State ex rel. Friendship Supported Living, Inc. v. Ohio Bur. of Workers' Comp.

[Cite as State ex rel. Friendship Supported Living, Inc. v. Ohio Bur. of Workers' Comp., 2021-Ohio-4490.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
State ex rel., :
Friendship Supported Living, Inc.,
:
Relator, No. 19AP-882
:
v. (REGULAR CALENDAR)
:
Ohio Bureau of Workers' Compensation,
:
Respondent.
:
DECISION
Rendered on December 21, 2021
Law Office of Tracy L. Turner, LLC, and Tracy L. Turner for
relator.
Dave Yost, Attorney General, and John R. Smart, for
respondent Ohio Bureau of Workers' Compensation.
IN MANDAMUS
ON OBJECTIONS TO THE MAGISTRATE'S DECISION
NELSON, J.
{¶ 1} Are the people who contracted (non-exclusively) with Friendship Supported
Living, Inc. ("Friendship") to provide direct in-home care for individuals with
developmental disabilities employees of Friendship for workers' compensation purposes,
or are they independent contractors? We are asked to review the decision of the Ohio
Bureau of Workers' Compensation ("BWC") under the standards that obtain in an action
for a writ of mandamus.
{¶ 2} To offer just a bit of background texture:
 The record reflects that the State of Ohio, through its Department of
Developmental Disabilities ("ODDD"), has treated people it engages to provide
No. 19AP-882 2
the same services (including, apparently, some of the same people who also
contract with Friendship) as independent contractors;
 The Franklin County Court of Common Pleas, after careful review on a record
that overlaps significantly with the stipulated record here, albeit under different
statutory provisions and on a different standard of review than we apply, found
that the evidence there "establishe[d] that the workers at issue were independent
contractors rather than covered employees" for unemployment compensation
purposes, Friendship Supported Living, Inc. v. Dir., Ohio Dept. of Job and
Family Servs., Franklin C.P. No. 15CVF-8721 (March 7, 2016) at 9; and
 A BWC auditor concluded in 2006 that Friendship's " '1099 home health workers
are considered independent contractors.' " Stip.R. at 125 (Adjudication
Committee Order quoting June 19, 2006 audit findings), and the record also
reflects a "REVISED" description of findings from BWC's June 19, 2008 audit of
Friendship, finding (maybe once again; the record is somewhat muddled here)
that "1099 home health workers are considered independent contractors." Stip
R. at 6 (perhaps overlooked by the BWC Adjudicating Committee for the present
matter, which cited at page 2 of its December 5, 2017 order to a different outcome
from that 2008 audit, without mentioning the revision).
{¶ 3} But after another audit and other administrative proceedings as outlined in
the appended magistrate's decision, the BWC on November 26, 2019 issued a Final Order
of the administrator's designee determining that the workers at issue are Friendship
employees and not independent contractors. Friendship petitioned this court for a writ of
mandamus to require the BWC to reclassify the direct care workers as independent
contractors, and our magistrate, in his decision from July 23, 2021, has recommended that
the BWC determination be upheld and that no writ issue. Friendship has filed objections
to the magistrate's decision, and the BWC has filed a memorandum in response to those
objections.
{¶ 4} In ruling on the objections, we review the magistrate's decision
independently, and may adopt or reject it in full or in part. Civ.R. 53(D)(4)(b) and (d). As
the magistrate's decision correctly noted, in order to gain the writ it seeks, Friendship must
show a clear legal right to the relief sought, a clear legal duty on the part of the BWC to
provide such relief, and the lack of an adequate remedy in the ordinary course of law.
No. 19AP-882 3
Magistrate's Decision at ¶ 49, citing State ex rel. Pressley v. Indus. Comm., 11 Ohio St.2d
141 (1967).
{¶ 5} In this context, the writ can issue only on a showing that the BWC abused its
discretion in classifying the workers at issue: "The central issue in this case is whether the
administrator's designee abused his discretion in determining that Friendship's homecare
providers were employees rather than independent contractors, thereby requiring
Friendship to include" them for purposes of workers' compensation premium calculation.
Magistrate's Decision at ¶50. This court has said that the BWC abuses its discretion when
it reaches its determination without "some evidence" to support its findings. See State ex
rel. Ugicom Ents. v. Morrison, 10th Dist. No. 17AP-895, 2021-Ohio-1269, ¶ 18 (citing cases
within BWC's core competencies: State ex rel. Fiber-Lite Corp. v. Indus. Comm., 36 Ohio
St.3d 202 (1988) [on questions "involving specific safety requirements," see id. at 204], and
State ex rel. Bennett v. Aldi, Inc., 10th Dist. No. 14AP-632, 2016-Ohio-83 [involving claim
for permanent total disability]); compare State ex rel. Schaengold v. Ohio Pub. Emps.
Retirement Sys., 114 Ohio St.3d 147, 2007-Ohio-3760, ¶ 19-20 (reciting that standard in
case involving employee/independent contractor distinction for state retirement board
coverage decision before concluding: "There is sufficient evidence here to support the
board's determination that Schaengold was an independent contractor rather than a public
employee when he served as a temporary magistrate for the Dayton Municipal Court").
{¶ 6} We do not construe this standard to make BWC employee/independent
contractor determinations absolutely unreviewable. Guided by the Supreme Court of Ohio,
we recognize that " '[a]s a practical proposition, every contract for work to be done reserves
to the employer a certain degree of control, at least to enable him to see that the contract
is performed according to specifications.' " Gillum v. Indus. Comm., 141 Ohio St. 373, 382
(1943), quoting 27 American Jurisprudence, Section 7, at 488 (emphasis added, in case
finding Workers' Compensation Act inapplicable because worker was independent
contractor). In this sphere, then, revolving around who "reserves the right to control the
manner or means of doing the work," id. at paragraph two of the syllabus, we apply the
relevant, highly deferential some-evidence standard in light of the case- and fact-specific
analysis illustrated, for example, by Schaengold, see 114 Ohio St.3d 147, at ¶ 20-23, and in
light of a contracting company's inevitable right to see that the outcome of work contracted
for accords with particular specifications. A central question, therefore, is whether the
BWC shows some evidence that Friendship controlled the manner and means by which the
No. 19AP-882 4
direct care workers did their jobs. In conducting that limited inquiry, we summarize what
the record reflects of the nature of the work at issue, how it is performed, and Friendship's
relationship to these direct care workers.
{¶ 7} Friendship is certified as an agency provider of in-home care by the Ohio
Department of Developmental Disabilities. See Magistrate's Decision at ¶ 44 (quoting BWC
adjudicating committee). As an agency provider (rather than as an "independent," self-
employed individual provider as also certified by ODDD), Friendship maintains state-
required liability insurance and holds itself out as able to furnish care to people with
developmental disabilities. Id. at 7-8 (quoting adjudicating committee). "[C]onsumers
have a choice of certified agencies" from which to select, id. at 12; if Friendship is picked by
the customer, " 'ODDD pays Friendship because they [sic] are the agency provider
responsible for providing the services,' " id. at 8 (quoting adjudicating committee). Services
are provided according to "an individual service plan ('ISP') developed by the state or
county agency." Id. at 2. See also Friendship at 2 (citing to testimony also of record here:
ISP "becomes [Friendship's] contract" with the government; "[t]he ISP, controlled by the
State, establishes the number of hours and timing of services for the client").
