Lerohl v. Friends of Minnesota Sinfonia
322 F.3d 486 (2003)
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Rule of Law:
When determining if a skilled professional is an employee or an independent contractor under federal anti-discrimination statutes, courts apply the common law agency test, where factors such as the worker's discretion to pursue other work, the method of payment, and the tax treatment of the relationship often outweigh the hiring party's control over the specific performance of a task.
Facts:
- The Friends of the Minnesota Sinfonía ('Sinfonía') is a nonprofit organization that performs free classical music concerts, conducted by Jay Fishman.
- Tricia Lerohl and Shelley Hanson were highly skilled professional musicians who performed as 'regular' players with the Sinfonía from 1990 to 1999.
- Sinfonía musicians were paid on a per-concert basis at the union scale, and the Sinfonía issued them IRS Form 1099s without withholding income or FICA taxes.
- The Sinfonía did not provide the musicians with employee benefits such as annual leave, health insurance, or life insurance, though it did contribute to a union pension fund.
- The musicians owned their own instruments and were free to perform for other organizations.
- Musicians retained the discretion to decline to play in a particular concert series and could even arrange for a substitute after agreeing to perform.
- In 1999, the Sinfonía stopped offering performance opportunities to Lerohl and Hanson.
Procedural Posture:
- Tricia Lerohl filed an action against Friends of the Minnesota Sinfonía and Jay Fishman in the U.S. District Court for the District of Minnesota, alleging violations of Title VII.
- Shelley Hanson filed a separate action against the same defendants in the same court, alleging violations of the Americans with Disabilities Act (ADA).
- In Hanson's case, the district court granted the defendants' motion for summary judgment, finding she was an independent contractor.
- In Lerohl's case, the district court also granted summary judgment for the defendants based on the same reasoning.
- Lerohl and Hanson, as appellants, appealed the district court judgments to the U.S. Court of Appeals for the Eighth Circuit.
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Issue:
Under Title VII and the ADA, are professional musicians who are paid per concert, own their own instruments, receive no employee benefits, and are free to perform for other organizations considered 'employees' of the orchestra or independent contractors?
Opinions:
Majority - Loken, J.
No. Professional musicians working under these conditions are independent contractors, not employees, and therefore are not protected by Title VII or the ADA. The court applied the multi-factor common law agency test established in 'Nationwide Mut. Ins. Co. v. Darden,' which requires assessing all aspects of the working relationship. It rejected the argument that the conductor's control over the artistic details of a musical performance was the determinative factor. Instead, the court emphasized other factors that strongly indicated an independent contractor relationship: the musicians were highly skilled professionals who supplied their own instruments; they were paid per engagement without tax withholding; they received no traditional employee benefits; and, most significantly, they retained discretion to accept or decline work and to perform for other organizations. The court held that this 'freedom-of-choice' and the economic realities of the arrangement were the more relevant indicators of their status than the conductor's control during a rehearsal or concert.
Analysis:
This decision solidifies the application of the 'Darden' common law agency test for highly skilled professionals in the 'gig economy' context. It clarifies that a hiring party's control over the final product or performance does not automatically create an employment relationship, especially when economic factors point toward independent contractor status. The ruling makes it more challenging for freelance professionals to claim employee status under federal anti-discrimination laws, reinforcing the significance of tax treatment, benefits, and the worker's entrepreneurial freedom to work for multiple clients. It sets a precedent that weighs the overall structure of the working relationship more heavily than the moment-to-moment supervision of a specific task.
