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Sales Worker Seeks to Use

Independent Contractor Status

to Get her own notes into Evidence

---------------------------------------

Tells Illinois Supreme Court

They’re “Business Records”

 

            Helen Rakhnovich sued Cels Enterprises for over eighteen months’ worth of commissions, and at trial she offered her own notes of a meeting as evidence that Cels promised to pay her four percent of her annual sales.  Cels objected on the grounds of hearsay, but Judge Nowicki of the Cook County Circuit Court let them in.  On appeal Cels was vindicated; the court held the notes she took were for her personal use.  Judge Quinn characterized them as “notes scribbled on hotel stationary [then] placed in her personal files in her Northbrook office.”  She took these notes for her own personal use, not at the direction of Cels.

            Although the appellate court sent the case back to the trial court for a new trial, given the impact of their admission at the first trial, the plaintiff seeks help from the opposite direction.  In petitioning to the Illinois Supreme Court recently, No. 104040, Rakhnovich has argued that she was not an employee, but an independent contractor.  She claims the company converted her from a regular employee to a “statutory employee” at the end of 1998.  The latter term in IRS-ease means an independent contractor. 

            This case is worth watching because if the supreme court buys her position Rakhnovich and the many workers in Illinois who are (or who are not) independent contractors – whether on commission or not – will have a new weapon for securing their rights.  For decades some Illinois employers have been operating in the gray area of employee vs. independent contractor, using agreements and other trappings to formalize a relationship that was intended to build a wall between the worker and employee status.  If this case goes the wrong way, notes taken by the “independent contractor” will not be hearsay at a trial but will be admissible as business records.

            One safeguard is to assure that any independent contractor agreement you use always reflects reality and comprehensively addresses all compensation issues.  A properly worded agreement will trump any of the worker’s business records (handwritten notes) that are inconsistent, no matter what hotel stationary or dry cleaner’s receipt they are written on.

 

1/25/07