{¶ 8} As of the 2017 audit, Friendship had six W-2 employees whose employee
status is not at issue here. One or more of them apparently interacts with the relevant
government authorities, see Magistrate's Decision at ¶ 56; one is a corporate officer who
also performs clerical duties, and five assist clients with matters including services " 'that
the contractors do not provide. This includes redetermination of individuals, scheduling
doctor appointments along with transporting clients as needed,' " see id. at ¶ 40 (quoting
audit), and working with the clients to schedule days and times to receive services, see
adjudicating committee order reciting facts as adopted by BWC final order, at 2 ("[t]he
company performs all scheduling of days and times when the contractor is to work").
{¶ 9} Friendship contracts with the tax-form-1099 workers at issue to "provide[]
the actual in-home care and assistan[ce] to consumers[.]" Magistrate's Decision at ¶ 38;
see also Stip.R. at 207 (sample "Work for Hire Agreement for Self Employed Independent
Contractors and Sole Proprietors"; capitalizations adjusted). The undisputed record
reflects that these contractors do not work on Friendship premises, but rather "provide[]
all services at the consumer's home." Stip.R. at 14 (Friendship petition for [audit] appeal,
verified as to facts by June 8, 2017 Affidavit of Friendship owner Florence Hein and very
largely consistent with August 18, 2015 testimony of Ms. Hein on examination as also
No. 19AP-882 5
contained in this record, see id. at 41-81). The record further shows that these contractors
"decide how many hours, which days, and what times they want to work. [They
communicate their availability to Friendship, and Friendship] tries to match [them] with a
consumer." Id. at 13. The direct care provider can choose whether or not to work with a
particular consumer. Id. at 54; see also Friendship at 3. "Once at the consumer's home, the
direct care worker and the consumer mutually decide what they will do [consistent with the
ISP, as described at page 2 of the verified petition for (audit) appeal] while the direct care
worker is there." Id. at 13. This control over their own schedules further distinguishes the
contractors from Friendship's W-2 employees, who "are required to work set hours and are
on call," Stip.R. at 14; when direct care contractors are unavailable, Friendship will fill in
the gap by "requiring one of [its] employees to perform the services," id. at 15.
{¶ 10} It is further undisputed on the record that "[m]ost of Friendship['s] * * *
direct care providers work for short periods of time. Some direct care providers take
extended breaks from receiving assignments * * * * Friendship does not guarantee any
direct care provider work or a certain number of hours per week." Id. The direct care
providers can "refuse hours when they do not want to work," id. at 13, they can decline to
work for particular consumers, id. at 54, and they invoice Friendship and are paid only for
the hours they work, id. at 13. Therefore, "if a consumer with whom a direct care provider
is working decides that they do not need services on the day the direct care worker is
scheduled, then the direct care worker does not get paid." Id. at 15. But "[a]fter two years,
the direct care workers are able to apply for employment as [Friendship] health service
coordinators." Id. at 14; see also BWC Final Order at 4 ("Friendship clarified that the jobs
that workers may apply for after 24 months with Friendship are for administrative
functions and not for the functions that the workers had performed as alleged independent
contractors.").
{¶ 11} Friendship "provides no training to any direct care provider"; it furnishes no
tools; and it "does not reimburse direct care providers for any expenses" (apart from
mileage costs for driving consumers, for which expenses the State of Ohio reimburses
Friendship). Petition for [Audit] Appeal at 4, Stip.R. at 14.
{¶ 12} The record appears undisputed, too, that Friendship does not supervise the
work of the direct care providers while that work is being performed. Id. at 3, Stip.R. at 13
("No one at Friendship * * * supervises the direct care providers"); BWC Final Order at 4
("The nature of the services provided by the workers, in the home of a client consumer, will
No. 19AP-882 6
of course provide some flexibility and freedom for the worker. That is the nature of the
service at issue here"). Rather, as the magistrate observed, Friendship "meet[s] with
consumers on a regular basis to ensure that consumers are receiving appropriate services"
as assessed by Friendship under the ISP. Magistrate's Decision at ¶ 59 (noting, too, that
"Friendship stressed * * * that it did not monitor the homecare providers as they performed
their tasks and executed the ISP," while also stating that "minute-by-minute supervision is
not the test of oversight for these purposes"); see also BWC Final Order at 4 (Friendship
"monitor[s]" contractor performance "for compliance and quality").
{¶ 13} The direct care contractors are not required to perform their services
exclusively through Friendship. "In fact, while working for Friendship * * *, direct care
service providers perform services as independent contractors for other agency providers
who are in direct competition with Friendship * * * including the State of Ohio." [Verified]
Petition for [Audit] Appeal at Stip.R. 12. "Friendship * * * has direct care contractors who
provide services for the State of Ohio and Friendship * * * simultaneously." Id. See also
Stip.R. at 56 (Ms. Hein's testimony that "I have some independent contractors that work
for me and that also work [as such] for the state"); Friendship at 4 (noting that "Ms. Hein
stated [in testimony also incorporated into the record here] that the State and other
competitors also have independent contractors that provide the same services as
[Friendship's] direct care staff").
{¶ 14} BWC concluded in its Final Order that "the autonomy and flexibility common
for employees in this field does not equate to independent contractor status." BWC Final
Order at 4. As the BWC recognizes: " 'Whether one is an independent contractor in service
depends on the facts of each case. The principal test applied to determine the character of
the arrangement is that if the employer reserves the right to control the manner or means
of doing the work, the relation created is that of master and servant, while if the manner or
means of doing the work or job is left to one who is responsible to the employer only for the
result, an independent contractor relationship is thereby created.' " Id. at 1, quoting Gillum,
141 Ohio St. 373, at paragraph two of the syllabus (emphasis added). Compare Bostic v.
Connor, 37 Ohio St.3d 144 (1988), paragraph one of the syllabus ("The key factual
determination is who had the right to control the manner or means of doing the work").
{¶ 15} After rehearsing the arguments and evidence provided by both sides, the
administrator's designee "conclude[d] that there is sufficient control by Friendship over the
activities of the workers to conclude that the workers are employees of Friendship." BWC
No. 19AP-882 7
Final Order at 4. To substantiate this conclusion, the Final Order found that "Friendship
controls the workers by monitoring their activities for [ISP] compliance and quality. The
fact [that] the consumer and worker may mutually decide activities does not mean that the
worker is free from supervision or control. The workers have more autonomy and flexibility
than in some work setting[s], but the autonomy and flexibility common for employees in
this field does not equate to independent contractor status." Id.{¶ 16} But in this setting, on the facts before it, even BWC's invocation of the word
"quality" regarding results from services provided by the direct care workers electing day-
to-day activities in consultation with the clients and operating without specific Friendship
instruction or training cannot trump the longstanding directive of Gillum: " 'The control of
the work reserved in the employer which effects a master-servant relationship is control of
the means and manner of performance of the work, as well as of the result; an independent
contractor relationship exists where the person doing the work is subject to the will of the
employer only as to the result, but not as to the means or manner of accomplishment.' "
Gillum, 141 Ohio St., at 382, quoting 27 American Jurisprudence, Section 7, at 488 (our
emphasis). " 'Thus, a person employed to perform certain work is not necessarily a mere
servant because the contract provides that the work shall be subject to the approval or
satisfaction of the employer. Such a provision is not an assumption by the employer of the
right to control the person employed as to the details or method of doing the work, but is
only a provision that the employer may see that the contract is carried out according to the
plans.' " Id., multiple further citations omitted.
