A Toronto lawyer has launched a $384 million class action lawsuit against Deloitte LLP (“Deloitte”). The lawsuit alleges that lawyers who worked at the accounting firm’s document-review division were misclassified as independent contractors, depriving them of basic employee rights. Deloitte is one of the largest audit and financial consulting firms in the world.
The lawsuit further alleges that the lawyers should have been treated as employees because the substance of their relationship with Deloitte was that of an employee rather than an independent contractor. For example, the lawyers worked under the direct supervision of Deloitte, Deloitte provided them with work tools like computers, controlled their work schedules and forbade them from hiring subcontractors. The lawyers were not allowed to work from home and could not negotiate their own wages.
The lawsuit is seeking basic employee rights such as termination pay and a failure to remit statutory deductions, lost employment insurance benefits and punitive damages.
Deloitte may have a very big problem if the above facts can be proved to be true. The court will take a look at the substance of the parties’ relationship and there seems to be a number of factors that point to the strong possibility that despite Deloitte’s classification of these workers as independent contractors, they were indeed employees.
So what will happen next? Now that the lawsuit has been filed in the Superior Court and served on the defendant, a judge will have to certify the class action. This question will be answered by a certification motion. The purpose of a certification motion is to determine whether there is a legal basis for a class action. If the judge agrees and certifies the class action then it could potentially include hundreds of people because everyone who acted as a lawyer in Deloitte’s document-review division would automatically become a plaintiff. However, there is an option to “opt-out” of the litigation if the potential plaintiff so chooses.