Out now in the January 2024 issue of the American Association for Justice’s Trial magazine, TZ attorneys Partner Kristen Simplicio and Of Counsel Shana Khader have authored a groundbreaking article that delves into the complex issue of employee misclassification. Titled “The Next Chapter in Employee Misclassification,” this article discusses the evolving landscape of employee classification and the impact it has on workers in the multi-level marketing (MLM) industry.
“Home parties are becoming a relic of the past, and so should our assumptions about these [MLM] workers’ legal status.”
In their article, Ms. Khader and Ms. Simplicio highlight the changing nature of work and how it has brought about new challenges in determining employee classification. With the rise of app-based workers and the use of social media in MLMs, the traditional tests and principles of employee classification are being put to the test.
The attorneys also shed light on the current state of employee misclassification, citing recent lawsuits against companies such as Uber and Doordash for violating state labor laws. These cases serve as a reminder of the importance of properly classifying workers and the consequences that come with misclassification.
One of the key points discussed in the article is the significant level of control that MLMs exert over their so-called independent salesforce. Ms. Khader and Ms. Simplicio argue that this level of control goes against the outdated “direct seller” exemption and should not apply to MLMs in today’s technological landscape.
Readers of the article will also find valuable takeaways on how to navigate the complex issue of employee misclassification. Ms. Khader and Ms. Simplicio advise giving careful attention to laws in the relevant jurisdiction, reviewing independent contractor agreements for signs of control, and considering the value of time that MLM workers spend developing social media posts versus the benefit to the company.
In addition, the attorneys suggest finding ways to challenge forced arbitration agreements and, when unavoidable, carefully reviewing the arbitration forum’s rules. This article serves as a valuable resource for advocates, providing insights and strategies for addressing the issue of employee misclassification.
“MLM work arrangements are often designed to undervalue workers’ contributions—just as gig workers in the app-based economy. But it does not have to be that way. By looking to the hard-fought litigation wins on behalf of gig workers and revisiting our assumptions about MLM companies, advocates have a real opportunity to help the workers who have built the MLM industry get the recognition, protection, and compensation they deserve.”
The American Association for Justice (AAJ) is a membership-based organization for trial lawyers, providing “community, advocacy, and education” to the plaintiffs’ bar.