McGuine v. Nat'l Copier Logistics ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA19-735
Filed: 7 April 2020
From the North Carolina Industrial Commission, I.C. Nos. 13-729836, PH-3618
JAMES C. MCGUINE, Employee Plaintiff,
v.
NATIONAL COPIER LOGISTICS, LLC, Employer, and TRAVELERS INSURANCE
COMPANY OF ILLINOIS, Carrier and/or NCL TRANSPORTATION, LLC,
Employer, NON-INSURED, Defendants.
AND
THE NORTH CAROLINA INDUSTRIAL COMMISSION v. NCL
TRANSPORTATION, LLC, Non-Insured Employer, and THOMAS E. PRINCE,
Individually, Defendants.
Appeal by Plaintiff from opinion and award entered 25 April 2019 by the North
Carolina Industrial Commission. Heard in the Court of Appeals 5 February 2020.
Jay Gervasi, P.A., by Jay Gervasi, and Law Offices of Kathleen G. Sumner, by
Kathleen G. Sumner and David P. Stewart, for the Plaintiff.
Hedrick Gardner Kincheloe & Garofalo LLP, by M. Duane Jones and Neil P.
Andrews, for the Defendant.
BROOK, Judge.
James C. McGuine (“Plaintiff”) appeals from an opinion and award entered 25
April 2019 by the North Carolina Industrial Commission (“Commission” or “Full
Commission”) in which the Commission concluded as a matter of law that Defendant
MCGUINE V. NAT’L COPIER, LLC
Opinion of the Court
NCL Transportation, LLC (“NCL”), and not National Copier Logistics, LLC
(“National Copier”), was Plaintiff’s employer at the time of his injury. Plaintiff
contends that the Commission erred by concluding that Plaintiff was employed solely
by NCL, not by National Copier or jointly employed by both. For the reasons
discussed below, we reverse and remand.
I. Background
A. Facts
Defendant Thomas E. Prince (“Prince”) started shipping contractor National
Copier on 17 January 2007. National Copier contracted with equipment dealers to
move office equipment to and from clients.
Prince then established NCL in Ohio in January of 2007 and was its sole
manager and member. According to Prince and National Copier Accounting Manager
Susan German (“German”), the footprint and purpose of NCL was limited. No
employees worked at the NCL location in Ohio; Prince testified that “it was a hub
where drivers would pick up equipment, put equipment in, take equipment out[.]”
German testified that the “hub” was essentially a warehouse. Both Prince and
German testified NCL handled payroll for National Copier truck drivers. German
testified further that the “sole purpose for NCL Transportation” was to be the
company “that the [truck] drivers are basically paid out of . . . as well as getting the
Workman’s Compensation in Ohio.” Prince testified along the same lines, stating
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Opinion of the Court
that he formed NCL for two reasons: to limit National Copier’s liability and to
decrease National Copier’s workers’ compensation insurance costs.
Sometime in the summer of 2013—before the first hearing on this matter—
NCL ceased operations. At that time, Prince cancelled NCL’s payroll account and
began to pay the truck drivers through National Copier’s account; nothing else
changed regarding National Copier’s day-to-day operations or the truck drivers’ day-
to-day work.
Plaintiff, a commercial truck driver from Greensboro, North Carolina, applied
to work with National Copier in Charlotte in December 2012. The application for
employment that National Copier provided him listed “National Copier Logistics” as
the prospective employer. German oversaw Plaintiff’s application process, interview,
and hiring. Plaintiff was hired as a truck driver on 11 December 2012. German
provided him with a company credit card that listed National Copier’s name to use to
fuel the truck. The truck Plaintiff drove bore National Copier’s name and displayed
National Copier’s US Department of Transportation (“DOT”) number.1 Throughout
Plaintiff’s employment, instructions regarding his routes and deliveries came directly
from Prince or from Jake,2 National Copier’s dispatcher, who was “not considered
part of” NCL, and who “made the routes [and] kind of oversaw what the drivers did
day to day.” Plaintiff testified that he considered himself to be an employee of
1 NCL did have a US DOT number, but the number was never used.
2 Jakes’s last name is absent from the record.
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MCGUINE V. NAT’L COPIER, LLC
Opinion of the Court
National Copier because he spoke only with Prince, German, and Jake, he was hired
in Charlotte, and he never met anyone who identified themselves as being part of
NCL. Plaintiff’s W-2, pay statements, and employment verification form I-9,
however, listed his employer as NCL.
On 15 February 2013, Plaintiff was injured when several sheets of plywood fell
from a truck, striking Plaintiff on the head, back, neck, and left shoulder. Plaintiff
was diagnosed with left shoulder acromioclavicular strain and a possible rotator cuff
tear consistent with the mechanism of injury.
B. Procedural History
Plaintiff reported his injury to German, who provided him with the workers’
compensation form necessary to bring a claim against NCL in Ohio. The Ohio
Workers’ Compensation Bureau first denied Plaintiff’s claim, but, following Plaintiff’s
appeal, it allowed Plaintiff’s claim against NCL, concluding that Prince and NCL
employed Plaintiff. At the time of the first hearing on this matter, Plaintiff’s Ohio
claim was under appeal from his initial denial.
