after working for Envato for 8 years
I was dismissed without notice during the COVID-19 pandemic

But, what exactly does Envato have to gain with this release? Many companies ask workers to sign release forms at termination. However, this is not a standard release. The form itself is rather transparent and outlines - exactly what Envato does not want to be liable for. Signing this release means I would "waive entitlement to advance notice of termination"... and release all claims including those related to "breach of contract" and "implied covenant of good faith and fair dealing"... how convenient... but more importantly "all claims directly or indirectly arising with your engagement, or your relationships with any of the released parties stemming from your engagement with the company"...

Since 2013, I have suspected Envato of misclassifying workers based on how they engaged US contractors. Why is that a big deal? Companies that use independent contractors to fill employee roles are able to push their tax obligations onto their workers. For US contractors like myself, the portion of Medicare and Social Security taxes that an employer would typically pay was my responsibility - and was paid every year as part of my self employment taxes. In addition, states lose out on taxes that a business would typically owe for having employees - such as unemployment. This makes misrepresenting workers as independent contractors incredibly inexpensive in comparison - and ultimately allows a business to afford ~30% more human capital than their competition - which directly translates to rapid growth.

Companies exist for the bottom line. It is not unusual for a business to weigh profitability against legal compliance. Sometimes the cost and fines associated with breaking the law are easily written off as a cost of doing business. While this approach may indeed render better business results - somebody has to pay the price.

I questioned Envato's engagement practices many times - sending links to the IRS guidelines as well as the US Department of Labor Fact Sheet 13. I acted in good faith - assuming Envato wasn't familiar with US labor laws. They are an Australian company and technically did not have any US presence until around 2016. Requests for clarification were ignored - even those asked by other contractors. At the beginning of 2020, the Uber misclassification battle had hit a boiling point when California Assembly Bill 5 (AB5) went into effect. I believe it is not a coincidence that I was dismissed in such a coercive manner only months later. It remains a possibility that the timing and nature of dismissal was calculated and opportunistic.

I chose not to sign the release form. Primarily because of Envato's breach of contract, but more importantly the unbelievable disregard of human welfare during such a tragic time. Just months prior, Envato had guaranteed not to dismiss workers during COVID.

I requested arbitration since my contract required me to arbitrate any disputes - which many companies now use to keep legal and civil violations quiet and shield themselves from class action lawsuits. Envato ignored my request, so I paid an attorney to send a demand letter for unpaid wages. This was also ignored. So, I hired a different attorney specializing in misclassification. The first issue to address was an attempt to collect $580.32 for hours worked in October as well as the "severance offer". While I was never entitled to any type of severance, I am contractually entitled to 4 weeks written notice. Breach of contract was clear and confirmed - making damages under US contract law exactly the same as their severance offer. Envato's bully tactics had been confirmed.

A demand letter was sent and ignored, but serves as a written opportunity for Envato to rectify the situation. In accordance with terms of my original contract I no longer recognize any contractual obligations from my previous engagement - including any non-disparagement agreement or confidentiality and hereby terminate all prior agreements.

Envato is very much aware of this fact - and my efforts. Why not just sue in small claims court for breach of contract? Seems like the easiest and least expensive approach.Indeed, this is where I started. Unfortunately, the state of South Carolina does not currently recognize Envato USA, Inc. as a business entity. Extremely odd, considering they have had W2 employees in South Carolina recently. There must be some type of record on file with the state for paying taxes? When I explained the situation to the South Carolina Department of Revenue, I was forwarded to a special agent at the Criminal Investigation Nexus Branch and an investigation began. I'm not sure where that will lead and due to privacy concerns I will not hear the results.

Simply put - the state has no legal authority over Envato USA, Inc - because they do not exist in South Carolina. This means that no state level government agency (such as the Department of Labor that protects US worker rights violations) can exercise law over Envato USA, Inc - including courts. Digging deeper, I discovered Envato USA, Inc is only recognized in Utah and California. There are many contractors working in other states that are legally powerless regarding any civil or legal matters that may arise from Envato's actions. Should the company decide to breach any other existing contracts - including non-payment, those workers have absolutely no legal protections.

Attempted communication with Envato Pty Ltd / Envato USA, Inc was going nowhere. I have spent the last 3 months discussing my situation with the Fair Work Ombudsman in Australia, numerous Department of Labor investigators, Wage and Hour Division investigators, state advocates, tax advocates and multiple attorneys (specializing in contract law and misclassification). After the second demand letter, Envato finally responded - presenting the same opportunity to submit an invoice and sign the release for payment. I was given an option: take the money or do what I felt was right.

Months of discussions with state investigators and legal professionals have rendered no result for the sole reason of not having a suitable jurisdiction to enforce the law. However, on a positive note - they have given me enough confidence in my suspicions of Envato intentionally misclassifying US workers that I have chosen to leave nearly $5,000 on the table and spend thousands more in pursuit of what is right. It became clear this matter will only be resolved at a federal level. At the end of December, the IRS received 5 pounds of records and (what I consider) indicative proof surrounding how Envato has engaged US workers - in addition to documented discussions surrounding classification dating back to 2013. Many investigators and federal workers assisted me with compiling this request. For many years I wrote off my suspicions as differences in labor laws and worker protections between our countries. A lengthy discussion with a Fair Work Ombudsman Investigator made me aware that not only are our laws are quite similar, but Australia takes things one step further. Individuals that "look the other way" regarding misclassification claims can be held personally accountable. I agreed to provide the FWO with the results of current investigations. It is no longer in my hands and I trust that the state and federal agencies will arrive at the clear conclusion to protect the rights of US workers.