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A sign of the times: Court interprets "economic reality" test to insulate company from employer obligations

In White v. Detroit E. Cmty Mental Health, the plaintiff sued the Defendant, arguing that an entity called Gateway was his true employer and responsible for his hostile work environment.  Even though Gateway published and imposed "certain standards" in its Community Health Provider Manual that governed White's employment relationship, and even though the plaintiff presented testimony of involvement of the "third-party" corporation in the affairs of the "employing" corporation, the Court held that the relationship provided no evidence of "day-to-day control" over either White or his "employer."  Therefore, the Court concluded that the economic reality test did not establish that White had an employment relationship with Gateway. 

The Court gave undue emphasis to the fact that the corporate records of the two companies referred to their relationship as one of independent contractors.  Such a claim is present in almost every workplace where labor attorneys have been consulted by the employer desiring to limit its employment obligations.

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