A Toronto lawyer has launched a $384-million class-action lawsuit against Deloitte LLP, alleging that hundreds of lawyers were misclassified as independent contractors, depriving them of employee benefits.

The lawsuit claims that as independent contractors, the lawyers missed out on Employment Standards Act entitlements such as vacation or overtime pay, and the company was not required to provide termination notice.

Lawyer Shireen Sondhi has accused Deloitte and placement agency Procom Consultants Group Ltd. of misclassifying employees working in Deloitte’s document review branch, which formerly operated as ATD Legal Services Professional Corp.

Document review is the process of classifying documents relevant to a legal case.

Sondhi said she began doing contract work with ATD in November 2013, shortly before it was bought by Deloitte in January 2014.

The claim states Sondhi accepted work on a project at Deloitte on Jan. 15 that was expected to run for two to three weeks at an hourly rate of $47.

She alleges Deloitte unilaterally decided to administer the contract through Procom, which then deducted wages for administrative services, placement and Employment Insurance and Canadian Pension Plan contributions.

She said she was uncomfortable with these changes, and raised her concerns with management. After several back and forth emails, the lawsuit alleges Sondhi was told that if she didn’t accept the revised contract — at about $43 an hour — it would be terminated.

“I felt like Deloitte was in a power position and they knew it, and they were taking advantage of the document reviewers,” she told the Star.

None of the allegations have been proven in court, and Deloitte has denied them.

“We believe that the claim has no merit and we will vigorously defend the proposed class action. As the matter is now before the courts, it is not our intention to discuss the matter publicly,” Vital Adam, Deloitte’s senior manager of public relations, told the Star in an email.

The lawsuit states the lawyers should have been treated as employees since they worked under supervision in Deloitte’s offices, and the company provided them with computers, set their work schedules and barred them from hiring subcontractors.

The plaintiffs also argue that their duties as document reviewers did not constitute legal services, and therefore they should be covered under the Employment Standards Act.

“They have all the hallmarks of being employees,” said Andrew Monkhouse, a Toronto employment lawyer who filed the claim.

Most of the money being claimed in the lawsuit relates to pay “in lieu of reasonable notice” of termination, and a failure to remove statutory deductions, lost Employment Insurance benefits, and punitive damages, among other things.

“For many young lawyers, saddled with staggering student debt and desperate not to leave the field of law, document review is a last resort,” the statement of claim says. “Deloitte is one of only a few document review companies in Ontario, and for many Class Members, represents their sole source of income.”

The lawsuit was served on Tuesday on behalf of all persons that performed, or are performing, document review or e-discovery services for ATD or Deloitte, and were classified as independent contractors.

A certification motion is pending to determine whether there is a legal basis for a class action, Monkhouse said. If the case is certified, it could eventually include hundreds of people.

“We don’t know how many class members there are exactly, but it is certainly hundreds of lawyers,” he said, adding the case could lead to more class actions related to how workers are classified in other job sectors.

“It is important to enforce the laws because otherwise employers can just call people whatever they want.”

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Deloitte and Procom have 20 days as of Tuesday to respond to the claim, Monkhouse said.

Deloitte is one of the biggest audit and financial consulting firms in the world, and one of the “Big Four” in the U.S., alongside KPMG, PricewaterhouseCoopers and Ernst & Young.

The Canadian branch, Deloitte LLP, has offices in 55 locations across the country.