Opinion
Record No. 1498-92-1
November 10, 1992
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION.
(Steve W. Edwards; Crook, Edwards and Edwards, on brief), for appellant. Appellant submitting on brief.
(Ralph E. Lawrence; White, Johnson Lawrence, on brief), for appellees. Appellees submitting on brief.
Present: Judges Baker, Elder and Fitzpatrick.
Pursuant to Code § 17-116.010 this opinion is not designated publication.
William Ballantyne, appellant, seeks review of the determination of the Virginia Workers' Compensation Commission that he was not an employee under the Workers' Compensation Act and, as such, is not entitled to compensation for a pneumothorax allegedly suffered on April 14, 1991. We affirm the commission's decision.
During the period in question, appellant delivered newspapers for the Virginian Pilot Ledger Star (hereinafter VP LS) pursuant to a Motor Route Home Delivery Agreement, which stated that appellant was an independent contractor and not an employee. The agreement included several provisions relating to physical delivery of the newspapers. It specified the geographical boundaries of appellant's route and the time by which the papers had to be delivered. It also required that he install and maintain delivery tubes and posts at the residence of each subscriber on his route and that he deliver the papers in plastic sleeves during inclement weather. Finally, it prohibited him from altering the contents of each paper, other than to insert the monthly bills.
The agreement also set forth various conditions regarding financing and record-keeping. VP LS agreed to sell to appellant, at wholesale prices, whatever quantity of papers he required. In addition to delivering the papers, appellant agreed to collect the subscription fee, to use a specific accounting method to keep track of those collections, and to make his collections records accessible to the newspaper for auditing. VP LS reserved the right to collect directly from the subscribers the moneys they owed in the event that appellant failed to do so, and it also reserved the right to increase the price charged per paper. Finally, it agreed to pay appellant a monthly amount of $560 plus commissions to be spent in whatever way he thought appropriate.
VP LS also sought to assure that its ultimate goal of newspaper delivery was met. It specifically disclaimed responsibility for any equipment, vehicles or personnel used by appellant in the performance of his duties, but it did require that appellant keep his delivery vehicle in good condition. It also required that, in the event of a planned or unplanned absence or incapacity, appellant would find a suitable substitute over the age of twenty-one to ensure uninterrupted delivery. Finally, it prohibited assignment of the delivery agreement without VP LS's prior consent and required thirty days notice for termination by either party.
Upon initial review, the deputy commissioner found that appellant had suffered a compensable injury. VP LS appealed to the full commission, which concluded that, under the holding in Richmond Newspapers, Inc. v. Gill, 224 Va. 92, 294 S.E.2d 840 (1982), appellant was not an employee at the time of the injury and, therefore, was not entitled to compensation.
In order to be eligible for workers' compensation benefits, a claimant must first establish that he or she was an employee at the time of the alleged injury. Independent contractors are "`not countable as employees within the meaning of the [Workers'] Compensation Act[, which] applies [only] to the contractual relationship of master and servant.'" Id. at 97, 294 S.E.2d at 843 (quoting Stover v. Ratliff, 221 Va. 509, 511, 272 S.E.2d 40, 42 (1980)). Determining whether appellant was an employee or an independent contractor is a question of law which we may review on appeal. Brown v. Fox, 189 Va. 509, 516, 54 S.E.2d 109, 113 (1949). However, upon application of the law to the undisputed facts, we reach the same conclusion as the commission — the ruling in Gill compels the determination that appellant was acting as an independent contractor at the time of the alleged accident.
In Gill, which also involved a newspaper delivery contract, the Virginia Supreme Court held that the "power of control is the most significant indicium of the employment relationship."Gill, 224 Va. at 98, 294 S.E.2d at 843. It also held, however, that "an employer-employee relationship exists only if the control reserved includes the power to control, not only the result to be accomplished, but also the means and methods by which the result is to be accomplished." Id. The Court discussed a variety of factors relevant to an assessment of that power. It noted that the contract itself stated that the worker was an independent contractor and held that, although not dispositive, this statement was relevant to show the parties' intent.Id. It compared appellant to an independent business retailer, who buys his merchandise at wholesale and resells it at a higher price, thereby assuming a risk of loss based on noncollection.Id. at 99, 294 S.E.2d at 844. It also discussed the contract's termination provisions, which allowed either side to terminate, but only after giving advance notice. Id. at 100, 294 S.E.2d at 844. Although not dispositive, the Court stated that this notice provision showed less power to control, which provided some evidence of an independent contractor rather than an employer-employee relationship. Id.
Of primary importance in the Court's analysis was the distinction between the power to control the result and the power to control the method by which that result was achieved. Although acknowledging that the contract required prompt delivery of newspapers to customers in a specified geographical area, preservation of the physical integrity of the newspapers, and the maintenance of goodwill toward the company, the Court emphasized that these conditions "relate[d], primarily, to [the newspaper's] power to control the result sought to be accomplished" rather than the method, which was indicative of an independent contractor rather than an employer-employee relationship.Id. at 100, 294 S.E.2d at 844-45 (emphasis added). In addition, the carrier had no specified work hours, could simultaneously hold other jobs, and could enlist the help of others so long as the papers were delivered in compliance with the terms of the contract. Id. at 101, 294 S.E.2d at 845. Finally, he was responsible for maintaining all equipment used to deliver the papers and for collecting client accounts. Id. Based on the newspaper's lack of control over the appellant's methods for accomplishing delivery, the Court concluded that he was an independent contractor and not entitled to workers' compensation. Id. at 102, 294 S.E.2d at 846.
The facts in this case are almost identical to those in Gill. Although the agreement included multiple provisions concerning delivery, these provisions related most directly to the result to be achieved. The newspaper retained only minimal control over the methods by which appellant chose to achieve that result. As in Gill, the agreement stated that appellant was an independent contractor and that notice was required prior to termination by either party. Also as in Gill, appellant operated much as a retail merchant, assuming the risk of loss from noncollection of subscription fees. The agreement did not require that he work specific hours, but only that the newspapers be delivered by a certain time. Although appellant consented to review of his accounting information by the company, he was personally responsible for collecting subscription fees, maintaining his own delivery equipment, and paying any other related expenses. Finally, the agreement allowed assignment with the company's permission, a term not characteristic of an employment contract for personal services.
In this case, as in Gill, appellant clearly functioned as an independent contractor and is not entitled to benefits under the Virginia Workers' Compensation Act. Accordingly, we affirm the commission's denial of benefits.
Affirmed.