Varisco v. Gateway Science and Engineering, Inc
In the Court of Appeal of the State of California
15 September 2008
B200339 (Los Angeles County Super. Ct. No. BC342672)

Lack of “control” can Mean Independent Contractor Relationship

This is yet another case which asks the Court to determine whether one is an employee or an independent contractor, since the answer to that question would in turn determine whether the plaintiff’s action before the court will fail or succeed.

The defendant in this case is Gateway Science and Engineering, Inc. It provides professional services such as project, planning and design management, inspection and quality assurance to the construction industry.

While Al Varisco, the petitioner, is a construction inspector and has a Class-1 Inspection Certification from the California Division of the State Architect or DSA. Sometime in 2004, he contacted Gateway seeking work. The latter then had a contract with the Los Angeles Unified School District (LAUSD) to provide certified project inspectors for projects then under construction.

The two parties signed a letter agreement which provides, among others:

• arisco would be compensated at $75 per hour “with no benefits such as medical, dental, paid sick, vacation and holidays”


• Gateway would cover for professional and general liability insurance


• Varisco would be required to complete Gateway time sheets, and that “Overtime does not apply unless authorized by Los Angeles Unified School District”

When Varisco signed the letter agreement and the attaching “Duties of the Inspection Contractor”, he understood that he was entering into an independent contractor relationship with Gateway and not an employment relationship.

The Court, quoting him at his deposition, as saying “I did not work for Gateway. Gateway acted as my agent to hook me up with L.A. Unified School District…” and “I did not and would not, I would never work for Gateway.”

During Varisco’s stint with Gateway, he was not provided any uniform, apparel, equipment, material or tools. Rather, he wore his own hardhat and work boots and mandatory apparel on the job site. He also testified that “as an independent contractor” he provides his own equipment, uses his own car for transportation to and from the job site and was not reimbursed for mileage or gas.

Further, Varisco was not provided any training by Gateway. His work hours were established by the architect of record not by Gateway.

Varisco’s relationship with Gateway was terminated when he refused to sign a new contract when the latter initially turned down his request for a raise.

Subsequently, Varisco sued Gateway for wrongful termination of employment and similar causes of action – all of which depended on the allegation that he had been Gateway’s employee.

Gateway moved for a summary judgment which was granted. Varisco appeals, hence, the instant case before the Court of Appeal of the State of California.

The Court of Appeal affirmed the decision of the trial court saying that all the undisputed facts mentioned above add up to an independent contractor relationship. The principal issue, said the Court, is the right to control of the “manner and means” of accomplishing the work, and the facts are that Gateway had no such control, and no right to such control.

As per Varisco’s main argument that an at-will clause in the letter agreement means that he was an employee, the Court held that “an independent contractor agreement can properly include an at-will clause giving the parties the right to terminate the agreement. Such clause does not, in and of itself, change the independent contractor relationship into an employee-employer relationship. If it did, independent contractor arrangements could only be established through agreements which limited the right of a party, or perhaps both parties, to terminate the agreement.

The Court said that this would be absurd and it is not the law.