Financial investment firm’s misclassification leads to kick in assets

One area of employment law that remains a trap for the unwary is determining whether a worker is an independent contractor or an employee. A recent Illinois Wage Payment and Collection Act (IWPCA) ruling by a state appellate court is a cautionary tale to those who misclassify employees as contractors.

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Dennis J. O’Malley holds degrees in finance and law and cut his teeth in banking at ABN AMRO in Chicago, where by 1988 he helped lead a group providing financing for leveraged buyouts. By 2000, he had a multi-billion-dollar book of business, and two years later he became global head of asset-backed commercial paper for the company. He left ABN in 2004.

Soon thereafter, O’Malley was contacted by an investor who suggested he consider joining International Asset Transactions, LLC (IAT). IAT was a start-up developing an independent conduit for asset-backed commercial paper, a type of business O’Malley thrived in at ABN.

After meeting in New York with Augustine Udo, IAT’s president and CEO, O’Malley accepted an offer to run a conduit called SuperLumina, which would provide financing for trade payables. The deal was to compensate him $1,000 per day plus expenses, until the company was fully funded, when he would have a base salary of $215,000. The written “engagement letter” confirming the terms referred to him as a “consultant.”