{¶ 17} Here, the "plans" were the individual service plans, the ISPs, as approved by
the state or the county for the agency provider. We note that Gillum's directive has
remained good law in Ohio over the decades. See, e.g., Frankhauser v. Knight-Ridder
Newspaper, 27 Ohio App.3d 236, 238 (9th Dist.1986) ("means or manner of
accomplishment" not implicated where "[t]he result reserved by the newspaper is the
carrying and delivery of the papers in a prompt and careful manner. [Citation omitted.]
The means of achieving the result (whether to use a car or bike, or to walk; the order in
which papers are to be delivered; and the places where the papers are to be placed) are left
to the newscarriers"); Eisenhour v. State Unemp. Comp. Bd. of Rev., 10th Dist. No.
97APE03-349, 1997 Ohio App. Lexis 3631, *6-7 (Aug. 12, 1997) (emphasizing trial court's
conclusion that company "controlled only the end result," while the in-home senior care
workers there controlled "the means and manner of the work performed").
No. 19AP-882 8
{¶ 18} The remaining two paragraphs of analysis in the BWC's Final Order were
devoted to distinguishing the Friendship result, that (one of the kind of) direct care
providers whose status is at issue here was an independent contractor for unemployment
compensation purposes. Final Order at 4-5. BWC is correct that that decision is not
binding on it here; while a state agency and Friendship both litigated on a record some of
which was transported to this matter, the governing statute there and the trial court's
standard of review for an administrative appeal pursuant to R.C. 4141.26(D)(2) do not
apply to this mandamus action against the BWC. Compare, e.g., Alternatives Unlimited-
Special, Inc. v. Ohio Dept. of Edn., 168 Ohio App.3d 592, 2006-Ohio-4779, ¶ 38, 46 (10th
Dist.) ("An 'issue or a fact that was fairly, fully, and necessarily litigated and determined in
a prior action, may not be questioned in a subsequent action between the same parties or
their privies,' " adding that "[r]egardless of which agency is acting, it is doing so in order to
advance or protect the state's interests" and so "agencies, departments, and
instrumentalities are all considered to be the State.").
{¶ 19} Nonetheless, recognizing those differences while also noting the overlap of
the records, we do find Friendship instructive in the way that it characterizes various facts
that the record in this BWC matter also reflects. Compare Magistrate's Decision at ¶ 47
("More or less contemporaneously to the present proceedings before the BWC, Friendship
successfully challenged a similar determination by the Unemployment Compensation
Board of Review * * * * A transcript of the testimony of Florence Hein, a principal of
Friendship, before the court of common pleas [sic; apparently actually the Unemployment
Compensation Review Commission], was later presented and accepted as evidence before
the adjudicating committee in BWC proceedings."). The reviewing judge in Friendship
noted that the record there reflected, as it does here, that a direct care provider (there, a
particular named person) was not controlled by Friendship as to "how the work was
performed." Friendship at 7-8. Moreover, also as reflected for providers here, she "could
call in to see if hours were available or choose not to work." Id. at 8. "The essential and
determining factor is the right to direct or control the performance of services. The
evidence shows [there, as here] that [the direct care worker] worked if and when she was
available, with no set hours. [Friendship] did not supervise [her] in performing the
services; rather, the services were performed off-premises according to the ISP established
through the State." Id. On the record before it then, which is not identical to the record
here but which overlaps in many significant respects, the Friendship court concluded the
No. 19AP-882 9
evidence showed "that the workers at issue were independent contractors rather than
covered employees." Id. at 9.
{¶ 20} While Friendship is by no means dispositive for our purposes here and while
we do not rely upon that court's assessment of evidence not before us, we do not subscribe
to the interpretation of the administrator's designee that Friendship " 'did not examine the
obligation Friendship * * * has with ODDD to provide services as an agency provider[,]' "
or properly reflect on whether " 'the "contractor" has an independent business or
occupation.' " Compare BWC Final Order at 4-5, quoting Adjudicating Committee. That
the governmentally established ISP sets the requirements of the care to be provided was a
salient feature of the Friendship decision, see Friendship at 2, 7, 8, and we consider it
significant here. But that does not at all cut in favor of BWC's position, and BWC points to
no evidence that Friendship directs the direct care providers on the manner or means by
which they go about fulfilling those requirements. And Friendship was clear that the
evidence there reflected that the direct care provider "worked for [Friendship] and for other
companies and made her services available to the public," id. at 8, just as the record here
reflects that Friendship does not have exclusive relationships with the direct care providers,
some of whom also work for Friendship competitors. We do not find these criticisms of
Friendship well taken.
{¶ 21} The magistrate reviewed the briefs, as we have, digested the arguments of the
parties regarding Friendship's mandamus complaint, and arrived at findings of fact and
conclusions of law. His decision lays out well and at some length the BWC proceedings
preliminary to the conclusions of the administrator's designee in his Final Order (the
conclusions at issue here). And it accurately captures the essence of that Final Order and
the basis that the BWC ultimately adopted in reaching that Order. Magistrate's Decision at
¶ 46 (omitting, reasonably, that Order's further arguments against Friendship beyond the
point that it is not binding here). It then correctly recites the relevant standards that we
must apply. Id. at ¶49-50. It also properly identifies the "threshold issue" of "the amount
of control exercised by the putative employer over the manner and means of performing
the work," as laid out in Gillum. Id. at ¶52. And at ¶53, it correctly paraphrases Bostic's
instruction that: "The determination of who has the right to control must be made by
examining the individual facts of each case. The factors to be considered include, but are
certainly not limited to, such indicia as who controls the details and quality of the work;
who controls the hours worked; who selects the materials, tools and personnel used; who
No. 19AP-882 10
selects the routes travelled; the length of employment; the type of business; the method of
payment; and any pertinent agreements or contracts." 37 Ohio St.3d, at 146 (emphasis
added). The magistrate's decision reflects significant and helpful work, and we are largely
with him up to that point.
{¶ 22} However, the magistrate then identifies as "[o]ne of the most pertinent facts"
relied on by the BWC "that ODDD recognizes two types of providers, independent providers
and agency providers." Id. at ¶55. But the fact that BWC certifies "independent" providers
does not seem to us at all to mark those who contract with a certified agency to provide
direct in-home care as "employees." And, as Friendship's objections note, the magistrate
seems to have been somewhat off base in stating that "Friendship's homecare providers
were not documented in this case as being individually certified to provide such care under
ODDD programs." Compare id. with Friendship Objections to Magistrate's Decision at 5.
Ms. Hein's testimony from August 18, 2015, during the period under review, did reflect that
"I have some independent providers for the State of Ohio that work for me and also work
for the state * * * and [the state] can afford to pay more quite frankly so they're a big
competitor of us." Stip.R. at 56-57; see also, e.g., (Verified) Petition for (Audit) Appeal at
2, Stip.R. at 12 ("while working for Friendship * * *, direct care service providers perform
services as independent contractors for other agency providers who are in direct
competition with Friendship * * * including the State of Ohio").
