

any of them, you do have protection under the Illinois Human Rights Act. Meaning you have a case. You could sue. You could fight. Right. And we've talked about this before, John. Where you have to start is you have to file a charge with the Illinois Human Rights Department, or you have to file with the EEOC, the Equal Employment Opportunity Commission. So if you're harassed because of the class you're a part of, or can it be general sexual harassment, or is that not covered? It is, but it has to be... sex-based harassment. The key is harassment based on a protected category. The other one is retaliation. If you're being retaliated against as a consultant because you complain about harassment or you complain about the fact that there's something illegal going on in the workplace, that's the other protection. But unlike an employee... where you have a ton of protections under the Illinois Human Rights Act from discrimination, from retaliation on a whole bunch of different bases, on harassment for a whole bunch of different bases. It's very limited when you're a consultant. You have none of those discrimination protections, which is sort of strange to me. Is it harder to prove as an independent contractor consultant that you've been harassed or... or the other protected one, discriminated, well, not discriminated. Not discriminated. Or retaliate against. Because here's what I'm thinking is the relationship between a contractor and employer is a little bit more tenuous. Naturally, just by design. I'm doing this gig for you for a set period of time. I'm doing this for you regularly, but I control the hours, et cetera, if you're labeled correctly. Right. And. They could just like break your contractor to let the contract just kind of phase out for any reason. That's part of the normal doing a business. It is. So to show retaliation, you probably have to go a step further and show, no, I was going to keep getting paid and being hired by this company. but for my retaliation, but for my harassment and speaking up about it. I guess it's a little similar to an employee being fired. Do you see what I'm asking here? And actually, John, it's easier to get rid of a consultant than an employee. That's what I'm saying. Yeah, you can just end the contract. You just end the contract. So how do you prove that it's because of something? Well, I mean, that's what I do. I mean, you have to gather facts to determine whether you were harassed or retaliated against. You know, that's based on communications. It can be either with a coworker. And that coworker can be, you know, a consultant or an employee or with a boss, a supervisor, a manager, something like that. It's really the same analysis, but the legal protections are just so much more limited for a consultant under the Illinois Human Rights Act. Okay. Why is that? Is it just... No, it's a really good question. I don't really know. And historically, up until 2020, John, independent contractors had no protections, not even from harassment, not even from retaliation. But then Illinois added those two specific areas of protection for consultants, but they didn't add the discrimination stuff. I think about that a lot. And I get questions from consultants and say, wait a minute. So I can be...

you know, treated very poorly because of my religion, my sexual orientation, my age, my gender, on and on and on. The short answer is yes. I think that's very odd. A company could say, we don't do contract work with people over 40, and they're in the Ecclare. You have no claim. Yes, you have no claim for age discrimination. I'm just saying that an employee, obviously they can't even, they can't even do their interview process. If they're hiring a W-2 employee, they can't even show age discrimination in that. But they could just say, we don't hire contractors over 40 and they're fine. I know. And it's really, you just hit another point on that. For employees, it's from beginning to end. It's from the application process, the, you know, the everything you're onboarding, the, you know, severance, and even beyond, even beyond. There is a retaliation beyond that it's protecting an employee that doesn't protect a consultant. I honestly don't understand that. I really don't. Because in the workplace, you should not be discriminated against. No matter what you are, whether you're a consultant or a W2 employee. So it's my job, frankly, to look at these folks if they have been the victims of discrimination. to determine whether they're properly classified as consultants. And I'll tell you, John, a lot of times they're not. And that's the hook. We'll get to that next. I do want to like when we, I think everyone thinks of a different job when you say contractor, an independent contractor. People think that maybe it's stuff that's done offsite, which it can be. But oftentimes, consultants and independent contractors walk the halls with us. They do. I think most people would maybe not even know. Who's an independent contractor? Who's an employee? Which is, I guess, why what you're saying is so true that they have so few protections. Yet for many people and many jobs, they walk the halls like everybody else with basically no protections that the next person over has. That's exactly right. And they've been placed there through an agency. to some sort of third-party vendor typically, or they have their own company. That's true. That's who they are. And you're also bringing up a great point. I think a lot of people think of independent contractors as a band of one. But often, no, they're placed there by an agency. They're a temp. Yeah. But they blend in, like, Ryan, the temp from the office seems like just as valid of an employee as Pam did. The receptionist, but he had no protections. 100%. And then when, so think about this. You walk in, you do the same job, you sit next to the same person, same hours, et cetera. But that goes to my point. Okay. Are you truly a consultant? Right. Are you truly a consultant? Remember the law, frankly, doesn't want you to be a consultant. Employers oftentimes want you to be a consultant, but, you know, the law doesn't. The default is you're a debut to employee. Here's the difficulty I see is that let's say you're hired as an independent contractor either by another company and you're placed there or you yourself are doing work.