Plaintiff’s North Carolina workers’ compensation case first went before Deputy
Commissioner Myra L. Griffin in Charlotte on 19 February 2014. Deputy
Commissioner Griffin entered an order on 25 February 2014 noting that “a
substantial conflict of interest between Defendant-Carrier, Travelers Insurance
Company of Illinois and Defendant, National Copier Logistics, LLC” could exist.
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Opinion of the Court
The Commission then set the matter for a de novo hearing before Deputy
Commissioner Adrian Phillips. The parties stipulated to the prior hearing transcript
and presented additional testimony. Deputy Commissioner Phillips entered an
opinion and award on 9 June 2015 and then entered an amended opinion and award
on 22 June 2015. Deputy Commissioner Phillips concluded as a matter of law that
Plaintiff suffered a compensable injury on 15 February 2014. She concluded that
both National Copier and NCL employed Plaintiff at the time he sustained his injury
and ordered both Defendants to pay all costs for Plaintiff’s medical treatment.
Defendant National Copier noticed appeal to the Full Commission on 25 June 2015.
The Full Commission heard the matter on 30 November 2015, reviewing the
prior opinion and award based upon the records of the proceedings before Deputy
Commissioners Griffin and Phillips and considering the briefs and arguments of the
parties. The Commission issued an interlocutory opinion and award on 23 January
2017. The Commission made the following conclusions of law:
1. Under the Workers’ Compensation Act, “[t]he term
‘employee’ means every person engaged in an employment
under an appointment or contract of hire or apprenticeship,
express or implied, oral or written . . .” N.C. Gen. Stat. §
97-2(2). Plaintiff bears the burden of proving that an
employer-employee relationship existed at the time an
injury by accident occurred. Hughart v. Dasco Transp.,
Inc., 167 N.C. App. 685, 689, 696 S.E.2d 379, 382 (2005).
...
4. In the instant matter, Plaintiff has failed to prove by a
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Opinion of the Court
preponderance of the evidence that he was an employee of
National Copier. Plaintiff failed to prove that he entered
into an express or implied contract of hire with National
Copier, that he was performing the work of National
Copier, that National Copier had the right to control the
details of his work, that he was under the simultaneous
control of and simultaneously performing services for both
NCL and National Copier, or that the services for each
employer were closely related to that of the other. Collins
459, 204 S.E.2d at 876, Anderson at 636, 351 S.E.2d at 110.
Accordingly, the Full Commission concludes that Plaintiff
was an employee of NCL at the time of the injury by
accident that is the subject of this claim. N.C. Gen. Stat.
§ 97-2(2).
...
7. In the instant case, the preponderance of the evidence
of record shows that Plaintiff’s contract of employment
with NCL was made in North Carolina, that North
Carolina was NCL’s principal place of business, and that
North Carolina was Plaintiff’s principal place of
employment. Id. As such, the Full Commission concludes
as a matter of law that the Industrial Commission has
jurisdiction over Plaintiff’s claim. Id.
...
9. On 15 February 2013, Plaintiff sustained a compensable
injury by accident to his left shoulder arising out of and in
the course of his employment with Defendant-Employer
NCL. N.C. Gen. Stat. § 97-2(6).
...
22. The Full Commission is unable to determine from the
evidence of record whether Defendant-Employer NCL was
insured under the North Carolina Workers’ Compensation
Act as of 15 February 2013. As such, there is good ground
to reopen the record in this matter to receive further
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MCGUINE V. NAT’L COPIER, LLC
Opinion of the Court
evidence regarding Defendant-Employer NCL’s Ohio
workers’ compensation insurance policy for the coverage
period including 15 February 2013.
(Alterations in original.) The Commission awarded Plaintiff “payment of any
remaining past medical expenses and all future medical expenses incurred or to be
incurred as a result of Plaintiff’s compensable left shoulder condition” and remanded
the matter to the Chief Deputy Commissioner to determine whether NCL was
insured under the North Carolina Workers’ Compensation Act on the date of
Plaintiff’s injury.
Plaintiff appealed the opinion and award on 30 January 2017. This Court
granted Defendant-Appellee National Copier and Travelers’ motion to dismiss
Plaintiff’s appeal as interlocutory on 28 September 2017.
Deputy Commissioner Phillips then issued a discovery order consistent with
the Full Commission’s directives on remand on 11 June 2018. The parties jointly
submitted additional evidence pursuant to the discovery order. The Full Commission
then entered a final opinion and award on 25 April 2019, incorporating by reference
the findings and conclusions of the 23 January 2017 opinion and award. The Full
Commission made the following additional findings:
7. As of 15 February 2013, Ohio’s workers’ compensation
law did not have any provisions granting the Bureau the
authority to contract with an insurer licensed in other
states to provide coverage to eligible Ohio employers.
Thus, the coverage NCL obtained through the Bureau did
not extend to provide coverage for claims filed in other
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MCGUINE V. NAT’L COPIER, LLC
Opinion of the Court
jurisdictions.
...
10. As of 15 February 2013, National Copier had a worker’s
compensation policy providing coverage in North Carolina
through Travelers Insurance Company of Illinois. The
policy did not cover employees of NCL.
