McClusky v. City of North Bend , 308 Or. App. 138 ( 2020 )

138
Argued and submitted November 5, reversed and remanded December 23, 2020,
petition for review denied April 22, 2021 (368 Or 37)
Will McCLUSKY,
Plaintiff-Appellant,
v.
CITY OF NORTH BEND,
an incorporated city of the State of Oregon,
Defendant-Respondent.
Coos County Circuit Court
18CV20329; A171089
481 P3d 431
This case arises from cross-motions for summary judgment on plaintiff’s
claims of unlawful employment discrimination and unlawful retaliation under
ORS 659A.199, ORS 659A.203, and ORS 659A.030(1)(f). Plaintiff argues that
the trial court erred in granting summary judgment for defendant and denying
summary judgment for plaintiff on the issue of whether defendant was plaintiff’s
“employer.” Held: ORS 659A.001(4)(a) defines “employer” as one who reserves “the
right to control” the means by which an employee performs a service. Nothing in
the statute forecloses the possibility that multiple persons or entities may retain
the right to control. The undisputed factual record establishes that defendant
reserved the right to control plaintiff’s work and exercised that control in termi-
nating him.
Reversed and remanded.
Andrew E. Combs, Judge.
Quinn E. Kuranz argued the cause for appellant. Also on
the briefs was The Office of Q.E. Kuranz, AAL, LLC.
Alicia M. Wilson argued the cause for respondent. Also
on the brief were Tracy M. McGovern and Frohnmayer,
Deatherage, Jamieson, Moore, Armosino & McGovern, P.C.
Before Lagesen, Presiding Judge, and James, Judge, and
Haselton, Senior Judge.
JAMES, J.
Reversed and remanded.
Cite as 308 Or App 138 (2020) 139
JAMES, J.
This case arises from cross-motions for summary
judgment on plaintiff’s claims of unlawful employment dis-
crimination and unlawful retaliation under ORS 659A.199,
ORS 659A.203, and ORS 659A.030(1)(f). On appeal, plain-
tiff raises three assignments of error; we write primarily to
address his first.1 There, plaintiff argues that the trial court
erred in granting summary judgment for defendant on the
issue of whether defendant was the “employer” of plaintiff.
“Employer” is defined in ORS 659A.001(4)(a) as “any person
who in this state, directly or through an agent, engages or
uses the personal service of one or more employees, reserving
the right to control the means by which such service is or will
be performed.” (Emphasis added.) Here, the undisputed fac-
tual record establishes that defendant reserved the right to
control plaintiff’s work, and did, in fact, exercise that control
in terminating him. Accordingly, we reverse and remand.
The essential facts are not in dispute. Defendant is
the City of North Bend, and this litigation arises from North
Bend’s administrative involvement in plaintiff’s employment
and termination as Technology Systems Manager for the
Coos County Library Service District (CCLSD). The CCLSD
is governed by a Master Plan, which was approved by the
Coos County commissioners in 1992 and provides that each
city retains control of daily library operations and is respon-
sible for administering its own library services. The Master
Plan mandates that shared library services (catalogues,
databases, information technology services, outreach pro-
grams, etc.) are administered by the CCLSD Extended
Services Office (ESO).
1
Our disposition on the first assignment of error obviates the need to address
the second. In his third assignment of error, plaintiff challenges the trial court
ruling that plaintiff waived his patient-based privileges by virtue of alleging
noneconomic damages. According to plaintiff, because he only alleged “garden
variety” noneconomic damages, he has not waived patient privilege. Plaintiff
acknowledges that the rule he advocates, although having a basis in federal law,
has not been adopted in Oregon. Whatever the potential merits of the federal
approach, we are bound by controlling precedent. See, e.g., Baker v. English, 134
Or App 43, 46-47, 984 P2d 505 (1995), aff’d in part, rev’d in part, 324 Or 585, 932
P2d 57 (1997) (“There is no dispute that [plaintiff’s] records, as they pertained to
plaintiff himself, were not privileged, because plaintiff put his own psychological
condition into question by claiming emotional distress damages.”). Plaintiff has
offered no showing that our decisions in this area are plainly wrong.
140 McClusky v. City of North Bend
To manage CCLSD activities, Coos County con-
tracts through an intergovernmental agreement with the
City of Coos Bay. Under that agreement, Coos Bay Public
Library houses the ESO and employs the ESO Director.
The director reports to the CCLSD Advisory Board, who is
appointed by the Coos County Board of Commissioners.
In support of the CCLSD, the cities of Coos Bay and
North Bend entered into an intergovernmental agreement.
Under the terms of that agreement, North Bend agreed to
hire the CCLSD Technology Services Manager and house
that position in the City of North Bend’s public library. The
City of Coos Bay reimbursed North Bend for 100 percent
of those costs (salary, benefits, and office overhead costs)
using the ESO budget. The intergovernmental agreement
provided:
“1. Provide a base of operations for the CCLSD
Technology Services Manager in the City’s public library.
