Dublin Express Transport Solutions, Ltd. v. Ohio Dept. of Job & Family Servs.

[Cite as Dublin Express Transport Solutions, Ltd. v. Ohio Dept. of Job & Family Servs., 2018-Ohio-3877.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Dublin Express Transport Solutions, Ltd., :
Appellant-Appellant, : No. 17AP-604
(C.P.C. No. 13CV-13521)
v. :
(ACCELERATED CALENDAR)
Ohio Department of Job :
and Family Services,
:
Appellee-Appellee.
:
D E C I S I O N
Rendered on September 25, 2018
On brief: Breen Law, and John E. Breen, for appellant.
Argued: John E. Breen.
On brief: Michael DeWine, Attorney General, and Susan M.
Sheffield, for appellee. Argued: Susan M. Sheffield.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} Appellant, Dublin Express Transport Solutions, Ltd., dba Wheels to Go
("Dublin Express"), appeals from a decision of the Franklin County Court of Common Pleas
affirming a decision of the Ohio Unemployment Compensation Review Commission
("commission") finding Dublin Express to be a liable employer under unemployment
compensation law. For the following reasons, we affirm.
I. Facts and Procedural History
{¶ 2} Dublin Express operates a transportation service for passengers to and from
medical appointments pursuant to agreements with government agencies. Dublin Express
enters into lease agreements with its drivers, providing that Dublin Express will provide
No. 17AP-604 2
dispatch service and use of a vehicle in exchange for a lease fee comprised of a percentage
of any fare the driver obtains for transporting passengers.
{¶ 3} Appellee, Ohio Department of Job and Family Services ("ODJFS"),
conducted a compliance audit of Dublin Express. On August 2, 2012, ODJFS issued a final
audit report finding Dublin Express was not in compliance with R.C. 4141.01(B)(1) and
Ohio Adm.Code 4141-9-04(A) because it classified its drivers as independent contractors,
and payments to those drivers were excluded from its reports to ODJFS. Pursuant to the
audit, ODJFS issued a notification of its determination of Dublin Express's liability and
contribution rate. Dublin Express requested reconsideration of the final audit report,
asserting it improperly classified the drivers as employees rather than independent
contractors.
{¶ 4} The Director of ODJFS issued a reconsidered decision affirming the liability
and contribution rate determination. The Director concluded Dublin Express retained the
right of direction and control of the drivers and therefore met the statutory definition of an
employer with respect to the drivers.
{¶ 5} Dublin Express appealed the Director's reconsidered decision to the
commission. A hearing officer conducted a hearing on the appeal on November 15, 2013.
The owner of Dublin Express, Yasir Ahmed, testified at the hearing. Ahmed explained that
when a passenger needs transportation, he or she contacts Dublin Express and provides the
relevant details to a dispatcher. The dispatcher then contacts the lead driver to determine
whether he or she can transport the passenger. Individual drivers are not obliged to agree
to transport any passenger and may select their own days and hours of availability. If the
first contacted driver is unable to transport the passenger, the dispatcher will then proceed
to contact other drivers until one is found to take the assignment.
{¶ 6} Ahmed testified Dublin Express owns seven wheelchair accessible minivans
and two sedans that are leased to drivers. The vehicles bear a Wheels to Go logo. Each
driver takes the vehicle home at the end of the day. Dublin Express insures the vehicles and
the drivers are listed on the insurance policy. Dublin Express also pays for maintenance
and repair of the vehicles. At the beginning of a lease, the driver is given a vehicle with a
full tank of gasoline and is required to return it with a full tank of gasoline at the end of the
lease; during the period of the lease and while using the vehicle, the driver pays for gasoline.
No. 17AP-604 3
Dublin Express enters into contracts with various government agencies to transport their
clients and the fare rates are set by contract. The driver receives 50 to 60 percent of the
fare rate for each transported passenger. At the conclusion of a ride, the passenger presents
the driver with a voucher issued by the respective government agency; the driver then turns
that voucher over to Dublin Express to be redeemed from the agency. Dublin Express
issues checks to its drivers on a weekly basis, which are picked up from the Dublin Express
office. Ahmed testified a driver may choose to stop taking jobs, terminate the lease, and
return the vehicle whenever they choose.
{¶ 7} Following the hearing, the commission issued a decision affirming the
Director's reconsidered decision. After reviewing the factors set forth in the Ohio
Administrative Code, the commission concluded the drivers were subject to sufficient
direction and control by Dublin Express and therefore were employees of Dublin Express.