11. In July or August 2013, Mr. Prince made the decision
to transfer the payroll of truck drivers employed by NCL to
National Copier’s payroll, re-classified the truck drivers as
employees of National Copier, and obtained a North
Carolina workers’ compensation policy to cover the truck
drivers. The truck drivers remained so covered as of the 19
February 2014 evidentiary hearing.
12. By July or August 2013, NCL was no longer in
operation.
...
14. The Full Commission finds that on 15 February 2013
NCL did not have workers’ compensation insurance as
required by N.C. Gen. Stat. § 97-93.
In addition to the incorporated conclusions of law from the 23 January 2017
opinion and award, the Full Commission concluded that “Defendant-Employer NCL
Transportation, LLC was uninsured for workers’ compensation purposes on 15
February 2013.”
Plaintiff appealed on 6 May 2019.
II. Jurisdiction
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Opinion of the Court
The Commission’s 25 April 2019 opinion and award, incorporating in its
entirety its previous 23 January 2017 opinion and award, is now a final judgment,
and jurisdiction is proper with this Court pursuant to N.C. Gen. Stat. § 7A-27(b).
III. Analysis
Plaintiff contends that the Full Commission committed reversible error by
concluding that Plaintiff was employed solely by NCL. Plaintiff contends that
National Copier was in fact Plaintiff’s joint employer. In the alternative, Plaintiff
argues that the Commission erred in concluding that National Copier is not liable as
a primary contractor pursuant to N.C. Gen. Stat. § 97-19. We hold that Plaintiff was
employed both by NCL and National Copier and that both are therefore liable for
Plaintiff’s workers’ compensation; we therefore need not reach Plaintiff’s second
argument.
A. Standard of Review
“The question of whether [an employer–employee] relationship existed at the
time of the claimant’s injury is jurisdictional,” Hicks v. Guilford Cty., 267 N.C. 364,
365, 148 S.E.2d 240, 242 (1966), and is reviewed by our Court de novo, Whicker v.
Compass Grp. USA, Inc., 246 N.C. App. 791, 795, 784 S.E.2d 564, 568 (2016).
Further, the Commission’s “findings of jurisdictional fact are not conclusive on
appeal, even if supported by competent evidence. The reviewing court has the right,
and the duty, to make its own independent findings of such jurisdictional facts from
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Opinion of the Court
its consideration of all the evidence in the record.” Perkins v. Arkansas Trucking
Servs., Inc., 351 N.C. 634, 637, 528 S.E.2d 902, 903-04 (2000) (internal marks and
citation omitted). In making findings of jurisdictional facts, this Court must “assess
the credibility of the witnesses” and weigh the evidence, “using the same tests as
would be employed by any fact-finder in a judicial or quasi-judicial proceeding.”
Morales-Rodriguez v. Carolina Quality Exteriors, Inc., 205 N.C. App. 712, 715, 698
S.E.2d 91, 94 (2010).3
B. Employer–Employee Relationship
An employee can, under some circumstances, operate as an employee of two
employers at the same time, in which case both employers can be liable for workers’
compensation. See Leggette v. McCotter, Inc., 265 N.C. 617, 625, 144 S.E.2d 849, 855
(1965). “Plaintiff may rely upon two doctrines to prove [he] is an employee of two
different employers at the same time: the joint employment doctrine and the lent
employee doctrine.” Whicker, 246 N.C. App. at 797, 784 S.E.2d at 569. “Joint
employment occurs when a single employee, under contract with two employers, and
under the simultaneous control of both, simultaneously performs services for both
employers, and when the service for each employer is the same as, or is closely related
3 Despite agreement between the parties that we must apply this standard of review for such
jurisdictional questions, the dissent applies the standard of review for non-jurisdictional questions
without explaining its basis for doing so.
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Opinion of the Court
to, that for the other.” Id. (internal marks and citation omitted). The quite similar
lent employee doctrine can be summarized as follows:
When a general employer lends an employee to a special
employer, the special employer becomes liable for workers’
compensation only if
(a) the employee has made a contract of hire, express or
implied, with the special employer;
(b) the work being done is essentially that of the special
employer; and
(c) the special employer has the right to control the
details of the work.
Id. (internal marks and citation omitted).
We thus structure our analysis around whether Plaintiff has established the
requisite contract, control, and work overlap to show he was employed by National
Copier and NCL such that both employers are liable for his workers’ compensation
claim.
i. Employment Contract
As noted above, both joint employment and lent employee “doctrines require
an employment contract to exist between” the plaintiff and the defendant. Id. at 798,
784 S.E.2d at 569. Employment contracts can be express or implied; implied
contracts can be “inferred from the circumstances, conduct, acts or relations of the
parties, showing a tacit understanding.” Id., 784 S.E.2d at 570 (internal marks and
citation omitted).
