This paper examines a workplace scenario involving Little Lamb Company and a contract worker named Mary. Using principles of employment law, the paper evaluates Mary's classification as an independent contractor, the implications of an at-will employment state, and three potential breach claims: breach of public policy, breach of implied covenant of good faith and fair dealing, and breach of implied contract. The analysis considers factors such as the use of company equipment, work schedule integration, duration of service, and contractual language to determine whether Little Lamb acted legally in terminating Mary's services and subsequently hiring a different contractor.
The paper demonstrates issue-spotting and rule application, a core legal writing technique. Each section identifies a specific legal issue, states the relevant rule or doctrine, and applies it to the facts of the Little Lamb scenario. This IRAC-style reasoning (Issue, Rule, Application, Conclusion) is standard in law and business law courses and gives the analysis a structured, professional quality.
The paper opens with a brief scenario overview, then works through four numbered parts: contractor classification, employment extension, at-will doctrine, and breach analysis. The breach section is further divided into three sub-issues — public policy, implied covenant, and implied contract — each treated as a standalone analysis. References are provided in a standard list at the end.
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 nears completion, Little Lamb realizes it needs Mary's services longer and asks her to continue with the company. While completing the new project, the supervisor observes that Mary must use company materials and equipment in order to meet the job requirements.
Two years pass, and an economic downturn requires Little Lamb to make budget cuts, including the elimination of Mary's position. A month later, Little Lamb receives another major contract requiring the services of a programmer like Mary. However, instead of rehiring Mary, the supervisor decides to hire his equally qualified cousin. This situation raises concerns about Mary's status as an employee, the at-will employment clause, breach of policy, and breach of contract.
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 a company under certain legally defined terms but is not considered a permanent employee and is not entitled to the benefits or considerations afforded to a formally hired employee. Mary remained a contract employee because the definition of her job and contract changed and she was asked to continue under the same contractual arrangement.
While some organizations hire independent contractors to avoid payroll taxes and similar obligations, 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, had they possessed 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).
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 that contract she completed her portion of the work. One of the exceptions to the independent contractor classification involves the use of tools and equipment. Mary's continued work with Little Lamb resulted in her using their equipment, which could support an argument that the lines between contractor and employee became blurred. This is also the case when Mary's hours began to blend into Little Lamb's regular work schedule.
It is also unclear how Mary is compensated. If she is paid per job and is permitted to work for more than one firm at a time, she remains an independent contractor. Regardless, the at-will clause is not violated, because there was a mutual agreement for her to remain as long as the company needed her services, with no implication that the work was perpetual or that she was guaranteed continued employment. Under at-will principles, Little Lamb acted legally.
When examining this scenario from a breach perspective, three issues require consideration: breach of public policy, breach of implied covenant of good faith and fair dealing, and breach of implied contract.
Breach of public policy refers to the termination of an employee because they refused to violate a public law or statute. In the case of Little Lamb, Mary had free will to use the company's equipment and was not asked to perform her duties in any manner that violated an existing law. Therefore, no breach of public policy occurred.
Under at-will employment principles and the terms of her independent contractor relationship, Little Lamb acted within its legal rights when it ended Mary's engagement and subsequently hired a different contractor. The key factors — contractual clarity, payment structure, equipment use, and schedule integration — create some ambiguity regarding Mary's classification, but absent a formal employment agreement or explicit guarantee of continued work, Mary's legal remedies are limited. Organizations engaging contractors for extended periods should take care to ensure contract language is precise in order to avoid implied contract disputes in the future.
Andrews, N. (2011). Contract law. Cambridge University Press.
Independent contractor — Self-employed or employee? (2012). Internal Revenue Service. Retrieved from https://www.irs.gov
Rothstein, M., et al. (1987). Cases and materials on employment law. Foundation Press.
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