I’m Working as a Retail Merchandiser — Am I an Independent Contractor or an Employee

Retail merchandisers work in almost every industry one can think of throughout California. Their work may vary based on the details of a particular industry, but the core of the work generally involves setting up and managing product displays at a variety of retail outlets in a given geographical area. Some merchandisers work “in-house,” managing inventory and floor displays for a particular retail outlet. Other merchandisers work for a non-retail company, and their work revolves around displaying that company’s product at a variety of different retail outlets. 

Merchandisers, particularly those in the second category, may sometimes be classified as independent contractors by the company hiring the merchandiser. When companies hire workers as independent contractors, they avoid guaranteeing minimum wage, paying overtime, or providing other important benefits to workers. But this classification can be erroneous as a matter of California law if the company hiring the merchandiser cannot pass the so-called “ABC” test, which determines whether a worker is properly classified as an independent contractor.

A company can fail the ABC test if it exercises too much control over the manner and means of how the merchandiser performs their job. The test also requires that merchandising the products falls within the usual course of the hiring company’s business. Finally, the merchandiser must be set up in an independent trade or business. 

Importantly, it does not matter whether a worker agrees to be an independent contractor rather than employee, and it does not matter if the worker signs a contract that refers the worker as an independent contractor. What matters is the nature of the actual work performed.

If you are working as a merchandiser, ask yourself some of these questions:

Does my employer tell me when to work? Does my employer tell me what to do, or otherwise give me specific instructions on how to do my job? Does my employer tell me what to wear? Does my employer require me to check in frequently? Are the products I am merchandising the kinds of products my employer produces for sale? Am I working for any other companies? Have I set up a business for myself as a merchandiser with independent business finances, an entity structure (such as an LLC or a corporation), and/or separate efforts to promote and market merchandising services? 

These is just a few examples of the facts an experienced labor attorney could consider to determine whether you are properly classified as an independent contractor. If you answered “NO” to the last question, or “YES” to any of the others, you might be misclassified. 

Deliberate misclassification can be a tactic for employers to dodge paying minimum wage or overtime to their workers, and to avoid their responsibilities to contribute to the Medicare and social security safety nets on which many workers rely when they reach retirement age. Misclassified employees can file claims with the California Labor Commissioner, or private lawsuits to recover unpaid wages and benefits. If you have any doubts about your status, you should consult with an attorney for advice.

California Workers Will Suffer if the US Supreme Court Invalidates the Private Attorneys General Act

The United States Supreme Court’s impending decision in Viking River Cruises, Inc. v. Moriana has the potential to reshape California labor law in a way that will harm workers in this state. In California, the state Department of Industrial Relations (itself a part of the Labor & Workforce Development Agency) is the government branch that prosecutes violations of state laws regulating minimum wage and working hours. The state has long had the power to enforce California labor law by collecting unpaid wages on behalf of workers and by collecting penalties that an employer in violation of the law would pay to the state. However, the state government has never had the manpower or resources to combat every Labor Code violation that occurs within the state. 

The Private Attorneys General Act of 2004 (“PAGA”) increased the state’s power to enforce labor laws by empowering California workers to prosecute civil lawsuits on behalf of the state government. Under the PAGA, workers can sue when their employers violate California labor law, and an employer in violation of state labor law can be forced to pay a penalty to the state, with a portion going directly to the workers as an incentive to bring cases on behalf of the state. Most importantly, the PAGA permits workers to sue not only on their own behalf, but on behalf of all other similarly aggrieved employees. Thus, a single worker can protect the rights of all workers by collecting penalties for a large group of workers in a single lawsuit. 

Since its inception, the PAGA has proven to be an effective tool for protecting workers’ rights. Not only does it help bring in millions of dollars in penalties that benefit the state, the PAGA has provided individual workers with a powerful tool to advocate on their own behalf by filing representative actions on behalf of the state when the state does not have the resources to fight its own battles. 