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MCGUINE V. NAT’L COPIER, LLC
Opinion of the Court
Absent an express contract (which the parties agree did not exist here between
Plaintiff and National Copier), we determine whether an implied contract existed by
considering who “hired, paid, trained, and supervised” the plaintiff. Id. at 799, 784
S.E.2d at 570. Henderson v. Manpower of Guilford Cty., Inc., 70 N.C. App. 408, 319
S.E.2d 690 (1984), illustrates how this inquiry operates. In Henderson, Manpower of
Guilford County, Inc., a company supplying temporary workers to employers, placed
the plaintiff with Benner & Fields, a construction company, for whom he cut trees
and cleared land. 70 N.C. App. at 409, 319 S.E.2d at 691. As part of that
arrangement, Benner & Fields paid Manpower $6.25 per hour that the plaintiff
worked, $4 per hour of which Manpower then passed along to the plaintiff. Id. After
the plaintiff was injured when a tree felled by another employee struck him, the
Industrial Commission concluded that he was an employee solely of Manpower. Id.
at 409-10, 319 S.E.2d at 691. This Court reversed, concluding that, “[a]lthough no
express contract existed between plaintiff and Benner & Fields, an implied contract
manifestly did, since they accepted plaintiff’s work and were obligated to pay
Manpower for it, and Manpower was obligated in turn to pay plaintiff[.]” Id. at 414,
319 S.E.2d at 694.
Here, the record evinces an implied contract between Plaintiff and National
Copier. First, the evidence shows that National Copier hired Plaintiff. See Whicker,
246 N.C. at 799, 784 S.E.2d at 570. Plaintiff traveled to National Copier’s office in
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Opinion of the Court
Charlotte to apply for work, National Copier Accounting Manager German informed
Plaintiff he would be working for National Copier, and the preprinted application
listed National Copier as the prospective employer. German testified that she had
“no role” at NCL; she is an employee only of National Copier, and she hired and fired
drivers at Prince’s direction. Second, the evidence shows that National Copier
trained and supervised Plaintiff. See id. Jake, National Copier’s dispatcher, gave
the drivers route directions, and Prince testified that National Copier controlled
where the drivers went on their routes. German testified that Jake—who was not
“considered part of [] NCL”—“made the routes [and] kind of oversaw what the drivers
did day to day.”
The Industrial Commission based its conclusion that Plaintiff was employed
solely by NCL on the facts that Plaintiff’s W-2 tax form, pay statements, employment
verification form I-9, and payroll authorization for automatic deposit list NCL as the
employer. This evidence tends to suggest that NCL, not National Copier, paid
Plaintiff, a fact relevant to the implied contract inquiry. See id. (considering who
“hired, paid, trained, and supervised” in determining whether an implied
employment contract existed). But even these facts favorable to Defendant are far
more nuanced than is reflected in the Full Commission’s opinion and award. German
explained at the first hearing how the companies interacted regarding paying the
truck drivers:
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MCGUINE V. NAT’L COPIER, LLC
Opinion of the Court
[GERMAN]: [A]ll that we were running out of NCL
Transportation was the payroll . . . It was not created for
any other purpose but to employ[] drivers to work for
National Copier Logistics. . . . really all that was run out of
that, NCL Transportation, financially was payroll. And
because that was a subcontractor expense to National
Copier Logistics, National Copier Logistics would fund
the payroll to the NCL Transportation bank account
as an expense and then the payroll run (sic) through
NCL Transportation’s bank account.
(Emphasis added.) In short, National Copier paid NCL, which, in turn, paid the truck
drivers for the work they completed for the benefit of National Copier. The payor
name on a paystub and the like is not determinative; our Court has found an implied
contract in such instances between the worker and the company paying the company
nominally paying the employee. See Henderson, 70 N.C. App. at 414, 319 S.E.2d at
694 (finding an implied contract between the plaintiff and Benner & Fields where
Benner & Fields “accepted plaintiff’s work and were obligated to pay Manpower for
it, and Manpower was obligated in turn to pay plaintiff[.]”). Because the evidence
tends to show that National Copier hired, trained, supervised, and functionally paid
Plaintiff, we conclude that an implied contract existed between Plaintiff and National
Copier.
ii. Control
A finding of joint employment also requires that a plaintiff be “under the
simultaneous control of both” employers. Whicker, 246 N.C. App. at 797, 784 S.E.2d
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Opinion of the Court
at 569 (citation omitted). Similarly, special employment requires that “the special
employer ha[ve] the right to control the details of the work.” Id. (citation omitted).
Henderson again articulates the factors we consider in assessing whether the
requisite control exists to support finding an employment relationship. Concluding
that Benner & Fields had sufficient control over the plaintiff’s work, our Court
focused on the facts that Benner & Fields supplied all of the “materials or tools” for
the plaintiff’s work; supervised temporary employees “one hundred percent”; retained
discretion to terminate any temporary employees; assigned duties to temporary
employees; and controlled “the manner and method in which [temporary employees]
carried out [their] duties.” 70 N.C. App. at 410-11, 319 S.E.2d at 692. Manpower, on
the other hand, had no control over the “tree cutting work and those that did it.” Id.
at 413, 319 S.E.2d at 693. These facts led our Court to conclude that “Benner & Fields
had the right to and did control the details of that work.” Id. at 414, 319 S.E.2d at
694.
