Seeking employment attorney with experience in the events industry

April 01, 2025
by a searcher from Georgetown University - The McDonough School of Business in Cleveland, OH, USA
I have a business under LOI in the events industry that uses contractor###-###-#### support for events during busier seasons. The contractors are specialized designers and installers that travel across the country to work for various event companies, in addition to Target company.
My attorney has raised a potential concern that the company could be in violation of federal (IRS, DOL) and/or state (SC) laws, and that successor liability would hold me accountable for all prior unpaid taxes post-sale even in an asset sale if the company is indeed misclassifying employees as contractors. While I understand that the latter point is accurate (successor liability would include employment/employee-related issues regardless of asset sale), I find it difficult to understand how the industry overall could operate without the use of contractors. My sister-in-law works as a director for Sparks (recently acquired by Freeman, one of the largest events companies nationally) and confirms that this is common practice. I find it difficult to believe that a transaction of that size did not go through an extensive audit to ensure that there were no violations of labor laws.
The IRS "tests" for classifying labor as employees vs. contractors are opaque and there appears to be nothing but gray area in anything I have read online.
Liabilities for past practices aside, if the business were required to classify all of these contractors as employees, this would very likely kill the deal based on the go-forward financial implications alone.
Any attorneys out there specializing in employment law have experience in the events industry? Catering is another industry that I believe uses a similar business model. Referrals much appreciated!
from North Park University in Orlando, FL, USA
from Wright State University in Bellefontaine, OH 43311, USA
https://wellslawllc.com/about/mindiwells/