{¶ 23} In any event, whether or not any particular quantum of providers who
worked through Friendship also contracted directly with ODDD (as opposed to being free
to contract, simultaneously, with other agency providers, as the record reflects some also
did) would not count in favor of their being employees even if they elected to contract only
with Friendship (to work whatever hours they chose). The magistrate's decision seems to
make its same point later in saying that "Friendship's homecare providers cannot establish
a care position with a Friendship consumer outside of the relationship agreement between
the provider and Friendship," Magistrate's Decision at ¶57, but again this perspective does
not take into account that Friendship's contract with its "Self Employed Independent
Contractors and Sole Proprietors" does not purport to be exclusive and that just as
customers can choose providers other than Friendship, the direct care providers are free
also to work through other agencies.
{¶ 24} The magistrate's decision does not address what would seem to be at least an
interesting if not "pertinent" related point that, regardless of any affiliation with Friendship,
No. 19AP-882 11
the state has considered its own direct care workers to be independent contractors. See
Objections at 5 (objecting that magistrate "rejected" its argument on that score). The
testimony admitted into the record was undisputed on this point. See Stip.R. at 56 (Ms.
Hein: "we are an agency provider, but the State of Ohio also has independent providers
which are independent contractors. They bill, they provide the same services * * * *"); see
also Stip.R. at 12. BWC's Final Order indeed conceded the fact, even while quoting a BWC
representative's assertion that "on the website of the Department of Developmental
Disabilities there is [unspecified] evidence that the Department is moving away [how and
to what extent is not specified] from the independent contractor model to a co-employer
model which states that the workers would be employed by the provider employees"
(through conditions, perhaps, that do not obtain here). BWC Final Order at 4. Friendship's
point that what's good for the governing and presumably law-abiding goose should be good
for the subject gander, under the same rubrics, is left unanswered.
{¶ 25} Echoing the BWC's briefing, the magistrate's decision does note that "the
evidence establishes that homecare providers * * * do not engage with the agencies in
preparing the ISP." Magistrate's Decision at ¶ 56. True enough. The direct care providers
do not undertake to do that: the particular service that they contract to provide relates not
to the drafting of documents but to the care of disabled individuals in their homes pursuant
to the ISPs that set the terms of what services are required. That they have had no hand in
drafting the state-approved ISP is no evidence as to whether or not they are independent
contractors in the role that they do undertake to perform. And again, the record reflects no
evidence that the particular manner and means by which they undertake to satisfy the ISP
and the customer are controlled by Friendship.
{¶ 26} The Magistrate's Decision next attempts to make something along the lines
of the Friendship goose/gander argument in reverse. When one direct care provider
chooses not to work, Friendship either turns to other such providers or fills a gap with one
of its own employees: that, the magistrate posits, "demonstrates the interchangeability" of
the direct care providers with workers Friendship concedes are "employees." Id. at ¶ 58.
No, it doesn't. In fact, the comparison underscores a significant distinction: the record
reflects that the direct care providers are free to pick and choose hours and assignments as
they like, working no more than they like but with no guarantee of assignments or hours.
The employees, by contrast, who have responsibilities other than and beyond filling in as
No. 19AP-882 12
needed for direct care service gaps, have no such flexibility (they are "on call") and more
stability.
{¶ 27} The Magistrate's Decision concludes in its next paragraph that: "While
Friendship stressed before the commission that it did not monitor the homecare providers
as they performed their tasks and executed the ISP, minute-by-minute supervision is not
the test of oversight for these purposes." Id. at ¶ 59. We have no quarrel with that
formulation: "minute-by-minute supervision" is not required to mark someone as an
employee. But Friendship's "meeting with consumers on a regular basis to ensure that
consumers are receiving appropriate services[,]" id., does not go to the "key factual
determination [of] who had the right to control the manner or means of doing the work,"
see Bostic at paragraph one of the syllabus: as we already have elaborated, " 'if the manner
or means of doing the work or job is left to one who is responsible to the employer only for
the result,' " employee status is not implicated, see BWC Final Order at 1 (quoting Gillum).
Again, we are directed to no evidence that Friendship supervises " 'the means or manner of
accomplishment,' " to use the words that Gillum quoted in establishing the law.
{¶ 28} Finally, in (properly) seeking to identify evidence in support of the BWC's
determination, the Magistrate's Decision concludes that because the direct care providers
invoice Friendship using an hourly rate, they "have no exposure to profit or loss and as such
are essentially submitting a time sheet rather than a billing statement." Magistrate's
Decision at ¶ 60. We agree that the record reflects that the direct care providers are paid
by the hours they actually work (sometimes weekly, or every two weeks, "really at their
discretion," Stip.R. at 48). In this specific context, where the undisputed record is that the
workers must provide their own equipment, if any, are not reimbursed for most expenses,
are not guaranteed hours of work, and are subject to having the client cancel the hours they
planned to work, "without warning to anybody," (Stip.R. at 50)—and where the state has
treated its own similarly situated workers as independent contractors—we do not find this
to be evidence that Friendship exercises the relevant right of control. In the context of this
matter, involving clients with potentially ongoing direct care needs, it is precisely because
of the great flexibility and autonomy that the direct care providers have to elect their own
days and hours of work that other systems of payment could be unwieldy.
{¶ 29} The balance of the magistrate's decision goes not to evidence that might
support the BWC's decision but is directed to addressing various arguments put forward by
Friendship. The decision is correct that providers who work part-time and irregular hours
No. 19AP-882 13
need not for that reason alone be independent contractors. Even sporadic workers whose
employers maintain control over the manner and means by which they perform their work
may be employees. The case and paragraph the magistrate's decision cites, for example,
pointed to evidence of the company manager's " 'presence on the jobsite' " (in addition to
other evidence including company transport of workers from the employer's location to the
worksite, the employer's provision of large equipment for the work, and other factors also
not present in the case at hand). State ex rel. Ohio Valley Selective Harvesting, L.L.C. v.
Buehrer, 10th Dist. No. 16AP-5, 2017-Ohio-369, ¶ 20, as cited by Magistrate's Decision at
¶ 61.
{¶ 30} The magistrate's decision is also correct to the extent that it notes that the
signed agreements between Friendship and direct care providers designating the workers
as independent contractors are not dispositive of the issue or binding on the BWC. We do
not read the Magistrate's Decision to go so far as to suggest that such agreements should be
of "no weight" to the finder of fact, compare Magistrate's Decision at ¶ 62 with, e.g., Gillum,
141 Ohio St., at 382 (referencing parties' mutual understanding as a potential
consideration), and Bostic, 37 Ohio St.3d, at 146 ("any pertinent agreements or contracts"
may be factors to consider), but rather to say that it is of no moment here given our standard
of review looking only to whether there is evidence to support the BWC determination.
Similarly, as explained above, we agree with the magistrate's decision that Friendship is not
dispositive for our purposes (just as the 2006 or 2008 BWC auditor decision is not, and
even as we recognize that a factfinder can take eligibility for unemployment compensation
into account in such determinations, see, e.g., Schaengold at ¶ 20).
{¶ 31} Finally, the magistrate's decision counts as waived Friendship's argument
that the BWC adjudicating committee did not hear the matter promptly enough, because
"Friendship did not raise this issue before the designee." Magistrate's Decision at ¶ 63.
Friendship poses a two-sentence objection to this conclusion, but provides us with no
citation to the record or anything else to go on. Objections to Magistrate's Decision at 13.
We overrule that objection.