{¶ 8} Dublin Express appealed the commission's decision to the Franklin County
Court of Common Pleas. The common pleas court affirmed the commission's decision,
concluding there was reliable, probative, and substantial evidence to support the
commission's conclusion that Dublin Express had the right to direct or control the drivers
in the performance of their services and that they were employees of Dublin Express.
II. Assignments of Error
{¶ 9} Appellant appeals and assigns the following two assignments of error for our
review:
[I.] THE LOWER COURT ERRED IN UPHOLDING THE
AGENCY'S DETERMINATION THAT APPELLANT'S
DRIVERS ARE NOT INDEPENDENT CONTRACTORS AND
ARE DEEMED EMPLOYEES FOR PURPOSES OF OHIO
UNEMPLOYMENT COMPENSATION CLASSIFICATION.
[II.] THE LOWER COURT ERRED AND DENIED
APPELLANT EQUAL PROTECTION OF LAW IN FAILING
TO CONSIDER THAT OTHER AGENCIES HAVE
CLASSIFIED THE DRIVERS AS INDEPENDENT
CONTRACTORS.
III. Discussion
{¶ 10} Under R.C. 4141.26(D)(2), a decision of the commission may be appealed to
the Franklin County Court of Common Pleas, which may affirm the decision if it finds,
No. 17AP-604 4
based on a review of the entire record, the decision is supported by reliable, probative, and
substantial evidence and is in accordance with law. BNA Constr., Ltd. v. Ohio Dept. of Job
& Family Servs., 10th Dist. No. 16AP-317, 2017-Ohio-7227, ¶ 24. If the common pleas court
finds the commission's decision is not supported by reliable, probative, and substantial
evidence and is not in accordance with law, it may reverse, vacate, or modify the decision,
or make such other ruling as is supported by reliable, probative, and substantial evidence
and is in accordance with law. R.C. 4141.26(D)(2). On appeal to this court from a decision
of the common pleas court, we apply a narrower standard of review. As to issues of fact, we
review the trial court's decision for abuse of discretion. Id. at ¶ 25. In this context, "[t]o
find an abuse of discretion, we must conclude that the trial court's decision is without a
reasonable basis and clearly wrong." Miracle Home Health Care, LLC v. Ohio Dept. of Job
& Family Servs., 10th Dist. No. 12AP-318, 2012-Ohio-5669, ¶ 18. With respect to issues of
law, however, we exercise plenary review. BNA Constr. at ¶ 25.
{¶ 11} Dublin Express argues in its first assignment of error that the common pleas
court erred by affirming the commission's conclusion that the drivers were employees for
purposes of the unemployment compensation system. Dublin Express asserts the drivers
were independent contractors rather than employees.
{¶ 12} Ohio employers pay contributions into the state's unemployment
compensation fund. R.C. 4141.23(A). The definition of "employer" includes any individual
or entity that "[h]ad in employment at least one individual." R.C. 4141.01(A)(1)(a).
"Employment" is defined as "service performed by an individual for remuneration under
any contract of hire, written or oral, express or implied * * * unless it is shown to the
satisfaction of the director [of ODJFS] that such individual has been and will continue to
be free from direction or control over the performance of such service, both under a contract
of service and in fact." R.C. 4141.01(B)(1). The statute provides that the director of ODJFS
shall adopt rules to define "direction or control." R.C. 4141.01(B)(1). Pursuant to that
statutory authority, Ohio Adm.Code 4141-3-05 provides that, with certain exceptions, a
worker is in employment when an employer-employee relationship exists between the
worker and the person for whom services are performed and the director determines that
(1) the person for whom services are performed has the right to direct or control the
performance of the services, and (2) remuneration is received by the worker for the services
No. 17AP-604 5
performed. Ohio Adm.Code 4141-3-05(B) sets forth 20 factors drawn from the common
law as an aid to determine whether there is sufficient direction or control to constitute
employment. The 20 factors, which must be considered in totality, are as follows:
(1) The worker is required to comply with the instructions of the
person for whom services are being performed, regarding when,
where, and how the worker is to perform the services;
(2) The person for whom services are being performed requires
particular training for the worker performing services;
(3) The services provided are part of the regular business of the
person for whom services are being performed;
(4) The person for whom services are being performed requires that
services be provided by a particular worker;
(5) The person for whom services are being performed hires,
supervises or pays the wages of the worker performing services;
(6) A continuing relationship exists between the person for whom
services are being performed and the worker performing services
that contemplates continuing or recurring work, even if not full time;
(7) The person for whom services are being performed requires set
hours during which services are to be performed;
(8) The person for whom services are being performed requires the
worker to devote himself or herself full time to the business of the
person for whom services are being performed;
(9) The person for whom services are being performed requires that
work be performed on its premises;
(10) The person for whom services are being performed requires that
the worker follow the order of work set by the person for whom
services are being performed;
(11) The person for whom services are being performed requires the
worker to make oral or written progress reports;
(12) The person for whom services are being performed pays the
worker on a regular basis such as hourly, weekly or monthly;
(13) The person for whom services are being performed pays
expenses for the worker performing services;
No. 17AP-604 6
(14) The person for whom services are being performed furnishes
tools, instrumentalities, and other materials for use by the worker in
performing services;
(15) There is a lack of investment by the worker in the facilities used
to perform services;
(16) There is a lack of profit or loss to the worker performing services
as a result of the performance of such services;
(17) The worker performing services is not performing services for a
number of persons at the same time;
(18) The worker performing services does not make such services
available to the general public;
(19) The person for whom services are being performed has a right
to discharge the worker performing services;
(20) The worker performing services has the right to end the
relationship with the person for whom services are being performed
without incurring liability pursuant to an employment contract or
agreement.
