O'Dell v. Director, Department of Workforce Services , 2014 Ark. App. LEXIS 670 ( 2014 )


Menu:
  •                                Cite as 
    2014 Ark. App. 504
    ARKANSAS COURT OF APPEALS
    DIVISION III
    No. E-13-1226
    Opinion Delivered   September 24, 2014
    JANA O’DELL
    D/B/A PROFESSIONAL                   APPEAL FROM THE ARKANSAS
    TRANSCRIPTION                        BOARD OF REVIEW
    APPELLANT [NO. 2013-BR-002-EC ]
    V.
    DIRECTOR, DEPARTMENT OF
    WORKFORCE SERVICES, AND
    EMPLOYER CONTRIBUTIONS
    UNIT
    APPELLEES REVERSED AND REMANDED
    RHONDA K. WOOD, Judge
    Jana O’Dell, d/b/a Professional Transcription, appeals the Arkansas Board of
    Review’s decision holding that O’Dell is responsible for paying unemployment taxes on
    the typists she hires because she failed to satisfy the three-prong test in Arkansas Code
    Annotated section 11-10-210(e). O’Dell contends that the Board’s findings are not
    supported by substantial evidence. We reverse the Board’s decision.
    The Arkansas Department of Workforce Services issued a Determination Letter of
    Liability finding that Gina Polston and other similarly situated workers were employees of
    O’Dell for employer tax-contribution purposes. O’Dell requested that the Department’s
    director issue a “Determination of Coverage.” The director conducted a telephone
    hearing and decided that Polston was an employee of O’Dell. O’Dell appealed that
    Cite as 
    2014 Ark. App. 504
    decision to the Arkansas Board of Review, which affirmed. O’Dell filed a timely notice of
    appeal.
    We consider the Board of Review’s findings of fact conclusive if they are
    supported by substantial evidence and view the evidence in the light most favorable to the
    Board’s findings. Baldor Elec. Co. v. Ark. Emp’t Sec. Dep’t, 
    71 Ark. App. 166
    , 
    27 S.W.3d 771
    (2000). However, we conduct a de novo review when there are issues of statutory
    construction. Ark. Comprehensive Health Ins. Pool v. Denton, 
    374 Ark. 162
    , 
    286 S.W.3d 698
    (2008). Arkansas Code Annotated section 11-10-210(e) (Supp. 2005) provides that the
    following three-prong test should be used to determine whether a worker is not an
    employee for unemployment-benefit purposes:
    (e) Services performed by an individual for wages shall be deemed to be
    employment subject to this chapter irrespective of whether the common-law
    relationship of master and servant exists, unless and until it is shown to the
    satisfaction of the Director that:
    (1) Such individual has been and will continue to be free from
    control and direction in connection with the performance of such
    service,both under his contract for the performance of service and in fact;
    (2) The service is performed either outside the usual course of the
    business for which the service is performed or is performed outside all the
    places of business of the enterprise for which the service is performed; and
    (3) The individual is customarily engaged in an independently
    established trade, occupation, profession, or business of the same
    nature as that involved in the service performed.
    There is a presumption of employee status, and to overcome that presumption, the party
    seeking the exemption must establish that all three subsections are satisfied. Morris v.
    Everett, 
    7 Ark. App. 243
    , 
    647 S.W.2d 476
    (1983). Thus, to establish that Polston and other
    2
    Cite as 
    2014 Ark. App. 504
    workers were independent contractors, O’Dell was required to prove the existence of all
    three factors.
    The record showed that O’Dell provided medical-transcription services to
    physicians for St. Vincent Hospital. The physicians provided tapes to O’Dell, who would
    transcribe them. She also assigned tapes to other typists when she had more work than she
    could complete alone. The typists picked up the tapes from O’Dell’s residence, transcribed
    them, and returned their transcriptions on a thumb drive or floppy disk. O’Dell then
    reviewed the transcripts, made necessary changes, printed them, and returned them to the
    physicians.
    The Board found that O’Dell failed to prove the first prong: namely, that Polston
    and other typists were not free from her control. We disagree with the Board’s broad
    interpretation of the statute. The sole evidence of control before the Board was that
    O’Dell gave instructions to her typists regarding the format, font, and margins, and she
    required them to return the completed work within 24−36 hours. Once the work was
    returned, O’Dell would review it and make any revisions before forwarding the product
    to St. Vincent. If any of the typists failed to adequately complete the work, O’Dell
    retained termination rights and did not pay them. The Board’s broad interpretation results
