Windows v. ICAO

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
January 16, 2020
2020COA9
No. 18CA1908, Pella Windows v. ICAO — Labor and Industry —
Workers’ Compensation — Independent Contractors
A division of the court of appeals considers whether the
independent contractor analysis adopted by the Colorado Supreme
Court in Industrial Claim Appeals Office v. Softrock Geological
Services, Inc., 2014 CO 30, an unemployment case, also applies in
the workers’ compensation context and must be considered when
determining whether an injured worker is an independent
contractor for purposes of the Workers’ Compensation Act. The
division concludes that the Softrock analysis applies.
The division further concludes that once an administrative law
judge has weighed the statutory and Softrock factors, the
administrative law judge’s findings and determinations regarding
independent contractor status cannot be set aside if substantial
evidence supports them.
COLORADO COURT OF APPEALS 2020COA9
Court of Appeals No. 18CA1908
Industrial Claim Appeals Office of the State of Colorado
WC No. 4-950-181
Pella Windows & Doors, Inc.; and Pinnacol Assurance,
Petitioners,
v.
Industrial Claim Appeals Office of the State of Colorado and Christopher Pierce,
Respondents.
ORDERS SET ASIDE AND CASE
REMANDED WITH DIRECTIONS
Division II
Opinion by JUDGE RICHMAN
Dailey and Brown, JJ., concur
Announced January 16, 2020
Harvey D. Flewelling, Denver, Colorado, for Petitioners
No Appearance for Respondent Industrial Claim Appeals Office
Burg Simpson Eldredge Hersh & Jardine, P.C., John M. Connell, Brian Matise,
Nelson Boyle, Englewood, Colorado, for Respondent Christopher Pierce
¶1 In this case, we consider whether the independent contractor
test adopted by the Colorado Supreme Court in Industrial Claim
Appeals Office v. Softrock Geological Services, Inc., 2014 CO 30, an
unemployment case, applies to workers’ compensation actions. We
determine that the Softrock standard applies but conclude that the
Industrial Claim Appeals Office (Panel) exceeded its authority by
disregarding the findings of fact made by the administrative law
judge (ALJ). We therefore set aside the Panel’s orders and remand
with directions to reinstate the full findings of fact, conclusions of
law, and order issued by the ALJ on November 25, 2015.
I. Background Facts
¶2 Claimant, Christopher Pierce, began employment as a service
technician for employer, Pella Windows & Doors, Inc., in June
2008. In March 2009, Pella laid off its entire team of seventeen
service technicians. Immediately thereafter, claimant was one of
nine service technicians offered a “service contract” with Pella,
which he accepted. Pella signed a contract with claimant called the
Master Service Subcontract Agreement.
¶3 Under the terms of the service contract, claimant was no
longer Pella’s employee but was described as an independent
1
contractor. Pella could hire claimant to perform service work for its
customers, but the written contract did not prohibit or prevent
claimant from performing work for individuals or entities other than
Pella. Claimant conceded that, if he so chose, he could advertise
his business and accept other work.
¶4 Claimant testified that his daily work remained largely
unchanged. However, he took several steps, many at Pella’s behest,
separating him from Pella’s employ, including but not limited to the
following:
• Claimant formed his own business and registered his
business name, CP Window Service (CP), with the
Colorado Secretary of State in March 2009.
• Claimant renewed the CP trade name with the Secretary
of State’s Office in 2010, 2011, 2012, and 2013.
• Claimant could work any day he wished. If he wanted to
take a day off, he simply so advised Pella one week in
advance.
• Pella issued payment checks to CP — not to claimant —
for work performed by the job, rather than by the hour,
regardless of how long it took to complete the work.
2
• Pella did not withhold taxes from the checks it wrote to
CP; claimant was responsible for paying any taxes he or
CP incurred.
• Claimant obtained and paid for his own liability
insurance.
• Claimant also lost his health insurance when Pella “made
the switch over.”
• Claimant’s business operations as CP were never
combined in any way with Pella’s business operations.
¶5 Claimant was likewise required to obtain his own workers’
compensation insurance, but when he established CP in March
2009, he filed a form with the Department of Labor expressly
rejecting such insurance. Four months later, he filed a second
rejection of workers’ compensation coverage.
