Jensen Tech Services v. Labor Commission , 2022 UT App 18 ( 2022 )

2022 UT App 18THE UTAH COURT OF APPEALS
JENSEN TECH SERVICES AND SENTINEL INSURANCE COMPANY LTD.,
Petitioners,
v.
LABOR COMMISSION AND SERGIO HERRERA,
Respondents.
Opinion
No. 20200194-CA
Filed February 3, 2022
Original Proceeding in this Court
Ryan P. Atkinson, Scarlet R. Smith, and Matthew A.
Jones, Attorneys for Petitioners
Gary E. Atkin and Marsha S. Atkin, Attorneys for
Respondent Sergio Herrera
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES JILL M. POHLMAN and DIANA HAGEN concurred.
MORTENSEN, Judge:
¶1 On a job-by-job basis, Sergio Herrera agreed to provide IT
services for Jensen Tech Services’ (Jensen) clients. While
performing one of these unsupervised work orders, Herrera fell
from a ladder, injuring his ankle. When Herrera sought
compensation, the Utah Labor Commission (the Commission)
ultimately identified Herrera as Jensen’s employee and thus ruled
that he qualified for workers’ compensation benefits. However,
after reviewing the record before us, we set aside the
Commission’s decision and instruct the Commission to
reconsider the issue in accordance with the following opinion.
Jensen Tech v. Labor Commission
BACKGROUND 1
¶2 As an IT technician, Herrera installed computers, ran
cables, and facilitated IT-switch connections. Having the
necessary training and two years of experience, Herrera
eventually signed an agreement (the Agreement) with Jensen to
receive specific work orders through Jensen’s dispatch and online
portal. One relevant portion of the Agreement read,
As an independent contractor for Jensen Tech
Services, I will not compete with or take work from
buyers outside of Jensen Tech Services, and I will
report all communications with buyers to Jensen
Tech Services. Ten percent commission on all
contracts will be given to Jensen Tech Services along
with ten percent to the marketplace, no payments
will be made until contracts have been completely
closed, and payments from buyers have been
received by Jensen Tech Services.[2]
The Agreement further stated that Herrera would be paid based
on completed work orders and that, “[a]s an independent
contractor,” Herrera did not enter an employer–employee
relationship, could not act as Jensen’s agent, would provide his
own tools and materials, and would be responsible for his own
1. “In reviewing an order from the Commission, we view the facts
in the light most favorable to the Commission’s findings and
recite them accordingly.” O’Connor v. Labor Comm’n, 2020 UT App
49, n.1, 463 P.3d 85.
2. We acknowledge the ineloquence of the Agreement and note,
for example, the Agreement’s failure to identify Herrera as the
contracting party and our struggle to understand what the terms
“buyers outside of Jensen” and “the marketplace” (which the
Agreement references in no other way) mean.
20200194-CA 2 2022 UT App 18Jensen Tech v. Labor Commission
taxes and withholdings as well as necessary insurance, taxes, and
withholdings for any subcontractors or consultants hired by
Herrera. And although Herrera testified that he was free to accept
work from others or refuse available jobs, for a period of time he
received so many jobs from Jensen that he sought no other work.
¶3 Generally speaking, Herrera would call Jensen’s dispatch
or check its online portal to receive a work order that instructed
him on where and when to perform the work. If he found the job
parameters acceptable, Herrera would take the job and, upon
arriving at the worksite, check-in with the customer and Jensen
using the online portal. During each job, Jensen provided Herrera
with a “phone line” and “consumables . . . [or] special cable . . .