Applying this framework to the case at hand, we conclude that National Copier
controlled the details of Plaintiff’s work. National Copier supplied Plaintiff’s
“materials [and] tools” in that the truck Plaintiff drove bore National Copier’s name,
logo, and US DOT number. Plaintiff delivered equipment for National Copier’s
customers. Only Jake, the dispatcher, assigned duties to truck drivers; Jake was
solely an employee of National Copier. German hired and terminated drivers for
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Opinion of the Court
National Copier at Prince’s direction. German testified that the “sole purpose for
NCL Transportation” was to pay drivers out of NCL, “as well as getting the
Workman’s Compensation in Ohio.” Indeed, when Prince moved six truck drivers
from NCL’s payroll to National Copier’s, nothing changed about those drivers’ work;
their duties, instructions, materials, and continued employment all continued to flow
from National Copier. Upon an examination of the record, we must conclude that
National Copier controlled the details of Plaintiff’s work.
iii. Work Overlap
The third factor necessary to find either joint or special employment is
whether the work the employee does at the relevant time is essentially the same for
both employers. Whicker, 246 N.C. App. at 797, 784 S.E.2d at 569. The plaintiff’s
injury in Henderson, for example, involved the work of Benner & Fields, namely
“[c]utting trees and clearing land,” supporting the conclusion that there was an
employment relationship between plaintiff and Benner & Fields. 70 N.C. App. at
412, 319 S.E.2d at 693.
Here, Plaintiff’s work responsibilities were driving trucks labeled “National
Copier Logistics” to deliver equipment for customers and contractees of National
Copier. Plaintiff never performed work for NCL that was not also the work of
National Copier; as noted above, NCL merely was a payroll service for National
Copier’s truck drivers. We conclude that Plaintiff has met this factor because there
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Opinion of the Court
was no clean partition between the work of National Copier and NCL and, as such,
he “was doing [National Copier’s] work when injured[.]” Id. at 414, 319 S.E.2d at 694.
*****
In short, Plaintiff has established an implied contract between National Copier
and himself and, further, that National Copier controlled his work, which, at bottom,
was that of National Copier’s.4
IV. Conclusion
Thorough consideration of the facts, law, and the parties’ arguments therefrom
makes plain Plaintiff was jointly employed by NCL and National Copier. We
therefore do not reach Plaintiff’s argument in the alternative that National Copier
and NCL had a contractor–subcontractor relationship because we conclude they were
joint employers.
The award of the Industrial Commission is reversed and the matter remanded
for the entry of an award in favor of the appellant in accord with this opinion.
REVERSED AND REMANDED.
Judge HAMPSON concurs.
4 The dissent contends Plaintiff’s claim is barred by the doctrine of judicial estoppel.
Specifically, the dissent states “Plaintiff first asserted his sole employment was with NCL when he
applied for Ohio workers’ compensation benefits.” McGuine, infra at ___ (Tyson, J., dissenting). This
assertion is belied by the evidence. Put simply, Plaintiff’s seeking recovery as an employee of NCL in
Ohio is not “clearly inconsistent” with his argument before our Court that he was a joint employee of
NCL and National Copier. Whitacre P’ship v. BioSignia, Inc., 358 N.C. 1, 29, 591 S.E.2d 870, 888
(2004). This is another argument the Defendants have not made.
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Opinion of the Court
Judge TYSON dissents by separate opinion.
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No. COA19-735 – McGuine v. National Copier Logistics, LLC
TYSON, Judge, dissenting.
The majority’s opinion misapplies the standard of appellate review and
reweighs the evidence to substitute and imply its preferred, but wholly unsupported,
outcome to reverse the Commission’s opinion and award. I respectfully dissent.
I. Background
Thomas Prince contracted with equipment dealers and sellers to transport
their office equipment to buyers. He chartered and formed National Copier Logistics,
LLC (“Defendant”) as a North Carolina Limited Liability Company with the North
Carolina Secretary of State’s Office in 2007.
Four years later, Prince formed NCL Transportation, LLC (“NCL”) as an Ohio
Limited Liability Company and chartered under the laws of the State of Ohio to
employ truck drivers. NCL complied with all state and federal governmental
regulations as a separate entity and obtained Ohio workers’ compensation insurance
coverage for all of NCL’s employees.
James C. McGuine (“Plaintiff”) was hired by NCL on or around 11 December
2012. Plaintiff’s tax withholding forms, Form I-9, and pay stubs identified and
designated NCL as his employer. Plaintiff represented NCL as his employer on
authorization forms for direct deposit of his NCL salary into his bank account.
Plaintiff never asserted or filed anything claiming Defendant was his employer from
his employment date with NCL until this action was commenced.
MCGUINE V. NAT’L COPIER, LLC
TYSON, J., dissenting
Plaintiff was injured while at work for NCL in Ohio. Plaintiff asserted a claim
against NCL as his employer under the Ohio workers’ compensation policy. Plaintiff
represented himself as an employee of NCL and received workers’ compensation
benefits due under the Ohio policy.
The action before us commenced when Plaintiff filed the present claim before
the Commission and asserted he was not employed solely by NCL. Plaintiff also
claimed to be either solely an employee of Defendant or jointly an employee of both
NCL and Defendant.