And maybe it works out well. You get paid well for it and you like the gig and you keep doing it. But the reality is you're afraid to bark about this because you're just afraid like what you're saying. There's so few protections. They can just be like, eh, we're done with you. I mean, that's the reality is I think a lot of independent contractors just go along with the game because it's the way the game is played. And for a lot of folks, honestly, they don't really want to be in a placement position by a vendor. They're looking for a permanent job oftentimes, not all the time, but oftentimes. So they're afraid of doing anything that's going to upset their role at that placement. Because if they become a quote-unquote problem to the company, that company is going to tell the vendor or whoever placed them there. You can be like, you know what, we don't really like this person. Yeah. Unless it's... because of harassment or retaliation or something that actually protects that consultants, they're gone. They don't have a job. And there's nothing that the consultant can do about it. So they're in a really, really difficult spot. Now, remember, John, I'm only talking about under the Illinois Human Rights Act, are you protected from discrimination? The answer is typically no. Okay. You may have... thing like common law claims like did someone interfere with your contract right to be there right okay you got to get creative as a lawyer who represent these folks they could be violating your contract you had with the company yes so if someone is you know uh discriminating against you and that leads to your departure maybe you have a tortious what's called a torsious interference with your contract right i just my brain my brain just exploded when you said right it's it's essentially the person you're working with is interfering with your contractual right to be there. And remember, you're there under contract. Yes. You know, through your vendor or through the, you know, the company you're working for directly. You're there pursuant to a contract. So you've got to get creative to sort of get around these things. But the policy point that I'm thinking of is it doesn't make sense to me. No one should be a victim of discrimination and be able to do nothing about it. That doesn't make sense in the workplace. Should every independent contractor have a contract with every vendor or every employee their employer they're working with? 100%. That lays out start date. Absolutely, yes. What else should be in there? Maybe not end date because maybe it's an ongoing thing. And oftentimes it is, although to be, you know, you really want, as a consultant or you really want a period of time where the contract will end in the company does too. Right. For consultant purposes. But, I mean, Yes, because if you don't have that contract, then you don't have the thing that I just talked about. You have no claim. You have no claim. You have no interference with contract claim. Then what are you left with? You're really left with, frankly, nothing. You really are left with nothing. Let's say you were an independent contractor who was misclassified. You were clearly enshrined into the workplace, set to be there a certain amount of hours, expected to be given no benefits, and eventually the contract ends, and you're now realizing. Boy, I was misclassified there, and that's no good. Can you get, like, for example, if you're an independent contractor and maybe you're running your own company, not as a temp, you're probably responsible for your own payroll taxes. Yes. Paying them in full. Yes. Can you, like, sue to get some of that back? Like, what would you start?