    in it becoming next to impossible for anyone to be free from control. The legislature
    surely intended for independent contractors to exist in Arkansas or the statutory test would
    not exist. Providing an independent contractor with basic guidelines and retaining the
    right to discontinue using them in the future does not equate to control sufficient to create
    an employer-employee relationship under the statute.
    3
    Cite as 
    2014 Ark. App. 504
    Even had we agreed with the Board’s statutory interpretation, this was also not
    substantial evidence of control under Ark. Code Ann. § 11-10-210(e)(1). 1 While we give
    great deference to the Board’s findings of facts, the facts must equate to substantial
    evidence that reasonable minds might accept as adequate to support a conclusion. We
    simply do not agree there was evidence substantial enough for the Board to find that
    O’Dell had failed to meet the burden of proving that the typists she hired were free from
    her control and direction.
    The Board additionally found that O’Dell failed to meet the second prong of the
    three-part test by not proving that the typists’ services were “performed outside all the
    places of business of the enterprise for which the service is performed.” 2 Ark. Code Ann. §
    11-10-210(e)(2). Here, the Board incorrectly applied a supreme court case addressing this
    issue: Mamo Transportation, Inc. v. Williams, 
    375 Ark. 97
    , 
    289 S.W.3d 79
    (2008).
    In Mamo, our supreme court stated “we hold that ‘place of business’ is the place
    where the enterprise is performed. An enterprise’s place of business must be decided on a
    case by case basis.” 
    Id. at 103,
    289 S.W.3d at 85. More specifically, the court compared
    the facts in Mamo with the facts in Home Care Professionals of Arkansas, Inc. v. Williams, 
    95 Ark. App. 194
    , 
    235 S.W.3d 536
    (2006). In Home Care, the enterprise contracted home-
    1
    While we do not weigh the evidence in these cases, it is useful to note that the
    Board also had the following uncontroverted evidence: (1) O’Dell did not control who
    actually performed the typing (the typists often used others to complete the work); (2) the
    typists could, and some did, work for other entities; (3) O’Dell did not train, supervise, or
    provide equipment; and (4) O’Dell did not control the hours worked or the typists’
    wardrobe.
    2
    It is clear that O’Dell is in the business of transcription services and her typists
    performed said services; therefore, our focus is on the second subsection of the second
    prong.
    4
    Cite as 
    2014 Ark. App. 504
    healthcare professionals to provide care in client’s homes. In Mamo, the enterprise
    contracted trucks to provide transportation across the United States and Canada.
    In both Home Care and Mamo, the enterprise in question necessarily entailed
    providing a service that could be done only at a place of business outside the enterprise’s
    actual physical office. Transportation takes place on the open road, and home healthcare
    takes place in the clients’ homes. Thus, in both those cases, the employer failed the second
    prong because the services were performed within the places of business of the enterprise:
    that is, on the road and in the home.
    The present case involves a business venture different from those in Mamo and
    Home Care. O’Dell’s enterprise was to provide transcription services. She could and did
    provide this service within her business office, her home. However, the key difference is
    that the typists she contracted with did not provide the service at her place of business but
    at their places of business or where they chose to complete the work. The service here did
    not dictate alternative places of businesses as necessary to fulfill the purpose of the
    enterprise. As a result, the Board of Review incorrectly applied Mamo and thus erred in
    finding that she failed to prove the second prong.
    In sum, to overcome the presumption of employment, the party seeking the
    exception must prove the existence of all three subsections of Ark. Code Ann. § 11-10-
    210(e). The Board of Review failed to address the third prong after erroneously ruling
    that O’Dell had failed to meet the first and second prongs. We therefore reverse and
    remand for the Board to consider whether she met the third prong.
    Reversed and remanded.
    5
    Cite as 
    2014 Ark. App. 504
    GLADWIN, C.J., and BROWN, J., agree.
    R. David Lewis, for appellant.
    Phyllis A. Edwards, for appellees.
    6
    

Document Info

Docket Number: E-13-1226

Citation Numbers: 2014 Ark. App. 504, 442 S.W.3d 897, 2014 Ark. App. LEXIS 670

Judges: Rhonda K. Wood

Filed Date: 9/24/2014

Precedential Status: Precedential

Modified Date: 10/19/2024