Opinion
No. 1319 C.D. 2012
02-07-2013
Renee S. Ebert, Petitioner v. Unemployment Compensation Board of Review, Respondent
PER CURIAM AMENDING ORDER
AND NOW, this 25th day of February, 2013, the memorandum opinion filed on February 7, 2013, is amended as follows: the second sentence in the first full paragraph on page 5 is hereby amended to read, "She applied for unemployment compensation benefits effective November 13, 2011,..."
In all other respects, the opinion and order shall remain in effect. BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE COLINS
Renee S. Ebert (Claimant), representing herself, petitions for review of the decision and order of the Unemployment Compensation Board of Review (Board), which affirmed the decision of a referee to deny unemployment compensation benefits pursuant to Sections 4(l)(2)(B) and 402(h) of the Unemployment Compensation Law (Law). We affirm.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§753(l)(2)(B), 802(h).
Section 402(h) of the Law provides that an employee shall be ineligible for compensation in any week in which he or she is engaged in self-employment. 43 P.S. §802(h). The term "self-employment" is not defined in the Law; however, the courts have utilized Section 4(l)(2)(B) to fill the void because its purpose is to exclude independent contractors from coverage. Krum v. Unemployment Compensation Board of Review, 689 A.2d 330, 332 (Pa. Cmwlth. 1997). Section 4(l)(2)(B) provides, in relevant part:
(2)(B) Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the department that -43 P.S. §753(l)(2)(B)
(a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact; and
(b) as to such services such individual is customarily engaged in an independently established trade, occupation, profession or business.
There is a presumption that one who performs a service for wages is an employee and not an independent contractor, but this presumption can be overcome if an employer sustains its burden of showing that each of the requisite elements set forth in Section 4(l)(2)(B) are met. Pasour v. Unemployment Compensation Board of Review, 54 A.3d 134, 137 (Pa. Cmwlth. 2012); Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593, 596 (Pa. Cmwlth. 2012).
The Board adopted the referee's conclusion that Claimant knowingly and freely entered into an independent contractor relationship with BeavEx, Inc. (BeavEx), a transportation broker, and performed transportation/delivery services for BeavEx's client, IDEXX Laboratories (IDEXX). (Record Item (R. Item) 19, Referee's Decision/Order at 3.) The Board also adopted the referee's findings of fact, which established that Claimant, who had performed transportation and delivery services in regular employment, became affiliated with BeavEx after responding to a newspaper ad soliciting individuals to perform its transportation services. (R. Item 19, Findings of Fact (F.F.) ¶¶ 5, 7.)
Claimant attended a seminar at which the affiliation agreement and necessary qualifications were explained, and subsequently executed an Owner/Operator Agreement with BeavEx; Claimant has a Commercial Drivers License, and has performed delivery services over the road for 10 years, in 48 states and Canada. (R. Item 19, F.F. ¶6, R. Item 18, Transcript of Testimony from Referee's 4/6/2012 Hearing (2nd H.T.) at 27.) BeavEx provided Claimant a list of available courier routes, and Claimant chose two routes, a morning route and an evening route, each consisting of seven or eight pickups, at prescribed times and in a prescribed order, of laboratory specimens from veterinary clinics in and around Pittsburgh, with a final drop-off at a prescribed location or "meet point" established by IDEXX. (R. Item 18, 2nd H.T. at 9-10.) Couriers for BeavEx negotiate a settlement amount for each route, based upon the number of stops and the total mileage, including a fuel surcharge; BeavEx paid Claimant $70.50 per day for the morning route, and $50 per day for the evening route. (R. Item 14, Transcript of Testimony from Referee's 3/12/2012 Hearing (1st H.T.) at 18, 33.) Just before Claimant arrived at her first route stop each day, she was required to log-in with the BeavEx dispatcher via telephone; she was also required to check in by telephone with IDEXX to determine whether any additional stops had been added to the route for that day, and to check in by telephone once more after turning over the specimens at the "meet point." (R. Item 18, 2nd H.T. at 14-15.) IDEXX required that persons performing delivery services wear identifying shirts and badges for security reasons, and complete and submit delivery logs to assure completion of work. (R. Item 19, F.F. ¶9, 11.) Claimant provided her own vehicle, gas, and any other needed supplies; was free to hire subcontractors or employees to perform delivery services as long as they met IDEXX's requirements (i.e., pass a drug test and a background check, and have a clean driving record); was free to perform the same kind of work for BeavEx's competitors; was not required to attend any regular meetings or training sessions; could contract for as many or as few routes as she wished; and received an IRS Form 1099 from BeavEx for tax filing purposes. (R. Item 19, F.F. ¶¶14, 16, 18, 23-24.) The referee found that Claimant's work was not supervised by BeavEx and that Claimant was not required to take any specific routes to reach her destinations. (R. Item 19, F.F. ¶¶19, 22.)