Competent evidence in the record supports the Commission’s finding and
conclusion that:
Plaintiff has failed to prove by a preponderance of the
evidence that he was an employee of National Copier.
Plaintiff failed to prove that he entered into an express or
implied contract of hire with National Copier, that he was
performing the work of National Copier, that National
Copier had the right to control the details of his work, that
he was under the simultaneous control of and
simultaneously performing services for both NCL and
National Copier, or that the services for each employer
were closely related to that of the other.
The Commission concluded, “Plaintiff was an employee of NCL at the time of
the injury by accident that is the subject of this claim. N.C. Gen. Stat. § 97-2(2).”
Plaintiff appealed.
II. Standard of Review
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TYSON, J., dissenting
“Plaintiff bears the burden of proving the existence of an employer-employee
relationship at the time of the injury by accident.” Whicker v. Compass Grp. USA,
Inc., 246 N.C. App. 791, 797, 784 S.E.2d 564, 569 (2016) (citation omitted). The
Commission’s findings and conclusions are presumed to be correct unless Plaintiff
carries his burden to prove otherwise. See id.
III. Employment Status
Plaintiff argues he was employed solely by Defendant or, alternatively, jointly
by Defendant and NCL.
A. Sole Employment
Plaintiff made inconsistent assertions before the Ohio Workers’ Compensation
Bureau and before the Commission. He is judicially estopped from asserting any
claim of sole employment by Defendant. Our Supreme Court has held three factors
inform the decision whether to apply the doctrine of judicial estoppel in a particular
case:
First, a party’s subsequent position must be clearly
inconsistent with its earlier position. Second, courts
regularly inquire whether the party has succeeded in
persuading a court to accept that party’s earlier position
. . . . Third, courts consider whether the party seeking to
assert an inconsistent position would derive an unfair
advantage or impose an unfair detriment on the opposing
party if not estopped.
Whitacre P’ship v. Biosignia, Inc., 358 N.C. 1, 29, 591 S.E.2d 870, 888-89 (2004)
(citations, footnote, and internal quotation marks omitted). As noted above, there is
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TYSON, J., dissenting
a presumption of correctness of the Commission’s order and award that is Plaintiff’s
burden to overcome. This Court is not bound solely to appellee’s arguments and
authorities to affirm the order appealed from. See State v. Hester, 254 N.C. App. 506,
516, 803 S.E.2d 8, 16 (2017) (citations omitted).
Applying this analysis, Plaintiff first asserted his sole employment was with
NCL when he applied for Ohio workers’ compensation benefits. This claim is
inconsistent with his current claim of being solely employed by Defendant. Secondly,
the Ohio Workers’ Compensation Bureau and the Commission both concluded
Plaintiff was an employee of NCL. Finally, Plaintiff actually received benefits in Ohio
for an injury that occurred in Ohio as an employee of NCL, and he now seeks to
receive additional benefits from Defendant, which would “impose an unfair
detriment” upon Defendant. See Whitacre P’ship, 358 N.C. at 29, 591 S.E.2d at 888-
89. Plaintiff is judicially estopped from asserting Defendant was his sole employer.
See id. His argument of sole employment with Defendant is without merit.
B. Joint Employment
Plaintiff also asserts Defendant was his joint employer. As the Commission
properly found and concluded, joint employment only exists when a single employee,
under contract with two employers, and under the simultaneous control of both,
performs services for both employers at the same time, and where the service for each
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TYSON, J., dissenting
employer is the same as, or is closely related to, that for the other. Henderson v.
Manpower, 70 N.C. App. 408, 413-14, 319 S.E.2d 690, 693 (1984).
The majority’s opinion purports to find Plaintiff’s joint employment with
Defendant through an implied in fact employment contract between Plaintiff and
Defendant. It does so by disregarding the facts as found by the Commission and re-
weighing the evidence to assert and imply its notion of Plaintiff’s simultaneous
employment by NCL and Defendant. No evidence in the record during the period
relevant to the Commission’s inquiry supports Plaintiff’s burden to show joint
employment under any theory of implied contract. See id.
1. Employment Contract
The employer-employee relationship is contractual in nature and determined
by governing contractual rules. Hollowell v. Department of Conservation and
Development, 206 N.C. 206, 208, 173 S.E. 603, 604 (1934) (citations omitted). An
employee’s right to demand pay from his employer is “essential to his right to receive
compensation under the Workmen’s Compensation Act.” Id. at 210, 173 S.E. at 605
(citations omitted).
“An implied [employment] contract refers to an actual contract inferred from
the circumstances, conduct, acts or relations of the parties, showing a tacit
understanding.” Whicker, 246 N.C. App. at 798, 784 S.E.2d at 570 (citation omitted).
To support a finding of joint employment, Plaintiff must produce evidence of a
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TYSON, J., dissenting
contract of employment, express or implied, with each employer. See Anderson v.
Demolition Dynamics, Inc., 136 N.C. App. 603, 607, 525 S.E.2d 471, 475 (2000).
The majority’s opinion correctly notes the parties stipulated that no express
contract of employment existed between Plaintiff and Defendant. The only basis for
finding joint employment under these facts would be an implied in fact contract
between the parties.