¶6 By contrast, other factors evidenced claimant’s dependence on
Pella’s business:
• CP Window Service had no employees other than
claimant.
• Customers paid Pella for the service work, not CP.
3
• Although the written contract permitted him to work for
others, in practice claimant never worked for any
individual or entity other than Pella “from 2009 until
2012.”
• Claimant testified that Pella work kept him busy full
time, leaving him no time or opportunity to accept other
work.
• He had no customers other than Pella.
• Claimant did not advertise CP.
• Claimant had no business cards for CP. He testified that
Pella provided him with “blank” cards bearing Pella’s
phone and fax numbers, on which he could handwrite in
his or CP’s name.
¶7 On December 11, 2013, claimant was repairing a window
pursuant to a Pella assignment when he fell from a second-floor
window. The fall resulted in a compression fracture of claimant’s
spine at L1. Claimant now suffers from paraplegia. He told the
hospital during his initial stay that he was “self employed and a
contract employee for [the] job he was on, so there is NO worker[s’]
comp[ensation] possibility.” He also indicated on other related
4
medical forms, in conversations with doctors, and on a social
security disability benefits application that he was self-employed
and had been working as an independent contractor. Nonetheless,
several months after sustaining his injury, claimant filed a claim for
workers’ compensation coverage, which Pella and its insurer,
Pinnacol Assurance, contested on the ground that claimant was an
independent contractor at the time of his injury.
II. Procedural History
¶8 The parties litigated the issue. The resulting case has had a
lengthy procedural history. It went to a hearing in September 2014
conducted by ALJ Michelle Jones. In analyzing the evidence
presented, ALJ Jones applied the independent contractor tests set
forth in the Workers’ Compensation Act (WCA), section
8-40-202(2)(b), C.R.S. 2019. That statutory section enumerates
nine criteria which establish an independent contractor’s
independence from a prospective employer. It also mandates that,
if the worker and the putative employer enter into a written
contract, the document “shall create a rebuttable presumption of an
independent contractor relationship between the parties.”
§ 8-40-202(2)(b)(IV).
5
¶9 ALJ Jones found that the nine factors all weighed in Pella’s
favor, tipping the scales toward a finding that claimant was an
independent contractor rather than an employee. For example, she
explained that, although claimant had no employees and performed
work for no one other than Pella, the “issue is whether or not
claimant was required to work exclusively for the employer.” She
concluded claimant was not required to work exclusively for Pella.
She noted that there was conflicting testimony about whether
claimant’s work was inspected by Pella, but concluded that the
evidence did not establish that Pella oversaw claimant’s work or
instructed claimant on how to perform the work. Likewise,
although ALJ Jones credited claimant’s testimony that “he was
provided with materials and equipment necessary for his repair
work . . . includ[ing] . . . scaffolding, ladders, suction cups, and
glass cutters,” she found that “the evidence establishes that the
actual tools used were” claimant’s. She also found that Pella
provided claimant with no more than “minimal training” and no
longer provided him with tools to perform the service work,
although he did obtain some materials from Pella to perform the
work. She determined that the written contract between the parties
6
created a rebuttable presumption that claimant was an
independent contractor, which he failed to overcome. Based on her
analysis of all nine factors, she concluded claimant was an
independent contractor.
¶ 10 But, in May 2015, the Panel set aside ALJ’s Jones’ order,
concluding that she had failed to follow the test adopted by the
supreme court in Softrock. Although the WCA specifies that the
determination “whether an individual is an employee” or an
independent contractor for workers’ compensation purposes “shall
be based on the nine criteria found in section 8-40-202(2)(b)(II),” the
Panel concluded that Softrock applied because the nine factors in
the WCA are identical to the nine factors listed in the Colorado
Employment Security Act (CESA), section 8-70-115(1)(c), C.R.S.
2019. Because Softrock had expanded the analysis beyond the nine
factors identified in the CESA, the Panel reasoned the same
expansion applied to the WCA.
¶ 11 Under Softrock, the Panel observed, the fact finder charged
with determining whether an individual was an employee or
independent contractor “was directed to conduct ‘an inquiry into
the nature of the working relationship’” and must consider “any
7
other relevant factors” in reaching a decision. The Panel then listed
several factors identified in Long View Systems Corp. USA v.