use[d] to access some of the clients’ switches and routers,” as well
as the cables for installation and a laptop for connecting the IT
switches. The tools and equipment that Herrera provided for
himself included transportation, working tools, drills, cutters,
screwdrivers, a phone-line tracer, a ladder, and a personal cell
phone—camera included. Herrera’s actual work went
unsupervised even though Jensen’s owner and other Jensen
contractors sometimes worked at the same job site. But upon
finishing the work order, Herrera checked out through the online
portal, sent pictures of his work to the customer and Jensen
(depending on the job requirements), and either received Jensen’s
approval or was required to return and “correct the work without
pay.” Jensen received payment for the work order’s satisfactory
completion and then paid Herrera, usually by the job and
sometimes by the hour (at times including mileage), but did not
withhold taxes and instead provided Herrera with a 1099 tax
form. 3
3. The record contained a 1099-MISC Jensen provided to Herrera.
“A 1099–MISC form is a tax form that reports earnings paid to an
independent contractor or a person who is self-employed but has
20200194-CA 3 2022 UT App 18Jensen Tech v. Labor Commission
¶4 While attending to the work order relevant to this case,
Herrera stood atop a twelve-foot A-frame ladder, and as he ran a
phone cable to an alarm system, the ladder fell out from under
him. Despite his efforts to hang from the ceiling with his hands,
Herrera dropped “about 16 feet,” crashing feet first onto the
concrete floor and injuring his left ankle. Herrera called Jensen’s
dispatch and was instructed to go to the hospital, where he was
diagnosed “with a left tibial fracture and ligament injuries in his
left ankle.” Following surgery and physical therapy, Herrera
began working for a different company several months later.
¶5 Around that same time, Herrera applied for workers’
compensation benefits, seeking payment for “medical expenses,
follow-up care, and compensation” for the period that had passed
since the accident. Jensen and Sentinel Insurance Company
contested the application. In response, an administrative law
judge (the ALJ) conducted an evidentiary hearing to determine if
Herrera qualified as a Jensen “employee” for workers’
compensation purposes. Following the hearing, the ALJ entered
findings of fact nearly identical to those recited above. The ALJ
concluded that, based on an application of these facts to various
legal factors used to identify independent contractors, Herrera
did meet the definition of an independent contractor and thus did
not qualify for workers’ compensation benefits. The ALJ
accordingly denied Herrera’s application.
¶6 Herrera sought review from the Commission. Although it
adopted many of the ALJ’s findings of fact, the Commission
rejected the ALJ’s conclusion and determined that Herrera was
Jensen’s employee and qualified for workers’ compensation
performed work for another. The person or entity that pays for
the services fills out and provides the 1099–MISC form to the
worker for earnings paid during the tax year.” Needle Inc. v.
Department of Workforce Services, 2016 UT App 85, ¶ 3 n.3, 372 P.3d
696.
20200194-CA 4 2022 UT App 18Jensen Tech v. Labor Commission
benefits. In making this determination, the Commission relied on
the facts that Herrera performed the same work as Jensen itself,
that Herrera testified to working a full-time schedule for Jensen,
and that Jensen could require Herrera to correct unsatisfactory
installations. The Commission also relied on its understanding of
the word “employee” and on the Agreement. According to the
Commission, the Agreement contained ambiguity regarding the
meaning of the word “buyer” and the scope of the Agreement’s
noncompete clause. The Commission stated that, because the
Agreement contained ambiguity, and “[b]ecause Jensen
controlled the terms of the [Agreement] that it required . . .
Herrera to sign, the ambiguity must be construed against Jensen.”
The Commission determined that the Agreement “limited
[Herrera] from competing with Jensen and obtaining work from
a ‘buyer’ outside of his work with Jensen,” including “preventing
. . . Herrera from seeking work from even prospective clients
outside of his work with Jensen,” thus suggesting that “Jensen
retained a right to control” Herrera that is fundamental to an
employer–employee relationship as opposed to independent-
contractor status.
¶7 On remand, the ALJ awarded Herrera benefits. When
Jensen requested the Commission’s review, the Commission
affirmed the ALJ’s order and reiterated the same findings of fact.
And in its conclusion, the Commission mentioned that Jensen
provided necessary equipment, “such as cable and a laptop,” and
emphasized the Agreement’s noncompete provision and Jensen’s
right to approve the final work product.
