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Misclassification: Pointing fingers

Contingent workforce specialist Kimberly Couto is suing former employer Magic Leap, claiming it fired her after she raised concerns the company misclassified workers as independent contractors, according to court documents.

Couto is suing the company under Florida’s private-sector whistleblower act. The suit, which was filed March 9 in Broward County court, claims Magic Leap withheld taxes on nearly $36 million of wages paid nonemployee workers, depriving them of benefits.

Magic Leap is developing an augmented reality, wearable computer. The Plantation, Fla.-based company has raised $1.9 billion in funding to date with investors that include Alibaba Group and Google. It disputes Couto’s claims.

“We are confident the complaint is entirely without merit and will vigorously defend the company against these baseless claims,” a Magic Leap spokesperson said in a statement.

In her lawsuit, Couto claims the company misclassified hundreds of workers as “contractors” or “consultants” when they should have been employees. After raising her concerns at a meeting on Nov. 29, 2017, the lawsuit says Couto was fired the next day. She had worked at the company since Oct. 31, 2016.

The complaint lists 25 ways Magic Leap treats nonemployee workers — which include workers provided by staffing firms and individual consultants — as employees.

Some of those include:

It also claims the company had staffing agencies “poach” employees from other tech firms such as Samsung, Google and Blackberry and provide them to Magic Leap as contractors in a scheme to avoid noncompete agreements.

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