Hollywood Reporter Slapped With Lawsuit by Assistant Editor

Hollywood Reporter Slapped With Lawsuit by Assistant Editor

THR.com assistant editor David Simpson accuses the outlet of “willful disregard of mutual and economic realities of the working relationship with ‘freelancers'”

The Hollywood Reporter has been sued by one of its own.

THR.com assistant editor David Simpson filed a class action lawsuit on Friday against the publication's parent company Prometheus Global Media, accusing it of “willfully misclassifying their freelancers as independent contractors and denying them the wage and hour rights and protections of employees under the California Labor Code and applicable Wage Order.”

According to the suit, though Simpson, “one of numerous freelancers at THR,” performs duties for the outlet that are “indistinguishable” from full-time employees, he does not receive the same benefits or protections.

Also read: Hollywood Intern Lawsuit Panic: Who's Really Paying the Price?

“‘Freelancers’ work alongside and perform the same work as employees,” the suit said. According to the suit, that includes working from the office 9 to 5 on weekdays and being “required to attend mandatory work meetings alongside other employees.” It further states they “are supervised by and report to the same managers that supervise employees, and are subject to the same discipline and discharge policies applicable to employees. For example, other individuals at THR besides Plaintiff post video content onto THR's website.”

Yet, the suit said, “inexplicably, some of those individuals are deemed to be employees while Plaintiff and others like him labeled ‘freelancers’ are deemed to be independent contractors.”

Also read: Daily Mail Slapped With $3 Million Libel Lawsuit by Porn Actress

Simpson claimed that he and other freelancers were sometimes required to work more than eight and even 10 hours a day, but were not entitled to overtime pay, nor were they allowed meal breaks, reimbursed for business expenses, or paid in a timely fashion.

Simpson is listed on THR's masthead as an assistant editor for THR.com and a March 2013 photo gallery on the site tagged him as “THR staff.” If he gets the requested injunction to require THR to reclassify him as an employee, that's exactly what he'll be.

The Hollywood Reporter did not immediately respond to requests for comment.

Pamela Chelin contributed to this report.

  • GlamGail

    The question of an independent contractor vs. staff employee is uncommonly easy to ascertain. And, it does not involve, hours, meetings, lunch breaks or how someone gets listed on the paper. The distinction is legal. How is the reporter paid? To be a legally employed reporter, there have to be the usual deductions made from the paycheck, equivalent employee benefits and a W-2 form given at the end of the tax year.

    An Independent Contractor, or Freelancer, receives Gross Wages, has no deductions made from his/her paycheck and is given a W-4 tax form to file their annual taxes. There are other IRS requirements to meet Independent Contractor status but this reporter is arguing that he's an employee.

    So, it comes down to this: his end of year tax form. If he received a W-2 tax form with deductions taken, the IRS says he's an employee, entitled to everything equivalent to all other employees of his rank.

    If, the same reporter gets a W-4, or other form, showing his Gross salary and no deductions for Social Security, FICA, etc,, the IRS considers him to be an Independent Contractor and he then has to pay those deductions and taxes.

    It is that clear and that simple. And, whom among us would question the IRS?

    • a lawyer

      You could not be more wrong. It's rather scary. You should definitely refrain from posting any other comments on the internet.

      • GlamGail

        As Socrates said, a smart man knows he knows nothing.

    • GM52246

      In order for a company to have the *right* to classify someone working for them as an Independent contractor, that person should not be supervised in the same way that employees are; in fact, if the company is requiring that the worker attends meetings alongside employees, that significantly undermines their claim of “Independent Contractor.”

      • Bogar Alonso

        Spot on. An employer has no right to dictate when and where an independent contractor can work. Or has any right over how much work that contractor should take on. For their sake, it's better if that contractor has a list of clients to prove that they, in fact, are such and are actively marketing themselves and seeking new clients. Some of my clients wouldn't work with me unless I proved the latter. This runs counter to a required 9-to-5 work week. I think he'll win easily and hopefully sets a precedent.

    • Perimenopausal

      Wow, seriously, that is entirely false. Check out IRS publication 15-A. It very clearly states how a contractor v. employee determination is made, and this guy is going to win easily.

  • The Observer

    And then he'll get fired….

  • Perimenopausal

    Congratulations for being brave and standing up for this issue, David. I know it takes guts, but know that others are watching and appreciative of your efforts on this issue. You will no doubt win. Anyone who doubts it, please check out IRS publication 15-A.

  • Former staffer

    When you lie down with dogs…

    • Bogar Alonso

      Former staffer of the Hollywood Reporter?

  • GlamGail

    Clarifying things, first, the case was not about the reporter trying to claim Independent Contractor tax status. He was claiming the opposite;the Reporter was claiming employee status. No matter the job descriptions, which change’ no matter the hours, which fluctuate, no matter the working conditions that change; it comes down to his pay stubs.

    His valid point was that just being labeled a Freelancer or Independent Contractor by the employer, does not automatically make him one. All taxpayers claiming to be an Independent Contractor have to meet the strict criteria set up by the IRS. Since an Independent Contractor enjoys different tax benefits than an employee, such as certain business deductions and taxes deferred to the end of the year per a W-4 form, the IRS wants to be very sure that an Independent Contractor really operates in business as such.

    Usually, a person claims an Independent Contractor status that he/she does not really earn and cannot prove to the IRS when challenged. The reporter in this lawsuit is maintaining that he is an employee. In no way is he trying to meet the definition and tax status of being an Independent Contractor.

    What makes this case somewhat easy is that since the reporter is claiming he is an employee, the burden of proof thus goes to the paper to deny he is an employee. If the Hollywood Reporter paid him as an employee, making proper and regular paycheck deductions, making their required matching employer contributions to SS, FICA, etc. and gave him regular, easily produced in Court, W-2 form for taxes, he's an employee. He would thus be subject to equal benefits and responsibilities as other employees in the same full/time, part/time range.

    On the other hand, if there is an employment contract signed by both, or even just by agreement, naming him to be an Independent Contractor and he is being paid Gross Wages, with no deductions, no equal employee contributions or benefits of medical/dental, etc. as other employees and he is given the appropriate, annual, equally Court produceable, W-4 IRS Tax forms, the reporter must accept the Independent Contractor Tax status, meeting all other IRS Independent Contractor criteria including any applicable past fines and charges.

    Of course, this is all a moot point. If the reporter really is an Independent Contractor, it isn't likely he would throw that away to plead he's an employee,

    The system is set up so that neither the employer nor the employee can have it both ways. Either you get paid and file your taxes as an employee or as an Independent Contractor, meeting the strict criteria for each designation. A company can require a person to join an office meeting but that determines nothing other than a person attending a meeting. The label of Independent Contractor is not arbitrary; it has to meet all the varied IRS requirements. They are very specific and not withstanding how a company, or a worker, would like to label themselves for their own means.

    As I started, it comes down to this, the Hollywood Reporter has to prove that they never paid him as an employee, never made matching employer contributions, never gave him any W-2 Federal/State tax forms, no matter what they did, did not, require of him for his duties, If they can do that and show he’s been an occasional hourly worker, etc. so be it. But, if they issued him a W-2 and made matching employer monies for payroll taxes, they are sunk and should be. If he was an occasional worker and he got a W-4, he’s sunk.

    Most assuredly, it will be evident and settled at the first hearing where one, or the other, will push the critical W-2 or W-4 Wage Tax Forms to the other.

    And so, as usual, it all comes down to money.