Ohio Adm.Code 4141-3-05(B). An alleged employer bears the burden of proving that a
worker is not an employee. Miracle Home at ¶ 21.
{¶ 13} The common pleas court analyzed the 20 factors and found there was
reliable, probative, and substantial evidence to support the commission's conclusion that
Dublin Express had the right to direct or control the drivers in the performance of their
services. The common pleas court further concluded that Dublin Express failed to
demonstrate the drivers were not employees. Dublin Express argues on appeal that the
common pleas court did not properly apply the 20 factors set forth in the rule. Specifically,
Dublin Express cites 11 of the factors contained in Ohio Adm.Code 4141-3-05(B) that it
argues do not apply to its relationship with its drivers.
{¶ 14} Dublin Express asserts it does not require particular training for drivers, as
set forth in Ohio Adm.Code 4141-3-05(B)(2). Addressing this factor, the common pleas
court found the drivers are required to be licensed to operate a motor vehicle and be
physically able to operate a motor vehicle. The court further noted the drivers were
reviewed by Dublin Express's insurance company to determine whether they were
No. 17AP-604 7
insurable. The lease agreement provides that drivers will abide by all applicable laws,
regulations, and ordinances related to the operation of a vehicle, which would include the
legal requirement of holding a valid license under Ohio law. Additionally, Ahmed testified
that before a driver was permitted to begin work, a check was performed to determine
whether the driver was licensed and could be insured, and that periodic checks were
performed to determine whether drivers retained valid licenses. Based on this evidence,
we cannot conclude the common pleas court abused its discretion by finding this factor was
present.
{¶ 15} Dublin Express also argues it does not require that services be provided by a
particular worker, as set forth in Ohio Adm.Code 4141-3-05(B)(4). However, as the
common pleas court noted, Ahmed testified a driver who has agreed to transport a
passenger cannot arrange for another individual to complete that task for them; it must be
done by a driver who is covered by Dublin Express's insurance. Therefore, the common
pleas court did not abuse its discretion by finding this factor was present.
{¶ 16} Dublin Express further claims it does not supervise or pay the wages of its
drivers, as set forth in Ohio Adm.Code 4141-3-05(B)(5). The common pleas court
concluded Dublin Express hired its drivers and paid their compensation. Ahmed testified
the fares for transporting passengers are based on contracts with various client agencies
and that drivers receive 50 to 60 percent of the fare for each trip. Passengers present a
voucher to the driver, which the driver gives to Dublin Express to be redeemed from the
agency. The drivers then receive their compensation in the form of a weekly check issued
by Dublin Express and picked up from its office. Based on this evidence, we cannot
conclude the common pleas court abused its discretion by finding this factor was present.
{¶ 17} Dublin Express asserts it does not require set hours during which services are
to be performed, as set forth in Ohio Adm.Code 4141-3-05(B)(7), does not require drivers
to devote themselves full time to its business, as set forth in Ohio Adm.Code 4141-3-
05(B)(8), and does not require work be performed on its premises, as set forth in Ohio
Adm.Code 4141-3-05(B)(9). The common pleas court's decision noted the hours Dublin
Express's office is open and that it offers 24-hour dispatch service, but the court does not
appear to have found the requirement of set hours for performance of service under Ohio
Adm.Code 4141-3-05(B)(7) was present. Similarly, the common pleas court expressly
No. 17AP-604 8
found the factors contained in Ohio Adm.Code 4141-3-05(B)(8) and (9) were not present.
We find no abuse of discretion in the common pleas court's analysis of these three factors.