{¶ 32} In its response to Friendship's other objections (relating to what the record
reflects and, more globally, to the magistrate's conclusion that the BWC did not abuse its
discretion in classifying the direct care workers as employees), the BWC argues at some
length that the common law test as reflected in Gillum and Bostic applies to this matter.
No. 19AP-882 14
Memorandum in Opposition to Objections at 2-5. That is correct: within the confines of
the relevant standard of review, Gillum and Bostic control the analysis.
{¶ 33} The BWC's brief in opposition to the objections then essentially summarizes
the magistrate's analysis that we have reviewed above. Id. at 6-9. The citations that the
BWC provides in this section of its brief are exclusively to the magistrate's decision and do
not independently refer to any other part of the record. Id. Thus, for example, the BWC
cites that decision in support of its argument that "[t]here is no evidence any of
[Friendship's] workers were certified by ODDD as an individual provider during the period
under consideration," id. at 6, without responding to the record citations to the contrary
provided by Friendship. See Objections at 5; Stip.R. at 56-57 (Hein testimony from
August 18, 2015 that "I have some independent providers for the State of Ohio that work
for me and also work for the state[, which] can afford to pay more quite frankly so they're a
big competitor for us"); Stip.R. at 12. Repetition of the observation from the magistrate's
Decision that the direct care providers "do not enter into a direct relationship [read,
contractual relationship?] with the customer," Memorandum in Opposition to Objections
at 6, is not evidence that Friendship exercises any right to control the manner and means
by which the workers provide their services and does not distinguish this situation from
any number of independent contractor scenarios. And emphasis on the point that
Friendship direct care providers can "choose[] not to work for a given day" and that gaps
are filled by Friendship employees who are not given that flexibility only further
undermines the BWC's position. See id. at 7.
{¶ 34} In further rehearsing the magistrate's decision that we have parsed above, the
BWC cites to no evidence on what Bostic reestablished as "the key" matter of who controls
"the manner or means of doing the work." See 37 Ohio St.3d 144, 146 and paragraph one
of the syllabus. BWC takes the passage from the magistrate's decision observing that
"Friendship supervises the quality of care provided by the homecare providers, meeting
with consumers on a regular basis to ensure that consumers are receiving the appropriate
services as reviewed by supervisory staff," see magistrate's decision at ¶ 59 (emphasis
added), to mean not that Friendship "supervises the quality of care provided," but rather
that "[t]he magistrate found * * * Friendship-recognized employees supervise the other
workers [something the magistrate's decision did not find, at least in those terms], and
meet with consumers" to ensure that they are receiving what the employees deem
appropriate services. Memorandum in Opposition to Objections at 7 (emphasis added).
No. 19AP-882 15
But the BWC makes no effort to reconcile the actual record with what the BWC
acknowledges the Supreme Court of Ohio said in Gillum, that "if the manner or means of
doing the work or job is left to one who is responsible to the employer only for the result,
an independent contractor relationship is thereby created." See BWC Memorandum in
Opposition to Objections at 3 (quoting Gillum); BWC Brief at 19-20. Again, what counts
here is " 'the right to control the person employed as to the details or method of doing the
work,' " not " 'only * * * that the employer may see that the contract is carried out according
to the plans.' " 141 Ohio St., at 382.
{¶ 35} We adopt paragraphs 37-48 of the magistrate's decision (modified herein as
to ¶ 47) describing the BWC process that brought us to this stage. We sustain Friendship's
objections to the magistrate's decision to the extent that the decision concluded that the
BWC did not abuse its discretion in determining that the direct in-home care providers in
question were not independent contractors during the relevant period. Finding that there
was such an abuse of discretion, we grant the requested writ to the extent that we order the
BWC to vacate its order finding that the in-home direct care providers were not
independent contractors for the period assessed, and to return to Friendship any premium
payments imposed or received as a result of that Final Order. For the years in question here
and for later years, the BWC is not bound now or for all time by the results of its earlier
audit or audits concluding that such workers were independent contractors, or by
unadjudicated practices of the State of Ohio in also treating such workers as independent
contractors, but on this record BWC lacks any evidence by which it could establish anything
to the contrary for the years in question.
Objections to Magistrate's Decision sustained in part;
writ granted as described.
BEATTY BLUNT and MENTEL, JJ., concur.
NELSON, J., retired, of the Tenth Appellate District, assigned
to active duty under the authority of the Ohio Constitution,
Article IV, Section 6(C).
___________________
No. 19AP-882 16
APPENDIX
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
State ex rel., :
Friendship Supported Living, Inc.,
:
Relator,
:
v. No. 19AP-882
:
Ohio Bureau of Workers' Compensation, (REGULAR CALENDAR)
:
Respondent.
:
MAGISTRATE'S DECISION
Rendered on July 23, 2021
Law Office of Tracy L. Turner, LLC, and Tracy L. Turner for
relator.
Dave Yost, Attorney General, and John R. Smart, for
respondent Ohio Bureau of Workers' Compensation.
IN MANDAMUS
{¶ 36} Relator, Friendship Supported Living, Inc. ("Friendship"), seeks a writ of
mandamus ordering respondent, Ohio Bureau of Workers' Compensation ("BWC"), to
vacate an order of the administrator's designee that determined that certain individuals are
Friendship employees for purposes of workers' compensation coverage rather than
independent contractors.
Findings of Fact:
{¶ 37} 1. Friendship is an Ohio corporation in the business of providing or
coordinating in-homecare for persons with developmental disabilities under programs
overseen by the State of Ohio Department of Developmental Disabilities ("ODDD") and the
Franklin County Board of Developmental Disabilities ("FCBDD"). The recipients of these
No. 19AP-882 17
services are referred to as "consumers" for purposes of care programs. The services
provided are defined under an individual service plan ("ISP") developed by the state or
county agency.
{¶ 38} 2. Friendship has participated in BWC's workers compensation system
without lapse beginning November 4, 2003. (Stip. at 219.) Friendship included certain
participants in its homecare services program as employees, particularly its health services
coordinators. Friendship did not include its direct care workers, who provided the actual
in-homecare and assistant to consumers, as employees and considered them independent
contractors.
{¶ 39} 3. BWC notified Friendship that it would be conducting an audit of
Friendship's payroll and business organization from the period July 1, 2014 to June 30,
2015. (Stip. at 7.) The audit report concluded that Friendship's homecare providers should
be deemed employees for workers' compensation coverage purposes. The audit report
concluded as follows:
Based on the information provided the 1099's contractors are
deemed as employees based on the following:
Paid hourly; The W-2 staff also visits the same clients as the
contractors to perform other related services including
redetermination; Typically, the workers are interviewed,
hired and paid set wages; They have their work assigned and
scheduled (i.e. they are expected to be the client's between
specific hours); The home health worker does not make
decisions about the care or medication, exercise, etc.; they
follow a plan developed by a healthcare provider and are
overseen by a case manager or RN; The contract states that
after 24 months they can apply to be an employee of
friendship; Industry standards have some supervisor of the
work that is performed by the home health aides; The
contractors do not call to schedule any visits to the clients they
serve. The company performs all scheduling of days and times
when the contractor is to work; Worker's activities are
monitored for compliance and quality; A worker could not
hire someone to fill in – the services have to be performed by
him/her personally; Timesheets are submitted and 1099
recipients do not invoice for their services. They are paid
hourly, not by visit; The HHA cannot contract to another party
to provide the services - he/she must perform the services
personally; Liability insurance is carried by the employer;
Services are integrated into the functioning of the employer
who is in the business to provide home health.