Industrial Claim Appeals Office, 197 P.3d 295 (Colo. App. 2008),
another unemployment compensation case, which Softrock had
approvingly cited. Softrock suggested that the Long View factors
should be considered as follows:
when evaluating a claim that the putative
employee maintained an independent trade or
business, the Division and the ICAO could
consider whether the putative employee:
maintained an independent business card,
listing, address, or telephone; had a financial
investment such that there was a risk of
suffering a loss on the project; used his or her
own equipment on the project; set the price for
performing the project; employed others to
complete the project; and carried liability
insurance.
Softrock, ¶ 16. Based on this language, the Panel ruled that the
“paucity of evidence in the record pertinent to many of the factors
mentioned by the Softrock decision” required it to set aside ALJ
Jones’ order and “remand the matter for additional evidentiary
proceedings.”
¶ 12 On remand a few months later, ALJ Jones conducted a second
hearing and admitted additional evidence. She again weighed the
8
nine criteria set out in section 8-40-202(2)(b)(II), but also
considered the Long View/Softrock factors. ALJ Jones noted that
claimant had a business name, used tools he purchased, lost his
benefits, obtained his own liability insurance, and was free to
accept or reject Pella’s projects.
¶ 13 She expressly found that claimant had failed to show “that he
was not free from control and direction in the performance of his
services” and failed to show that “he was not customarily engaged
in an independent trade or business.” To support these findings,
she found that Pella was not aware that claimant was working
exclusively for it. She also found again that Pella no longer
provided claimant with tools, although she found that it did provide
him with materials necessary for jobs he accepted. But she pointed
out that the sixth factor of the nine factor test addresses provision
of tools and benefits, not the provision of materials.
9
¶ 14 She therefore concluded that “the nature of the working
relationship in this case shows that it was an independent
contractor/employer relationship.”1
¶ 15 In an order issued April 26, 2016, the Panel rejected ALJ
Jones’ reasoning a second time. The Panel reiterated its
determination that Softrock applies to workers’ compensation cases,
noting that
[t]he intent of the sponsors [of the legislation]
was to have both [section] 8-70-115 and
[section] 8-40-202(2)(b)(II) construed in a
similar fashion, but only to the extent a court
was applying the nine factors. The Softrock
decision in 2014 was interpreting the nine
factors included in [section] 8-70-115, which
also appear in [section] 8-40-202(2)(b)(II).
Applying that decision to the application of
either statute cannot be seen as contrary to
the intent of the General Assembly.
The Panel then went on to conclude that ALJ Jones’ conclusions of
law were “unsupported by substantial evidence in the record.” The
Panel chastised ALJ Jones for “[p]ermitting the label rather than the
actual nature of the relationship to control” and criticized her
1 The ALJ did not address whether claimant “had a financial
investment such that there was a risk of suffering a loss on the
project,” but neither did the Panel in its review.
10
reliance on “the documents executed by the parties in March,
2009[,]” as indicative of claimant’s “independent business . . .
[despite] the absence of evidence in the record that claimant ever
took any steps to “create an independent business. The Panel
reasoned that Pella’s motivation for entering into a contractual
relationship with claimant and the other service technicians “was to
save money on payroll expenses.” It further observed that, under
the parties’ agreement, “claimant simply performed the same job he
had prior to 2009, but was paid in a different manner.” It deemed
claimant’s injury compensable. Because the parties had stipulated
to claimant’s average weekly wage, claimant’s award was calculable.
¶ 16 Pella subsequently appealed the Panel’s decision to this court.
However, because the Panel’s order had not reduced claimant’s
award to a sum certain, the appeal was dismissed without
prejudice. Pella Windows & Doors, Inc. v. Indus. Claim Appeals
Office, (Colo. App. No. 16CA0845, Mar. 2, 2017) (not selected for
publication pursuant to C.A.R. 35(e)).
