Why This Sifter Matters: “Independent Contractor”

This is another in an intermittent series of Why This Sifter Matters blog posts explaining why users would benefit from having a given Sifter in their array of Sifters. For previous posts in the series, go here and here.

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Some Sifters are particularly meaningful because the issue in question is important. Other Sifters are particularly meaningful because they have something surprising to tell users. The Sifter Independent Contractor falls into the latter category.

This Sifter has been with us for a while, but we heard from a client it wasn’t performing well, so we took that as our cue to overhaul it.

As you might imagine, Independent Contract looks for provisions saying that someone is acting as an independent contractor. It’s gratifying that we’ve added to the specifications for this sifter several other ways this concept is expressed. For example, besides just looking for Stella is an independent contractor, we also look for Stella is not an employee.

Adding to the excitement is what’s in the new advice we’ve written for this sifter. For one thing, I recently realized that independent-contractor provisions have mutated alarmingly. Now they’re routinely used to say that a company is an independent contractor—that it’s not an agent. That doesn’t make sense—independent contractor is an employment-law concept. To say that a company isn’t your agent, say that, instead of misusing the phrase independent contractor. For more on that, see this post on my blog.

Another issue routinely raised by independent-contractor provisions is that you can’t make someone an independent contractor just by saying so in a contract. Instead, whether someone is an employee or an independent contractor depends on the nature of the relationship, and it’s routine for courts to recharacterize the nature of a relationship.

But it’s the norm for independent-contractor provisions to say, with no caveats, that Stella is an independent contractor. That doesn’t reflect reality. And it could be misleading—a company might be lulled into thinking that given what the contract says, it need not concern itself with Stella’s status anymore.

To reflect reality, use what I call “language of intention”—The parties intend that Stella will be an independent contractor. That makes it clear what the parties have in mind on entering into the relationship, but it acknowledges that the status of the relationship can change depending on how the parties behave. For more about that, see this 2011 post on my blog, which is the first time I aired the concept of language of intention.

So what we have with Independent Contractor is a better-performing Sifter that tells users that independent-contractor provisions exhibit in two ways the chronic copy-and-paste obliviousness of mainstream contract drafting. That’s why Independent Contractor matters.