Misclassified Clinical Research Associates

Are You Misclassified as an Independent Contractor?

Potter Handy has begun a further investigation into the position of Clinical Research Associates, and systematic misclassification of Clinical Research Associates as either salaried exempt employees, or as independent contractors. In either case, Clinical Research Associates are subject to wage violations that may cause them to lose tens of thousands of dollars each year. For this reason, Potter Handy, a law firm dedicated to protecting employee rights, is investigating these potential violations of California law.

What are Clinical Research Associates?

A Clinical Research Associate (“CRA”) is a health-care professional who performs many activities related to medical research, particularly clinical trials. Clinical research associates work in various settings, such as pharmaceutical companies, medical research institutes and government agencies. The main function of a clinical research associate is to monitor clinical trials. The CRA may work directly with the sponsor company of a clinical trial, as an independent freelancer or for a contract research organization (CRO). CRAs monitor compliance with the clinical trial protocol, check clinical site activities, make on-site visits, review case report forms (CRFs), and communicate with clinical research coordinators. By performing this monitoring and inspection function, CRAs help assure the protection of the rights, safety and well being of human study subjects. Further, by monitoring and inspecting the work of testing sites, CRAs help insure that the results are accurate.

Who do Clinical Research Associates Work For?

Typically, CRAs can work:

For pharmaceutical companies
For clinical research organizations (i.e., Covance, Parexel, Quintiles, IQVIA, PPD, Inc., PRA Health Sciences)
For “themselves”

A CRA may actually find themselves working for one or more the above organizations, with many becoming “contract” or “freelance” CRAs at some point in their careers.

Legal issues for Clinical Research Associates

When it comes to CRAs, the key legal issues are ones of misclassification. In many ways, CRAs fall outside the work of typical employees or independent contractors, and so, they are often classified incorrectly. This comes in two ways – classification as exempt employees, and classification as independent contractors.

Misclassification as Exempt Employees

Most CRAs who are classified as employees are further classified by their employers as salaried exempt. Meaning that when CRAs work in excess of 8 hours in a day, or 40 hours in a workweek, they do not receive overtime. But interestingly enough, most employers have not actually investigated as to why CRAs should be classified as exempt. And as a result, most employers get it wrong, costing CRAs thousands of dollars in unpaid overtime.

In fact, a review of the California Labor Code (specifically Labor Code §515), and Industrial Wage Order 4-2001, shows that CRAs don’t fit the typical categories of exempt employees. For one, CRAs are not executives or managers as they do not supervise anyone. Nor are CRAs licensed professionals like attorneys, doctors, or professors. While their work is close, they are not licensed or certified, and as such, fall outside of the professional exemption.

The closest exemption to the work that CRAs perform is that of the administrative exemption. An administrator is defined under California and federal law as someone:

a) Whose duties and responsibilities involve either: (i) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer’s customers. . . . (b) Who customarily and regularly exercises discretion and independent judgment; and (c) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section); or (d) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (e) Who executes under only general supervision special assignments and tasks; and (f) Who is primarily engaged in duties that meet the test of the exemption.

But does this describe the work of a CRA? While certainly CRAs perform work independently, and they are utilizing specialized and technical areas of expertise, most CRAs fall short of the exemption because of the requirement that CRAs operate with independent judgment and discretion. If anything, CRAs exist to insure that no one, including the doctors, operate with independent judgment and discretion.

Instead, CRAs operate according to the drug trial protocol – known as the Bible of the drug trial. Before each drug trial, CRAs undergo weeks of trainings on the testing protocols, and only upon passing tests on the protocols, are CRAs allowed to perform their duties. With each site visit and each report, the CRA looks to see if the site is complying with the protocol. As one senior explained it to us, the difference between a good CRA and a bad CRA isn’t the use of judgment, but rather, the knowledge of where to look to find deviations from the protocol. So, instead of making judgments, or acting with independent discretion, CRAs are monitoring and grading the work of others to see if the testing sites are violating protocol, and if so, to report them.

To wit, federal regulations on this issue of independent judgment and discretion note that graders and inspectors are not administrators because they do not operate with the requisite independent judgment and discretion. 29 C.F.R. 541.203. Similarly, cases against Parexel, Covance, and Stanford University, have all been brought by CRAs alleging that they were misclassified, and have resolved for significant amounts.

Misclassification as Independent Contractors

While some CRAs are classified as employees by their employers, many CRAs work as “freelance” or “contract” CRAs, and are classified as independent contractors. But upon review of the relevant law of independent contractors, it is not entirely clear why.

As with all CRAs, freelance or contract CRAs are assigned to a specific project, spend weeks learning the project protocol, and then monitor testing sites to look for deviations from the protocol. Like other CRAs, freelance CRAs are provided with the tools of their work, including laptops, and are told what to do, when to do it, and how to do it. Under virtually any test of employment versus independent contractors, freelance CRAs should be deemed to be employees – albeit short-term employees.

And as with their directly employed counterparts, contract CRAs, by virtue of their misclassification, loose tens of thousands of dollars in lost income. For one, they pay self-employment taxes at double the rate of payroll taxes. That’s just one of a number of possible losses for misclassification.

Our California Employment Lawyers Can Help

If the company you work for tried to cut corners by misclassifying you as an independent contractor, you may be eligible to file a lawsuit seeking back pay and other benefits. These lawsuits usually have a 2-3 year time limit, so it’s important to get in touch with an employment lawyer right away to discuss your rights.

Contact us for a free, no-obligation consultation to learn more. Call to speak with our intake specialist (415) 534-1911.