The Entrepreneurial Responsibilities Test

Article by Jooho Lee

This Article proposes a three-part test to help simplify worker classification and connect the law with the overall purposes of our economic system.  Existing legal tests struggle to provide justifiable and workable guidance for courts, employers, and workers.  One recent response has been an increased focus on entrepreneurship.  However, neither courts nor scholars have paid sufficient attention to economic theories of entrepreneurship to inform their reliance on the concept.  By drawing from classic economic theories of entrepreneurship, this Article will argue that a worker should be considered an employee unless she assumes entrepreneurial responsibility within her economic relationship with the hirer and that entrepreneurial responsibility consists of three elements: (1) the assumption of liability for economic uncertainty; (2) the exercise of control over the allocation of resources being combined to sell in the market; and (3) participation in the market discovery process by buying resources to sell in the market in the pursuit of profits.

About the Author

Assistant Professor of Business Ethics and Law, Pepperdine University; Ph.D., The Wharton School at the University of Pennsylvania; J.D., University of Pennsylvania Law School.


92 Tul. L. Rev. 777 (2018)