The Commission based its conclusion that Plaintiff was employed solely by
NCL on the objective facts that Plaintiff’s signed tax withholding forms, pay
statements, employment verification form I-9, and payroll authorization for
automatic deposit all list NCL as the employer, and he was solely paid by NCL. The
majority opinion’s analysis of whether an implied contract existed between Plaintiff
and Defendant is based on who “hired, paid, trained, and supervised” Plaintiff.
Whicker, 246 N.C. App. at 799, 784 S.E.2d at 570.
This undisputed evidence shows NCL, not Defendant, employed, paid, and
supervised Plaintiff’. See id. (considering who “hired, paid, trained, and supervised”
in determining whether an implied employment contract existed). Plaintiff
stipulated and submitted that he was NCL’s employee in Ohio to secure Ohio
Workers’ Compensation benefits from an injury that occurred in Ohio, while he was
working in that state for an Ohio-chartered and based entity. Plaintiff never asserted
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TYSON, J., dissenting
any claim of employment or entitlement to benefits against Defendant until this
action.
It is absolutely irrelevant to the Commission’s or this Court’s analysis or
decision that Prince formed either or both Defendant or NCL to reduce liability and
costs. These reasons are the normal and legitimate bases to form all corporations,
limited liability companies, limited partnerships, or other entities. Hamby v. Profile
Prods., L.L.C., 361 N.C. 630, 636, 652 S.E.2d 231, 235 (2007) (explaining the limited
liability of the entity’s owners is a “crucial characteristic” of LLCs); see also N.C. Gen.
Stat. § 57D-2-03 (2019) (“an LLC has the same powers as an individual or a domestic
corporation to do all things necessary or convenient to carry out its business”).
Neither Prince’s, Defendant’s, nor NCL’s use of these normal and legitimate
uses of the corporate form supports the majority opinion’s conclusion otherwise.
Plaintiff failed to produce any evidence to show or support an implied contract of
employment with Defendant. See Whicker, 246 N.C. App. at 798, 784 S.E.2d at 570.
The Commission’s conclusion is properly affirmed.
2. Control
Evidence to support a finding and conclusion of joint employment requires a
plaintiff to prove that he or she was under simultaneous control of both employers.
Id. at 797, 784 S.E.2d at 569. The majority’s opinion purports to apply the framework
in Henderson v. Manpower to conclude Defendant controlled the details of Plaintiff’s
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TYSON, J., dissenting
work. See Henderson, 70 N.C. App. at 412-13, 319 S.E.2d at 693. Under these facts,
or the lack thereof, the majority’s implying a contract to impose liability on Defendant
is unsupported and misapplies the analysis in Henderson. See id.
Manpower’s business model in Henderson was significantly different from that
of Defendant and NCL. Defendant and NCL were formed and chartered in different
states and were maintained for distinct and admittedly lawful purposes. Defendant
and its employees provided office equipment transportation and delivery services.
NCL employees were truck drivers. It is wholly irrelevant to the proper disposition
of this appeal whether the principal shareholder or member of Defendant also wholly
owned NCL, or whether NCL was a purported subsidiary of Defendant.
NCL’s drivers’ use of Defendant’s trucks or fuel cards does not give Defendant
control over NCL’s drivers. Defendant’s dispatcher schedules all of its deliveries,
whether to NCL or others. These facts, even if true, are wholly immaterial to this
analysis.
In Henderson, “the work that injured [the employee], was entirely the work of
[the employer], who not only controlled the details of that work, but had the right to
discharge plaintiff from that work at will.” Henderson at 412, 319 S.E.2d at 693
(emphasis in original). In this case, Defendant’s purported control over Plaintiff did
not approach the level of control in Henderson. Plaintiff was injured while working
in his capacity as a driver for NCL. Defendant did not have the authority to fire
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TYSON, J., dissenting
Plaintiff. Because of the separate and distinct business functions of NCL and
Defendant, the majority’s opinion errs in misapplying Henderson’s framework to the
facts of this case.
As the Commission properly found and concluded, Plaintiff failed to show by a
preponderance of the evidence that Defendant exercised any control over the details
of Plaintiff’s express and admitted employment by NCL or that Plaintiff was jointly
employed by Defendant. The Commission’s opinion and award are properly affirmed.
3. Work Overlap
The final factor required for Plaintiff to prove joint employment exists is to
show the work the employee does is the same for both employers. Whicker, 246 N.C.
App. at 797-98, 784 S.E.2d at 569. Again, the majority’s opinion cites Henderson to
illustrate its implication of Plaintiff’s joint employment with both Defendant and
NCL.
The example cited in the majority’s opinion does not show Plaintiff carried his
burden to prove an overlap in responsibilities between NCL and Defendant as was
shown between Manpower and the employer in Henderson. Their example goes more
to the control the employer in that case had over that plaintiff.
This Court’s analysis in Whicker is consistent with the present facts. This
Court reasoned the type of services offered between purported joint employers were
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TYSON, J., dissenting
distinct in Whicker, and therefore no work overlap existed. Id. at 800, 784 S.E.2d at
571.