doing as an independent contractor if you think you're misclassified? It's a really good question. So, you know, it's a whole bunch of different compensation and benefits that you should have been entitled to from the moment you started working. So, yes, as an element of damages, if you did have to pay all of those payroll taxes, which you did, employer and employee portion, right, all of that becomes an element of damage. So the benefits that you lost, compensation, taxes, I mean... Frankly, anything you can think of. Expenses that you had to pay because you're not entitled to those being reimbursed because you're not an employee. Right. I mean, literally anything an employee has a right to, that's an element of damage for you as a consultant. Do those cases often go well for people, or are they hard to prove? Or is Illinois pretty in the justice system in this area seem to favor people that were misclassified? Yeah, so... Because these issues tend to be more about more than one person, companies are really concerned about them. So when I send a demand letter, they have a one person and say, my person was misclassified for wage purposes, for purposes of discrimination or whatever, chances are really high. It affects a whole bunch of people. That gets the company's attention. These issues are litigated. I would say more often for reasons that I find strange. But the company is- What do you mean? Is litigated? You just can't settle. And so I have to file a lawsuit or a claim. That's what I mean by litigated. Right. But, you know, sometimes the company is like, okay, what can we do for your person? So that it doesn't become a big deal. Because, as I said, oftentimes it becomes a big deal. Do you think every independent contractor right now should be looking at exactly what they're doing? and make sure that they are classified correctly. Yes, and here's something kind of the strange caveat. A lot of people don't want to do that because they're concerned. You know, the company that placed them there, they're going to lose that relationship. They're probably going to lose their job. Might they have a retaliation claim? Yes. But then a lot of folks come down to say, I can't afford to assert this because I can't afford to lose my job. And even if you tell me I have a retaliation claim that you can pursue by way of demand letter or something like that, I'm still out of a job. How much money am I going to get? So folks think about those things long and hard before they say, hey, I'm misclassified or, hey, I want to do something about it because the ramifications are pretty severe for those folks. Do people ultimately often call you when the relationship with that company has been severed in one way or another? And then they say, looking back, hey. I should have been misclassified. Or is there even an argument that the company could maybe like, oh, you may have been just misclassified, but he didn't say anything for eight years. Yeah, no, it doesn't, I mean, you can still bring that claim according to the statute of limitations. You still have that claim. But I would say most of the time people come to me while they're still employed, but you know what? The relationship is probably soured for one reason or another. And they're like, I don't care anymore. I really think I'm misclassified. I brought up the issue. They ignored me. I don't want to work here anymore. You know, the company that placed me here, if that happens, I don't like them anymore. I just want proper recourse. I want to be provided the money and the benefits I should have been provided the whole time I was here because the person sitting next to me was doing exactly what I was doing. And I didn't get the benefit of that, and they did.

Yeah. There's so many interesting storylines about independent contractors versus employees. Uber and Lyft have been fighting that for a long time. A lot of people say, oh, you're independent contractor. You choose your hours when you sign on when you don't. Yet you're using the payment system of Uber and Lyft. You're beholden to certain rules and regulations of Uber and Lyft. And they don't really help you out too much if you get in an accident, yet you're using and you're using your own vehicle. I mean, I guess what I'm saying is that's a classic example of. This isn't so black and white. It is really hard to define sometimes. It's not black and white. And to make it even more complicated, John, there are two different tests for whether someone's a consultant, whether it be a wage issue or a discrimination, harassment, employment issue. That makes it even more complicated. You have federal law, you have state law. These are not black and white issues. And that's why there's so much written about them by different lawyers. That's why there's so much litigation, Uber, Lyft, et cetera, et cetera. This is not a straightforward analysis, unfortunately, and there should be more clarity there. Yeah, is there like, I mean, who's the ultimate arbiter of whether it, I guess it's if you file a lawsuit and win? That's the only way. That's the, that's, you were right. That's the only way. But again, Some people might be going, well, this source seems more like employee, but this part seems more like independent contractor. And this part's more employee. And this part's independent. I mean, it is sometimes right down the middle. It is. But in those cases, John, you're going to be an employee. I mean, you really are. It's got to be really, really clear under these multi-part tests that you're a consultant. You literally check all those boxes and there are a lot of them. Because remember, the default is you're a W-2 employee. Okay. Patrick Dolan, how can people reach you not only for this, but all the other things you mentioned at the start? So they can call me at 312-332-7800. They can send me an email at P. Dolan at conti-dolanlaw.com. And Conti, if you're wondering, that's Karen Conti, who does family law and is a personality, a host on WGN Radio as well. And she has bigger biceps than Patrick Bowen. And that's not her. You've got good biceps too. Thanks, John. You know. You do too, but Karen Conti could. No, she's ripped. Yeah, she can go through here and beat us all up. Patrick Dolan, thanks for joining the Block Clip Chicago podcast Sidebar Edition, as always. Thanks, John.