This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Key Transportation, Inc.,
Commissioner of Economic Security,
Filed July 18, 2000
Richard S. Eskola, Moore, Halsey & Eskola, L.L.C., PACO Office Center, Suite 160, 7260 University Avenue Northeast, Fridley, MN 55432 (for relator)
Kent E. Todd, 390 North Robert Street, St. Paul, MN 55101 (for respondent Commissioner of Economic Security)
U N P U B L I S H E D O P I N I O N
Relator Key Transportation, Inc., challenges the determination of respondent Commissioner of Economic Security that respondent Jason L. Knox was an employee rather than an independent contractor and was discharged for reasons other than misconduct. We conclude that Knox was an independent contractor and reverse.
Knox became a driver for Key when he answered an ad in the Anoka County Shopper seeking independent contractors. Key provides transportation services to and from medical appointments for persons on medical assistance. Knox had to provide his own vehicle. He also had to provide and pay for checks on his vehicle's safety, his driving record and criminal record, and a physician's statement regarding his health. Knox had the option of obtaining insurance on his own for the vehicle but chose to have Key obtain it and deduct the payments from his salary. He also had to complete a series of four training courses (standard first aid, abuse prevention, defensive driving, and passenger assistance) that Key paid for and then deducted from his salary. Key provided certain state-mandated equipment, including signs and cellular phones. Key gave their drivers 1099 forms for tax-accounting purposes. Knox also signed several documents that indicated an independent-contractor status.
Knox drove for Key from July 1998 through June 1999. Key paid Knox weekly. He received $8 for each pickup and $.55 a mile. Knox had to turn in paperwork by Friday of each week in order to get paid the following Friday. His paychecks varied in amount from as much as $610.75 to as little as $86.80; some weeks he did not receive any pay. The procedure for assigning jobs was that Knox would inform Key when he was available and Key would call him with runs that fit his schedule. Knox could either accept or reject runs that Key offered. Key had no control over the actual driving routes used. Key gave drivers written policy requirements describing dress code and courtesy, prohibiting smoking in all vehicles at all times, and keeping in contact with the office. Knox had to complete a daily pre-trip inspection sheet and turn in a maintenance checklist every week or every 1,000 miles. In June 1999, Key informed Knox that he was no longer needed as a driver because they needed a driver who was more available than Knox had been.
Knox applied for reemployment insurance. Key responded that Knox had been an independent contractor. The Minnesota Department of Economic Security issued a determination of employment status indicating that Key and Knox had an employer-employee relationship. The department of economic security then issued a separate determination of nondisqualification, finding Knox was separated for reasons other than employment misconduct. Key appealed from the employment-status determination and the nondisqualification determination. A reemployment insurance judge held an evidentiary hearing and affirmed both determinations on appeal. Key appealed to the commissioner's representative, who affirmed the decisions, concluding that services performed by Knox and other drivers for Key were in employment and that Knox was discharged for reasons other than misconduct. Key sought review of the decisions, and this court consolidated the two appeals.
While this court defers to the commissioner's findings of fact if they are reasonably supported by the evidence in the record, the court exercises its independent judgment with respect to questions of law. McGowan v. Executive Express Transp. Enter., 420 N.W.2d 592, 594 (Minn. 1988). Whether a worker is an employee or an independent contractor is a mixed question of law and fact. Moore Assocs. v. Commissioner of Econ. Sec., 545 N.W.2d 389, 393 (Minn. App. 1996). Once the controlling facts have been determined, the question becomes one of law. Id.
Employment is service performed by "an individual who is considered an employee under the common law of employer-employee and not considered an independent contractor." Minn. Stat. § 268.035, subd. 15 (Supp. 1999).
The distinction between an employee and an independent contractor may be said to consist largely in the difference between one who undertakes to achieve a given result under an arrangement with another who has authoritative control over the manner and means in which and by which the result shall be accomplished and one who agrees to achieve a given result but is not subject to the orders of another as to the method or means to be used.
Geerdes v. J.R. Watkins Co., 258 Minn. 254, 262, 103 N.W.2d 641, 646 (1960) (footnote omitted). The label given by the parties themselves is not in itself determinative. Lakeland Tool & Eng'g, Inc. v. Engle, 450 N.W.2d 349, 352 (Minn. App. 1990).
The traditional factors used to determine whether an employment relationship exists are:
(1) The right to control the means and manner of performance; (2) the mode of payment; (3) the furnishing of material or tools; (4) the control of the premises where the work is done; and (5) the right of the employer to discharge.
Guhlke v. Roberts Truck Lines, 268 Minn. 141, 143, 128 N.W.2d 324, 326 (1964) (footnote omitted).
In Neve v. Austin Daily Herald, 552 N.W.2d 45 (Minn. App. 1996), this court applied the traditional factors in concluding that a newspaper delivery person was an independent contractor. This court reasoned that time, place and manner restrictions imposed by the newspaper industry were not relevant to the employment-status inquiry because they related to the definition of the task, not the means of accomplishing it. 552 N.W.2d at 48. Key argues that Neve controls this case. We agree.
The right to control is the determinative factor in this case, as it was in Neve. "'Control' is the power to instruct, direct, or regulate the activities of an individual whether or not the power is exercised." Minn. R. 3315.0501, subp. 2. In concluding that Key had the right to control the means and manner of performance, the commissioner's representative pointed in part to the smoking ban and hygiene requirements. Key argues that any control exerted was done pursuant to state mandate or to ensure desired customer service. Key prohibited smoking in all vehicles at all times because some customers could be allergic to smoke. A smoke-free vehicle and minimal hygiene are part of the definition of the task, not the means of accomplishing it, and as such are not relevant to the employment-status inquiry. See Neve, 552 N.W.2d at 48.
The only apparent distinction between this case and Neve is that Knox could not arrange for his own subcontractors as substitutes. But this distinction is not significant because Knox was free to set his own availability and could either accept or turn down any runs offered. He retained responsibility for his vehicle and submitted paperwork in order to get paid. He was provided with a 1099 form rather than a W-2 form and was aware that Key considered him an independent contractor. Although Key paid for training and insurance, these costs were deducted from Knox's paychecks. Knox was ultimately responsible for when and how much he worked. Under these circumstances, we conclude that the record does not support the commissioner's determination that Knox was an employee rather than an independent contractor.
Because we reverse the employment-status determination, we do not reach the issue of whether Knox committed disqualifying misconduct.