Pursuant to the Owner/Operator Agreement, Claimant was permitted to discontinue a route so long as she provided BeavEx with two weeks' notice; she did in fact exercise her option to discontinue the daytime route after stops were rearranged, and she was unsuccessful in renegotiating a higher payment for that route. (R. Item 18, 2nd H.T. at 35.)
The referee found that Claimant performed her work out of her home in Ohio, but most of her pickups and deliveries occurred in Pennsylvania. (R. Item 19, F.F. ¶15.) Although the major portion of the first hearing focused on the localization issue, the referee concluded that since Claimant was found ineligible for benefits due to her status as an independent contractor, the issue of localization, as well as the issue of Claimant's availability for work at the time she filed her application for benefits, need not be addressed in her decision.
Claimant severed the Owner/Operator Agreement when she could no longer maintain her route due to the impending birth of her child and an anticipated maternity leave. (R. Item 19, F.F. ¶27.) She applied for unemployment compensation benefits effective November 13, 2011, and, following a wage investigation conducted by a tax agent from the Bureau of Labor and Industry, the UC Service Center determined her to be ineligible. (R. Item 5, Notice of Financial Determination.) Claimant appealed, and a referee conducted a hearing over two days at which Claimant, represented by counsel, and two representatives from BeavEx, represented by counsel, testified, together with the tax agent who conducted the wage investigation. After the referee denied benefits, and the Board affirmed, Claimant timely filed the instant petition for review appealing the Board's order to this Court.
Our scope of review is limited to determining whether necessary findings of fact are supported by substantial evidence, whether an error of law was committed or whether constitutional rights were violated. 2 Pa. C.S. §704; Middletown Township v. Unemployment Compensation Board of Review, 40 A.3d 217, 223 n.8 (Pa. Cmwlth. 2012); First Federal Savings Bank v. Unemployment Compensation Board of Review, 957 A.2d 811, 814 n.2 (Pa. Cmwlth. 2008). --------
On appeal, Claimant argues that she was not an independent contractor but a BeavEx employee, and should therefore be eligible for benefits. She asserts that BeavEx did in fact directly supervise and control her performance, required her to report in and out for work, set her work hours and her salary, and wrongfully fired her prior to the commencement of her maternity leave. She claims that her position is buttressed by the hearing testimony of the tax agent, who, Claimant alleges, now believes that there is sufficient evidence to conclude that Claimant was an employee and not an independent contractor. Finally, Claimant alleges that her hearings were rushed and interrupted, leaving issues unaddressed.
In its brief, the Board relies upon Beacon Flag Car Co., Inc. (Doris Weyant) v. Unemployment Compensation Board of Review, 910 A.2d 103 (Pa. Cmwlth. 2006), a case wherein the claimant provided flag car driving services to clients of Beacon Flag Car Co. (BFC), a dispatch service, under an independent contractor agreement. As with BeavEx, BFC did not provide vehicles, and drivers were free to accept or decline any trip offered. As with BeavEx, BFC drivers did not report to any office or attend any meetings or training, but were told where a particular trip would start. Unlike BeavEx, BFC drivers were prohibited from competing with BFC during, and for eighteen months after, the agreement. In Beacon Flag Car Co., our Court noted that the first element of Section 4(l)(2)(B) of the Law - the issue of control - is based upon a showing of control, not only with regard to the work to be done, but also with regard to the manner of performing it. Beacon Flag Car Co., 910 A.2d at 108; see also Erie Independence House, Inc. v. Unemployment Compensation Board of Review, 559 A.2d 994 (Pa. Cmwlth. 1989). The Court stated in Beacon Flag Car Co.:
[T]he record and findings clearly support the conclusion that BFC does not control, or have authority to control, [c]laimant's day-to-day operations in the performance of his work. For example, (1) the client, not BFC, determines the time, place and destination of the trip; (2) BFC does not determine the route for its drivers or require drivers to report on their progress; (3) BFC does not supervise drivers; (4) BFC provides no training or equipment for its drivers, and does not require drivers to attend any meetings or report to a workplace; (5) drivers are free to make their own arrangements with clients, so long as BFC and [a leasing company] are appropriately
compensated; (6) BFC pays its drivers job to job on a per mile basis rather than an hourly wage; and (7) drivers are free to refuse any client or trip without repercussions.910 A.2d at 108. The Court concluded that notwithstanding BFC's non-compete clause, a factor not present sub judice, the numerous other factors weighed in favor of finding an absence of control. Id.