This has been most acutely felt in California as a check against the rise of class action waivers imposed on employees as a condition of employment. From an economic perspective, many lawsuits to recover unpaid wages do not make financial sense because the amount of money at issue, although usually significant to the aggrieved worker, is often dwarfed by the time and expense of litigating a civil case to recover an individual workers’ unpaid wages. For many years, class action procedures offered a solution to this problem by giving workers a chance to aggregate their claims, which permitted courts to resolve disputes much more efficiently. As a means of avoiding liability, many employers have begun requiring their employees enter into so-called “class action waivers” as a condition of employment, which essentially nullify the class action procedure. By removing the possibility of a class action, employers are able to create a system where individual workers have no economic incentive to protect their rights, and they cannot count on the government to do it for them because the government lacks adequate resources.

As a consequence of class action waivers, many labor code violations might go unpunished because of the economic disincentives to litigating individual cases. The PAGA helped ameliorate this problem for workers because California courts have consistently ruled that, unlike the right to bring a class action, which can be waived by an individual litigant, the right to prosecute labor code violations on the behalf of the state government cannot be waived as a matter of fundamental public policy. Thus, even if an employer could deprive workers of class action procedures, the workers could still band together under the PAGA and obtain some relief for themselves (and some for the state) with efficiency similar to a class action.

Of course, the PAGA is not a 1:1 replacement for true class action procedures. In a traditional class action, all wages recovered would be paid directly to the workers. The PAGA recovers civil penalties, and 75% of the penalties recovered are paid directly to the state while the workers share the remaining quartile. But compared to the alternative—not filing a case at all because of the economic disincentive—the workers’ option with the PAGA is clearly superior.

Now, corporations are asking the United States Supreme Court to invalidate the rule that employers may not force workers to waive their right to bring representative actions under the PAGA. Their argument relies on the Federal Arbitration Act (9 U.S.C. §§1-16), a body of law that was originally enacted during the Roaring Twenties to facilitate resolution of private commercial disputes, but which has received a series of ever more expansive interpretations in the US Supreme Court. 

Over the years, corporations have convinced the Supreme Court to interpret the Act expansively, so employers can force workers to arbitrate legal claims against their employers (as opposed to bringing those claims in court) even when forced arbitration would violate California law, and also to prevent workers from joining together in class actions. Now, corporations have asked the Supreme Court to issue a rule that, under the Act, employers can force employees to waive their right to bring representative actions, including actions under the PAGA. 

As a matter of doctrine, federal courts have thus far agreed with California courts that (a) parties may not waive the right to bring a PAGA action because such waivers violate public policy; and (b) claims under the PAGA are not subject to arbitration agreements because a PAGA claim concerns a dispute between the employer and the state of California, and the state is not a party to any contract with the employer. 

But the Viking River Cruises case has the potential to upend this rule because businesses are urging the Supreme Court to expand the rule permitting class action waivers to the point where it would also encompass waivers to bring representative actions. Although a representative or qui tam action is fundamentally different from a conventional class action, businesses hope the Court will rule the two devices are fundamentally interchangeable for purposes of federal arbitration law. 

A favorable ruling on this case will substantially impede the rights of workers not only in California, but also in other states that have enacted, or are thinking about enacting, laws like the PAGA. Deprived of the ability to aggregate their claims in a representative action, workers will lose a powerful tool to combat wage theft, and businesses will continue to evade justice by using a 100-year-old law to make substantive legal rights procedurally impossible to assert. 

HAE Represents Former County of San Diego Chief Medical Officer In Disability Discrimination Lawsuit

HAE attorneys Alreen Haeggquist, Aaron Olsen, and Jenna Rangel have filed a disability discrimination lawsuit against the County of San Diego on behalf of Dr. Nicholas Yphantides, who led the County’s early response to the COVID-19 pandemic.


Dr. Yphantides, or “Dr. Nick,” served as San Diego County’s Chief Medical Officer for 11 years and was one of the County’s first public faces leading San Diego’s response to the COVID-19 crisis. But that work came at a great personal cost. By October of 2020, Dr. Nick – like so many of his colleagues in the healthcare community – was suffering from crippling depression, anxiety, and insomnia.