¶8 Jensen now seeks judicial review.
ISSUE AND STANDARD OF REVIEW
¶9 Jensen asserts that the Commission failed to properly and
completely employ the correct legal standard in determining
Herrera’s status as an employee as opposed to an independent
20200194-CA 5 2022 UT App 18Jensen Tech v. Labor Commission
contractor. 4 “Whether the Commission applied the correct legal
standard is a question of law we review for correctness.” YESCO
v. Labor Comm’n, 2021 UT App 96, ¶ 13, 497 P.3d 839; see also
Utah Code Ann. § 63G-4-403(4)(d) (LexisNexis 2019) (stating
that the appellate court may grant relief if “a person seeking
judicial review has been substantially prejudiced by,” among
other things, a situation where “the agency has erroneously
interpreted or applied the law”). And when an agency misapplies
the governing law in making a decision, we may set aside
the resulting decision with instructions to reconsider the issue.
See Oliver v. Labor Comm’n, 2013 UT App 301, ¶¶ 14–15, 318
P.3d 777.
ANALYSIS
¶10 Jensen contends that although the Commission referenced
the right-to-control analysis, which governs this case, it “failed to
continue with the analysis.” We agree. While our caselaw has
established a robust right-to-control test and associated analysis
to assist in applying the governing statutes, the Commission did
not fully engage with that analysis.
Governing Statutes
¶11 Utah Code provides that “[a]n employee . . . who is injured
. . . by accident arising out of and in the course of the employee’s
employment . . . shall be paid . . . compensation for loss sustained
on account of the injury.” Utah Code Ann. § 34A-2-401(1)(a)
(LexisNexis 2019). Thus, before benefits can be issued, a key
question is whether the requesting individual is actually an
“employee.”
4. While the briefs discuss many additional issues, because we
resolve the case on this issue, we have no occasion to discuss the
remaining issues except as otherwise indicated.
20200194-CA 6 2022 UT App 18Jensen Tech v. Labor Commission
¶12 An “employee” is “a person in the service of any employer,
. . . who employs one or more workers or operatives regularly in
the same business, . . . under any contract of hire[,] . . . not
including any person whose employment . . . is casual[] and . . .
not in the usual course of the trade, business, or occupation of the
employee’s employer.” Id. § 34A-2-104(1)(b).
¶13 On the other hand, an
“[i]ndependent contractor” means any person
engaged in the performance of any work for another
who, while so engaged, is:
(A) independent of the employer in all that
pertains to the execution of the work;
(B) not subject to the routine rule or control
of the employer;
(C) engaged only in the performance of a
definite job or piece of work; and
(D) subordinate to the employer only in
effecting a result in accordance with the
employer’s design.
Id. § 34A-2-103(2)(b)(i) (Supp. 2021). Our jurisprudence’s “right to
control” test is anchored in these statutes. See Utah Home Fire Ins.
Co. v. Manning, 1999 UT 77, ¶ 10, 985 P.2d 243; see also Utah Code
Ann. § 34A-2-103(2)(b)(i) (stating that an independent contractor
is “not subject to the routine rule or control of the employer” but
is “subordinate to the employer only in effecting a result in
accordance with the employer’s design”).
Right-to-Control Test
¶14 “Regardless of how the parties intended to structure their
relationship,” when “determining whether a worker acted as an
employee as opposed to an independent contractor for purposes
of the Workers’ Compensation Act, our inquiry has long focused
on whether the employer had the right to control the worker,”
20200194-CA 7 2022 UT App 18Jensen Tech v. Labor Commission
while keeping in mind that “the degree of control actually
asserted is not essential.” Manning, 1999 UT 77, ¶ 10 (cleaned up);
see also Norris v. Labor Comm’n, 2010 UT App 358U, para. 5 (same).
