Summary
In Abramczuk, we noted that 8-41-301 requires that in order to recover workers' compensation benefits the claimant must be the respondent's "employee" at the time of the injuries.
Summary of this case from In re Johnson v. Brisk Trans., L.P., W.C. NoOpinion
W.C. No. 4-688-350.
November 19, 2007.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Felter (ALJ) dated May 30, 2007 to the extent that the ALJ determined the claimant was a Brisk Transportation, L.P. (Brisk) employee acting in the course and scope of his employment at the time of his neck injury. We affirm.
The ALJ's pertinent findings of fact are as follows. On May 4, 2006, the claimant suffered an injury to his neck while unloading goods that he had hauled by truck as a driver pursuant to a contract with Brisk. Brisk is a common carrier that picks up and delivers trailers loaded with goods for grocery stores. The contract provides that the claimant will lease a truck to Brisk that the claimant will then drive, in order to transport goods. Brisk's dispatcher specified the claimant's daily runs. The contract provided the claimant could elect to participate in a master occupational accident and disability insurance plan through Great American (Plan) and the claimant elected to do so. The Plan provided by Brisk to the claimant did not provide benefits that were "at least comparable to" the benefits available in Colorado's Workers' Compensation system. Brisk did not offer the claimant workers' compensation coverage through Pinnacol Assurance or through any other company.
The ALJ concluded that the claimant was an employee pursuant to §§ 8-40-301 and 40-11.5-102, C.R.S. 2007. The ALJ also considered the criteria outlined in § 8-40-202(2)(b)(II) C.R.S. 2007 and concluded that the claimant was not an "independent contractor." The ALJ found that the claimant had proven by a preponderance of the evidence, that he was an "employee" within the meaning of the Colorado Workers' Compensation Act.
I.
On appeal the respondents contend that the ALJ erred by concluding that the claimant was an employee pursuant to § 8-40-301 and § 40-11.5-102. We disagree.
Section 8-41-301 requires that in order to recover workers' compensation benefits the claimant must be the respondent's "employee" at the time of the injuries. Section 8-40-202(2)(a), C.R.S. 2007, provides:
Notwithstanding any other provision of this section, any individual who performs services for pay for another shall be deemed to be an employee, irrespective of whether the common-law relationship of master and servant exists, unless such individual is free from control and direction in the performance of the service, both under the contract for performance of service and in fact and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed.
However, under § 8-40-301(5), a person working as a driver under a lease agreement meeting the requirements set forth in § 40-11.5-102, is excluded from the definition of "employee." Further, a lease agreement which meets the requirements of § 40-11.5-102(4) creates a presumption that the lessee is an independent contractor and that presumption may only be overcome by "clear and convincing evidence." It is also provided in § 8-40-301(6), that any person working as a driver with a common carrier shall be offered workers' compensation insurance coverage by Pinnacol Assurance or similar coverage consistent with the requirements set forth in § 40-11.5-102 (5).
Section 40-11.5-102(5)(a) provides, however, that a lease agreement that qualifies to exclude a driver from the definition of an "employee" must also "provide for coverage under workers' compensation or a private insurance policy that provides similar coverage." Section 40-11.5-102(5)(b), defines the term "similar coverage" as disability insurance for on and off-the-job injuries, health insurance and life insurance.
In USF Distribution Services, Inc. v. Industrial Claim Appeals Office, 111 P.3d 529 (Colo.App. 2004), the issue arose of whether the claimant's failure to secure complying coverage changed his status from that of an independent contractor to that of an employee. The court noted that § 8-40-301(5) was enacted simultaneously with § 8-40-301(6) and § 40-11.5-102(5). See Colo. Sess. Laws 1992, ch. 224 at 1798-801. The court determined that the purpose of these amendments was to clarify that drivers working for contract carriers under qualifying lease agreements are to be treated as "independent contractors" for purposes of workers' compensation benefits liability. The court recognized that § 8-40-301(5) evinces a clear legislative intent to exclude leased drivers from the definition of "employee." However, the court also noted that when the statute is viewed in combination with both § 8-40-301(6) and § 40-11.5-102(5), it becomes clear that the exclusion takes effect only when the lease agreement includes complying coverage. The scheme created by these statutes shares the same purpose underlying the statutory employer provision, see § 8-41-401(1)(a), C.R.S. 2007, which is to prevent an employer from evading compensation coverage by contracting out work instead of directly hiring the workers.
