Speaking of independent contractors
Four days ago we blogged on independent contractors. Low and behold, a case was recently decided that summarizes what we were talking about. This is a summary by a well regarded defense attorney in Chicago.
In Skzubel v. Illinois Workers’ Compensation Commission Division, No. 01-09-0442WC, 2010 WL 1796802 (1st Dist. May 4, 2010), the court found the Commission’s decision that the petitioner was not an employee to be against the manifest weight of the evidence. The petitioner worked delivering Chicago Sun-Times newspapers for Four M every day for two years. Four M’s contract with the Sun-Times required it to deliver newspapers to the destinations by 6:30 a.m. The contract between Four M and its drivers stated that drivers were not employees. The delivery drivers would service a specific route and would use their own vehicle. Drivers could deviate from the route as long as the papers were delivered on time. Drivers were paid a set rate per paper delivered, which could be changed by Four M without notice to the driver. Four M would provide certain instructions on the manner in which papers were to be packed and to whom they were to be delivered and, in some instances, specific delivery instructions. Four M could also terminate the agreement at any time. The driver had to give seven days’ notice to cancel the agreement. The petitioner’s immigration status was pending when she began to work for Four M. Her husband signed the contract because she was not able to legally work. Checks were issued in her husband’s name. The checks were given to the petitioner. Four M admitted at trial that it knew the petitioner was making the deliveries.
The arbitrator found the petitioner was not an employee because of the fact that the checks were issued in her husband’s name. Accordingly, the arbitrator concluded that there was no contract of employment between Four M and the petitioner. The arbitrator also noted there was an issue as to whether the petitioner was an independent contractor but did not rule on the question. The arbitrator also found that because she failed to prove she was an employee, she failed to prove that the Sun-Times was a statutory employer. The Commission majority adopted the decision and further stated that she failed to prove accident without explaining the basis for that finding. The dissenting Commissioner found that the petitioner was an employee.
The appellate court reversed, finding the Commission’s determination on the employment issue was against the manifest weight of the evidence. The court agreed with the dissenting Commissioner that Four M knew the petitioner made the deliveries. Four M admitted that it knew she made the deliveries and that she was given the paychecks. The court found that Four M controlled the actions of drivers such as the petitioner by determining the work days and hours and such things as how the papers were to be delivered. The court also found it equally clear that the work performed by the petitioner was necessary to Four M’s operation as a newspaper distributor. The fact that Four M could terminate the agreement without notice was also a significant factor for the court, as was the fact that the work did not require any special skills. Facts such as that the contract labeled the relationship as principal and independent contractor, that the petitioner used her own vehicle, and that Four M did not withhold taxes and did not instruct her which route to take were not as significant.
The court vacated the holding that the Sun-Times was not a statutory employer because the decision was premised on a faulty predicate. The court also vacated the Commission’s finding that the petitioner failed to prove an accident and remanded the case to allow the Commission to make appropriate findings on the issue. The court noted that the conclusory statement in the Commission’s decision without setting forth any facts in support prevented the court from determining whether it was supported by the evidence.
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