Case Title: Rubalcaba v. Nagaki Farms, Inc.

Citation: 

Docket Number: S48217

State: oregon

Court: Oregon Supreme Court

Date: 2002-04-11T00:00:00Z

Document:
Filed:  April 11, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON

RAUL M. RUBALCABA,
		Petitioner on Review,
	v.
NAGAKI FARMS, INC.
and PAULA INSURANCE COMPANY,
	Respondents on Review.
(WCB 99-00151; CA A108450; SC S48217)

	On review from the Court of Appeals.*
	Argued and submitted November 5, 2001.
	D. Michael Dale, Legal Aid Services of Oregon, Portland,
argued the cause for petitioner on review.  With him on the
briefs was Diane Schwartz.
	David Levine, Sheridan, Bronstein & Levine, Lake Oswego,
argued the cause for respondents on review.  With him on the
briefs was Richard D. Barber, Jr.
	Lynn-Marie Crider, Salem, filed the brief for amici curiae
Oregon AFL-CIO, National Employment Law Project, and the
Farmworker Justice Fund.  With her on the brief were Rebecca
Smith, Catherine K. Ruckelshaus, and Bruce Goldstein.
	Before Carson, Chief Justice, and Gillette, Durham, Leeson,
Riggs, and De Muniz Justices.  
	LEESON, J.
	The decision of the Court of Appeals is reversed.  The order
of the Workers' Compensation Board is reversed, and the case is
remanded to the Workers' Compensation Board for further
proceedings.
	*Judicial Review from the Workers' Compensation Board. 170 Or App 791, 14 P3d 103 (2000).
	Balmer, J., did not participate in the consideration or
decision of this case.
		LEESON, J.
		The issue in this case is whether claimant is a
"worker" for purposes of workers' compensation coverage.  The
Workers' Compensation Board (board) held that claimant was not a
"worker" and that, accordingly, he was not entitled to workers'
compensation benefits for injuries that he had suffered while
working at employer's farm.  The Court of Appeals affirmed. 
Rubalcaba v. Nagaki Farms, Inc., 170 Or App 791, 14 P3d 103
(2000).  For the reasons that follow, we reverse the decision of
the Court of Appeals and the order of the board.
		Claimant was a harvest truck driver.  He filed a claim
for workers' compensation benefits after severely injuring his
arm while working at employer's farm.  Employer's insurer denied
the claim on the ground that claimant was not a "worker" under
the workers' compensation statutes.  Claimant requested a
hearing, and the administrative law judge (ALJ) made the
following findings of fact, which the board adopted in its order:
		"The alleged employer (hereinafter "employer") is
a farmer.  He raises wheat, onions, potatoes, and
beets.  He engages the assistance of persons with
trucks during the harvest season to haul vegetables to
the appropriate processor as the crops are harvested.
		"In 1998 the employer told a man (a Mr. Hernandez)
who had been hauling for him several years how many
haulers he needed for the harvest.  Hernandez contacted
claimant, apparently among others, and indicated that
there was an opportunity to haul vegetables for the
employer.  Claimant did not speak directly to the
employer regarding his being hired.
		"Claimant owns his own truck.  He maintains it and
buys the gas and insurance for it.
		"The employer directed claimant and the other
haulers to the field that was being harvested and
indicated where to take the produce.  He also advised
them as to the hours of the harvesting since the
haulers followed the harvesting equipment.  Some days
the employer gave this information directly to the
haulers.  Other days the employer gave Hernandez the
information and he conveyed it to the haulers.
		"Each hauler waited his turn in line and then
moved into position to receive produce in his truck
from the harvesting crew.  The hauler then drove his
truck to the processor and returned to the site of the
harvest to get in line again.
		"In 1998, when the onions were completed at the
employer's farm, claimant spent one day hauling for
another farm.
		"The employer's harvest season generally lasted
about six weeks, from early September to mid October. 
The haulers were paid per load or per ton and received
payment at the end of the season.  Claimant received
only one check from the employer.  Claimant was not
identified on the books of the employer as an employee. 
Following 1998, the employer provided claimant with a
Form 1099 indicating that claimant had received
miscellaneous income from the employer.
		"On October 9, 1998, while claimant had his truck
on the employer's land, he adjusted a belt in the truck
that caused produce to flow from the truck out to the
appropriate depository.  Claimant's shirttail became
caught in the truck's belt.  He attempted to free his
shirt and used his right hand to do so.  His arm became
involved with the belt in such a manner that it was
severely injured and part of the arm was amputated."
The ALJ also found that, "[p]er his testimony, the employer had
the right to discharge claimant."  
		The question before the ALJ was whether, on those
facts, claimant is a "worker" and, therefore, was entitled to
workers' compensation benefits for his injury.  ORS 656.005(30)
defines "worker" as "any person * * * who engages to furnish
services for a remuneration, subject to the direction and control
of an employer."  (Emphasis added.)
