@MPIGNY - Fall 2015 - (Page 14)
Top Tips for Vendor Relations
BY MICHAEL JAKOWSKY
o organize and run successful events, meeting
planners must manage complex relationships
among clients and vendors. Vendor relationships,
however, may expose planners to liability under
federal and state employment laws. To limit such
liability, planners should consider the following
when working with vendors.
court ruled that the dancers were employees, not independent
contractors and entered judgment in favor of the dancers on
their wage claims. The club eventually settled the case for
approximately $15 million.
This case illustrates the need for businesses engaging
independent contractors to carefully enter into and manage
Avoid Creating Employment
Relationships with Vendors
Require Vendor Compliance with Employment Laws
Planners should avoid inadvertently creating employment
relationships with their vendors. Determining whether an
individual is an independent contractor or an employee is highly
fact-specific; the determination typically focuses on the amount
of control or supervision exercised over the individual. Worker
misclassification can expose businesses not only to liability for
unpaid wages, overtime, taxes and benefits, but also to workers'
compensation and unemployment insurance claims.
Example: Are Exotic Dancers Employees or
Independent Contractors? A $15 Million Question
In Hart v. Rick's Cabaret International, Inc., a nightclub hired
exotic dancers to perform and classified them as independent
contractors. The dancers received their "performance fees"
directly from the club patrons. The dancers filed a class action
against the club for, among other things, unpaid minimum wages
under federal and New York law.
The dancers asked the federal district court to enter
judgment in its favor and argued that they were not independent
contractors; rather, they were employees because the club
exercised significant control over them, as detailed in the club's
dancer guidelines. The guidelines detailed various work rules for
the dancers such as, hours of work, minimum number of work
days, shifts, entrance/exit use, costumes (including the number
and types of dresses and shoes), grooming, restroom use, tipouts, fees and rules regarding dance performances. The failure
to comply with the guidelines would result in fines, warnings or
termination. The district court agreed that the club exercised
significant control over the dancers based on the guidelines
and imposition of fines for guideline violations. Thus, the district
@MPIGNY FALL 2015
Planners should require that vendors establish that they run
legitimate businesses and comply with applicable law. Vendors
should provide tax identification numbers, invoices and proof
of insurance, including workers' compensation, unemployment
and comprehensive general liability insurance coverage.
Planners should include representations in their vendor
agreements that the vendors comply with all applicable
employment laws; that neither the vendor nor its employees
will consider the planner as an employer; that they are not
entitled to any employment benefits from the planner; that
the vendor is responsible for all taxes and withholdings; and
that the vendor will indemnify the planner and not seek any
payments from the planner.
Vendor agreements also should include equipment
indemnities stating that the vendor is solely responsible for
any loss or damage to its equipment and will hold the planner
harmless for such damage.
Avoid the Courthouse -
Consider Arbitration Agreements
To help limit litigation expenses and expedite
dispute resolution, planners should consider including
arbitration provisions in their vendor agreements.
Such provisions should cover all disputes arising
between the parties and limit the right of vendors to
participate in class actions.
Table of Contents for the Digital Edition of @MPIGNY - Fall 2015
WHY I VOLUNTEER
AVOIDING EMPLOYMENT LAW LIABILITY
5 QUICK AND EASY TIPS TO PREVENT BURNOUT
MPI WEC 2015: SPOTLIGHT ON SAN FRANCISCO
MEET FIONA PELHAM
MPI INTRODUCES THE MPI ACADEMY AND EXPERIENTIAL EVENT SERIES
2015 MPIGNY HARD ROCK CAFE GOLF OUTING
SUSTAINABLE MEETINGS IN COPENHAGEN
@MPIGNY - Fall 2015