Initially,
the main facts to be considered as bearing on the
relationship here are: (1) whatever covenants or
agreements exist concerning the right of direction
and control over the employee, whether express or
implied; (2) the right to hire and fire; (3) the method
of payment; and (4) the furnishing of equipment.
Manning, 1999 UT 77, ¶ 11 (cleaned up). Generally, in application,
an employee is one who is hired and paid a salary,
a wage, or at a fixed rate, to perform the employer’s
work as directed by the employer and who is subject
to a comparatively high degree of control in
performing those duties. In contrast, an
independent contractor is one who is engaged to do
some particular project or piece of work, usually for
a set total sum, who may do the job in his or her own
way, subject to only minimal restriction or controls
and is responsible only for its satisfactory
completion.
Id. (cleaned up). None of these factors controls completely, but
“they all should be considered together in determining whether
the requirements of the statute are met.” Harry L. Young & Sons,
Inc. v. Ashton, 538 P.2d 316, 318 (Utah 1975); see also id. (“In its
carefully prepared findings and order it appears that the
Commission gave due consideration to the factors just listed
. . . .”); Glen M. Barney & Sons, Inc. v. Industrial Comm’n, 609 P.2d
948, 949 (Utah 1980) (“This court has considered the evidentiary
factors necessary to establish the [employee or independent
contractor] relationship on numerous occasions.” (cleaned up)).
20200194-CA 8 2022 UT App 18Jensen Tech v. Labor Commission
¶15 While we do not intend to mandate that every factor be
thoroughly explored in every case, the absence of any substantive
application of the recited facts to the relevant factors undermines
our confidence that the Commission gave proper credence to
these relevant factors. Regarding the right-to-control test, which
is used to apply the relevant statutory definitions, the
Commission partially analyzed only two of the four factors, at
best, and did so without considering governing caselaw
interpreting those two factors.
¶16 Where an “incorrect legal standard [is] applied to the facts
of [a] case,” we may “reverse and remand . . . for further
proceedings consistent with [our] opinion.” Sawyer v. Department
of Workforce Services, 2015 UT 33, ¶ 31, 345 P.3d 1253; see also Oliver
v. Labor Comm’n, 2013 UT App 301, ¶¶ 14–15, 318 P.3d 777. This is
the course we elect to take here. Specifically, in its right-to-control
analysis, the Commission emphasized two main bases for its
conclusion—that the Agreement subjected Herrera to a
noncompete clause and that Jensen retained the right to approve
Herrera’s final work product. But the first of these hardly
substitutes for a thorough application of the right-to-control test,
and the second basis is, as a statutory and a jurisprudential matter,
erroneous. Although we do not express an opinion on how the
complete right-to-control test applies in this case, we detail each
factor in turn as guidance for the Commission during its
reconsideration of the issue.
I. Agreements Concerning Right to Control
¶17 The first factor—“covenants or agreements . . . concerning
the right of direction and control,” Utah Home Fire Ins. Co. v.
Manning, 1999 UT 77, ¶ 11, 985 P.2d 243 (cleaned up)—has led
courts to find that a right to control existed when the employer
possessed the right to govern a worker’s conduct and product in
multiple ways, including when “the employer had the right to
control the worker’s manner or method of executing or carrying
20200194-CA 9 2022 UT App 18Jensen Tech v. Labor Commission
out the work,” see id. ¶ 10. Here, the Commission determined that
the Agreement’s noncompete language (which by one
interpretation could restrict Herrera’s ability to solicit IT work
outside of the work provided by Jensen) and Jensen’s right to
approve the final work product, gave Jensen a right to control
Herrera to such an extent that it supported a determination that
he qualified as an employee. However, this analysis was
incomplete as it pertains to the noncompete provision and
incorrect as it pertains to the approval of the final work product.
¶18 Regarding its analysis of the Agreement, the Commission
does not appear to have considered its contents as a whole. While
we recognize that the noncompete clause, in isolation, may be
indicative of an employer–employee relationship, the
noncompete clause is not the only provision in the Agreement
that informs a determination of whether the Agreement gave
Jensen a right “of direction and control.” See id. ¶ 11 (cleaned up).
