Problem
Eliminate Food Deserts is entering its event season and has a new fundraising running event on the calendar. You have decided to hire a contract worker to organize the event instead of hiring an employee. You already have an employee that oversees the logistics of Eliminate Food Deserts' other fundraising events. However, she already has enough work on her plate that adding another event to her workload is not feasible. The contractor is going to be paid a fixed fee of $10,000 and will work from May 1 through July 31. The event is a 5k run and is held on July 27. The contractor is responsible for all logistics of the event including obtaining sponsors for the event, negotiating contracts with vendors, recruiting and overseeing volunteers, obtaining required permits, and managing all employees, vendors, and volunteers day of event, which is a Saturday. The contractor already has experience in this field and does not require training aside from becoming familiar with the non- profit's mission. Since the contractor is giving you a reduced rate, he is going to use a computer and work space provided by Eliminate Food Deserts to complete his duties. He will use his cell phone for calls. To make this easier on everyone, he will have 15 hours a week where he is scheduled to come in. If he needs additional hours, he can come in any other time and will also come in as requested by you. The contractor let you know that he is very interested in your mission and is therefore only going to take your non-profit on as a client during this time so that he can dedicate all his time to this event. The non-profit has provided the contractor a schedule of when certain tasks need to be completed and will let him determine how to get the tasks done by that time. During the term of the contract, the contractor signs several contracts with vendors on behalf of Eliminate Food Deserts. One of the contracts ends up being at a price much higher than what you usually pay for the services so you decide to enter into a different contract with a different vendor. The first vendor demands payment and provides the contract signed by the contractor to show that Eliminate Food Deserts owes the money.
• Question I: Is the contractor really an independent contractor or is he an employee? Why? Be sure to outline all facts that support each classification.
• Question II: Assume the contractor is an employee. What potential issues could Eliminate Food Deserts run into based on only the facts above?
• Question III: Assume the contractor is an independent contractor. How could you have protected Eliminate Food Deserts in the independent contractor agreement from paying the vendor?