		The ALJ, concluded that claimant was a worker and that
he was entitled to compensation for his injuries.  On review, the
board reversed.  It held that factors relevant to the right to
control test (1) conclusively established that claimant was not a
"worker" for purposes of workers' compensation coverage. 
Accordingly, it refused to consider factors relevant to the
nature of the work test. (2)  As noted, the Court of Appeals
affirmed.  
		Before this court, claimant first argues that, under
this court's decisions in Bowser v. State Indus. Accident Comm.,
182 Or 42, 185 P2d 891 (1947), and Woody v. Waibel, 276 Or 189,
554 P2d 492 (1976), both of which involved the determination of
worker status on facts that were similar to this case, he is a
"worker" within the meaning of ORS 656.005(30).  Employer
responds that the board correctly applied the right to control
test and that, as a factual matter, employer had no right to
control claimant.  Moreover, employer contends, the board
correctly refused to consider factors relevant to the nature of
the work test.
		Before turning to the first question, namely, whether
claimant is a "worker" under ORS 656.005(30), we first address
this court's standard of review.  The board's determination that
claimant is not a "worker" within the meaning of ORS 656.005(30)
is a conclusion of law, not a finding of fact.  See Woody, 276 Or
at 192-93 n 3 (question of employee or independent contractor
status under workers' compensation statutes is one of law).  In
this case, the facts are undisputed.  We accept, as do the
parties, the board's factual findings and review the board's
legal conclusion for error of law.  See ORS 656.298(7) (providing
that review of board order shall be as provided in ORS 183.482);
ORS 183.482(8)(a) (providing for review for errors of law).
		We turn to the merits.  In this case, the board
determined claimant's employment status as though it were writing
on a clean slate.  That is, the board applied the factors germane
to the right to control test as though this court had not
provided any guidance in its case law regarding the meaning of
the statutory phrase "subject to the direction and control of an
employer" in analogous situations.  However, Bowser and Woody
interpreted the statutory definition of "worker" in factual
settings that are almost identical to this case.  The board's
analysis should have considered those interpretations, because,
as we discuss below, they are dispositive.
		In Bowser, the issue was whether a truck driver who
used his own truck to haul logs from a loading point to a saw-mill was a "workman" within the meaning of OCLA § 102-1703, a
predecessor to ORS 656.005(30).  Like ORS 656.005(30), that
statute defined "workman" as "any person who shall engage to
furnish his or her services, subject to the direction and control
of an employer."  (Emphasis added.)  This court considered
factors relevant to the right to control test, as adapted to the
workers' compensation context, by first considering the parties'
power to terminate the relationship without incurring contractual
liability.  Bowser, 182 Or at 54.  The court explained that the
employer's power to terminate was particularly strong evidence of
the right to control because "the effect of [the power to
terminate] possessed by the company required respondent to
conduct his operations at all times as it might please the
logging company and its manager."  Id. at 56.
		In considering whether there was direct evidence of
control, the court concluded that the indicators were mixed.  The
employer exercised some control by hiring a log loader and
determining the procedure for loading logs, but the claimant
provided his own truck, kept it in running condition, and drove
from the loading point to the place of delivery without
supervision.  Id. at 58-59, 61.  The court downplayed the
claimant's independence, however, because there was "no
difference at all between [the claimant's] actual situation in so
far as control is concerned and the situation of one hired to
drive a logging truck and trailer owned and operated by the
logging company."  Id. at 58.
		The court then analyzed other factors relevant to the
parties' relationship.  It reasoned that the fact that the
claimant was required to perform only such work as the company
could provide, rather than to perform a specific piece of work,
indicated that the claimant was a "workman" for statutory
purposes.  Id. at 63.  The court further reasoned that the manner
in which the employer entered into contracts with haulers
similarly suggested that the claimant fit within the statute. 
The employer gave the following account of how he hired haulers:
	"Supposing I needed two trucks tomorrow morning, and
you was the owner of one of them, and that man sitting
there was the owner of the other one.  Maybe I would go
to you and I would say, 'Well, I need two trucks. 
Would you come and haul for me?'  Well, you would say,
'Well, this man here has got a truck.  He isn't
working.  Maybe he would like to haul.'  'All right. 
Well, you go to see that guy, and you come out to my
landing the next morning, both of you.'  But the first
thing, before you would come, you could ask me how much