Similarly, in Venango Newspapers v. Unemployment Compensation Board of Review, 631 A.2d 1384, 1388 (Pa. Cmwlth. 1993), this Court found newspaper delivery persons free from direction and control where the only control exercised by the newspaper was over the territory they could cover, the time for picking up the newspapers for delivery, and the requirement that they provide prompt, dependable deliveries prior to a specified time each day. Sub judice, BeavEx's client, IDEXX would specify the times and the order in which its specimens would be ready for pickup on a given route, but Claimant was free to bid on the route, and thereafter abandon it, pursuant to the terms of her Owner-Operator Agreement, so long as she provided BeavEx with proper notice; she could continue to provide delivery services on other BeavEx-supplied routes, so long as she continued to service the entire route contracted for in the agreed upon manner. The Court, in Venango, found that the territory and time requirements are not factors indicative of control but rather parameters of the contract of service entered into between the claimants and the newspaper. Id.
The referee found that the second prong of the test set forth in subsection (b) of Section 4(l)(2)(B), regarding whether or not Claimant was engaged in "an independently established trade, occupation, profession or business," was met, stating that Claimant was free to avail her driving services to any other company for the performance of similar services. (R. Item 19, Referee's Decision/Order at 3.) In addition to the ability to work for more than one enterprise, our Supreme Court has also identified the ability to select which assignments an individual wants to accept or reject as a factor that supports a finding that the individual is engaged in an independently established business. Danielle Viktor, Ltd. v. Department of Labor and Industry, Bureau of Employer Tax Operations, 586 Pa. 196, 892 A.2d 781 (2006) (involving a group of limousine drivers). In Viktor, Ltd., the Supreme Court stated, "It is difficult to fathom a situation where someone other than an individual engaged in his or her own business would possess the unmitigated prerogative to accept or reject assignments at will, to work only when he or she chose to, to substitute other workers of his or her choice when he or she chose not to complete an assignment, and to perform the services however he or she saw fit to do so." Viktor, Ltd., 586 Pa. at 222, 892 A.2d at 797. The referee found that Claimant was free to pick and choose available routes, and to hire subcontractors to perform the work. (R. Item 19, F.F. ¶¶14, 17.) We conclude that under the totality of the circumstances presented here, BeavEx sustained its burden under both prongs of Section 4(l)(2)(B).
Claimant's argument regarding the testimony of the tax agent, who was responsible for performing Claimant's wage investigation, is unpersuasive, as is her assertion that the hearings were conducted improperly. Although she participated by telephone at both hearings, the tax agent declined to provide direct testimony, offered no specifics about her investigation, and commented at the conclusion of the second hearing, when asked by the referee if she had anything to say:
I pretty much made my [d]etermination - I did make her an independent contractor but mind you I didn't have all the documentation that I did at this point. And I'm actually still kind of in between now at this point...after
hearing all the testimony because I see some things one way and some things another...but I don't have any more questions...I don't know what else to really say...my mind is just numb right now. I'm sorry...I don't know what else to really say other than probably if I had more information I may have decided differently.(R. Item 18, 2nd H.T. at 74.) We find this testimony equivocal, at best. Further, Claimant was represented by counsel at the hearings, conducted over two days, and both Claimant and the BeavEx witnesses testified at length. Our review of the transcript reveals no evidence whatsoever indicating that the proceedings were either rushed or interrupted.
Accordingly, the order of the Board is AFFIRMED.
/s/_________
JAMES GARDNER COLINS, Senior Judge ORDER
AND NOW, this 7th day of February, 2013, the order of the Unemployment Compensation Board of Review in the above-captioned matter is hereby AFFIRMED.
/s/_________
JAMES GARDNER COLINS, Senior Judge