The lack of an actual, present injury prevents recovery by plaintiffs whose electronic patient records were stolen from the car of an employee of Providence Health System. So held the Oregon Supreme Court last month in Paul v. Providence Health System. The Court affirmed a 2010 decision by the Oregon Court of Appeals, which dismissed claims by individuals who were among thousands of patients whose records were stolen.
Plaintiffs asserted negligence and Unlawful Trade Practices Act claims against Providence. Plaintiffs did not allege that the records had been viewed or used by any third party, but only that defendant caused financial injury in the form of past and future credit monitoring, along with the possible future costs related to identity theft, and noneconomic damages in the form of emotional distress.
The Supreme Court relied on cases including Lowe v. Philip Morris USA, Inc., 344 Or 403 (2008), for the rule that the threat of future harm -- in the form of potential identity theft -- is not sufficient as an allegation of damages to support a negligence claim. That rule precludes as well recovery for the current cost of credit monitoring. Likewise, a risk of future identity theft will not support a claim for emotional distress, and the cost of credit monitoring is not the type of "ascertainable loss of money or property" subject to the UTPA.
See our coverage of the Court of Appeals opinion in Paul v. Providence Health System here.
This week, the Oregon Court of Appeals, in Avanti Press, Inc. v. Emp't Dept. Tax, provided welcome relief to companies that engage independent contractors. In a world where courts and state and federal agencies have increasingly pursued companies for "misclassification" of employees as "independent contractors," the Court held that a sales representative was an independent contractor and that the company that engaged her was not subject to unemployment tax.
The dispute arose when a sales representative filed a claim for unemployment benefits listing Avanti, a greeting card company, as her "employer." This prompted a notice of tax assessment to Avanti by the Oregon Employment Department for unemployment taxes. Avanti appealed the assessement, and the Administrative Law Judge affirmed in favor of the assessement, finding that the representative was an "employee." The Court of Appeals has now reversed, holding that the representative was an independent contractor.
Under ORS 657.040(1), services for remuneration are deemed to constitute employment unless it is shown that the individual is an independent contractor under the definition set forth at ORS 670.600(2)(a). The key issue in Avanti was whether the sales representative was "free from direction and control over the means and manner of providing the services." If so, then she was an independent contractor. Some variation of the right to control test is common in statutory definitions of independent contractor. Individuals in civil suits, and agencies in enforcement actions, argue that the mere right to control, even in the absence of actual control, is enough to establish an employment relationship.
The court, analyzing the common law history of the test, emphasized that:
the right to control test *** has never required that an "independent contractor" be free from all direction and control. Rather, the question is whether the party contracting for services maintains control over the "means and manner" of performance or, instead, gives more generalized instructions concomitant to the "right of the person for whom the services are provided to specify the desired results."
In Avanti, the sales representative maintained a home office, used her own vehicle, set her own work schedule and was paid purely on commission. Avanti set the prices and targets, and provided the representative with some limited training and sales policies. The representative carried business cards with the Avanti name, and, for a time, she did not represent any other businesses. However, eventually she began representing two other manufacturers and those manufacturers then were listed on her business cards.
The court found persuasive the evidence that the representative set her own schedule, and that the company's expectations revolved around results rather than methods used to obtain those results. The court noted that Avanti "'kept its hands off...day-to-day activities as long as [she] met her sales goals and no issues arose relating to any orders she secured.'" The court noted that "'[i]t has generally been held that a commission salesman who works on a part-time basis, selling only when he feels like it or when the opportunity presents itself, is an independent contractor.'"
Given regulators' aggressive pursuit of misclassification claims, the line that Avanti draws between employee and independent contractor status is helpful. In addition, the court's willingness to rely on pre-codification case law will assist those looking for guidance on proper classification of workers.
The anti-discrimination provisions of the Fair Housing Act don't apply to a Roommate.com, the Ninth Circuit Court of Appeals ruled last month in Fair Housing Council v. Roommate.com, LLC.
Roommate.com operates a web site that helps roommates find each other. When users sign up they create a profile stating their sex, sexual orientation, and whether children will be living with them. Users may also complete an "Additional Comments" section. Users are asked to list their preferences for roommate characteristics, including sex, sexual orientation, and familial status. Based on the profiles and preferences the web site provides potential matches. The site also allows users to search based on roommate characteristics.
Plaintiff sued Roommate.com alleging that the questions about users' characteristics, and matching and steering based on those characteristics, violate the federal Fair Housing Act, which prohibits discrimination in the sale or rental of dwellings.
Judge Kozinski, writing for the Ninth Circuit, found no violation, based on the fact that roommates necessarily share a single "dwelling": "It makes practical sense to interpret 'dwelling' as an independent living unit and stop the FHA at the front door." According to the court, the selection of a roommate is more akin to a private relationship -- in which the government won't meddle -- than to a landlord-tenant relationship that's protected against discrimination.