Showing up to work with a Mardi Gras King Cake, which for some is a symbol of Christian faith, and sending an email to coworkers about its religious significance can have bigger consequences than one may think. That was the case for Teresa Ratledge, an engineer employed by GH Engineering, Inc. who was assigned to work at the CIA on a government subcontract held by Science Applications International Corporation (SAIC). A coworker had already told Ratledge that she did not want to hear about the cake, but Ratledge nevertheless sent out the email. For Ratledge’s coworker, who was already angered by Ratledge’s frequent naps during meetings, it was the last straw. Shortly after, the annoyed coworker contacted SAIC about the naps and cake issue.
Teresa Ratledge suffers from a sleep disorder, which causes her to sometimes fall asleep while at work. Despite her efforts to stay awake and enlisting others to wake her when she dozed off during meetings, SAIC took her off the subcontract. Ratledge sued SAIC alleging violations of her rights under the Americans with Disabilities Act of 1990 and the Civil Rights Act of 1991.
In Ratledge v. Science Applications International Corporation, 2011 U.S. Dist. LEXIS 13799 (E.D. Va. Feb. 10, 2011), a case decided in February 2011, U.S. District Judge Claude M. Hilton held that Ratledge could not sue under these Acts because she was not an employee of SAIC. She was found to be an independent contractor for multiple reasons. Among them was the fact that GH Engineering, not SAIC, paid her for work performed. The failure of SAIC to extend employment benefits or to pay any payroll taxes was a significant factor considered by the court. Ratledge also failed to provide evidence that she was under the direct control of any SAIC supervisor- it was the CIA who gave her direct assignments, provided her with a desk and supplies, and oversaw her daily tasks. In addition, the Court also emphasized that a clearly defined subcontract between GH Engineering and SAIC evidenced that SAIC had no intention to treat GH Engineering personnel as SAIC employees. Consequently, Judge Hilton granted SAIC’s motion for summary judgment.
This case provides some important lessons for businesses involved in subcontracting work. A clearly defined subcontract with a third-party may help establish that you intend to treat those assisting your company with projects not as employees, but as independent contractors . Your argument that project assistants are independent contractors may also be bolstered by ensuring that project assistants are paid solely through a third party, as was the situation in the Ratledge case.