In USF Distribution Services, the court also explained that pursuant to § 8-40-202(2)(c), nothing in § 8-40-202(2)(a) or (b) was intended to conflict with § 8-40-301 or to otherwise relieve any obligation imposed by that statute. The court further reasoned that excepting the driver from the definition of an "employee" under § 8-40-202(2)(a) might conflict with the obligation to provide complying insurance imposed in § 8-40-301(6). Therefore the court concluded that § 8-40-202(2)(a) did not apply to the truck driver in USF Distribution Services. The court further ruled that since the claimant established that the policy negotiated through respondent did not comply with the requirements set forth in § 40-11.5-102(5), the claimant was an employee at the time of his industrial injury.
In USF Distribution Services the court concluded that the "claimant could establish his status as an `employee' of respondent for purposes of the Act either by overcoming the presumption created under § 40-11.5-102(4) with clear and convincing proof or by showing that he was not offered coverage that satisfied the requirements set forth in § 40-11.5-102(5)." USF Distribution Services, 111 P.3d at 533. The court found that because the claimant had established the policy negotiated through the respondent did not comply with those requirements, it did not need to reach the issue of whether the claimant otherwise established the existence of an employment relationship.
In our view, there is no principled distinction between USF Distribution Services and the facts of this case. Here, the ALJ found that Brisk was a common carrier, and as the claimant was a driver who delivered goods for Brisk, pursuant to the Act, Brisk was required to either offer the claimant coverage through Pinnacol Assurance or to offer similar coverage. The ALJ found that Brisk did neither. The ALJ, citing USF Distribution Services, Inc., specifically found that the coverage offered to the claimant under the Plan was not comparable to the benefits offered under the Workers' Compensation Act. Therefore, finding that the insurance coverage under the Plan offered to the claimant was not comparable to the benefits offered under the Act, the ALJ determined that the claimant was an employee of the respondents at the time of the accident and that the injury was compensable. In their appeal, the respondents do not contest this finding.
The respondents contend that § 8-40-202(2)(c) is ambiguous and argues that a preliminary determination must be made as to whether the claimant was an employee under § 8-40-202(a). However, the court of appeals in USF Distribution Services, Inc. specifically dealt with § 8-40-202(2)(c) and because they found that applying the exception would conflict with the obligation to provide complying insurance imposed in § 8-40-301 (6), the court concluded that § 8-40-202(a) does not apply. In our opinion, USF Distribution Services, Inc. is controlling and we perceive no error in the ALJ's reliance on it to find that the claimant was an "employee" at the time of the accident.
II.
The respondents also contend the ALJ erred by failing to make findings of fact and conclusion of law regarding all of the statutory elements of § 8-40-202(2)(B)(II). The respondents contend that the ALJ's findings and conclusions are insufficient to permit appropriate appellate review as to whether he properly weighed and applied the statutory elements in § 8-40-202(2)(b)(II). We disagree.
Pursuant to § 8-40-202(2)(a), "any individual who performs services for pay for another shall be deemed to be an employee" unless the person is "free from control and direction in the performance of the service, both under the contract for performance of service and in fact and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed." The putative employer may establish that the claimant was free from direction and control and engaged in an independent business or trade by proving the presence of some or all of the nine criteria set forth in § 8-40-202(2)(b)(II). See also Nelson v. Industrial Claim Appeals Office, 981 P.2d 210 (Colo.App. 1998). Under that statute, factors indicating that an individual is not an independent contractor include the individual being paid a salary or hourly rate instead of a fixed contract rate, and being paid in his individual name rather than a trade or business name. Conversely, independent contractor status may be indicated if the person for whom the services are performed provides no more than minimal training to the claimant, does not dictate the time of performance, does not establish a quality standard for the claimant's work, does not combine its business with the business of the claimant, does not require the claimant to work exclusively for one person or company and cannot terminate the claimant for any reason.
Here the ALJ specifically considered the criteria outlined in § 8-40-202(2)(b)(II). Findings of Fact, Conclusions of Law, and Order (Order) at 9, ¶ (h). This statute creates a "balancing test" to overcome the presumption of employment contained in § 8-40-202(2)(a) and establish independent contractor status. Nelson v. Industrial Claim Appeals Office, supra. The question of whether the employer has presented sufficient proof to overcome the presumption is one of fact for the ALJ. Accordingly, we are bound by the ALJ's determinations if supported by substantial evidence and plausible inferences drawn from the record. Section 8-43-301(8), C.R.S. 2007; F.R. Orr v. Rinta, 717 P.2d 965 (Colo.App. 1985). This standard of review requires that we view the record in the light most favorable to the prevailing party, and accept the ALJ's resolution of inconsistencies and conflicts in the evidence. Industrial Commission v. Royal Indemnity Co., 124 Colo. 210, 236 P.2d 293 (1951); Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995). The ALJ concluded that considering these factors, the claimant was not an independent contractor. We decline to disturb the ALJ's related findings. Moreover, as noted by the ALJ, his determination that the coverage offered to the claimant did not comply with the requirements of § 40-11.5-102(5) is dispositive concerning the claimant's employment status. Order at 9, ¶ (f). See USF Distribution Services, 111 P.3d at 533-34.