“2. Continue[ ] having the Technology Services
Manager as a City employee as it has since December 1,
2011. * * *
“3. Provide the day to day supervision of the Technology
Systems Manager in cooperation with the Director the
CCLSD’s Extended Services. The supervision of this posi-
tion provided by the City will be pursuant to City personnel
policies and the policies of the City library.”
Plaintiff was hired by North Bend as CCLSD
Technology Systems Manager in the summer of 2015. On
August 13, 2015, North Bend sent a letter on its letterhead
stating, in relevant part, “This will confirm that you have
accepted our offer of employment as Technology Systems
Manager for the Coos County Library Service District. The
City of North Bend is the fiscal agent.” Plaintiff signed per-
sonnel documents, agreeing to abide by North Bend’s per-
sonnel manual and practices.
It is undisputed that plaintiff’s employment discrim-
ination claims arise out of conduct primarily involving the
Director of CCLSD. It is also not disputed that the Director
of CCLSD recommended that North Bend terminate plain-
tiff. And North Bend did, in fact, terminate plaintiff. On
Cite as 308 Or App 138 (2020) 141
September 6, 2017, the North Bend City Administrator
issued a notice of termination on city letterhead which
stated “based on your recent actions, your employment with
the City of North Bend has been terminated.” As a basis
for termination, that letter indicated, among other reasons,
“[y]our conduct * * * violates the City of North Bend employ-
ment policies and falls well below the expectations that we
have for the IT Services Manager position.”
On cross-motions for summary judgment before the
trial court, the central point of litigation was whether North
Bend was plaintiff’s employer. North Bend argued that it
was merely a “fiscal agent” and that day-to-day supervision
of plaintiff fell to the director. The trial court agreed with
North Bend, issuing a written opinion in which it explained
“Yes, the City of North Bend reserved the right to provide
‘day-to-day supervision’ of plaintiff with the CCLSD, and
even evaluated plaintiff’s job performance once in two
years. However, while being deposed, Plaintiff admitted
that he performed all his work for the CCLSD, and that
[the CCLSD director] controlled what he did with his time,
not the City of North Bend.”
The trial court indicated that, although North Bend
“provided plaintiff with a salary, benefits, [and] workspace,
it was reimbursed by the CCLSD for all such costs associ-
ated therewith.” Finally, the trial court further explained:
“Plaintiff was an employee of the City of North Bend, and
thus, the City of North Bend was the only entity that had
the formal right to fire plaintiff. However, the evidence
shows that only the CCLSD had the right to ‘decide’ to fire
plaintiff, and once [the CCLSD Director] made that decision
* * *, the City of North Bend carried out the CCLSD’s deci-
sion by performing the necessary administrative functions
on its end to terminate plaintiff’s status as its employee.”
Following the grant of summary judgment in favor
of North Bend, this appeal followed. On appeal the parties
largely renew the arguments presented before the trial
court. At the outset, we address our standard of review.
When, as here, the relevant facts are not in dispute, “we
review rulings on cross-motions for summary judgment to
determine whether either party is entitled to judgment as a
142 McClusky v. City of North Bend
matter of law.” Busch v. Farmington Centers Beaverton, 203
Or App 349, 352, 124 P3d 1282 (2005), rev den, 341 Or 216(2006). Whether a party has the legal status of employee, or
employer, is a question of law. Schaff v. Ray’s Land & Sea
Food Co., Inc., 334 Or 94, 101, 45 P3d 936 (2002). Further,
whether one possesses a legal “right to control” is a question
of law. HDG Enterprises v. Natl. Council on Comp. Ins., 121
Or App 513, 518, 856 P2d 1037 (1993). Finally, to the extent
contractual agreements bear on the right to control, as a
general rule, the construction of a contract is a question of
law. Timberline Equip. v. St. Paul Fire and Mar. Ins., 281 Or
639, 643, 576 P2d 1244 (1978), May v. Chicago Insurance Co.,
260 Or 285, 292, 490 P2d 150 (1971).
ORS 659A.001(4)(a) defines employer as “any person
who in this state, directly or through an agent, engages or
uses the personal service of one or more employees, reserv-
ing the right to control the means by which such service
is or will be performed.” Neither party argues, and noth-
ing in the text or context of the statute indicates, that the
legislature sought to utilize a different understanding of
“right to control” than appears in various contexts through-
out Oregon law and that was reflected in caselaw at the
time of the predecessor statute’s enactment in Oregon Laws
1969, chapter 618, section 1.2 See, e.g., Herff Jones Co. v. Tax
Com., 247 Or 404, 409, 430 P2d 998 (1967) (“The single most
important factor in determining whether an individual is
an independent contractor or a servant is the right to control
or interfere with the manner and method of accomplishing
the result—not the actual exercise of control.” (Emphases
added.)); Jenkins v. AAA Heating & Cooling, Inc., 245 Or
382, 386, 421 P2d 971 (1966) (“As long as such right exists,
it is of no consequence that the employer may not have exer-
cised it.”).
