From AdvisorHub, Miriam Rozen discusses a case in which a California appeals court relied on an exception in the statute to allow a brokerage to classify a broker as an independent contractor. MIriam writes:
A California state appeals court affirmed a lower court ruling and rejected a former LPL Financial broker’s argument that the brokerage improperly categorized him and others as independent contractors rather than employees.
In a unanimous ruling issued on May 10, a panel of three justices ruled against the broker’s claim that the firm violated his constitutional due process and equal protection rights and should have covered his business expenses. The panel deferred to a California statute that creates an exemption that allows brokerages to categorize brokers as independent contractors, making them ineligible for all the protections of employees under the state’s labor laws.
“Professionals with superior bargaining power may need less protection in the marketplace than others. A labor regulation treating financial professionals differently from others is rational,” the panel’s unanimous ruling states.
“It is rational to think people licensed to work as financial professionals by the Securities and Exchange Commission or the Financial Industry Regulatory Authority have more skill and bargaining power than the average worker and do not need a new classification test,” the ruling states.
Read the full story at Ex-LPL Broker Was Independent Contractor, Not Employee, California Court Rules – AdvisorHub