California Basketball Officials Association Sued for Misclassification

Santa Clara, CAA basketball instructor has filed a Private Attorneys General Act (PAGA) lawsuit accusing the California Basketball Officials Association of misclassifying its instructors as independent contractors rather than employees. The lawsuit claims that the instructors have been cheated out of wages and other California labor law violations.

Former basketball instructor Yvette Perry filed the PAGA suit early November in state court claiming the California Basketball Officials Association (CBOA), which trains people to become basketball referees, misclassified her and other instructors because the CBOA functions as the instructors' employer: It sets their rate of pay, controls their performances and requires them to follow the association's bylaws and constitution, just as an employee would be treated. But employees are entitled to benefits under California labor law, including workers’ compensation or unemployment insurance, minimum wage and overtime pay.

Perry claims in her lawsuit that the CBOA:

• Failed to reimburse [instructors] for the business expenses they incur as a necessary expenditure to work for CBOA
• Failed to provide accurate wage statements
• Failed to pay instructors for all hours they worked and their overtime
• Engaged in discrimination, retaliation and harassment based on her sex and terminated her based on that bias.

Perry, who now lives in Georgia, said her duties as an instructor and instructional chairperson for the CBOA’s South Bay unit included training new officials on how to referee a game, implementing new training programs and helping with operating South Bay, reported Law360.

California Basketball Officials Association

She said the association “provides training and instruction for persons officiating basketball games from youth to semi-professional levels across California… Without instructors to perform such services, CBOA would not exist.”

The CBOA states on its website that it has “trained and developed officials for California over 100 years from Youth to Semi-Pro. Our program is being used in other states and we consistently work on our program and with our partnership with NASO, to provide the latest in officiating training.”

Its objectives include: Upholding, Encouraging and Promoting high ethical standards amongst institutions, spectators, participants, coaches and the officials involved in the game of basketball.

Unpaid Volunteers and Paid Employees

Many coaches and referees, particularly in youth sports, are unpaid volunteers. For instance, NCAA Volunteer Coaches recently filed a wage conspiracy and anti-trust complaint. Some associations pay their coaches and referees, so should they be classified as employees or independent contractors?

It’s not that straightforward, and a slippery slope for the employer if workers are misclassified. It mainly depends upon how much control the association has over the worker, but the definition of control is murky.

According to Sports Engine, the law uses a “balancing test,” which determines whether a worker is an employee or independent contractor. Here are the variables a court would consider:

• Does the association provide transportation, meals, uniforms, mobile or computing devices, cell phones, etc.?
• Does the association require the person to show up at a specific time prior to the game? Is the person required to attend meetings set on the basis of others’ schedules?
• Does the association select the games in which the coach/referee will participate?
• Does the association send the worker to conferences? Does it provide the worker with materials to remain current on new developments?
• Does the association implement comprehensive performance review procedures?
• How long was the coach/referee working for the association? Does the worker derive most of his or her income from this work?
• Does the association negotiate the pay rate with the coach/referee? Alternatively, does the association offer a non-negotiable rate?

Associations would be wise to classify its workers based on the above balancing test. If the CBOA has indeed misclassified its instructors as independent instructors, it could be on the hook for unpaid payroll taxes and severe penalties for failing to provide workers’ compensation or unemployment insurance.

Sports Engine points out that, on the other hand, incorrectly classifying workers as employees—when they could lawfully be deemed independent contractors—means associations will pay more to maintain their workforce and be subject to additional legal and regulatory burdens. It might be a good idea for associations such as the CBOA to also seek legal help before they face misclassification lawsuits.