REEVES v. NEW IMAGE SECURITY BARS DOORS, 1997 AWCC 155

CLAIM NO. E515779

WILLIAM D. REEVES, EMPLOYEE, CLAIMANT v. NEW IMAGE SECURITY BARS DOORS, UNINSURED EMPLOYER, RESPONDENT

Before the Arkansas Workers’ Compensation Commission
OPINION FILED MARCH 25, 1997

Upon review before the FULL COMMISSION in Little Rock, Pulaski County, Arkansas.

Claimant appears Pro Se.

Respondent represented by the HONORABLE GARY M. DRAPER, Attorney at Law, Crossett, Arkansas.

Decision of Administrative Law Judge: Affirmed.

[1] OPINION AND ORDER
[2] The respondent appeals an opinion and order filed by the administrative law judge on July 12, 1996. In that opinion, the administrative law judge found that the claimant was entitled to receive medical benefits as a result of a compensable injury he received on April 25, 1995.

[3] The first issue raised by the respondent is that at the time of the claimant’s injury, the respondent did not employ a sufficient number of employees for the Arkansas Workers’ Compensation Act to apply to them. The date of the injury alleged in this case was subsequent to Act 796 of 1993. However, we find that the changes made by that legislation did not change the relevant definition of employment as set out in Ark. Code Ann. § 11-9-102 (12):

(A). Every employment in the state in which three (3) or more employees are regularly employed by the same employer in the course of business,

. . .

(C). Every employment in which one (1) or more employees are employed by a contractor who subcontracts any part of his contract;

[4] The organization of the claimant’s employer was explained by Ronnie Rains, the owner of the business, and Ms. Kathy Herron, who described herself as the Office Manager of New Image of America. The two witnesses described the business arrangement by stating that New Image of America provided management services for several other small businesses that all operate out of the same location. These businesses included a locksmithing operation, window tinting service, a body shop and a security system installation service. It was admitted by all the witnesses, that employees of one business would, from time to time, work for one of the other businesses that were operating under the New Image of America organization. Mr. Rains and Ms. Herron sometimes referred to these other businesses as “departments”. The apparent intent of the parties was that all employees would be operating as independent contractors, and that New Image of America was merely providing management services for each of these separate business entities. [5] In deciding whether or not the respondent was covered by the Workers’ Compensation Act, the arguments of the parties and the administrative law judge’s analysis all focus on whether or not the employer had three statutory employees. See, Ark. Code Ann. § 11-9-102 (A). However, it would appear that based upon the testimony of all parties, the employer did, from time to time, operate as a contractor. Therefore, under Ark. Code Ann. § 11-9-102 (12)(C), if the respondent had even one employee, they would be covered by the Workers’ Compensation Act. Therefore, a resolution of the coverage question depends upon whether or not the claimant was an independent contractor. [6] Numerous cases from the Commission and the Court of Appeals have set out various factors that should be considered in determining whether or not a claimant is an employee or an independent contractor. Set out below are the factors as listed in the case of Wagnon v. KaplinTrucking, Full Commission opinion, August 16, 1993 (WCC Claim No. E100032):

1. The right to control the means and the method by which the work is done;
2. the right to terminate the employment without liability;
3. the method of payment, whether by time, job, piece, or other unit of measurement;
4. the furnishing, or the obligation to furnish, the necessary tools, equipment and materials;
5. whether the person employed is engaged in a distinct occupation or business;

6. the skill required in a particular occupation;

7. whether the employer is in business;

8. whether the work is an integral part of the regular business of the employer;
9. the length of time for which the person is employed.

[7] The facts and the record are sufficient to establish that the claimant was an employee and not an independent contractor. The claimant was being paid $150.00 per week plus a commission for each security door installed. The claimant had begun working for the respondent after being contacted by Mr. Rains and during the time of his employment he worked solely for the respondent. Also, while there was not a great deal of supervision exercised over the claimant while he was performing his job functions, it does appear that Mr. Rains retained the ability to hire and fire the claimant whenever he chose to do so. The claimant was also assigned to do work for other operations in the New Image organization. The respondents have argued that since there was a written agreement entered into by the parties, the claimant must have been an independent contractor. However, merely because the parties have entered into a written contract of hire does not mean that the claimant is automatically an independent contractor. The contract that existed between the parties consisted of the following three sentences:

I understand that I will be working for New Image on a part-time basis and will be paid on a per-job basis as any subcontractor. Therefore, I understand that I will be responsible to pay my own tax and furnish my own insurance. I also agree to not use any of my training to compete with New Image.

[8] The contract is signed by William Reeves and is witnessed by Kathryn Herron. [9] The contract is of questionable validity since it does not state any consideration nor is it signed by someone with the apparent legal authority to bind the respondent. However, those defects aside, we note that the purported agreement does contain a non-competition clause, which would be highly unusual for a truly independent contractor. [10] Another witness who testified in this case is Mr. Stephen White, another employee of New Image. The respondent offered into evidence the contract which had been entered into between Mr. White and the respondent. That contract contained a specific provision stating that Mr. White would be working on a contract labor basis. Significantly, this provision was not included in the contract signed by the claimant. We also note that the alleged contract cannot be considered any type of a waiver or release of workers’ compensation liability since Ark Code Ann. § 11-9-108 specifically provides that a claimant cannot waive his or her right to workers’ compensation benefits as a result of signing any type of waiver or agreement. [11] We also find that the respondent provided all of the tools and other equipment necessary for the claimant to carry out his assigned tasks. Mr. Rains testified that the respondent had purchased a welder for the claimant to use while installing the security doors. While Mr. Rains did testify that the purchase of the welder was made by the respondent on behalf of the claimant, who was supposed to reimburse the respondents for the cost of the purchase, we note that there was no documentary evidence offered to corroborate this alleged agreement, and that the payroll records furnished by the respondent did not indicate that any such withholdings had in fact been made. [12] In light of the foregoing evidence, we specifically find that respondent was an employer, acting as a contractor. We further find that the claimant was an employee of the respondent and not an independent contractor. Therefore, the Workers’ Compensation Act does apply to any injuries the claimant received while working for the respondent. [13] The next issue that must be dealt with is the compensability of the claimant’s injury. The only evidence produced relating to the accident itself was the testimony of the claimant. The claimant stated that while operating a drill, the bit became stuck causing the drill to twist, wrenching his shoulder. The claimant then notified his employer and was seen by a physician on May 1, 1995. At that time, the claimant related that he was injured when he slipped while working with tools at his job. The injury was supported by the medical evidence of the claimant’s physician. [14] We therefore find that the claimant is entitled to benefits in this case. [15] The respondent is directed to pay the claimant’s medical bill in the amount of $456.00, owed to the Family Chiropractic Clinic of Crossett, Arkansas. [16] All accrued benefits shall be paid in a lump sum without discount and with interest thereon at the lawful rate from the date of the administrative law judge’s decision in accordance with Ark. Code Ann. § 11-9-809 (Repl. 1996). For prevailing on this appeal before the Full Commission, claimant’s attorney is hereby awarded an additional attorney’s fee in the amount of $250.00 in accordance with Ark. Code Ann. § 11-9-715 (Repl. 1996). [17] The administrative law judge’s decision must be, and hereby is affirmed. [18] IT IS SO ORDERED.

ELDON F. COFFMAN, Chairman PAT WEST HUMPHREY, Commissioner

[19] Commissioner Wilson dissents.