Independent contractor litigation. The next big thing?

Earlier this week The Legal Broadcast Network released a broadcast with the host of our new tax law channel, Attorney Robert Wood of the firm Wood & Porter in San Francisco, CA., and Attorney Shannon Liss Riordan an employment law attorney and expert on the topic from Boston, MA. The topic of that podcast was the recent law suit filed on behalf of a woman who had worked for some time as an editor and writer for the web site "Trip Advisor" one of the internet most heavily trafficked travel web sites, in fact I use to consult Trip Advisor myself prior to leaving for a trip to a city I hadn't visited in advance.

The nominal purpose of Trip Advisor was, and is, to provide user written reviews and reports on hotels, restaurants, lodging, etc, and to have it posted for review by other travelers.  As the service grew in popularity it was acquired by Expedia and it now is a true travel site that provides links to hotel web sites, search engines and other information beyond the scope of user generated content. Toward that end Trip Advisor hired a group of writers, editors, copy-writers and others to maintain, edit, write and generally ride herd over it's growing blog and web based publication and travel site. Like many web businesses on thin budgets, such as our own LBN, they would bring people in on a part time basis and as the business grew they evolved into what were for all intents and purposes full time employees who need to be categorized as such.

However, the cost savings of keeping people as independent contractors is obviously too great and too tempting for a lot of rapidly expanding firms and consequently the list of major companies who take this approach is a veritable who's who of the Fortune 500 and internet firms. 

I can tell you as someone who works with some of the nations leading attorneys and who has interviewed many of the top litigator and tax experts in the country, that this topic is going to be an area of massive growth and activity in the coming years. Just here on our network we have an in depth interview with Attorney Rex Burch on wage and hourly litigation, Rob Wood on his recent book and publication on the IRS push to look at companies not properly classifying workers and now Attorney Liss Riordan and her high profile cases on behalf of American Airline Skycaps and Trip Advisor independent contractors. This topic has flown under the radar for years but it is about to bloom into a harvest for trial lawyers and aggrieved employees who have been denied employment status as employers work to keep them in a ghetto of independent contractor status just to save a few dollars. 

The implications for the structured settlement industry, particularly in light of the recent private letter ruling on taxable damage cases and employment discrimination, are that this could be an area of growing and highly profitable business if our profession continues to adopt 468b trusts as standard practice in multi-litigant cases. Most employment cases involving these types of damages related to independent contractor status are multi-litigant work place situations which are ideally suited for 468b. At the moment only a few life markets write non-qualified annuity contracts on taxable cases but with the double whammy of a PLR and this growing area of litigation we now have an opportunity in front of our business that we need to prepare for. 

If you are an online employer, it's time to get with your lawyers, look at your employment and contractor contracts and read up on Rob Wood's latest publication to make sure you don't have the government or an attorney knocking on your door and asking to see them first. 

If you are a settlement professional or life market, it's time to get acquainted with non-qualified annuity practices and the use of 468b trusts on non-qualified litigation.