Health Care Associates, Inc. v. Oklahoma Employment Security Commission

BOUDREAU, J.,

dissenting:

'I 1 I respectfully dissent. The Legislature created a presumption of employment for purposes of unemployment compensation and also provided for exclusions from that presumption.¹ In my view, today's opinion applies subpart (b) of the exclusionary test in a manner that eviscerates the statutory provision and will result in automatically excluding from unemployment insurance those persons in covered employment which requires training and a license.

12 Health Care Associates, Inc. (HCA) is a staffing agency which not only places nurses at various hospitals and nursing homes on a temporary and part-time basis but also pays the wages to those nurses. The question of whether the work of these nurses is employment within the Employment Security Act of 1980² must be determined by application of the tests set out in § 1-210(14).³ Subsection 1-210(14) creates a presumption that services performed for wages constitute "employment" for purposes of the employment security act. Accordingly, the services performed by the nurses are presumed to be "employment" subject to the employment security act.

T3 HCA may rebut this statutory presumption of "employment" with evidence that satisfies one of two distinct exelusion-ary tests, each a two-prong test, set forth in § 1-210(14). The exclusionary test involved in this case, § 1-210(14), subparts (a) and (b), requires HCA to demonstrate first, that the nurses are free from HCA's control or direction over the performance of their services and second, that the nurses are customarily engaged in an independently established trade, occupation, profession, or business. It is the meaning and application of subpart (b) that is presented on cer-tiorari.

T4 The seminal Oklahoma case interpreting and applying subpart (b) is Brenner v. State ex rel. Oklahoma Employment Security Commission, 1948 OK 273, 201 Okl. 70, 201 P.2d 236. In Brenner, this Court addressed the issue of whether skilled tailors were "customarily engaged in an independently established trade[.]" After years of operating a tailor business, Brenner leased his shop to several of his employees who, in turn, contracted to perform tailoring services for Brenner. When the Employment Security Commission attempted to collect taxes based upon the remuneration paid to the lessees/tailors, Brenner challenged the assessment.

15 The Brenner Court determined that Brenner had failed to satisfy subpart (b) of the exclusionary test. The Court observed that the lessees/tailors had no proprietary interest in the business to the extent of being able to operate it without hindrance from Brenner, they had no enterprise they could sell or give away, and they were dependent upon Brenner for their continued employment. The Brenner Court concluded that the tailors were not individuals customarily engaged in an independently established trade, occupation, profession or business.

T 6 In commenting on Bremner, the majority opinion acknowledges that the only way the lessees/tailors could have been considered independent contractors under § 1-210(14) was by proof that they had an independently established business. However, the majority opinion allows HCA to satisfy subpart (b) without demonstrating that the nurses had an independently established business. The majority opinion concludes that "the nurses in this matter are established in an independent profession by virtue of their training and license to practice nursing."

17 In support of this conclusion, the majority opinion reasons that to hold otherwise "would transform the Legislature's use of the disjunctive in 'trade, occupation, profession, or business' into a requirement that the nurses have both a profession and a business." However, this is precisely what we did in Bremmer when we construed subpart (b) to require Mr. Brenner to demonstrate that his lessees, tailors by trade, had an independently established business.

8 In my view, the majority opinion misses the mark when it ignores entirely the statutory language in subpart (b) which requires an individual be "customarily engaged" in an independently established profession. This statutory language requires more than a showing that the individual is engaged in an independently established profession. It requires a showing that the individual is customarily engaged in a professional endeavor other than the challenged employment.⁴

19 I cannot accept the notion that under subpart (b) the nurses in this matter are customarily engaged in an independently established profession merely because they have been trained and licensed. I concede that in a broad sense, the nurses have a proprietary interest in their training and license. However, it is not the training and license alone that prove an individual is "customarily" established in a profession, rather it is the fact that the individual by reason of such training and license engages in a professional economic enterprise where he/she bears the risk of his/her own unemployment.⁵

10 While the majority opinion implicitly abrogates the subpart (b) requirement for all professionals and perhaps all license holders, it assures us that professionals will still have to satisfy the "subpart 'a' requirement that '[sluch individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of hire and in fact.'" However, this is not the test for rebutting the statutory presumption of covered employment set forth in § 1-210(14) which requires the entity to prove the individuals at issue meet both sub-parts (a) and (b). Control over the individual is a separate issue from whether the individual is customarily engaged in an independently established trade, occupation, profession, or business.

{11 Because there is no evidence in the record that the nurses are customarily engaged in an independently established profession, I must respectfully dissent.

1 . 40 O.$.Supp.2000, § 1-210(14)(a) and (b) or (a) and (c). See note 3 infra. °

2 . 40 0.5.1991, §§ 1-101, et seq.

3 . 40 0.S.S$upp.2000, § 1-210(14) provides: EMPLOYMENT.

"Employment" means:

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(14) Notwithstanding any other provision of this subsection, services performed by an individual for wages or under any contract of hire shall be deemed to be employment subject to the Employment Security Act of 1980 unless and until it is shown to the satisfaction of the Commission that:

a. such individual has been and will continue to be free from control or direction over the performance of such services, both under the contract of hire and in fact; and

b. such individual is customarily engaged in an independently established trade, occu-I pation, profession, or business; or

c. such service is outside the usual course of the business for which such service is performed and that such service is performed outside of all the places of business of the enterprise for which such service is performed.

4 . Brenner, 201 P.2d at 242; and Fuller Brush Co. v. Industrial Commission, 99 Utah 97, 104 P.2d 201, 203 (1940), 129 A.L.R. 511, cited with approval in Perma-Stone Oklahoma City v. Oklahoma Employment Security Commission, 1954 OK 322, 278 P.2d 543. See also, Union Avenue Social Club, Inc. v. J.N. Peet, 249 Or. 135, 437 P.2d 730, 731 (1968) (Independently established business under the employment security statutes does not mean the work the employee is doing for the defendant employer, it means other work of the same nature that the employee is doing.).

5 . The public policy and purpose of the employment security act is to lighten the burden of unemployment upon the workers and their families and the provisions of the act must be interpreted and applied in light of its public policy. 40 0.$.1991, § 1-103; and Realty Mortgage & Sales Co. v. Oklahoma Employment Security Commission, 1945 OK 268, 197 Okl. 308, 169 P.2d 761.