Little Lamb Scenario Little Lamb Company requires an additional employee to complete a special project. They contract Mary for this position, and enter into a contract with her. Just as the project is almost completed, Little Lamb realizes it needs Mary's services longer and asks Mary to continue with the company. While completing the new project, the supervisor sees that Mary must use company materials and equipment in order to meet the requirements of the job. Two years pass, and the economic downturn requires Little Lamb to make budget cuts, among them Mary's position. A month later, Little Lamb receives another major contract, thus requiring the services of a programmer like Mary. However, instead of hiring Mary back, the supervisor decides to hire his equally qualified cousin. Now there are concerns about Mary's status as an employee, the at-will clause, breach of policy and breach of contract.

Part 1 -- Mary is hired as a contract employee because she enters into a specific relationship with Little Lamb. An independent contractor is a person who works for an employee under certain terms that are legally defined, but is not considered a permanent employee and is not due the benefits or considerations afforded to an employee who is formally hired. Mary remained a contract employee because the definition of her job and contract changed and she was asked to continue on the same contract.

Little Lamb hired Mary as a programmer for a specific project, and then found that her services could be extended to other projects. Little Lamb could have offered Mary a permanent position with the company, if they had the budget and resources to do so. Instead, both parties agreed to simply extend the contract, and continue the relationship of independent contractor (Independent Contractor, 2012).
Part 3 -- We will assume Little Lamb is located in an "at will" employment state. In this type of relationship "any hiring is presumed to be "at will"; that is, the employer is free to discharge individuals "for good cause, or bad cause, or no cause at all," and the employee is equally free to quit, strike, or otherwise cease work" (Rothstein, et.al., 1987, p. 738). Even though Mary was under contract, by the letter of the contract, she completed her portion. One of the exceptions to the independent contractor rule is the use of tools and equipment. Mary's continued work with Little Lamb resulted in using their equipment, so a case could be made that there was a blur in the lines. This is also the case when Mary's time and hours began to blend into Little Lamb's regular schedule. We are also not clear how Mary is paid; if she is paid by each job and is allowed to work for more than one…