a thousand I was paying on these particular hauls.  If
you figured it was a fair price you would come; if you
didn't figure it was a fair price you wouldn't come,
because a truck driver - if you was owning that truck
you would want to make as much as you could, and that
is where you would go and haul, if you had the chance
to haul."
The court concluded that that testimony "smacks strongly of the
hiring of an employee."  Id. at 62-63.  
		The court declined to consider whether the employer's
mode of compensating the claimant -- payment by the board foot
hauled -- was suggestive of "workman" or independent contractor
status, because cases were evenly split on that point and there
was sufficient evidence relating to the other factors to conclude
that the claimant was a "workman."  Id. at 60-61.  Although the
fact that the claimant was required to haul logs exclusively for
his employer tended to suggest that the claimant was a "workman,"
the court held that that factor was "not conclusive," id. at 61-62, just as the fact that the claimant provided and maintained
his own truck, a factor pointing towards a relationship of
independent contractor, was not conclusive, id. at 61. 
Considering all the factors together, the court concluded that
the claimant was a "workman" within the meaning of the statute. 
Id. at 65. 
		In Woody, the issue was whether the plaintiff was a
"workman" within the meaning of ORS 656.005(28) (3) and,
accordingly, was barred, under the exclusive remedy provision of
the workers' compensation statute, from maintaining an action for
damages against his employer for injuries that he had suffered
while hauling logs.  276 Or at 191, 199.  Like the statute at
issue in this case, that statute defined "workman" as "any person
* * * who engages to furnish his services for a remuneration,
subject to the direction and control of an employer."  Id. at 196
(emphasis added).  Woody involved similar facts.
		"(a) Plaintiff and defendant had agreed that
plaintiff would haul timber from defendant's logging
operation to a destination designated by defendant.
		"(b) That defendant would pay to plaintiff for
such hauling so much per thousand based upon the
distance of the haul and the grade of the timber.  The
parties discussed these factors and agreed upon the
price to be paid.  The plaintiff would be paid every
two weeks and would be paid up to 10 days prior to the
date of pay.
		"(c) Either party could terminate the agreement to
haul timber at any time.
		"(d) The loader was an employee and under the
direction of defendant in loading the truck; however,
plaintiff had a right to object and have corrected an
improper loading.
		"(e) Plaintiff was not restricted to haul only for
defendant and in fact on several instances hauled at
other places in slack periods or when defendant's
'show' was being moved.
		"(f) Plaintiff provided and was responsible for
the operating and all expenses of his own truck and had
the right to employ other drivers for the truck.
		"(g) Defendant claims plaintiff was an employee,
however, he made no deductions from payment to
plaintiff for Workmen's Compensation, Social Security
or Income Tax.
		"(h) Plaintiff had the entire responsibility,
after being loaded, for the delivery to the appointed
destination and had the duty to rectify any condition
that occurred affecting the ability to deliver.
		"(i) Plaintiff was classified as an independent
contractor by the P.U.C., and carried his own
insurance.  Plaintiff claims he considered himself an
independent contractor and further claims, without
contradiction, that defendant had previously stated to
him that he was not covered by Workmen's Compensation
and had to get his own insurance."
Id. at 191-92 n 1.  
	Based on those facts, this court concluded that the
employer had the right to control the plaintiff's performance in
some respects, but not in others.  Id. at 197.  The court then
considered factors relevant to the nature of the work test to
determine whether the evidence that the employer retained a right
to control the claimant's work was sufficient to conclude that
the claimant was a "workman" within the meaning of the statute. 
Id. at 197-98.  The court concluded, among other things, that the
transportation of timber formed "an essential and regular part"
of the defendant's marketing enterprise; that certain aspects of
the job, such as loading, required close cooperation between the
plaintiff and the defendant's other employees; and that the
extent of the plaintiff's work and the corresponding degree of
risk to him depended on the defendant's output.  Id. at 198.  The
court held that the plaintiff "must * * * be considered an
employee for purposes of workmen's compensation."  Woody, 276 Or
at 198.
	We see no meaningful distinction between the facts in
Bowser or Woody and this case for purposes of applying ORS
656.005(30).  As in Bowser, employer in this case retained the
right to fire claimant without incurring contractual liability, a
factor that this court has given great weight in previous cases
as suggesting the existence "worker" status.  See Bowser, 182 Or
at 54-56 (discussing reasons for importance accorded to right to
terminate and citing cases).