And here, other provisions in the Agreement warranted
consideration.
¶19 For example, Herrera’s implied ability to hire
subcontractors was a factor that weighed against an employer–
employee relationship. “An independent contractor can employ
others to do the work and accomplish the contemplated result
without consent of the [employer], while an employee cannot.” Id.
¶ 14 (cleaned up). In Manning, the court identified a “right of
direction and control,” id. ¶ 11 (cleaned up), when the worker
“agree[d] to perform the work as directed by [the employer]”;
gave the employer “rights, privileges, options and exercise of
discretion with respect to said work . . . [to] be maintained and
exercised with or against [the worker],” id. ¶ 12 (cleaned up); and
agreed to obtain the employer’s approval before hiring a
subcontractor, id. ¶ 14. The agreement there also required a
written daily report, specified regular working hours, and gave
the employer the right to control the work, which right the
employer routinely exercised. Id. ¶ 13. In contrast, the Agreement
20200194-CA 10 2022 UT App 18Jensen Tech v. Labor Commission
here implicitly addressed Herrera’s right to hire others to
accomplish the work by stating that Herrera would be responsible
for taxes, insurance, and other matters related to Herrera “or any
other person consulted or employed by [Herrera] in performing
services under” the Agreement.
¶20 On remand, the Commission should consider the
noncompete provision in light of the Agreement as a whole.
Although the Commission might conclude that, on balance, the
Agreement as a whole is more indicative of an employer–
employee relationship, the Commission must first at least attempt
to balance the import of all the provisions of the Agreement rather
than focusing on a single provision to the exclusion of the others.
¶21 Regarding its analysis of Jensen’s right to approve
Herrera’s final work product, the Commission incorrectly
construed this right as a hallmark of an employer–employee
relationship. Employees are those who “perform the employer’s
work as directed by the employer and who [are] subject to a
comparatively high degree of control in performing those duties.”
Id. ¶ 11 (cleaned up). Independent contractors, on the other hand,
“may do the job in [their] own way, subject to only minimal
restriction or controls and [are] responsible only for its satisfactory
completion.” Id. (cleaned up) (emphasis added). In fact, the very
statute defining “independent contractor” expressly provides that
an independent contractor is “subordinate to the employer . . . in
effecting a result in accordance with the employer’s design.” Utah
Code Ann. § 34A-2-103(2)(b)(i) (LexisNexis Supp. 2021).
¶22 Thus, the right to control focuses not on the right to require
a satisfactory product but on the “right to control the manner or
method in which the [worker completes the] work.” See Averett v.
Grange, 909 P.2d 246, 249 (Utah 1995). Indeed, a hiring party “who
wants to get work done without becoming an employer, is
entitled to as much control of the details of the work as is
necessary to ensure that it gets the end result from the contractor
20200194-CA 11 2022 UT App 18Jensen Tech v. Labor Commission
that it bargained for.” 5 Arthur Larson et al., Larson’s Workers’
Compensation Law § 61.03[1] (2021). “[C]ontrol of the quality or
description of the work itself” is “distinguish[able] from control
of the person doing it.” Id. In other words, the quality of the final
product is at the discretion of the person doing the hiring, and
exercising that discretion for the limited purpose of ensuring the
final product’s quality meets the required standards does not by
itself render the worker an employee. See id.; see also Averett, 909
P.2d at 250 (“[C]lients . . . have certain rights as to the end product
. . . in all independent contractor relationships . . . .”); Harry L.
