Tuesday, October 8, 2013

Nationwide Mutual Insurance Company v. Darden case brief summary

Nationwide Mutual Ins. Co. v. Darden case brief
Employment Law

Recommended Outlines for Employment and Labor Law:
Employment Law in a Nutshell
Gilbert Law Summaries: Labor Law

-Respondent's contract provided that he would be entitled to receive retirement benefits if he refrained from selling insurance for competing companies after termination.
-When respondent became an independent insurance agent, he brought suit under the Employee Retirement Income Security Act of 1974 (ERISA) pursuant to 29 U.S.C.S. § 1132(a), claiming that the benefits were vested. The district court granted summary judgment to petitioners. The appellate court vacated because respondent had a reasonable expectation of receiving retirement benefits.
-On appeal, the Court reversed because the proper test of employee status under 29 U.S.C.S. § 1002(6) was the master-servant relationship as defined by common-law agency doctrine.
-Because Congress had not specified any other test, it should have been presumed that the traditional definition was intended. The Court remanded for a determination of whether respondent could be considered an employee under agency law.

ERISA doesn’t define EE so SC looks to common law and adopts common law control test.

-The Supreme Court summarized common law test used in CCNV v. Reid
-Basically comes down to the ER’s right to control, on a daily basis, the manner and means of EE’s work.
-Huge number of factors go towards right to control. Some factors that are relevant:
     1.  Source of instrumentalities and tools, location of work.
     2.  Extent of hired party’s discretion on when and how long to work, whether he can assign work to third parties or hire/fire assistants
     3.  Method of paying individual and benefits/tax treatment

-The Right to control standard is most important because it is derived from agency law and tort standards of vicarious liability.

-The Common law test is the default rule. Only when statute defines EE in a different way will courts look to the statutory purpose.

The Court reversed because the traditional master-servant relationship as understood by common-law agency doctrine was the test that should have been applied. The Court remanded for a determination of whether respondent qualified as an employee under the common law definition.

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