Opinion
Case No. 03-1463-KI.
July 1, 2004
Steven C. Burke, Lake Oswego, Oregon, Attorney for Plaintiff
Carol J. Bernick, Elizabeth C. Knight, Davis Wright Tremaine LLP, Portland, Oregon, Attorneys for Defendant.
OPINION
Plaintiff Herbert Rowder alleges various wage claims under Oregon law against his former employer BancTec, Inc. ("BancTec"). About a year after Rowder was hired as an employee, BancTec claims it changed his employment status from employee to independent contractor. Rowder contends that he is still an employee and is entitled to be treated as one under the wage laws. Before the court is Plaintiff's Motion for Partial Summary Judgment (#8), in which Rowder seeks a ruling that he is an employee. For the reasons below, I deny the motion.
FACTS
BancTec's Computer and Network Services ("CNS") division provides services for several companies that make personal computers. CNS has two sub-divisions: (1) full service; and (2) parts and labor. The full service division does troubleshooting, updating software and hardware, replacing printer toner cartridges, and providing maintenance to printers and computers. The parts and labor division does only warranty repair work. Customer Engineers did both warranty work and full service work. Mike Wills, a Field Service Supervisor, supervised the Customer Engineers in Oregon. Every morning, he would email the Customer Engineers in Oregon and assign them jobs for the day. The Customer Engineers had no discretion on accepting or rejecting assignments. They were expected to work all assignments sent to them.
Customer Engineers were paid on an hourly basis, including overtime, after submitting weekly time sheets to Wills. BancTec made a contribution to Customer Engineers' 401(k) plans, offered health insurance, provided vacation and sick leave, withheld taxes, reimbursed them for business expenses such as mileage and parking, and provided a paid cell phone. BancTec expected Customer Engineers to carry certain tools. Many had the required tools from prior work experience but if not, they could purchase the tools and be reimbursed by BancTec.
BancTec hired Rowder as an employee on November 13, 2000, as a Customer Engineer with Wills as his supervisor. Rowder's primary job duty was to repair and maintain computers. He performed both warranty work and full service work, with most of the work being warranty work. Rowder would receive his work assignments via email at home, contact the customer to confirm the appointment, travel to one or more locations to pick up parts, then travel to customer locations to work on the computers. Rowder would plan out his day based on the location of the work assignments and whether people were home when he first tried to contact them. Rowder reported his work hours to BancTec. Like other Customer Engineers, he had to provide his own tools based on a minimum set specified by BancTec.
In 2001, BancTec made a business decision to spin off the warranty work to independent companies. Former Customer Engineers were offered the opportunity to sign an Independent Contractor Agreement ("Agreement"). The Agreement clearly states that the independent contractor will at no time be considered an employee of BancTec.
According to Wills, the independent contractors performed only warranty work and no full service work. Wills continued to email the independent contractors with a list of jobs, which they could accept or reject. Wills did not instruct the independent contractors on the order to perform the jobs. They were not required to work an 8:00 AM to 5:00 PM shift and could arrange their own work schedules. Independent contractors were paid by the job after submitting invoices showing the number of jobs completed and the mileage involved. They did not report hours and were not reimbursed for business expenses. BancTec did not withhold taxes for the independent contractors, did not contribute to their 401(k) plans, and did not provide any other benefits. BancTec also required the independent contractors to have a minimum set of tools but would not reimburse tool purchases.
In early December 2001, BancTec gave Rowder the Agreement and told him that he could sign the contract and become an independent contractor, thus terminating his employment, or that he would be terminated and unemployed. Rowder executed the Agreement effective December 22, 2001.
After signing the Agreement, Rowder was paid a flat rate by the job, depending on the distance between consecutive jobs, he no longer received fringe benefits and he was no longer reimbursed for business expenses. He states that the means and manner in which he performed his work did not change, although the means of assigning specific jobs changed slightly. Rowder continued to tell customers that he was a BancTec employee if they asked. BancTec never instructed him to stop doing so. BancTec continued to require him to carry a minimum set of tools.
Rowder states that he continued to perform both warranty work and full service work. After executing the Agreement, however, Rowder stopped performing both full service and warranty work on printers due to the manufacturer's requirement that trained, full-time employees of BancTec perform that work.
Rowder states that occasionally, Wills would still prioritize his assignments or require that a particular assignment be performed on a certain date. Rowder states that BancTec's policies and procedures about his schedule, hours worked, and time of completion never changed after he executed the Agreement. BancTec would require Rowder to wait on standby for a full day at an Airborne Express pick-up location for jobs that might be assigned to him during that day, although BancTec would not guarantee that any work would be assigned.
When Rowder refused to take specific work assignments, BancTec retaliated by reducing his workload. After Rowder refused two assignments, BancTec never sent him another. His last service call was in May 2002.