Young & Sons, Inc. v. Ashton, 538 P.2d 316, 318 (Utah 1975) (“[A]n
independent contractor . . . is responsible only for [a job’s]
satisfactory completion.”); Luker Sand & Gravel Co. v. Industrial
Comm’n, 23 P.2d 225, 228 (Utah 1933) (“An independent
contractor is one who has entered into a contract or upon
employment to render service or do work for another, according
to his own method, means, and manner of doing the work, and
without being subject to the control, direction, or supervision of
such other, except as to the result of the work or service.” (cleaned up)
(emphasis added)); Ludlow v. Industrial Comm’n, 235 P. 884, 888
(Utah 1925) (“An independent contractor [is] . . . one who
undertakes to produce a given result, but so that in the actual
execution of the work he is not under the order or control of the
person for whom he does it, and may use his own discretion in
things not specified. . . . [This] general statement[] as to what
constitutes an independent contractor must be accepted with the
modification that the status of independent contractor is not
affected by the mere fact that the employer may supervise and
direct in matters necessary to a faithful performance of the
contract.” (cleaned up)); Stricker v. Industrial Comm’n, 188 P. 849,
851 (Utah 1920) (“If one renders service to another in the course
of an occupation, representing the will of his employer only as to
the result of his work, and not as to the means by which it is
accomplished, he is an independent contractor.” (cleaned up)); cf.
Callahan v. Salt Lake City, 125 P. 863, 865 (Utah 1912) (noting that
the independent contractor had an obligation to comply “with the
20200194-CA 12 2022 UT App 18Jensen Tech v. Labor Commission
specifications and terms of the contract,” even though the
employer “had no more right to interfere with the methods . . .
employed in doing the work than a mere stranger would have
had”).
¶23 For example, in Averett v. Grange, 909 P.2d 246 (Utah 1995),
the court found an agreement establishing the right to control
when the worker was “subject to the direction of [the employer]
as to what, when, how, and where the work was to be performed”;
had agreed to “perform[] other duties at the job site when asked”;
and was supervised by a manager during work. Id. at 250. And in
Harry L. Young & Sons, Inc. v. Ashton, 538 P.2d 316 (Utah 1975), the
court upheld the Commission’s conclusion that the worker was
an employee when the worker had to receive approval from a
supervisor for his work activities, could not refuse particular
assignments, had to check in throughout his assignments, was
given “direction” regarding company equipment, and had been
penalized for violating company policy. Id. at 318–19. On the other
hand, in Norris v. Labor Commission, 2010 UT App 358U, when the
employer “had no supervision” over the work and the worker
“decided his own work schedule,” the court declined to disturb
the Commission’s determination that the worker qualified as an
independent contractor. Id. para. 6. Here, the Agreement required
Herrera to provide satisfactory completion of the work, but
Herrera undertook no obligation to be available, complete a
certain number of jobs, or even accept any jobs from Jensen.
Herrera did engage with Jensen for recurring jobs—and at times
these were substantial enough to compare to a full-time
schedule—but these jobs were defined, specified projects that
Herrera completed on his own schedule within the parameters
included in the job description. And not until completion did
Herrera’s work come under scrutiny, even when working on the
same site as other Jensen workers and even Jensen’s owner.
¶24 In our view, the Commission appears to rely almost
exclusively on the Agreement’s noncompete clause, while
20200194-CA 13 2022 UT App 18Jensen Tech v. Labor Commission
overlooking other contractual provisions. And the Commission
wrongly understood Jensen’s right to approve the work as being
legally indicative of the right to control. On remand, the
Commission should apply established law and, while considering
the Agreement as a whole, engage in a full analysis of all aspects
of the parties’ agreement concerning the right to control.
II. The Right to Hire and Fire
¶25 The second factor under the right-to-control test is “the
right to hire and fire.” Utah Home Fire Ins. Co. v. Manning, 1999 UT
77, ¶ 11, 985 P.2d 243 (cleaned up). In this context, the relevant
inquiry is whether Herrera had the right to employ others to do
his work outside of Jensen’s control. See id. ¶ 14 (evaluating the
level of control exerted by the purported employer over
individuals hired by the purported employee). 5 As this court has
recognized, “The difference between an employee and an
independent contractor is [that] . . . an independent contractor can
employ others to do the work and accomplish the contemplated
result without the consent of the contractee, while an employee
cannot substitute another in his place without the consent of the
employer.” See Osman Home Improvement v. Industrial Comm’n, 958
P.2d 240, 244 (Utah Ct. App. 1998) (cleaned up); see also id. at 244–
45 (determining that a party was not an independent contractor
based in part on the fact that he had no authority to hire or fire the
individual working under his supervision).