¶ 17 In the second remand, ALJ Kara Cayce entered a brief order
dated February 2, 2018, approving the parties’ stipulation;
awarding claimant $800 per week in temporary total disability (TTD)
11
benefits from December 12, 2013, through May 31, 2014; deducting
$186.23 from the TTD award after June 1, 2014, as an offset
against the social security disability benefit claimant began
receiving that month; and ordering Pella to pay claimant TTD
benefits of $613.77 per week thereafter and continuing. However,
ALJ Cayce crossed out language on the order notifying the parties
of their right to seek review.
¶ 18 Nevertheless, Pella sought the Panel’s review of this order. The
Panel issued its final order on September 24, 2018. Because ALJ
Cayce had stricken language in the order advising the parties of
their appeal rights, one member of the Panel characterized the order
as a summary order necessitating a request for full findings within
ten days of the order before further appellate review could be taken.
See § 8-43-215, C.R.S. 2019. 2 Pella had not sought review within
the statutory ten-day period. Consequently, one of the two Panel
members reviewing the matter concluded that ALJ Cayce’s order
2 Section 8-43-215, C.R.S. 2019, mandates that any party seeking
review of a summary order must “make a written request for a full
order within ten working days after the date of mailing of the
summary order. The request is a prerequisite to review under
section 8-43-301[, C.R.S. 2019].”
12
was final and unappealable. The other Panel member disagreed
with that characterization and conclusion. But, because she
concurred with the rest of the decision and with the conclusion that
ALJ Cayce’s order should be affirmed, the Panel member’s
disagreement did not change the outcome of the decision. Instead,
the Panel again reiterated its belief that Softrock applied and that
the evidence supported a finding that claimant was an employee
whose on-the-job injury was compensable.
¶ 19 All three of the Panel’s decisions are now before us for review.
Pella asks us to consider whether the Panel erred by concluding
that Softrock applies to workers’ compensation actions. It also
challenges the Panel’s characterization of ALJ Cayce’s order as a
summary order. And, finally, Pella argues that the Panel
overstepped its authority by rejecting ALJ Jones’ finding that
claimant was an independent contractor.
III. Finality of ALJ Cayce’s Order
¶ 20 We first address the Panel’s determination that ALJ Cayce’s
order reducing claimant’s award to a sum certain was a summary
order. In that order, issued after Pella’s first appeal to this court
was dismissed without prejudice, ALJ Cayce stated that she was
13
“reversing this ALJ’s prior order of November 30, 2015, . . .
pursuant to the stipulation of the parties and in order to create a
final and appealable order” and awarded claimant specific TTD
benefits. Nowhere was the order identified as a summary order.
Nothing in the order stated that Pella’s time to seek review was
limited to ten days. Pella, therefore, had no reason to believe it had
to act within ten days to preserve its appellate rights.
¶ 21 But parties are entitled to “notice of a critical determination in
a proceeding.” Patterson v. Indus. Comm’n, 39 Colo. App. 255, 257,
567 P.2d 385, 387 (1977). Notice that an order is characterized as
a summary order requiring a request for full findings within ten
days is a “critical determination” pertinent to the order. “[W]here
the parties, whether employee or employer, are represented in the
administrative proceeding under consideration by attorneys of
record, notice of decisions affecting the substantial rights of the
parties must be given to their attorneys.” Mountain States Tel. &
Tel. Co. v. Dep’t of Labor & Emp’t, 184 Colo. 334, 338, 520 P.2d 586,
588 (1974).
¶ 22 Here, the failure to advise Pella and its counsel that the order
may be considered a summary order subjecting Pella to a ten-day
14
window within which to request full findings violated Pella’s right to
due process under the law. See Hall v. Home Furniture Co., 724
P.2d 94, 96 (Colo. App. 1986) (“Due process is violated when an
attorney of record, through no fault of his own, is denied notice of a
critical determination in his client’s case and by reason thereof fails
to take the procedural steps necessary to preserve his client’s
rights.”).
¶ 23 Accordingly, the determination of Panel member Kroll
characterizing ALJ Cayce’s order as a final, unappealable summary
order improperly deprived Pella of its guaranteed rights to due
process. We therefore set aside that portion of the Panel’s
September 24, 2018, decision and proceed with our review of the
merits of ALJ Cayce’s decision as well as ALJ Jones’ two decisions
and the Panel’s three decisions in this case.