	Second, employer in this case exercised a degree of
control over the system for loading its product into the trucks
that is virtually identical to the control that the logging
company had exercised in Bowser.  According to the board's
uncontested findings in this case, "[e]ach hauler waited his turn
in line and then moved into position to receive produce in his
truck from the harvesting crew," and employer "directed claimant
and the other haulers to the field that was being harvested and
indicated where to take the produce" that had been loaded.  As in
Bowser, there is no suggestion that claimant here had any choice
over which load he was going to take.  See Bowser, 182 Or at 58 
(holding that employer's control over which load hauler took
"strongly tends to establish the relationship of employer and
employee").
	Third, claimant did not contract to do piece work for
employer and had no written contract of any kind.  Like the
hauler in Bowser, claimant was paid according to how much he
hauled, and he had no obligation to haul a specific amount of
employer's product.  See id. at 63 ("respondent was not required
to do a specific piece of work, but only as much as the company
could provide from day to day").  Fourth, the parties in this
case established their relationship in a manner that closely
resembles the scenario described in Bowser:  Both employers used
intermediaries to contact haulers as they needed them.  In
Bowser, the court stated that such a hiring method "smack[ed]
strongly" of an employer-employee relationship.  Id.
	The factors leaning against employee status also
closely resemble those described in Bowser.  As in Bowser,
claimant in this case owned and maintained his own truck. 
However, the court there stated that ownership is not a
conclusive factor and held that the claimant was a worker even
though he owned his own truck.  See id. at 63-64 (so stating and
citing cases).  Likewise, here, employer paid claimant by the
volume of produce hauled, a fact that potentially could suggest
that claimant was not a "worker."  In Bowser, however, the court
noted that such a method of payment could point in either
direction and did not affect the outcome of the case, given the
other indicators of employment.  See id. at 59-61 (so stating and
citing authority).   
	The only relevant distinction between this case and
Bowser is that, in Bowser, the employer had an exclusive hauling
agreement with the hauler.  Id. at 62.  However, as noted, that
factor is not conclusive.  In Louvring v. Excel Logging Co., 280
Or 463, 573 P2d 266 (1977), this court held that a log hauler was
a "worker" under the workers' compensation statutes even though
"fully a third of the log loads [that he hauled] * * * were for
operators other than the [d]efendant."  Id. at 466.  In this
case, the undisputed fact is that claimant hauled produce for
another farm for only one day after employer's onion harvest was
finished.  After comparing all the facts, we see no legally
significant difference between Bowser and this case.  As noted,
in Bowser, this court held that the hauler was a "workman" under
the Workmen's Compensation Act and was entitled to compensation. 
Bowser, 182 Or at 65.  
	This court's subsequent decision in Woody also supports
the conclusion that claimant was a "worker" under the workers'
compensation statutes.  As we have explained, in that case, as
here, some factors pointed towards control, while others did not. 
Having found some evidence of control, the court then considered
the factors relevant to the nature of the work test.  See Woody,
276 Or at 196 (although control is "essential ingredient" in
determining employment status, workers' compensation statutes do
not preclude consideration of nature of work factors when some
evidence of control exists).  One factor relevant to the nature
of the work test in Woody was how integrated and coordinated the
haulers' activity was in the employer's overall production
pattern.  See Woody, 276 Or at 198 (citing 1A Larson's Workmen's
Compensation Law § 45.22 (1973)).  The court noted that
"[c]ertain aspects of the job, such as loading, required close
cooperation between plaintiff and employees of the defendant." 
Id.  
	The same is true in this case.  According to the
uncontested findings, each hauler who worked for employer had to
wait his turn in line and then move into position to receive
produce in his truck from the harvesting crew.  The movements of
the trucks had to be coordinated with the availability of produce
and the schedule for harvesting.  As in Woody, claimant's work
was "an essential and regular part" of employer's production of
vegetables, a factor suggesting "worker" status.  See id. at 198 
(discussing that factor). 
	Employer offers no reason why this case differs
analytically from Bowser or Woody.  Nonetheless, employer asserts
that, under this court's decision in S-W Floor Cover Shop v.
Nat'l Council on Comp. Ins., 318 Or 614, 872 P2d 1 (1994), the
board correctly declined to consider the factors concerning the
nature of the work.  Employer apparently reads S-W Floor Cover
Shop as having altered the analysis that this court prescribed in
Woody.  Employer is mistaken.
	In S-W Floor Cover Shop, in a footnote, this court