¶26 As explained above, see supra ¶¶ 18–19, the Commission
did not analyze Herrera’s alleged right to hire others to do his
work without oversight from Jensen. On remand, the
5. In other contexts, particularly where there is a dispute over
whether one of two entities or individuals is the worker’s
employer, the inquiry focuses on “whether the principal has the
right to hire and fire the agent.” See Sutton v. Miles, 2014 UT App
197, ¶ 13, 333 P.3d 1279 (cleaned up).
20200194-CA 14 2022 UT App 18Jensen Tech v. Labor Commission
Commission should consider this issue and explain how any such
right factors into its analysis.
III. Method of Payment
¶27 The third factor, “method of payment,” has led courts to
identify employees as those paid on a regular basis by the hour or
by a set salary, and independent contractors as those paid a
certain amount for a particular job. See Utah Home Fire Ins. Co. v.
Manning, 1999 UT 77, ¶ 11, 985 P.2d 243 (cleaned up). The
Commission did recite facts related to this factor but did not apply
those facts to the caselaw to reach a conclusion.
¶28 Our caselaw illustrates how this factor should be applied.
For example, in Averett v. Grange, 909 P.2d 246 (Utah 1995), the
fact that the worker, like the employer’s other workers, was “paid
by the hour every two weeks . . . [and] not paid by the job,” was
one factor that led the court to identify the worker as an employee.
Id. at 250. On the other hand, in Norris v. Labor Commission, 2010
UT App 358U, the fact that the worker “would be paid a certain
amount of money to perform a job” weighed in favor of the court’s
declining to disturb the Commission’s determination that the
worker was an independent contractor. Id. para. 6 (cleaned up);
see also Manning, 1999 UT 77, ¶ 15 (stating that “despite the fact that
the parties’ agreement specified payment of a lump sum for
completing the job and that [the worker] would furnish his own
equipment, the evidence as a whole supports the district court’s
determination that, as a matter of law, [the worker] acted as [the
employer’s] employee” (emphasis added)).
¶29 As it relates to this factor, the situation presented here
provided the Commission ample facts to evaluate, including that
Herrera “was usually paid by the job, but would also be paid by
the hour on occasion,” that Herrera received payment “weekly
based on payments from the previous week,” and that “Jensen did
not withhold taxes from [Herrera]’s pay and gave him a 1099 tax
form.” And on remand, where the Commission has facts
20200194-CA 15 2022 UT App 18Jensen Tech v. Labor Commission
regarding this factor in the record, the Commission should
include some indication of how those facts are considered in the
Commission’s right-to-control analysis.
IV. Furnishing of Equipment
¶30 The fourth factor—“furnishing of equipment,” Utah Home
Fire Ins. Co. v. Manning, 1999 UT 77, ¶ 11, 985 P.2d 243 (cleaned
up)—generally provides that courts identify employees as those
workers who receive equipment from the employer and
independent contractors as those workers who provide their own
equipment. Regarding this factor, the Commission concluded that
“Jensen also provided . . . Herrera with some of the necessary
equipment, such as cable and a laptop to facilitate connection of
clients’ IT switches.” The Commission’s findings stated that
“Herrera used his own tools and equipment for installations, with
the exception of cable and a laptop.” But on review, although we
see that Jensen also provided a “phone line” and “consumables
. . . [or] special cable . . . use[d] to access some of the clients’
switches and routers,” the tools and equipment that Herrera
provided for himself included transportation, working tools,
drills, cutters, screwdrivers, a phone-line tracer, a ladder, and a
personal cell phone—along with its camera. After reviewing these
findings and assertions as well as the law controlling this factor,
it is not clear how the Commission weighed these facts in light of
the controlling law.