IV. Applicability of Softrock to Workers’ Compensation Actions
¶ 24 Pella contends that the Panel erred by applying the supreme
court’s Softrock decision to this workers’ compensation action. It
argues that Softrock was limited to unemployment cases and that
applying it in the workers’ compensation context violates the
15
General Assembly’s express intent. We are not persuaded that the
Panel erred.
¶ 25 Prior to Softrock’s announcement, independent contractor
determinations in unemployment cases often turned on a single
question: whether the worker performed services exclusively or
predominantly for one employer. If that question was answered in
the affirmative, the worker was generally found to be an employee
rather than an independent contractor. See, e.g., Carpet Exch. of
Denver, Inc. v. Indus. Claim Appeals Office, 859 P.2d 278, 282 (Colo.
App. 1993) (holding that because most of the employer’s workers
“were . . . not customarily engaged in the business independent of
their relationship with the company . . . they were not engaged in
an independent business and were, therefore, in covered
employment”), abrogated by Softrock, ¶ 18.
¶ 26 Softrock rejected the use of the dispositive factor test
exemplified by Carpet Exchange. Instead, the supreme court held
that nine factors enumerated in section 8-70-115 of CESA — which
are identical to the nine criteria set out in section 8-40-202(2)(b)(II)
of the WCA — are “indicative of what the General Assembly thought
are important distinctions between employees and independent
16
contractors. As such, we conclude that they should be considered
when determining whether an individual is engaged in an
independent business for the purposes of unemployment insurance
tax liability.” Softrock, ¶ 15. The nine factors listed in the WCA,
and repeated in the CESA, are as follows:
(II) To prove independence it must be shown
that the person for whom services are
performed does not:
(A) Require the individual to work exclusively
for the person for whom services are
performed; except that the individual may
choose to work exclusively for such person for
a finite period of time specified in the
document;
(B) Establish a quality standard for the
individual; except that the person may provide
plans and specifications regarding the work
but cannot oversee the actual work or instruct
the individual as to how the work will be
performed;
(C) Pay a salary or at an hourly rate instead of
at a fixed or contract rate;
(D) Terminate the work of the service provider
during the contract period unless such service
provider violates the terms of the contract or
fails to produce a result that meets the
specifications of the contract;
(E) Provide more than minimal training for the
individual;
17
(F) Provide tools or benefits to the individual;
except that materials and equipment may be
supplied;
(G) Dictate the time of performance; except
that a completion schedule and a range of
negotiated and mutually agreeable work hours
may be established;
(H) Pay the service provider personally instead
of making checks payable to the trade or
business name of such service provider; and
(I) Combine the business operations of the
person for whom service is provided in any way
with the business operations of the service
provider instead of maintaining all such
operations separately and distinctly.
§ 8-40-202(2)(b)(II).
¶ 27 But the supreme court held that the independent contractor
analysis need not be limited to these nine statutory criteria. Citing
the other factors considered in Long View — such as the worker’s
use of business cards, financial risk, setting the price for jobs,
employing others, and carrying liability insurance, Softrock, ¶ 16 —
the supreme court stated that,
[g]iven the wide array of factors that could be
relevant, we conclude that rather than
requiring a rigid check-box type inspection, a
more accurate test to determine if an
individual is customarily engaged in an
independent business involves an inquiry into
the nature of the working relationship. The
18
[Panel] and the Division may consider the nine
factors in section 8-70-115(1)(c) as well as any
other information relevant to the nature of the
work and the relationship between the
employer and the individual. Accordingly, we
decline to adopt the court of appeals’ test that
exclusively considers only the nine factors
enumerated in section 8-70-115(1)(c).
Id. at ¶ 17. Softrock thus expanded the scope of independent
contractor review in the unemployment arena.
¶ 28 As Pella points out, Softrock stated that the issue before it was
“whether an individual is an independent contractor as opposed to
an employee for unemployment tax liability purposes.” Id. at ¶ 1.
Nowhere does Softrock mention or discuss its applicability to
workers’ compensation cases.
¶ 29 Indeed, Softrock’s underlying premise — that an independent
contractor analysis cannot be based on a single, dispositive factor
— is not of concern in the workers’ compensation context. Unlike
the CESA, the WCA expressly prohibits such a singular analysis:
“The fact that an individual performs services exclusively or
primarily for another shall not be conclusive evidence that the
individual is an employee.” § 8-40-102(2), C.R.S. 2019.