{¶ 18} Dublin Express argues it does not require its drivers to "follow the order of
work set by the person for whom services are being performed" as set forth in Ohio
Adm.Code 4141-3-05(B)(10). The common pleas court's decision appears to suggest the
court found this factor was present, noting if a passenger needs to reach a medical
appointment at a specific time, the driver must transport the passenger on time and may
not alter the arrival time. Ahmed testified when a client gives a specific time for an
appointment, the driver must be able to meet that time requirement. If he or she cannot,
the dispatcher will contact the next available driver. Ahmed also testified drivers could not
transport an individual who attempted to flag them down on the street. Thus, a driver could
not diverge from delivering one passenger to a medical appointment in order to pick up an
additional passenger. Based on this evidence, we cannot conclude the trial court abused its
discretion in analyzing this factor.
{¶ 19} Dublin Express asserts it does not pay expenses for drivers, as set forth in
Ohio Adm.Code 4141-3-05(B)(13), specifically arguing it does not pay for gasoline for the
vehicles. Similarly, Dublin Express claims it does not furnish tools, instrumentalities, and
other materials for the drivers in performing services, as set forth in Ohio Adm.Code 4141-
3-05(B)(14). The common pleas court noted in its decision that while individual drivers are
responsible for buying gasoline, Dublin Express owns the vehicles and pays to insure,
maintain, and repair the vehicles. Ahmed testified each vehicle is given to the driver with
a full tank of gasoline at the beginning of the lease and that the driver must return it at the
end of the lease with a full tank of gasoline. He also testified drivers pay for gasoline while
using the vehicles. Ahmed further testified that Dublin Express owns the vehicles and
insures them, as well as paying for repairs and maintenance costs. Dublin Express also
provides the dispatch service that connects drivers with passengers in need of
transportation. Based on this evidence, we cannot conclude the common pleas court
abused its discretion in finding the factors under Ohio Adm.Code 4141-3-05(B)(13) and (14)
to be present.
{¶ 20} Dublin Express claims its business model does not result in "a lack of profit
or loss to the worker performing services as a result of the performance of such services,"
No. 17AP-604 9
as set forth in Ohio Adm.Code 4141-3-05(B)(16). The common pleas court found this factor
was not present. We find no abuse of discretion in the court's analysis of this factor.
{¶ 21} Finally, Dublin Express asserts the drivers have the right to end their
relationship with Dublin Express without incurring liability under an employment contract
or agreement, as set forth in Ohio Adm.Code 4141-3-05(B)(20). The common pleas court
found this factor was present, noting the drivers could end their relationship with Dublin
Express without incurring liability. This is consistent with Ahmed's testimony that drivers
were able to stop taking calls and transporting passengers of their own volition and leave
the job. Thus, it appears that Dublin Express agrees with the common pleas court's finding
as to this factor, and we find no abuse of discretion in the court's conclusion.
{¶ 22} In addition to contesting the common pleas court's evaluation of specific
factors, Dublin Express asserts that classifying the drivers as employees is inconsistent with
prior decisions from this court and other Ohio courts finding taxi operators to be
independent contractors. Dublin Express argues the present case is virtually identical to
the facts in Davis Cabs, Inc. v. Leach, 115 Ohio App. 165 (10th Dist.1962). In that case, this
court held a taxi driver who leased a taxi and dispatch service from a taxicab company was
an independent contractor and not an employee "where, pursuant to such lease, he pays
the lessor-owner fifty percent 'of the fares collected in excess of the cost of gasoline each
day from the operation of said taxicab,' and where the lessor-owner exercises no control
over the operation of the taxicab and the lessee-driver has no designated working hours, is
not required by the lessor-owner to accept dispatched calls or keep any records and receives
no compensation from the lessor-owner." Davis Cabs at syllabus. However, there are
significant factual differences between Davis Cabs and the present case. In Davis Cabs, the
drivers were "free to develop a customer business of their own," whereas in the present case
there was no evidence that Dublin Express's drivers were permitted to obtain customers
other than through Dublin Express's dispatch service. Id. at 170. At the hearing, Ahmed
testified Dublin Express's drivers could not accept a passenger who flagged the driver down
on the street like a typical taxi. He further testified he was not aware of any situation where
a Dublin Express driver transported a passenger without using the dispatch service. Unlike
the drivers in Davis Cabs, who were not required by the taxicab company to keep any
records, Ahmed indicated on an ODJFS questionnaire that drivers were required to give
No. 17AP-604 10
written confirmation of completing transportation service for a customer and the lease
agreement provides that drivers must record and report all fares. In Davis Cabs, the taxi
passenger paid the driver directly and the driver passed a share of that payment on to the
taxicab company as consideration for lease of the cab. By contrast, under Dublin Express's
business model, the driver receives a voucher from the passenger which is then given to
Dublin Express to be redeemed from the appropriate agency and then the driver is paid a
share of that amount by Dublin Express. Due to these differences, the result in Davis Cabs
does not control the outcome of the present case.