LEGAL STANDARDS
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). The initial burden is on the moving party to point out the absence of any genuine issue of material fact. Once the initial burden is satisfied, the burden shifts to the opponent to demonstrate through the production of probative evidence that there remains an issue of fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On a motion for summary judgment, the evidence is viewed in the light most favorable to the nonmoving party. Robi v. Reed, 173 F.3d 736, 739 (9th Cir.), cert. denied, 528 U.S. 375 (1999).
DISCUSSION
I. Motions to Strike
BancTec moves to strike Plaintiff's Exhibit 1, a letter dated November 8, 2002, from the Internal Revenue Service ("IRS") to Rowder which states the opinion that Rowder is an employee of BancTec for the year 2002. BancTec objects that the letter is not properly authenticated and is inadmissible hearsay.
The court can only consider admissible evidence in ruling on a motion for summary judgment. Authentication is a condition precedent to admissibility and is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims it is. Orr v. Bank of America, NT SA, 285 F.3d 764, 773 (9th Cir. 2002). If the document is authenticated by personal knowledge, rather than under Fed.R.Evid. 901 or 902, the document must be attached to an affidavit from an affiant through whom the exhibit could be admitted into evidence. Id. at 774.
Here, Rowder has not attempted to authenticate the IRS letter through any means, although he states in response that he is trying to do so by obtaining a declaration from the IRS custodian. Nothing has yet been filed so I grant the motion striking Plaintiff's Exhibit 1.
I also note that the letter has little evidentiary value, even if authenticated. The IRS opinion is based on information from Rowder only, with no input from BancTec, and does not even state the facts on which the opinion is based. Therefore, I would not have considered it persuasive.
BancTec also filed a motion to strike all new evidence that Rowder supplied with his reply brief, or alternatively asks to file a sur-reply. Because of the analysis below, I decline to rule on this motion and deny it as moot.
II. Statutory Provisions Concerning Independent Contractors
In his opening brief, Rowder bases some of his arguments on ORS 670.600 and ORS 652.310.
ORS 670.600 sets forth a standard to be used when determining if an individual is an independent contractor for purposes of ORS Chapters 316 (personal income tax), 656 (workers' compensation), 657 (unemployment insurance), 671 (architects, landscape architects, contractors), and 701 (construction contractors). Rowder, however, alleges his claims under ORS Chapters 652 (hours, wages, wage claims, and records) and 653 (minimum wage, employment conditions, minors). Thus, ORS 670.600 does not apply to this action.
ORS 652.310 distinguishes between employees and independent contractors in the music industry and only applies to the portion of ORS Chapter 652 discussing wage claims prosecuted by the Commissioner of the Bureau of Labor of Industries. Again, it does not apply.
III. Common Law Test for Independent Contractors
The sole issue before me is whether Rowder actually became an independent contractor after executing the Agreement.
The initial common law test used to determine if an individual is an employee or an independent contractor is the "right to control" test. Four factors are considered: "(1) direct evidence of the right to, or exercise of, control; (2) the furnishing of tools and equipment; (3) the method of payment; and (4) the right to fire." Stamp v. Dept. of Consumer and Business Services, 169 Or. App. 354, 357, 9 P.3d 729 (2000) (determining status for purposes of workers' compensation). No single factor is dispositive but a single factor indicating an employeremployee relationship may be proof of an employment relationship whereas contrary evidence, indicating independent contractor status, "is, at best, mildly persuasive and may have no effect at all to a determination of worker status." Id. at 360.
If, and only if, the right to control test is inconclusive, the court turns to the "relative nature of the work" test. Id. It consists of two components:
The first is the character of the person's work or business — its skill, status as a separate enterprise, and the extent to which it may be expected to carry the burden of its accidents itself. . . . The second nature of the work test element is the relation of a person's work to the employer's business — how much it is a regular part of the employer's regular work, whether it is continuous or intermittent, and whether it is of sufficient duration to be the hiring of continuing services rather than contracting for a particular job.Id. at 358-59.
The parties disagree on several factual aspects of Rowder's work after he signed the Agreement. There is a dispute on whether he continued to perform full service work or only did warranty work. Rowder states that the method of assigning jobs changed slightly but does not explain the change. There is a dispute on whether Wills prioritized Rowder's assignments. There is a dispute on whether Wills required Rowder to wait on standby for a full day with no guarantee of an assignment. There is a dispute on whether Rowder was free to turn down assignments without retaliation. These facts are all relevant to the first factor of the right to control test, whether BancTec retained the right to control, or actually did control, Rowder after he executed the Agreement. Consequently, I must conclude that there is a material factual issue preventing me from applying the test. I deny Rowder's motion for partial summary judgment.
CONCLUSION
Defendant's Motion to Strike (#13) is granted. Defendant's Motion to Strike Second Rowder Declaration and Paragraph 7 of Plaintiff's Concise Statement (#26) is denied as moot. Plaintiff's Motion for Partial Summary Judgment (#8) is denied.