III.
The respondents finally contend that the ALJ erred by failing to address the issue of whether the claimant's benefits should be denied pursuant to § 8-41-401(3), C.R.S. 2007. The respondents request the matter be remanded for the ALJ to address that issue. In our opinion, no remand is necessary.
The respondents in closing argument did mention § 8-41-401(3) as additional support for the proposition that the ALJ is first required to make a determination if the claimant is an independent contractor under § 8-40-202, in which event there is no need to consider the provision under § 8-40-301. Tr. at 112-113. It is clear from the transcript that the ALJ was not convinced by this argument.
The ALJ's written order does not specifically address § 8-41-401(3). However, we note the ALJ is not held to a standard of absolute clarity in expressing findings of fact and conclusions of law. It is sufficient for the ALJ to enter findings concerning the evidence he considers dispositive of the issues, and evidence and inferences inconsistent with the order are presumed to have been rejected. Magnetic Engineering Inc. v. Industrial Claim Appeals Office, 5 P.3d 385 (Colo.App. 2000). Further, the ALJ is presumed to have considered and applied the relevant legal principles. Shafer Commercial Seating, Inc. v. Industrial Claim Appeals Office, 85 P.3d 619 (Colo.App. 2003).
In any event in considering § 8-41-401(3), we perceive no error in the ALJ's determination that the claimant was a Brisk employee at the time of his injury. In general it is provided in § 8-41-401 that any company conducting business by leasing or contracting out any part of the work thereof to any lessee or subcontractor, shall be construed to be an employer. Section 8-41-401(3) specifically provides as follows:
Notwithstanding any provision of this section or section 8-41-402 to the contrary, any individual who is excluded from the definition of employee pursuant to section 8-40-202 (2), or a working general partner or sole proprietor who is not covered under a policy of workers' compensation insurance, or a corporate officer or member of a limited liability company who executes and files an election to reject coverage under section 8-41-202 (1) shall not have any cause of action of any kind under articles 40 to 47 of this title.
However, it also provided in § 8-41-401 (7) that the section shall not apply to any person excluded from the definition of "employee" pursuant to section 8-40-301 (5) or (7). As discussed above the court of appeals has in USF Distribution Services, Inc. v. Industrial Claim Appeals Office, supra, explained that a person excluded from the definition of an "employee" under section 8-40-301 (5) or (7) could establish his status as an "employee" under § 40-11.5-102(4) by showing that he was not offered coverage that satisfied the requirements of § 40-11.5-102(5), notwithstanding § 8-40-202.
Here the ALJ found that the coverage offered to the claimant under the Plan offered by Brisk to the claimant was not comparable to the benefits offered under the Workers' Compensation Act. In our view, the opinion USF Distribution Services, Inc. is again controlling and we perceive no error in the ALJ's reliance on it to find that the claimant was an "employee" at the time of the accident.
IT IS THEREFORE ORDERED that the ALJ's order dated May 30, 2007 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_______________________ John D. Baird
_______________________ Thomas Schrant
ANTON ABRAMCZUK, PARKER, CO, (Claimant).
BRISK TRANSPORTATION, L.P., Attn: MICHAEL LYNCH, DENVER, CO, (Employer).
LIBERTY MUTUAL FIRE INSURANCE CO, Attn: KAREN CROKER, ENGLEWOOD, CO, (Insurer).
FOGEL KEATING WAGNER POLIDORI SHAFNER, P.C., Attn: LAURENCE J FREE, ESQ., DENVER, CO, (For Claimant).
ZARLENGO, MOTT, ZARLENGO WINBOURN, P.C., Attn: SCOTT M BUSSER, ESQ., DENVER, CO, (For Respondents).
LIBERTY MUTUAL INSURANCE COMPANY, Attn: MOLLY CJHAPUT, IRVING, TX, (Other Party).
BRISK TRANSPORTATION, Attn: TERRY LYNCH, DALLAS, TX, (Other Party 2).