No. 19AP-882 18
{¶ 40} 4. The audit further described Friendship's operations as perceived by the
auditor:
The risk is a contractor that provides care services for
individuals with disabilities in their homes. There are six
individuals employed. One works performing in office clerical
duties. This individual is also a corporate officer and
reportable to manual 8810. There are five individuals that
work at various homes assisting clients. This includes other
duties that the contractors do not provide. This includes
redetermination of individuals, scheduling doctor
appointments along with transporting clients as needed. All
are reportable to manual 8835.
(Stip. at 126.)
{¶ 41} 5. Friendship protested the audit and requested a hearing. (Stip. at 35.)
BWC conducted the hearing before the adjudicating committee on December 5, 2017. (Stip.
at 38.)
{¶ 42} 6. The adjudicating committee rendered an opinion mailed March 5, 2018
denying Friendship's protest and upholding the audit findings. (Stip. at 132.)
{¶ 43} 7. In support of its proceedings before BWC, Friendship submitted the
affidavit of one of its principals, Jerry M. Hein. (Stip. at 1.) Hein described the process
under which Friendship provided services to consumers as follows:
[Four] The initial step in providing consumer services
involves an interview by the consumer of three agencies
approved by the Franklin County Board of MRDD. The
consumer has the free choice of selection based upon the
interviews. If the consumer selects Friendship Supported
Living, Inc., Friendship Supported Living, Inc. determines
whether there is an existing plan for the consumer or whether
a new plan needs to be developed.
[Five] The plan, an Individual Service Plan (ISP) is written by
the Franklin County Board of MRDD and specifies items such
as hours needed by the consumer, activities requested or
needed by the consumer, such as doctor visits, visits to the
bank, social activities, days per week and other items.
***
[Seven] The consumer is free to deviate, change or delete
services as the consumer deems appropriate. For example, if
a consumer has a family member run errands for the
consumer or the family member or friend fixes a meal, the
No. 19AP-882 19
consumer can tell the on-site independent contractor that the
independent contractor is not needed on a particular day or is
needed to perform other services. The consumer may also
determine, for example, that a different independent
contractor can be assigned. One woman customer, 72 years of
age, is not comfortable with a younger independent contractor
assisting her to shower and has requested an older
independent contractor to help with the showering.
[Eight] The independent contractor is also free to discuss with
the customer any changes in service. For example, if a
customer requests to be taken to the zoo when the
independent contractor arrives at the customer location, the
independent contractor can advise the customer that the
independent contractor cannot take the customer that day but
can take the customer to the zoo on the next visit.
[Nine] Friendship Supported Living, Inc. does not supervise
or in any way manage the services provided by the
independent contractor on a particular day. There is no on-
site supervision.
[Ten] Although Friendship Supported Living, Inc. does not
monitor or manage the means or way that an independent
contractor provides the ISP services on a particular day,
Friendship Supported Living, Inc. does meet with the
customer, not the independent contractor, on a regular basis
to ensure that the customer is, for example, treated fairly, that
sufficient groceries are at the residence, that the customer is
taking medication as ordered, and that the appropriate
activities have been provided.
[Eleven] The hours of service provided by independent
contractors vary from day to day and from week to week and
from independent contractor to independent contractor. Most
of our independent contractors have second jobs, and 80% of
the independent contractors work for another provider; that
is, a competitor of Friendship Supported Living, Inc. The
independent contractor is free to select the hours available as
an independent business person and make individual choices
concerning their income and the intangibles in providing
contractual services. Some of our independent contractors
attend school and contract with Friendship Supported Living,
Inc. to accommodate their class schedules.
[Twelve] A customer can terminate the services of an
independent contractor but cannot terminate one of our
employees.
No. 19AP-882 20
[Thirteen] Our employees, some of whom perform
management services, perform different services than the
independent contractors.
[Fourteen] The employees, not the independent contractors,
attend ISP plan meetings with the representative of the
Franklin County Board of MRDD. At least every twelve
months the services are renegotiated. These plan meetings
and redeterminations take approximately ten hours of time
during each week for each of the employees.
[Fifteen] The employees, not the independent contractors,
meet with representatives of Jobs and Family Services every
six months for the application and processing and review of
services provided under Ohio Medicare which covers such
things as physician services, food stamps and dental services.
***
[Twenty-Three] The employees, not the independent
contractors, are on call 24 hours a day and fill-in for
independent contractors if the independent contractor does
not show up on a given day.
[Twenty-Four] Because of business considerations, the
employees, not the independent contractors, are provided
with company cell phones.
***
[Twenty-Eight] The independent contractor relationship
between the independent contractor and Friendship
Supported Living, Inc. is intended to be short-term, as many
independent contractors have second jobs or are enrolled in
school. Most independent contractors are looking for short-
term arrangements.
[Twenty-Nine] The general hours of service are initially set
forth in the ISP plan subject to change by the consumer. The
specific hours of service of the independent contractor are
determined by the independent contractor. It is not an
infrequent situation where the consumer cancels the services
or reduces the hours on a particular day.
[Thirty] The independent contractor is not required to devote
full time to Friendship Supported Living, Inc. As stated above,
most independent contractors have second jobs and want
flexibility in their schedules.
No. 19AP-882 21
***
[Thirty-Two] The ISP (work order) is established by the
Franklin County Board of MRDD not by Friendship
Supported Living, Inc. and can be, and is in fact, changed by
the consumer.
***
[Thirty-Four] No expenses of the independent contractors are
paid by Friendship Supported Living, Inc. As stated above,
mileage is reimbursed by the state to the independent
contractor at the rate of $.30 per mile.
[Thirty-Five] Friendship Supported Living, Inc. does not
furnish any tools or materials to the independent contractor.
***
[Forty] The services of the independent contractor are
available to those member[s] o[f] the public who are in the
same business as Friendship Supported Living, Inc. These
services are regulated by the state, federal and local
governments.
[Forty-One] Friendship Supported Living, Inc. has the right
to terminate the independent contractor agreement, and
there exists no liability on the part of the independent
contractor upon such termination pursuant to any
employment agreement.
[Forty-Two] The independent contractor is advised that the
independent contractor [c]an obtain workers' compensation
coverage through the Ohio Bureau of Workers'
Compensation. Several of our independent contractors do, in
fact, have Ohio workers' compensation coverage under their
own policy.
[Forty-Three] The independent contractor executed an
independent contractor agreement which has already been
provided to the Ohio Bureau of Workers' Compensation.
[Forty-Four] The independent contractors have been
furnished 1099 forms for all tax purposes.
[Forty-Five] The independent contractors are not provided
any benefits, such as hospitalization, retirement, or vacation
benefits, by Friendship Supported Living, Inc.
No. 19AP-882 22
{¶ 44} 8. The adjudicating committee applied the common-law right-to-control test
as set forth in Gillum v. Indus. Comm., 141 Ohio St. 373 (1943), and based upon the findings
of fact in the audit, reached the following conclusions:
The Committee finds the direct care workers are in the service
of Friendship Supported Living, rather than "independent
contractors." Friendship Supported Living is certified by the
Ohio Department of Developmental Disabilities ("ODDD") as
a Home/Community Based Waiver Services provider
homemaker/personal care services. The auditor pointed out
ODDD recognizes two types of providers, independent and
agency, and that Friendship Supported Living is an agency
provider:
An agency provider "means an entity that directly employs at
least one person in addition to the chief executive officer for
the purpose of providing services for which the entity must be
certified in accordance with rule 5123:2-2-01 of the
Administrative Code." Ohio Adm.Code 5123:2-9-06(B)(1).