{¶ 23} Dublin Express also cites cases that have considered the employment status
of taxicab drivers in the context of workers' compensation, including Coviello v. Indus.
Comm., 129 Ohio St. 589 (1935), and Walters v. Americab, 118 Ohio App.3d 180 (8th
Dist.1997). As with Davis Cabs, there are important factual distinctions between those
cases and the present case. In Coviello, the driver paid a fixed rental fee for his taxicab each
day, whereas Dublin Express's lease agreement provides the lease fee is a percentage of
each fare the driver obtains. The Coviello decision expressly noted that "[i]f the rental
charges were calculated upon a percentage basis whereby any accounting of fares collected
was required, the arrangement might be construed to be one for payment of the driver upon
the basis of a percentage of the earnings of the taxicab" and that, under those circumstances
it might be considered a contract for hire of the driver. Coviello at 593. In Walters, the
driver "kept all money he earned while on duty, and had no obligation to report his earnings
to Americab." Walters at 183. As noted above, Dublin Express's drivers only receive a
percentage of each fare and that percentage is paid by Dublin Express.
{¶ 24} Based on our review of the particular evidence presented in this case, we
conclude the trial court did not abuse its discretion in affirming the commission's
determination that the drivers are employees of Dublin Express and its decision is in
accordance with the law. Accordingly, we overrule Dublin Express's first assignment of
error.
{¶ 25} In its second assignment of error, Dublin Express argues the common pleas
court denied equal protection of the law by failing to consider materials from the Ohio
Bureau of Workers' Compensation ("BWC") and the National Labor Relations Board
("NLRB") relating to an audit performed by BWC and a charge filed with NLRB alleging
No. 17AP-604 11
Dublin Express violated the National Labor Relations Act. Dublin Express filed separate
motions to admit these materials as newly discovered evidence in the common pleas court.
The trial court concluded the NLRB determination that Dublin Express sought to introduce
did not constitute newly discovered evidence because it did not relate to factual matters
that existed at the time of the hearing, but the court held it would consider the NLRB
determination as persuasive authority because it was a legal determination. The court ruled
it would not consider the BWC audit findings as newly discovered evidence because they
were issued nearly one year before the administrative hearing and therefore could have
been discovered with reasonable diligence before the hearing.
{¶ 26} R.C. 4141.26(D)(2) provides that in an appeal to the common pleas court "no
additional evidence shall be received by the court," although the court may order additional
evidence to be taken before the commission. "On its face, [R.C. 4141.26(D)(2)] gives the
court discretion." HumaCare-Consol. Emp. Mgt., Inc. v. Ohio, 10th Dist. No. 15AP-200,
2016-Ohio-715, ¶ 31. Therefore, we review the common pleas court's decision not to admit
the BWC audit findings for abuse of discretion.
{¶ 27} The description of findings contained in the BWC report that Dublin Express
sought to introduce consisted of a few sentences summarily concluding that the drivers
were independent contractors who owned or leased their vehicles, set their own operational
hours, and were available to the general public for employment or contract services. As
explained above, pursuant to R.C. 4141.01(B)(1) and Ohio Adm.Code 4141-3-05, ODJFS
undertakes an extensive, multifactor analysis in determining whether a worker is an
employee or an independent contractor. Due to its summary nature, the BWC report
Dublin Express sought to introduce did not provide much analysis or discussion of the
agency's underlying reasoning. Additionally, the report was issued well before the
commission hearing and therefore did not constitute newly discovered evidence that could
not have been introduced before the commission. Thus, the common pleas court did not
abuse its discretion by failing to admit the report.
{¶ 28} The common pleas court ruled it would consider the NLRB determination as
persuasive authority and did not abuse its discretion by refusing to admit the BWC report.
Accordingly, we overrule Dublin Express's second assignment of error and hold that Dublin
Express's constitutional argument is therefore moot and will not be considered.
No. 17AP-604 12
IV. Conclusion
{¶ 29} For the foregoing reasons, based on the facts of this case, we overrule Dublin
Express's two assignments of error and affirm the judgment of the Franklin County Court
of Common Pleas.
Judgment affirmed.
BROWN, P.J., and BRUNNER, J., concur.