In a lawsuit filed September 8 in federal court in San Diego, Dr. Nick says he requested and took a four-week medical leave to care for his mental health in October 2020.  But when he returned to work in November 2020, the lawsuit alleges, members of the County’s leadership presumed Dr. Nick was damaged goods. The County then began to unfairly scrutinize Dr. Nick’s performance, looking for proof to substantiate its illegal presumption. In January 2021, despite effectively leading the County through the holiday induced COVID spikes, the County forced Dr. Nick to take another leave of absence for his “mental health” or face immediate termination. Left without meaningful choice, Dr. Nick took an additional seven weeks of leave. But, before Dr. Nick could resume his job duties, the County then demanded he take a fitness for duty test – a request that Dr. Nick’s legal team says violated the County’s own policies and the law.  Before that exam could be completed, the County fired him without providing any reason for doing so.


“To put it simply, Dr. Nick is a healthcare hero,” Aaron Olsen, one of the attorneys representing Dr. Nick, says. “After years spent deftly guiding the County through its response to not one but multiple public health crises – and after devoting months of his life to serving on the front lines of the COVID19 pandemic – he should be applauded for putting his mental health first. He was transparent and genuine with the County of San Diego when he shared what he was going through – and in response, they fired him. This cannot stand.”


The case is pending in United States District Court in San Diego. MEMBERS OF THE MEDIA: please email media@haelaw.com to schedule an interview on this case.

Haeggquist & Eck, LLP Is Investigating Claims on Behalf of Owners of Certain Ram 2500 and Ram 3500 Trucks Regarding a Safety Recall of the Drag Link Assembly

San Diego: Haeggquist & Eck, LLP, a leading consumer rights litigation firm, is investigating claims against Chrysler (also known as “Fiat Chrysler Automobiles” or “Chrysler”) regarding a recall of the drag link assembly in approximately 796,000 2013-2018 Ram 2500 and Ram 3500 heavy duty pickup trucks. If you own a 2500 Ram Truck (model year 2014-2018) or 3500 Ram Truck (model year 2013-2018) you are encouraged to contact Amber Eck at Haeggquist & Eck for additional information.In January 2019, the National Highway Transportation Safety Administration (the “NHTSA”) issued Recall No. 19V-021 and Defendant Chrysler issued Manufacturer Recall No. V06 that applies to approximately 795,575 Ram trucks and required repair or replacement of drag link assemblies.Chrysler explained in its Safety Recall Advanced Communication notice, issued February 1, 2019, that the recall stems from safety issues relating to the drag link assembly on the vehicles – basically the nuts (often called jam nuts) on the drag link assembly. They can become loose and separate, resulting in a “loss of directional steering control, which can cause a vehicle [to] crash without prior warning.”Although Chrysler stated in the Recall notice that it would “repair or replace” the defective drag link assembly, in fact, its “repair” was to weld components of the drag link on the assembly, making it impossible for certain repair or service work (such as alignments) to be done on the vehicles without cutting the welds and then re-welding them.What You Can DoIf you own a 2500 Ram Truck or 3500 Ram Truck (model year 2013-2018) you may have legal claims against Chrysler. If you wish to discuss this investigation, or have questions about this notice or your legal rights, please contact attorney Amber Eck at 619-342-8000 or e-mail her at ambere@haelaw.com. There is no cost or obligation to you.Haeggquist & Eck, LLP is a nationally recognized leader in shareholder rights law. The firm represents consumers, employees and shareholders, and members of the firm have helped plaintiffs recover more than $1 billion.This release constitutes attorney advertising. Past results do not guarantee a similar outcome.Contact:Haeggquist & Eck, LLP619-342-8000Amber Eck, ambere@haelaw.com

Biden Administration Affirms Stance Against Gender Identity & Sexual Orientation Discrimination

In an executive order issued on his first day in office, U.S. President Joe Biden affirmed his administration’s stance against sexual orientation and gender identity discrimination.

The order promises to enforce protections so that people can access employment opportunities, schooling, housing, and healthcare without facing discrimination based on their gender identity or sexual orientation.

In his order, Biden cited equal protection of the law as provided in the Constitution, as well as Title VII of the Civil Rights Act of 1964. The latter statute was the backbone of a landmark ruling at the U.S. Supreme Court in 2020, which interpreted Title VII’s prohibition of sex discrimination to include sexual orientation and gender identity discrimination.

