Question on situation
timr: This is really common in the design world, especially in this crappy economy.  Design firms don't have steady demand right now, and a lot of them have laid off former full-time designers, only to pull them back in on contract when work comes through the door.  I have friends who are/were in exactly this situation.I think you probably overreacted.  Why don't you trust the professional designers to choose their employees?  What does the employee's tax status have to do with the designs they deliver?