19
Consequently, the Panel analysis that was challenged in Softrock is
not at issue in the worker’s compensation arena.
¶ 30 Pella also correctly notes several dissimilarities between the
CESA and the WCA which suggest that the legislature intended
independent contractor analysis to be limited to the WCA’s nine
criteria.
¶ 31 First, the CESA applies the nine criteria to “a written
document, signed by both parties.” § 8-70-115(1)(c). In contrast,
the WCA applies the factors to an analysis of the relationship
between the parties. However, this distinction is essentially
rendered moot by Softrock, which held them “indicative of . . .
important distinctions between employees and independent
contractors.” Softrock, ¶ 15. Thus, after Softrock, the nine criteria
are no longer limited to written documents; they can be applied to
the relationship between the parties, just as they are in the WCA.
See id.
¶ 32 Second, in 1993, the legislature expressly added language to
the WCA permitting consideration of independent contractor cases
that arose in the unemployment context. The statute was amended
to provide as follows:
20
The general assembly hereby finds that the
determination of whether an individual is an
employee for purposes of the “Workers’
Compensation Act of Colorado” is subject to a
great deal of speculation and litigation. It is
the intent of the general assembly to provide
an easily ascertainable standard for
determining whether an individual is an
employee. In order to further this objective,
the test for determining whether an individual
is an employee for the purposes of the
“Workers’ Compensation Act of Colorado” is
based on the criteria found in section 8-70-
115. It is the intent of the General Assembly
that when determining whether an individual
is an employee only the factors specified in
section 8-40-202(2) [the nine criteria set forth
above] and any case law which has construed
the provisions of section 8-70-115 are to be
considered.
Ch. 103, sec. 1, § 8-40-102(2), 1993 Colo. Sess. Laws 355
(emphasis added). However, the italicized language was removed by
legislative amendment just two years later. The amended legislative
declaration read as follows, and still so reads today:
The general assembly hereby finds that the
determination of whether an individual is an
employee for purposes of the “Workers’
Compensation Act of Colorado” is subject to a
great deal of speculation and litigation. It is
the intent of the general assembly to provide
an easily ascertainable standard for
determining whether an individual is an
employee. In order to further this objective,
the test for determining whether an individual
21
is an employee for the purposes of the
“Workers’ Compensation Act of Colorado” shall
be based on the nine criteria found in section
8-40-202(2)(b)(II) which shall supersede the
common law. The fact that an individual
performs services exclusively or primarily for
another shall not be conclusive evidence that
the individual is an employee.
Ch. 112, sec. 1, § 8-40-102(2), 1995 Colo. Sess. Laws 343. The
removal of the language can be interpreted as a signal from the
General Assembly that hearing examiners and litigators should not
look to the CESA for guidance when assessing whether a worker is
an employee or an independent contractor for workers’
compensation purposes.
¶ 33 Last, the legislative declaration expressly states that, in
workers’ compensation cases, the test for independent contractors
“shall be based on the nine criteria found in section
8-40-202(2)(b)(II).” Id. This, too, could be interpreted as the
legislature’s attempt to limit the analysis to the nine factors. And,
certainly, Pella so argues.
¶ 34 But we are not persuaded this legislative declaration or the
differences between the CESA and WCA necessitate limiting the
scope of independent contractor analysis. As the Panel suggests,
22
“based on” as used in section 8-40-102(2) does not necessarily
mean “exclusively.” On the contrary, the dictionary definition of
“based on” is “to find a foundation or basis for” and refers to “the
fundamental part of something.” Merriam-Webster Dictionary,
https://perma.cc/YXY6-8YZT.
¶ 35 Other courts have followed the dictionary’s expansive
denotation of the term “based on.” See McDaniel v. Chevron Corp.,
203 F.3d 1099, 1111 (9th Cir. 2000) (in reviewing the applicability
of mortality tables, the Ninth Circuit adopted an interpretation of
“based on” as referring “to a ‘starting point’ or a ‘foundation’” in
holding that mortality tables could be used as a “starting point” for
calculating mortality assumptions); Mount Vernon Fire Ins. Co. v.
