Practically Indefensible

[April 9th, 2008]

A multimillion-dollar battle between The Oregonian and a group of the newspaper’s former regional correspondents is inching closer to conclusion.

At issue during oral arguments last week in U.S. District Court in Eugene was a seemingly simple question: Was Elizabeth Quinn Bernard, who covered southern Oregon for The O between 1999 and 2005, an employee or a contractor?

The answer to that question will help federal Judge Michael Hogan determine whether Quinn is entitled to $308,000 in damages. That’s how much she’s seeking for what she says is the value of employee benefits wrongfully denied as an employee (see “Correspondents Course,” WW, Oct. 25, 2006).

Hogan’s eventual ruling will determine whether a dozen and a half other former Oregonian correspondents who signed the same annual contract as Quinn are also eligible for benefits. Collectively, their claims would total $2 million to $3 million.

Todd Hanchett, the O’s attorney, told Hogan that the following paragraph in that contract made Quinn’s status clear: “Contributor is an independent contractor and will not be treated as an employee of The Oregonian for any purpose, including but not limited to The Oregonian’s employee benefits, The Federal Insurance Contribution Act, unemployment taxes and income tax withholding at the source.”

Hanchett, who did not return WW’s call, argued that Quinn’s signature on that agreement shows she acknowledged being a contractor and that she waived any claim to the paper’s pension and medical plans.

But Quinn’s attorney, Roy Pulvers, argued that the contract Quinn signed misrepresented the nature of her duties.

Pulvers told Hogan the true test of Quinn’s status is whether The Oregonian controlled the “manner and means” under which she produced articles for the paper. Pulvers says Quinn performed the same duties as staff reporters for half the compensation.

Pulvers pointed to a 1992 U.S. Supreme Court ruling referred to as the Darden case. In that case, the court determined that the common-law test for whether a worker is an employee or a contractor consists of 12 points of evaluation of how much control the employer has over the worker, rather than how the employer labels the worker.

In 1998, the 9th Circuit Court of Appeals, which has jurisdiction over federal courts in Oregon and other Western states, ruled that Microsoft was incorrectly classifying workers as contractors, though they performed the same duties under the same conditions as employees.

The judges noted in the Microsoft case that the Internal Revenue Service reviewed the workers’ records and ruled they were employees. After leaving The Oregonian, Quinn received a similar ruling from the IRS.

She also learned from the Oregon Employment Department that The O had been paying unemployment tax for her, although the paper never alerted her to the fact.

Pulvers says both the IRS and employment department payments independently support the notion that regional correspondents were employees.

The lawsuit comes at a time when newspapers including The O are losing advertising and readers at historically high rates.

In a deposition last year, Oregonian publisher Fred Stickel was blunt about the purpose of classifying regional correspondents as contractors: “to take advantage of reduction in costs.”

The judge is expected to rule before July 1.