¶31 In Osman Home Improvement v. Industrial Commission, 958
P.2d 240 (Utah Ct. App. 1998), the court identified the worker as
an employee, in part, based on the fact that the employer
“provided all the . . . material required to complete the project.”
Id. at 245; see also Pinter Constr. Co. v. Frisby, 678 P.2d 305, 309 (Utah
1984) (deciding that the Commission’s identifying the worker as
an employee was warranted, in part, because the employer
“maintained some control over the materials” in that the worker
“could acquire the materials only after receiving payment”);
20200194-CA 16 2022 UT App 18Jensen Tech v. Labor Commission
Harry L. Young & Sons, Inc. v. Ashton, 538 P.2d 316, 318 (Utah 1975)
(identifying the worker as an employee, in part, based on the fact
that the employer had registered as the owner of the equipment
the worker used and had overtly indicated that ownership).
Conversely, in Norris v. Labor Commission, 2010 UT App 358U, the
court declined to disturb the Commission’s determination that the
worker qualified as an independent contractor when he
“provided his own tools for the work, used his own truck, and
was responsible for purchasing most of the supplies for the work,
with the exception of the cleaning supplies that he was told he
could use.” Id. para. 6 (cleaned up); see also Manning, 1999 UT 77,
¶ 15 (identifying the worker as an employee “despite the fact that”
the worker “furnish[ed] his own equipment” (emphasis added)).
¶32 Here, Herrera “provided his own tools for the work [and]
used his own [transportation],” but he also received cables and a
laptop to assist with that work. See Norris, 2010 UT App 358U,
para. 6 (cleaned up). And in its analysis, although the Commission
mentioned the cables and the laptop provided by Jensen, it did
not explain how this weighed against the transportation, working
tools, drills, cutters, screwdrivers, phone-line tracer, ladder, and
personal cell phone (complete with camera) that Herrera
provided for himself. Such facts existing in the record warrant
consideration, and on remand, the Commission should address
these facts and apply established law in undertaking its analysis. 6
6. Alternatively, Herrera requests that we leave the Commission’s
decision intact based on a “legal ground or theory apparent on the
record”—specifically, based on the idea that Herrera would still
qualify for benefits as a “statutory employee” under Utah Code
section 34A-2-103(7)(a)(ii). While “the appellate court will affirm
the judgment, order, or decree appealed from if it is sustainable
on any legal ground or theory apparent on the record, even
though such ground or theory differs from that stated . . . to be the
20200194-CA 17 2022 UT App 18Jensen Tech v. Labor Commission
CONCLUSION
¶33 Where the Commission failed to properly and completely
apply the legal standards that govern here—and in its right-to-
control analysis, relied primarily on only two bases, one of which
was faulty as a legal matter—we set aside the Commission’s final
decision and direct it on remand to reconsider Herrera’s status as
an employee or an independent contractor in light of the
governing law and the guidance we have suggested.
basis of [the] ruling or action,” State v. Montoya, 937 P.2d 145, 149
(Utah Ct. App. 1997) (cleaned up), we may do so only “as long as
we do not reweigh the evidence in light of the new legal theory or
alternate ground,” State v. Malloy, 2019 UT App 55, ¶ 9, 441 P.3d
756 (cleaned up), aff’d, 2021 UT 61, 498 P.3d 358. And here, even
assuming (without deciding or indicating) that the “statutory
employee” theory applies in this context, we would be unable to
apply the proposed legal ground to the facts of this case without
reweighing the evidence—particularly regarding the
determination of whether Jensen maintained “supervision or
control” over Herrera. See Utah Code Ann. § 34A-2-103(7)(a)(ii)
(LexisNexis Supp. 2021).
20200194-CA 18 2022 UT App 18