My question involves independent contractors in the state of: Arizona

I was a commission earning employee of a Process Serving Company. The information below is intended for knowledge and understanding purposes

This company is being investigated by the Arizona Department of Labor for other matters. It has also been stated there is a concern regarding the companies proper designation of Independent Contractor's. However, this is for the IRS to make the proper determination.

In the industry this corporation was one the largest process serving companies in Arizona. The company was founded by one individual. After many years a younger brother became a financial investor in the corporation. After many years the founder sold the majority of his interest in corporation and the younger brother sold out his interest completely. During the operation of the new corporation the founder was hired under a 5 year contract as an employee being the Chief Executive Officer. This new corporation went though major financial turmoil under the new corporate owners. Due to the turmoil and it was stated the company was go out of business and filing bankruptcy. The younger brother due to his financial manipulation along with his financial ability was able to take complete control and ownership of the corporation and then operating under a newly formed corporation.

During this period the founder brother had been designated as the Director of Operations. The younger brother designated himself as the Chief Operation Officer and hired a President who was suppose to to turn the business around from all the problems. Less than a year the President through the C.O.O. relieved his brother as the Director of Operations. They promoted someone else within the company to the position. The President on the advise of the C.O.O. wanted his brother to remain as the founder and corporate spokes person of the corporation, having a happy face telling all the client's the corporation is solvent, strong and operating just like it was originally. However, Knowing his younger brother is a snake, he declined and moved on to build a new company while taking his younger brothers client's since they have decided to kick their client's to the curb with their new developed business strategy.

Anyway, at the time before the end of the year the President and Director of Operations held a company employee meeting in order to discuss some of the major changes and their new business strategy which is going to take place at the start of the new year. One of the changes, we were no longer going to be employee process server's of the company. We were going to be designated as Independent Contractors. Several months later we were given a document called Preferred Process Server Agreement As indicated below is a portion of this document.

[B]The Preferred Process Server will be entitled to payment at rates specified and established by Company for particular services for the given area which Preferred Process Server is serving. (Designated as a commission schedule attached as Exhibit B Fee Schedule (Base Fee per job also Plus Zone fee)) The language in the agreement states It is agreed that COMPANY shall have the authority, in its sole and absolute discretion, to revise the commission schedule unilaterally upon ten (10) days advance notice, either by mailing a copy thereof to the last known address of the preferred process server, or by personally furnishing a copy there of to the Preferred Process Server. The amended commission schedule shall specify its effective date. This agreement was signed by the Process Serving Manager, Service Coordinator and Regional Service Manager.

We were told to sign the agreement several months before the end of the year. Several employee's did sign. I told the manager I would not sign until the end of the current year because I didn't to deal with having a few months of being an Independent Contractor during the current year. It was verbally agreed I would remain as an employee being paid my regular commission as an employee with the appropriate withholding.

It should also be noted here the term being an Independent Contractor was only by terminology as we continued working in the same exact manner under the exact requirements as being employee's except not having taxes withheld. This isn't about the proper designation this is for the IRS to decide.


I agreed to the base fee and agreed to an amount change on one plus zone and signed.

At the start of the new year during during our first pay period we all received a data sheet showing each job completed with the amount being paid.
We noticed a discrepancy in the base fee being paid from what our agreement specified. We also noticed there was also a change to an amount being paid on specific jobs which was not designated in our agreement. When we asked our manager why, were told the amount originally agreed upon has been lowered because the brother who is no longer with the company came up with this original amount and the C.O.O brother said he wasn't aware and said we were being paid too much money for each job. So, he basically he lowered the amount to what he felt we should be receiving saying we are still being paid more per job than we were receiving as employee's, including lowering the other specific job.(not a true statement) Well, as indicated above there was no advance notice being given. At this point several of us decided to stop the work flow until the matter could be resolved, while several others agreed and kept doing the work and accepted the adjusted rate which they signed a new agreement.

After several weeks passed with the work piling up, although the important work was being given to the others. Each of us received a call from the President. He wanted to know what was going on and why I have stopped the work He knew why and I told him exactly why, including that I have lost integrity of the company. The President ask if I would continue the work until he could come up with a solution. I agreed to continue on the basis of being paid according to the agreement. His final words were I'll see what I can do.

Several days later the manager told us we can accept what is being paid or there is the door you're free to leave. I told the manager I would continue accepting the work and receiving what is being paid under protest since the company has breached the agreement.

Since, then I have continued working and have accepted the amounts the company has decided to pay for each job. So, am I bound by this acceptance
or would i have recourse for payment of difference in the amount of the original agreement.

Currently, I no longer perform services for this company.

DDSA