(emphasis added)
An independent provider "means a self-employed person who
provides services for which he or she must be certified in
accordance with rule 5123:2-2-01 of the Administrative Code
and does not employ, either directly or through contract,
anyone else to provide the services."
In this type of work, a person can be self-employed in the
private sector. A person could also be an independent
contractor by becoming a certified independent provider with
the Ohio Department of Developmental Disabilities.
However, here, it is Friendship Supported Living that is
certified as an agency provider to employ people to provide
the services for which Friendship Supported Living is paid to
provide. Friendship Supported Living cannot provide these
services without employees. When working for Friendship
Supported Living the direct care workers are providing their
personal labor in the normal course of Friendship Supported
Living's business pursuit. The workers may not be full-time
employees, but part-time employees and casual workers are
employees under R.C. 4123.01(A)(1)(b). A casual worker is an
individual whose work is occasional and not on a regular
basis.
The workers were misclassified as "independent contractors"
by Friendship Supported Living. Friendship absolutely has
the right to control how the services are provided under the
authority it obtained from ODDD. Friendship Supported
No. 19AP-882 23
Living maintains the required liability insurance and if one of
the workers is unavailable to perform services it is Friendship
Supported Living that has the obligation to arrange coverage.
The assertion that "[n]o one at Friendship Supported Living
supervises the direct care providers" is not accurate.
Friendship Supported Living has employees that control the
workers by monitoring their activities for compliance and
quality. The fact the consumer and worker may mutually
decide what they will do while the direct care worker is there
has no bearing on if the worker is running their own business.
The workers in this employment relationship have more
autonomy and flexibility than in some employee/employer
relationships. However, autonomy and flexibility is common
for employees in his field and many other types of work.
The assertion that "the State of Ohio pays the wages" also is
not accurate. ODDD pays Friendship Supported Living
because they are the agency provider responsible for
providing the services. Friendship Supported Living then
compensates the workers utilizing straight-time pay (hourly
wages), but issued an IRS Form 1099 instead of a W-2. An
employee that is misclassified as an "independent contractor"
typically is issued a 1099. A person does not become an
"independent contractor" based on how the employer
characterizes the relationship or by a worker acquiescing to an
arrangement dictated by the employer. The underlying facts
and true nature of the relationship speaks for itself.
The employer asserted a pervious audit determined the direct
care workers were independent contractors. An auditor in
2006 did consider the 1099 workers as independent
contractors. However, a 2008 audit did not consider the 1099
workers as independent contractors. The fact an auditor
reached a different conclusion in 2006 has no bearing on the
analysis of the facts and determination made by the current
auditor. The employer did not comply with the audit findings
in subsequent payroll reporting periods. Based on this, the
auditor could have made the audit findings retrospective for a
significant period, but did not.
{¶ 45} 9. Dissatisfied with the adjudicating committee's decision, Friendship
requested a hearing before the administrator's designee. (Stip. at 133.)
{¶ 46} 10. The administrator's designee held hearing on April 16, 2019 and mailed
the decision on November 26, 2019 upholding the adjudicating committee's order. (Stip.
at 219.) The administrator's designee again applied the common-law right-to-control test
to determine that Friendship's homecare givers were employees, not independent
No. 19AP-882 24
contractors. The administrator's designee specifically rejected application of the 20-part
test of R.C. 4123.01(A)(1)(c) which applied only to construction workers in the workers'
compensation system. The administrator's designee made the following findings of fact
and conclusions of law:
After reviewing the testimony and evidence, the
Administrator's Designee concludes that there is sufficient
control by Friendship over the activities of the workers to
conclude that the workers are employees of Friendship. The
Administrator's Designee is not persuaded by the argument
that the workers are not supervised by Friendship but rather
have free rein in providing the care to the clients. The nature
of the services provided by the workers, in the home of a client
consumer, will of course provide some flexibility and freedom
for the worker. That is the nature of the service at issue here.
Friendship controls the workers by monitoring their activities
for compliance and quality. The fact the consumer and worker
may mutually decide activities does not mean that the worker
is free from supervision or control. The workers have more
autonomy and flexibility than in some work setting[s], but the
autonomy and flexibility common for employees in this field
does not equate to independent contractor status.
Friendship argued that there is a Franklin County Court
decision finding a worker to be an independent contractor for
unemployment compensation reporting purposes. While the
tests for an employer-employee relationship are similar for
unemployment compensation and workers' compensation
purposes, the Administrator's Designee finds that the
Bureau's determination in this case that the workers are
employees and not independent contractors is for the purpose
of reporting Ohio workers' compensation payroll and
premiums only, and this determination is not conclusive or
binding on Friendship for other payroll reporting obligations,
such as to the Internal Revenue Service for taxes or to the Ohio
Department of Job and Family Services for unemployment
compensation.
{¶ 47} 11. More or less contemporaneously to the present proceedings before BWC,
Friendship successfully challenged a similar determination by the Unemployment
Compensation Board of Review, which had found the homecare providers to be employees
for purposes of computing unemployment compensation payroll and risk. The Franklin
County Court of Common Pleas ultimately reversed the board and held that the homecare
providers were independent contractors for unemployment compensation purposes.
Friendship Supported Living, Inc. v. Ohio Dept. of Job and Family Serv., Franklin C.P. No.
No. 19AP-882 25
15CVF-8721 (Mar. 7, 2016 Decision.) A transcript of the testimony of Florence Hein, a
principal of Friendship, before the court of common pleas was later presented and accepted
as evidence before the adjudicating committee in BWC proceedings. It essentially
paralleled the affidavit evidence of Jerry Hein.
{¶ 48} 12. Friendship filed its complaint in mandamus in this court on
December 30, 2019.
Discussion and Conclusions of Law:
{¶ 49} In order for this court to issue a writ of mandamus, a relator must show a
clear legal right to the relief sought, a clear legal duty on the part of the respondent to
provide such relief, and the lack of an adequate remedy in the ordinary course of the law.
State ex rel. Pressley v. Indus. Comm., 11 Ohio St.2d 141 (1967). A right to a writ of
mandamus exists when a designee's order constitutes an abuse of discretion because it is
not supported by any evidence in the administrative record. State ex rel. Elliott v. Indus.
Comm., 26 Ohio St.3d 76, 78-79 (1986), citing State ex rel. Hutton v. Indus. Comm., 29
Ohio St.2d 9, 13 (1972); State ex rel. Teece v. Indus. Comm., 68 Ohio St.2d 165, 167 (1981).
The term "abuse of discretion" connotes more than an error of law. A reviewing court will
only reverse a decision for an abuse of discretion if the decision is unreasonable, arbitrary,
or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). Accordingly,
this court will not disturb the administrative order if there is "some evidence" to support it.
State ex rel. Fiber-Lite Corp. v. Indus. Comm., 36 Ohio St.3d 202 (1988), syllabus; State ex
rel. Bennett v. Aldi, Inc., 10th Dist. No. 14AP-632, 2016-Ohio-83, ¶ 6.
