June 2013 Monthly Independent Contractor Compliance And Misclassification Update

In the Courts 

• Texas federal district court denies summary judgment motion of American subsidiary of Chinese oil rig company where two welders claim they were misclassified as independent contractors under the Fair Labor Standards Act. Applying the economic realities test, the court found that material issues of fact remained regarding the company's degree of control over the welders; whether the welders were responsible for providing their own tools and equipment; what their investment was in those items; the extent to which the welders had the opportunity to control their profits and losses; the level of skill and initiative needed to perform the services; and the nature and permanency of the relationship between the welders and the company. Trahan v. Honghua America LLC, Civil Action No.H-11-2271 (S.D. Tex. June 10, 2013).