Creative Hous. Ltd., 668 N.E.2d 404, 405 (N.Y. 1996) (an insurance
policy that excluded claims “based on assault or on battery” was
held to exclude negligence claims arising out of an assault as well
as intentional torts); see also Freeman v. United States, 564 U.S.
522, 535 (2011) (Sotomayor, J., concurring) (“To ask whether a
particular term of imprisonment is ‘based on’ a Guidelines
sentencing range is to ask whether that range serves as the basis or
foundation for the term of imprisonment.”).
23
¶ 36 Thus, by using the term “based on,” the legislature signaled
that the nine factors would provide a fundamental baseline upon
which to premise the independent contractor analysis. If the
legislature had intended litigants to be limited exclusively to the
nine statutory criteria, it could have so stated by omitting the term
“based on” and instead stating simply that fact finders must
analyze these nine factors when weighing whether a worker is an
independent contractor. See, e.g., Young v. Brighton Sch. Dist. 27J,
2014 CO 32, ¶ 20 (“Had the legislature intended the waivers to be
mutually exclusive, it would have affirmatively expressed this intent
in the plain language of the statute.”); Montez v. People, 2012 CO 6,
¶ 20 (“Had the legislature intended that firearms be deadly weapons
per se — or, equivalently, that for a firearm to be a deadly weapon
its manufacturer must intend it to be used in a manner capable of
producing death or serious bodily injury, and that all firearm
manufacturers do so intend — the legislature could have expressed
that intent in any number of ways.”). Because the legislature chose
to use the broader term “based on,” we conclude that the legislature
left room for consideration of other factors beyond the nine
enumerated criteria.
24
¶ 37 Moreover, although our goal in statutory analysis is to give
effect to the legislature’s intent, see Davison v. Indus. Claim Appeals
Office, 84 P.3d 1023, 1029 (Colo. 2004), we are also bound to follow
the supreme court where it has determined the legislature’s intent.
See In re Estate of Ramstetter, 2016 COA 81, ¶ 40 (“[T]he court of
appeals is ‘bound to follow supreme court precedent.’” (quoting
People v. Gladney, 250 P.3d 762, 768 n.3 (Colo. App. 2010))).
¶ 38 In Softrock, ¶ 17, the supreme court held that fact finders
assessing the independence of a worker were not limited to the nine
statutory criteria but could weigh additional factors. Given that the
nine factors are identical in both the CESA and the WCA, and that
the factors in both circumstances are used to consider how
enmeshed the worker is with the putative employer, we must apply
Softrock to this case.
¶ 39 We therefore conclude that the Panel did not err when it
determined that ALJ Jones should have considered the Softrock
factors in weighing whether claimant’s business was independent of
Pella. And, where the Panel’s interpretation is reasonable and is
not inconsistent with the legislative intent, we generally defer to it.
See Sanco Indus. v. Stefanski, 147 P.3d 5, 8 (Colo. 2006); Support,
25
Inc. v. Indus. Claim Appeals Office, 968 P.2d 174, 175 (Colo. App.
1998).
V. The Panel Exceeded Its Authority
¶ 40 Having determined that the Panel correctly remanded the
matter to ALJ Jones for consideration of the Softrock factors, we
turn to the Panel’s 2016 post-remand order. As noted above, in
that order, the Panel reiterated its conclusion that Softrock applies
in the workers’ compensation context. The Panel then went on,
though, to hold that “the ALJ’s conclusions of law [are]
unsupported by substantial evidence in the record.” The Panel
criticized ALJ Jones for reasoning
that because claimant was allowed by the
documents executed by the parties in March,
2009, to operate an independent business, he
therefore was engaged in an independent
business. This finding is belied by the absence
of evidence in the record that the claimant ever
took any steps to do so.
¶ 41 The Panel continued its discussion by analyzing and
categorizing the evidence. Among its observations, the Panel noted
the following:
26
• Claimant expressed no interest in being an independent
contractor or getting laid off; he just wanted to keep
working.
• Claimant did not shop for his van. “He received the van
from the respondent.”
• He did not finance the van, but instead paid Pella for it.
• He did not have a business card.