To enforce the prohibition of such discrimination, the Biden Administration is taking the following actions:

  • Requiring each federal agency to review all existing orders, regulations, policies, and programs that were endorsed by the agency under any law that prohibits sex discrimination, including Title VII
  • Requiring each federal agency to consider revising, suspending, or rescinding any action – or taking new action – that fully implement laws that prohibit sexual orientation and gender identity discrimination
  • Requiring each federal agency to consider ways to combat overlapping forms of discrimination, such as that on the basis of race or disability
  • Within 100 days of the order, each federal agency will develop and implement a plan that addresses these mandates

Do You Need Legal Assistance?

At Haeggquist & Eck, LLP, we’re here to represent employees who have experienced unlawful discrimination at work. California has protected LGBTQ workers against discrimination for years, but the Biden Administration’s efforts to enforce Title VII as it was interpreted by SCOTUS last summer can mean a broader level of protection.

If you believe you have experienced discrimination because of your gender identity or sexual orientation, reach out to our legal team for a free initial consultation. During this meeting, you can meet with a Haeggquist & Eck, LLP attorney, who will listen to your story. If we think we can help you with your situation, we will offer options for how you can take the next step.

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

New Department of Labor Regulations Clarify Federal Law on “Tip-Pooling”

The Department of Labor has published new rules that bring the Department’s regulations on “tip-pooling” up to date with the Fair Labor Standards Act as amended by the 2018 Consolidated Appropriations Act (“CAA”).

As a default rule, federal labor law requires all employers pay at least $7.25/hour to their employees. There has been an exception on the books for many years that permits employers to take a “tip credit,” which allows them to pay as little as $2.13/hour to workers who earn tips, such as table servers in restaurants, as long as the workers’ tips make up the difference between the $2.13/hour wage and the federal minimum wage. Under federal law, the employer may only take the “tip credit” and offset wages if the tipped employees are allowed to retain all their tips.

Prior to the 2018 CAA, employers were allowed to both take a tip credit and implement mandatory “tip pooling” between traditionally tipped employees. The law was less clear as to whether employers could implement mandatory tip pooling between traditionally tipped employees (such as servers, bartenders, and other front-of-house workers), and employees who did not traditionally receive tips (such as cooks, dishwashers, and other back-of-house workers). The 2018 CAA attempted to clarify the law, and the Department’s new regulations make it explicit.

Under the new regulations, employers who take a “tip credit” may still only pool tips between employees who work in “traditional” tip-earning roles. E.g., if a restaurant takes the tip credit, it could only pool tips between servers, bartenders, and other tip-earning workers; while any back-of-house employees could not be included in the tip pool.

If, however, the employer pays federal minimum wage for allemployees and does not take a tip credit, then the employer can lawfully implement a mandatory tip pool that includes employees who would not have “traditionally” earned tips. Thus, a hypothetical restaurant could pool tips and distribute them to the front- and back-of-house employees if it pays at least minimum wage to all employees, including servers, for all hours worked.

In either scenario, the CAA and the new regulations prohibit businesses, managers, and supervisors from “keeping,” any tips, which excludes them from participating in any tip pools. The new regulations offer guidance on which employees count as “managers” or “supervisors,” but, unlike the rules on tip-pooling and the tip credit, they do not offer a bright line test.

The potential effects of this new set of rules are uncertain, and the Department of Labor acknowledges as much. On the one hand, the Department theorizes mandatory tip-pooling may foster greater cooperation between workers, which will in turn create a more efficient and profitable workplace for everyone. On the other hand, the Department’s analysis acknowledges a countervailing viewpoint, which is that employers in many states may use mandatory tip pooling to pay lower overall wages to traditionally non-tipped workers, which could result in a $109,000,000 “transfer” of wages from employees to employers every year. Time will tell which theory prevails. Regardless, the new rules will give consistency to tip-pooling practices under federal law.

Reach out To Us For a Free Consultation

If you believe your employer is unlawfully pooling tips, reach out to Haeggquist & Eck, LLP for assistance.

Reach out to us today to schedule a free initial consultation. You can get in touch with someone who can help by calling (619) 342-8000 or by contacting us online.

Translate »