IRS Preempts State In Misclassification Suit: 3rd Circ.

Law360, New York (September 11, 2008, 12:00 AM EDT) -- An appeals court has dashed a bid by a Planco Financial Services Inc. employee to overturn the dismissal of her putative class action alleging the company misclassified her and her co-workers as independent contractors, then wrongly withheld taxes after reclassifying them.

The Third Circuit ruled Wednesday the U.S. District Court for the Eastern District of Pennsylvania was right to toss the action alleging breach of contract and unjust enrichment under state law, saying the claims were preempted by federal income tax law.

The putative class action...
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