• Pella dictated the price of each job.
• Claimant only set up his business and registered his
business name after Pella laid him off.
• Claimant used his personal cell phone for business
purposes.
• Pella scheduled customers’ jobs.
¶ 42 While all these facts may be true, the Panel’s analysis ignored
other facts found by ALJ Jones. For example, ALJ Jones found that
• Claimant obtained his own liability insurance.
• He knew he could work for others if time permitted.
• He received only minimal training from Pella.
• He could rearrange his schedule.
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• He was paid through CP and issued invoices to Pella
through CP.
• He paid for his own phone.
• He received no benefits from Pella.
• Pella encouraged service technicians to seek other work
and did not know that claimant worked exclusively for it.
• Claimant himself told hospital staff, doctors, and the
social security administration that he was an
independent contractor, suggesting that he did not
believe he was Pella’s employee at the time of his injury.
The Panel did not address any of these findings.
¶ 43 Likewise, the Panel disregarded ALJ Jones’ credibility
determinations. Notably, ALJ Jones referred to claimant’s
testimony that, after signing the service contract with Pella, he was
unable “to reject some jobs and accept others.” But, she noted,
Brian McHugh, an employee of Pella, directly contradicted
claimant’s assertion. ALJ Jones expressly found Mr. McHugh’s
testimony credible and persuasive. Conversely, she described “the
testimony of [c]laimant, overall, is not found as credible or
persuasive.”
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¶ 44 When reviewing an ALJ’s decision, the Panel must adhere to
the authority granted it by statute. The Panel may only “correct, set
aside, or remand” an ALJ’s order on the grounds that
the findings of fact are not supported by the
evidence; that the findings of fact do not
support the order; or that the award or denial
of benefits is not supported by applicable law.
If the findings of fact entered by the director or
administrative law judge are supported by
substantial evidence, they shall not be altered
by the [P]anel.
§ 8-43-301(8), C.R.S. 2019. Whether a worker is an independent
contractor “is a factual determination for resolution by the ALJ.”
Nelson v. Indus. Claim Appeals Office, 981 P.2d 210, 213 (Colo. App.
1998). Therefore, like us, the Panel “must uphold the ALJ’s
findings of fact if such are supported by substantial evidence in the
record.” Id. Likewise, the Panel “must defer to the ALJ’s resolution
of conflicts in the evidence, credibility determinations, and the
plausible inferences that [s]he drew from the evidence.” Id. And the
ALJ’s credibility determinations cannot be set aside unless the
evidence is “overwhelmingly rebutted by hard, certain evidence” to
the contrary. Arenas v. Indus. Claim Appeals Office, 8 P.3d 558,
561 (Colo. App. 2000); see also Youngs v. Indus. Claim Appeals
29
Office, 2012 COA 85M, ¶ 46 (“Nor may we set aside a ruling
dependent on witness credibility where the testimony has not been
rebutted by other evidence.”).
¶ 45 The Panel disregarded ALJ Jones’ factual findings and
credibility determinations to enter findings of its own. ALJ Jones
followed the Panel’s remand order, conducted a second hearing, and
considered the evidence in light of both the nine statutory criteria
and the Softrock factors. Indeed, ALJ Jones’ November 2015
post-remand order is twenty-one pages long, contains fifty
numbered paragraphs of fact findings, and ten pages of conclusions
of law. It appears to us to be a thorough analysis of all the
applicable factors.
¶ 46 Accordingly, we conclude that the Panel exceeded its authority
by reweighing the evidence presented before ALJ Jones. Even
though the Panel may not have agreed with ALJ Jones’ decision,
substantial evidence supported her factual findings and credibility
determinations. The Panel was therefore bound by them and
should not have set aside the November 2015 order. See
§ 8-43-301(8); Nelson, 981 P.2d at 213. Having determined that the
30
Panel exceeded its authority when it set aside ALJ Jones’ November
2015 order, we need not reach the merits of ALJ Cayce’s order.
VI. Conclusion
¶ 47 The Panel’s final orders of April 26, 2016, and September 24,
2018, are set aside, and the case is remanded with directions to
reinstate ALJ Jones’ order of November 25, 2015.
JUDGE DAILEY and JUDGE BROWN concur.
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