cited Woody for the following proposition:
		"Where the relationship between the parties cannot
be established by the 'right to control' test, it is
permissible to turn to the judicially created 'nature
of the work' test to determine if an employment
relationship exists." 
318 Or at 622 n 6.  In describing the relationship between the
analysis for determining "worker" status as opposed to "subject
worker" status, this court also stated:
		"The initial determination of whether one is a
'worker' under ORS 656.005(28) continues to incorporate
the judicially created 'right to control' test.  One
who is not a 'worker' under that test is not subject to
workers' compensation coverage, and the inquiry ends."
Id. at 630.  Employer argues that those statements mean that this
court views the right to control and nature of the work tests as
separate, isolated inquiries, and that the court applies the
nature of the work test only if the evidence under the right to
control test is so evenly divided that there is no principled way
to decide employment status without resort to an additional test. 
	Neither passage quoted above signaled this court's
intent to alter the analytical framework established in Woody for
determining whether a claimant is a "worker" under the workers'
compensation statutes.  On the contrary, the footnote in S-W
Floor Cover Shop cited Woody as supporting authority, suggesting
that the court viewed Woody with approval.  Read in context, the
phrase "the judicially created 'right to control' test" in the
second passage from S-W Floor Cover Shop quoted above refers to
the analysis for determining "worker" status that this court
established in Woody.  It does not announce a new approach to
that matter.
	Therefore, the question is whether Woody prescribes the
sequence of analysis that employer urges.  It does not.  Woody
makes clear that the phrase, "subject to the direction and
control of employer," requires that an employer retain some
control over the method and details of a claimant's work if that
claimant is to be classified as a "worker" under the workers'
compensation statutes.  276 Or at 197.  However, when an employer
has the right to control a claimant's performance in some
respects but not others, "it is essential that we consider the
factors which make up the 'nature of work' test" in deciding
whether the control that employer retains makes the relationship
one of master and servant.  Woody, 276 Or at 196-97.
	In other words, Woody does not stand for the
proposition that the right to control and nature of the work
tests are independent of one another and should be applied
hierarchically, or that the nature of the work factors are
relevant only in situations in which a claimant's status cannot
be determined through application of the right to control test. 
Rather, Woody establishes that, in situations in which there is
some evidence suggesting that an employer retained the right to
control the method and details of a claimant's work, a conclusion
about the claimant's status depends on the analytical factors
relevant to both tests.  Nothing in S-W Floor Cover Shop
expressed this court's intent to alter that analytical approach. 
We reject employer's argument to the contrary. 
	Employer also suggests that we should revisit the
meaning of the phrase "subject to the control of employer"
because the workers' compensation statutes have changed since
this court's decisions in Bowser and Woody.  That argument lacks
merit.  Although the legislature has amended the workers'
compensation statutes many times in other respects in recent
years, the legislature has not changed the definition of "worker"
in any relevant respect since Bowser.  This court's
interpretations of that statutory definition in Bowser and Woody,
therefore, are unaffected by other unrelated statutory changes.
	In sum, we hold that the board erred in concluding that
claimant in this case is not a "worker" under ORS 656.005(30). 
Under both Bowser and Woody, claimant is a "worker" for purposes
of ORS 656.005(30). 
	The decision of the Court of Appeals is reversed.  The
order of the Workers' Compensation Board is reversed, and the
case is remanded to the Workers' Compensation Board for further
proceedings.



1. 	Factors relevant to the right to control test have
included, for example, whether the employer retains the right to
control the details of the method of performance, the extent of
the employer's control over work schedules, whether the employer
has power to discharge the person without liability for breach of
contract, and payment of wages.  S-W Floor Cover Shop v. Nat'l
Council on Comp. Ins., 318 Or 614, 622, 872 P2d 1 (1994)
(citations ommited).

2. 	Factors relevant to the "nature of the work" test have
included considerations such as whether the work done is an
integral part of the employer's regular business and whether the
individual, in relation to the employer's business, is in a
business or profession of his or her own.  See Woody v. Waibel,
276 Or 189, 197-98, 554 P2d 492 (1976) (so stating).

3. 	The legislature renumbered ORS 656.005(28) to ORS
656.005(30) in 1995.  Or Laws 1995, ch 332, § 1.  The relevant
text was not altered.