Reference no: EM132488885

Problem: Clayton began working for Sleep Eze, located in Newmarket, in 1980 as a customer service manager. In 1995, Sleep Eze had Clayton and all other salespeople enter into a series of one-year agreements that stated that they could be terminated on 60 days' notice. Three years later, in 1998, the company insisted that Clayton incorporate, and from that point on, the agreements were between Sleep Eze and Clayton's incorporation. The agreements defined Clayton, and later his corporation as an "independent marketing consultant" and expressly stated that the relationship was not an employment relationship, but rather an independent contractor - principal relationship. Clayton paid for his own office space and remitted his own income taxes and workers' compensation premiums. At the same time, Sleep-Eze set prices, territory, and promotional methods and Clayton was limited to servicing Sleep-Eze exclusively. In 2003, Sleep-Eze terminated the agreement with 60 days' notice. Clayton sued for wrongful dismissal damages, alleging that he was an employee.

i. What arguments could Clayton make to support his position that he was an employee?

ii. What arguments could Sleep Eze make to support that Clayton was an independent contractor?

iii. Which side do you think would be successful? Explain why.