Here, the undisputed evidence shows Defendant provides trucks, fuel, and
schedules delivery endpoints. NCL provides the drivers. NCL does not assert
responsibility of providing trucks, fuel, or when, where, or which products are picked
up or delivered. Alternatively, Defendant did not carry the responsibility of
employing, training, paying, insuring, or ensuring regulatory compliance of NCL’s
commercial truck drivers.
While both companies did business together and provided related or even
integrated services within the same industry, Plaintiff’s driving services were
provided solely for NCL, an admitted separate and distinct company that hired truck
drivers. No evidence supports Plaintiff carrying his burden before the Commission
to prove or imply any employment, joint or otherwise, by Defendant. The
Commission’s order and award is properly affirmed.
IV. N.C. Gen. Stat. § 97-19
The majority’s opinion reverses the Commission on Plaintiff’s first issue, due
to its prohibited fact finding and substituted conclusion on appellate review to imply
joint employment between Plaintiff and Defendant. The majority’s opinion fails to
address the second issue: whether Defendant and NCL had a contractor-
subcontractor relationship. The Commission held Defendant was not a statutory
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TYSON, J., dissenting
employer under N.C. Gen. Stat. § 97-19. A contractor-subcontractor relationship did
not exist between Defendant and NCL. N.C. Gen. Stat. § 97-19 does not apply.
“Any principal contractor . . . who shall sublet any contract for the performance
of any work” shall not be held liable to any employee of such subcontractor if the
subcontractor has a workers’ compensation policy in compliance with N.C. Gen. Stat.
§ 97-93 in effect on the date of the injury. N.C. Gen. Stat. § 97-19 (2019).
Prior precedents hold N.C. Gen. Stat. § 97-19 “cannot apply unless there is first
a contract for the performance of work which is then sublet.” Cook v. Norvell-
Mackorell Real Estate Co., 99 N.C. App. 307, 310, 392 S.E.2d 758, 760 (1990). N.C.
Gen. Stat. § 97-19 does not apply to a relationship between a principal and
independent contractor. Id. Plaintiff failed to prove Defendant was a contractor in
the case at bar.
No evidence in the record shows NCL received portions of the contract price
agreed upon by Defendant and its clients. NCL was a separate company and
Defendant used NCL’s employees’ services to assist them in the performance of their
contracts. N.C. Gen. Stat. § 97-19 is not triggered. Additionally, NCL had purchased
and maintained a valid Ohio workers’ compensation policy in place during all times
of Plaintiff’s employment in Ohio and at the time of Plaintiff’s injury in Ohio.
The Ohio Workers’ Compensation Bureau concluded Plaintiff had asserted a
compensable claim and NCL was liable for Plaintiff’s injuries. The stated legislative
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TYSON, J., dissenting
purpose of N.C. Gen. Stat. § 97-19 is to protect workers from “financially irresponsible
sub-contractors who do not carry workmen’s compensation insurance.” Cook, 99 N.C.
App. at 310, 392 S.E.2d at 759 (citations omitted). That text and purpose is not at
issue here. NCL maintained workers’ compensation coverage for its employees, as
Defendant did for its employees.
The Commission’s conclusion is supported by its findings of fact, which are
based upon competent evidence in the whole record. See Chambers v. Transit Mgmt.,
360 N.C. 609, 611, 636 S.E.2d 553, 555 (2006). For these reasons, I vote to affirm the
Commission’s opinion and award.
V. Conclusion
Plaintiff has produced no evidence to carry his burden or to show any bad faith
or fraud to disregard NCL’s Ohio-chartered entity or to pierce its corporate veil as an
alter ego or disregarded entity to Defendant. NCL observed all required corporate
formalities and filings to maintain its separate legal existence. NCL also met all
responsibilities to its employees to provide agreed-upon employment and required
workers’ compensation benefits, of which Plaintiff availed himself.
Prince, Defendant, and NCL complied with all laws in both Ohio and North
Carolina. They are entitled to the protections and benefits of lawfully arranging their
business transaction in both North Carolina and Ohio under these facts, as the
Commission properly found upon the uncontested facts before it. Hamby, 361 N.C.at
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TYSON, J., dissenting
636, 652 S.E.2d at 235. NCL alone “hired, paid, trained, and supervised” Plaintiff.
Whicker, 246 N.C. App. at 799, 784 S.E.2d at 570.
Plaintiff has failed to produce evidence or carry his burden to show entitlement
to any compensation due from Defendant in North Carolina. Having admitted he was
NCL’s employee in Ohio to apply for and receive benefits from an accident in Ohio,
Plaintiff is judicially estopped from asserting he was solely Defendant’s employee in
North Carolina. Whitacre P’ship, 358 N.C. at 29, 591 S.E.2d at 889. Plaintiff has not
produced any evidence to show or imply joint employment under any implied contract
with Defendant. See Henderson, 70 N.C. App. at 413-14, 319 S.E.2d at 693.
Finally, no evidence of a contractor-subcontractor relationship is shown to have
existed, nor is there evidence that either Defendant or NCL failed to maintain
workers’ compensation coverage for their respective employees. I vote to affirm the
Commission’s conclusion that N.C. Gen. Stat. § 97-19 does not apply.
The Commission’s opinion and award is properly affirmed. I respectfully
dissent.
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