{¶ 50} The central issue in this case is whether the administrator's designee abused
his discretion in determining that Friendship's homecare providers were employees rather
than independent contractors, thereby requiring Friendship to include compensation for
such persons, until now excluded from payroll, for purposes of determining the appropriate
premium for workers' compensation coverage in Ohio. Friendship also argues that BWC
did not timely conduct proceedings to provide a hearing before the adjudicating committee.
{¶ 51} The magistrate concludes the designee did not abuse his discretion when
applying the common-law test to determine whether these homecare providers were
employees, and it is therefore the magistrate's decision for the reasons that follow that no
writ issue in this case. The magistrate further finds that the timeliness of BWC proceedings
was not raised before the designee and is waived.
No. 19AP-882 26
{¶ 52} The threshold issue in determining whether workers are employees or
independent contractors is the amount of control exercised by the putative employer over
the manner and means of performing the work. Gillum at 373, 380-82. Whether a worker
is an independent contractor or employee depends upon the facts of each case. The
principal test applied to determine the character of the arrangement is that if the employer
reserves the rights to control the manner or means of doing the work, the relation created
is that of master and servant, while if the manner or means of doing the work or job is left
to one who is responsible to the employer only for the result, an independent contractor
relationship is thereby created.
{¶ 53} In determining the amount of control exercised over the alleged employee in
order to determine his status, the Supreme Court of Ohio has set forth certain factors to be
considered. These factors include such indicia as who controls the details and quality of the
work; who controls the hours worked; who selects the materials, tools, and personnel used;
who selects the routes traveled; the length of employment; the type of business; the method
of payment; and any pertinent agreements or contracts. Bostic v. Connor, 37 Ohio St.3d
144, 146 (1988); Gillum at 373.
{¶ 54} The adjudicating committee and designee in this case reviewed the evidence
in detail and found the homecare providers were sufficiently controlled by Friendship to be
employees rather than independent contractors. There is some evidence to support this
conclusion and it is not contrary to law.
{¶ 55} Ohio Adm.Code 4123-17-17 empowers BWC to undertake audits of employer
records to ascertain the correct premium paid for workers' compensation coverage. BWC
has a duty to correct inaccuracies and payroll reporting by employers. Ohio Adm.Code
4123-17-28. One of the most pertinent facts underlined by the auditor and subsequent
BWC review is that ODDD recognizes two types of providers, independent providers and
agency providers. Friendship, according to its own principal's affidavit and all other
evidence in the matter, is a certified agency provider. Friendship's homecare providers
were not documented in this case as being individually certified to provide such care under
ODDD programs.
{¶ 56} As the certified agency provider, Friendship negotiates the ISP with ODDD
or FCBDD. The evidence establishes that homecare providers, despite their purported
status as independent contractors, do not engage with the agencies in preparing the ISP.
No. 19AP-882 27
{¶ 57} Although the consumers have a choice of certified agencies, and as a second
step in the process may select or reject a proffered care worker if Friendship is the selected
agency provider, Friendship offers a choice limited to its own workers and providers.
Friendship's homecare providers cannot establish a care position with a Friendship
consumer outside of the relationship agreement between the provider and Friendship.
{¶ 58} The agreement between the homecare providers and Friendship does not
permit the purported independent contractor providing homecare under Friendship's
contract and ISP to subcontract the work to another party; if a homecare provider chooses
not to work for a given day where services are required, Friendship furnishes the
replacement either from its currently recognized (for BWC payroll purposes) employees or
another purported independent contractor. This demonstrates the interchangeability of
Friendship's supervisory employees, already treated as employees for workers'
compensation purposes, and the homecare providers that Friendship would prefer to treat
as independent contractors.
{¶ 59} The evidence also establishes that Friendship supervises the quality of care
provided by the homecare providers, meeting with consumers on a regular basis to ensure
that consumers are receiving appropriate services as reviewed by supervisory staff. While
Friendship stressed before the commission that it did not monitor the homecare providers
as they performed their tasks and executed the ISP, minute-by-minute supervision is not
the test of oversight for these purposes.
{¶ 60} The pay structure also supports the designee's conclusion. While Friendship
prefers to consider that its homecare providers submit an invoice reflecting hours worked,
the rate is set by Friendship at a fixed hourly rate. Employees have no exposure to profit or
loss and as such are essentially submitting a time sheet rather than a billing statement.
{¶ 61} Friendship also attempts to interpose the fact that homecare providers work
part-time and irregular hours. Employment is not limited to full-time workers in the Ohio
workers' compensation system. Workers' compensation coverage is required for part-time
and casual workers who meet the wage and other criteria of R.C. 4123.41. State ex rel. Ohio
Valley Selective Harvesting, L.L.C. v. Buehrer, 10th Dist. No. 16AP-5, 2017-Ohio-369, ¶
20.
{¶ 62} Finally, Friendship's own consistent but self-serving designation of the
homecare providers as independent contractors is of no weight in this decision. The recent
case of State ex rel. Ugicom Ent. v. Morrison, 10th Dist. No. 17AP-895, 2021-Ohio-1269, is
No. 19AP-882 28
on point. In that case, we noted with approval cases decided under the Federal Fair Labor
Standards Act: " 'It is well settled that the economic realities of an individual's working
relationship with the employer—not necessarily the label or structure overlaying the
relationship—determine whether the individual is an employee.' " Ugicom at 59, quoting
Acosta v. Jani-King of Oklahoma, Inc., 905 F.3d 1156, 1159-60 (10th Cir.2018). As in
Ugicom, the BWC determination here reflects the economic reality and the closely
controlled work performed by the employees, as well as the manifest employee-employer
relationship for pay and general working conditions. Ugicom also makes clear that
Friendship's reliance on rulings in unemployment compensation matters is misplaced.
These are not determinative of employee status for workers' compensation coverage
because the unemployment and workers' compensation systems rely on separate and
independent administrative and statutory criteria. Id. at ¶ 12.
{¶ 63} Friendship also asserts the designee's order should be set aside because the
adjudicating committee did not hear Friendship's appeal within 60 days, as purportedly
required by R.C. 4123.291. BWC argues that R.C. 4123.291's time limit is directive, rather
than mandatory, pursuant to Schick v. Cincinnati, 116 Ohio St. 16 (1927). The more
dispositive question, however, is the fact that Friendship did not raise this issue before the
designee. Issues that were not raised at the appropriate time in administrative proceedings
cannot lead to a finding of an abuse of discretion in subsequent proceedings and cannot
give rise to relief in mandamus. State ex rel. Quarto Mining Co. v. Foreman, 79 Ohio St.3d
78 (1997).
{¶ 64} In summary, it is the magistrate's decision and recommendation the
administrator's designee did not abuse his discretion in upholding the adjudicating
committee's determination that the audit correctly established Friendship's homecare
providers as employees rather than independent contractors, and no writ should issue in
this case.
/S/ MAGISTRATE
MARTIN L. DAVIS
NOTICE TO THE PARTIES
Civ.R. 53(D)(3)(a)(iii) provides that a party shall not assign as
error on appeal the court's adoption of any factual finding or
No. 19AP-882 29
legal conclusion, whether or not specifically designated as a
finding of fact or conclusion of law under Civ.R. 53(D)(3)(a)(ii),
unless the party timely and specifically objects to that factual
finding or legal conclusion as required by Civ.R. 53(D)(3)(b).