We have identified four nonexclusive factors for
consideration in assessing the right to control: “(1) direct
evidence of the right to, or the exercise of, control; (2) the
method of payment; (3) the furnishing of equipment; and
2
In 2001, the legislature repealed the original version of the statute defining
terms for antidiscrimination statutes, ORS 659.010, but reenacted the same rel-
evant text in ORS 659A.104(1)(a). Or Laws 2001, ch 621, § 1.
Cite as 308 Or App 138 (2020) 143
(4) the right to fire.” Oregon Country Fair v. Natl. Council on
Comp. Ins., 129 Or App 73, 78, 877 P2d 1207 (1994) (citation
omitted).
In this case, a threshold question for applying those
factors is whether they can ever point to more than one
employer at the same time. Relying on Ballinger v. Klamath
Pacific Corp., North Bend argues that they cannot, because
an employer “may control its employees ‘through an agent,’ ”
and an agent is not an “employer” who may be held liable
under ORS chapter 659A. 135 Or App 438, 452, 898 P2d
232 (1995). Although Ballinger does distinguish between
employers and agents, North Bend’s argument is, in essence,
an extrapolation from there that, after weighing the vari-
ous factors for control, only one entity can be an “employer.”
When multiple persons or entities exert a right to control,
North Bend’s methodological approach—and the approach
taken by the trial court—involves determining who among
those entities has the most control. North Bend’s argument
thus frames the right to control as a zero-sum game:there
is only ever one employer, and anyone else is, at best, an
agent. That is incorrect, and North Bend misunderstands
Ballinger.
Ballinger involved a corporate entity, KP, and its
president and majority shareholder, Stewart. As we noted,
“[a]lthough as a general rule the corporation alone would
be the entity that ‘reserv[es] the right to control the means
by which’ employee services will be performed, the trial
court decided that Stewart too fell within that definition,
apparently because his majority ownership of KP and his
principal role in the day-to-day management of the busi-
ness made him the person who actually had the power to
exercise that ‘right to control.’ ”
135 Or App at 451 (quoting ORS 659.010(6)) (second brackets
and emphasis in Ballinger).
We further opined that perhaps the trial court
reached its decision in reliance on federal law. On that point,
we held:
“[T]he Title VII definition of ‘employer’ differs from the
ORS chapter 659 definition in one important particular:
144 McClusky v. City of North Bend
the federal definition includes ‘agents’ to whom the high-
est level of supervisory authority has been delegated by the
employer. In contrast, the state definition appears to exclude
agents by limiting employer liability to those who ‘directly
or through an agent * * * reserv[e] the right to control’ their
employees * * *. Under that definition, which implicitly dis-
tinguishes between employers and their agents, a corporate
employer such as KP may control its employees ‘through an
agent’ such as Stewart, but the agent is not an ‘employer.’
The trial court erred in holding that Stewart fell within the
definition of ‘employer,’ for purposes of the state unlawful
employment practice statutes.”
Id. at 452 (quoting ORS 659.010(6)) (emphases, first ellipses,
and second brackets in Ballinger).
Ballinger thus stands for the uncontroversial point
that corporate entities can act through agents, and when
they do, the agents are merely exercising the power the cor-
porate entity holds and are not acting on their own, inde-
pendent, reservation of the right to control. In that circum-
stance, ORS 659A.001(4)(a) specifies that it is the one who
reserves the right to control—in Ballinger that was KP—
who is the employer, and not the agent acting on behalf of
the person or entity who reserves the right to control. But
nothing in Ballinger forecloses that a person or entity can
share the right to control or invest that power in another
person. In short, nothing in Ballinger precludes multiple
employers, that is, multiple persons or entities with the
right to control an employee. The proposition that more than
one employer can possess a right to control an employee is
well-established. See, e.g., Restatement of Employment Law
§ 1.04(b) (2015) (“An individual is an employee of two or
more joint employers if (i) the individual renders services to
at least one of the employers and (ii) that employer and the
other joint employers each control or supervise such render-
ing of services as provided in § 1.01(a)(3).”).
Here, even if we were to assume arguendo that
CCLSD possessed a right to control plaintiff, and even if
CCLSD actually exercised control over plaintiff, neither
point forecloses that North Bend also retained a right to
control him. In this case, the undisputed factual record
establishes that North Bend hired plaintiff pursuant to a
Cite as 308 Or App 138 (2020) 145
written contract where it explicitly reserved the right to con-
trol plaintiff, and, in fact, assumed the contractual obliga-
tion to “[p]rovide the day to day supervision” of plaintiff. As
part of that hiring, North Bend required plaintiff to sign
and abide by the North Bend policy manual. Finally, North
Bend cited as a partial basis for plaintiff’s termination that
he had failed to abide by North Bend policy. Whether or not
CCLSD was also plaintiff’s employer—a point on which we
offer no opinion on this record—as a matter of law, North
Bend reserved the right to control plaintiff and was his
employer for purposes of ORS chapter 659A. Accordingly,
the trial court erred in granting summary judgment to
North Bend and in denying plaintiff’s cross-motion.
Reversed and remanded.