1 IN THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 40462

WESTERN HOME TRANSPORT, INC.,

Claimant

- Appellant,

v. IDAHO DEPARTMENT OF LABOR,
Respondent.

_____________________________________ ) ) ) ) ) ) ) ) ) Boise, January 2014 Term
2014 Opinion No. 19

Filed: February 11, 2014
Stephen W. Kenyon, Clerk

Appeal from the Industrial Commission of the State of Idaho.

The decision of the Commission is vacated and this case is remanded for further proceedings consistent with this Opinion. Costs on appeal are awarded to appellant. No attorney’s fees are awarded.

David H. Le ro y, Boise, attorney for appellant.
Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, attorney for Respondent. Cheryl George argued.
Holden, Kidwell, Hahn & Crapo, PLLC, Idaho Falls, amicus curiae

.

__________________________ W. JONES, Justice I. N ATURE OF THE C ASE The Idaho Department of Labor (t he Department) determined that Western Home Transport, Inc. (Western) owed $13,277.93 in unemployment insurance taxes and penalties because the owners/operators who haul ed goods interstate for Western were engaged in covered employment under Idaho’s Employment Security Law. On appeal by Western, the Idaho Industrial Commission (the Commission) affirmed the Department’s decision. Western now appeals the Commission’s decision to th is Court. The decision of the Commission is vacated and
the case is remanded for further proceedings consistent with this opinion

. II. F ACTUAL AND P ROCEDURAL B ACKGROUN D Western is an Idaho corporation that facilitates the interstate transportation of oversized mobile homes from shippers to purchasers. Western does not own any equ ipment to transport the2 homes. Instead, West ern leases equipment from owner/operators

. The owner/operators then use their own equipment to transport the homes for Western

. All of Western’s owner/operators transport the homes with Western’s motor carrier authority through the U.S. Department of Transportation (DOT), hereinafter referred to as DOT authority. Under the terms of the lease, and required by federal law, Western has exclusive possession, use, and control of the owner/operators’ equipment. Truth

- in

- Leasing Regulations
, 49 C.F.R. § 376.12(c)(1) (2012). Western pays the owner/operators a p ercentage of each haul. Due to an inquiry from the Department, a tax auditor with the Department audited Western’s records covering January 1, 2008, throug h December 31, 2010. The auditor issued Western a “Redetermination of Employer’s Unemp loyment Insuran ce Tax Liability ” and
concluded that the remuneration received by Western’s owner/operators during the audit period was wages for services performed in covered employment under Idaho’s Employment Security Law. Consequently, the Department imposed an unempl oyment insurance tax liability of $13,277.93 on Western for the audit period. Western timely appealed the Department’s redetermination

. An appeals examiner held a hearing and subsequently affirmed the Department’s decision. Western then appealed to the
Co mmission. After a de novo review of the record
, the Commission affirmed the Department’s decision. Western appeals the Commission’s decision to this C ourt

. We vacate and remand.
III

. S TANDARD OF R EVIEW This Court exercises free review of the Commission’s legal conclusions. Giltner , Inc. v. Idaho Dep’t of Commerce & Labor , 145 Idaho 415, 418, 179 P.3d 1071, 1074 (2008)

. I V. A NALYSIS “Idaho’s Employment Security Law provides assistance for workers who f ace unemployment through no fault of their own.” Giltner , 145 Idaho at 419, 179 P.3d at 1075 (citing I.C. § 72

- 1302)

. “Under the established system, ‘covered employers’ are required to contribute, by way of a tax on wages paid empl oyees for services render ed in ‘covered employment,’ to the unemployment security fund. ” John L. King, P.A. v. Dep’t of Emp’ t , 110 Idaho 312, 313, 715 P.2d 982, 983 (1986). Covered employment is “an expansive term” that “sweeps within its purview employees and independent contrac tors alike.” S oftware Assocs., Inc. v. Dep’t of Emp’ t , 110 Idaho 315, 316, 715 P.2d 985, 986 (1986). “‘Covered employment’ means an individual’s entire service3 performed by him for wages or under any contract of hire, written or oral, express or implied, f or a covered employer or covered employers. ” I.C . § 72

- 1316(1). “Wages” include “[a] ll remuneration for personal services from whatever source, including commissions and bonuses and the cash value of all remuneration in any medium other than cash .” I.C. § 72

- 1328(1)(a). Unless the putative employer shows that an exemption applies, “[s] ervices performed by an individual for remuneration shall, for the purposes of the employment security law, be cover ed employment.” I.C. § 72

- 1316(4); Excell Constr., Inc. v. Dep’t of Labor
, 141 Idaho 688, 694, 116 P.3d 18, 24 (2005)

. The putative employer must satisfy a two

- prong test in I.C. § 72

- 1316(4) “to merit an exemption from the presumption that services for remuneration are covered employment.”
Giltner , 145 Idaho at 419, 179 P.3d at 1075. Under I.C. § 72

- 1316(4), t he putative employer must show: “(a) That the worker has been and will continue to be free from control or direction in the performance of his work, both under his contract of service and in f act; and (b) That the worker is engaged in an independently established trade, occupation, profession, o r business.” I.C. § 72

- 1316(4). T he putative employer must demonstrate both prongs in I.C. § 72

- 1316(4) to overcome the presumption of covered employmen t

. Giltner , 145 Idaho at 420 , 179 P.3d at 1076

. “[E]xemptions from coverage are narrowly construed.” John L. King, P.A. , 110 Idaho at 313,
715 P.2d at 983

. This Court in Giltner issued a bright

- line rule for the second prong in I.C. § 72

- 1316(4) specific t o the interstate trucking industry

. At issue in Giltner was whether the owner/operators used by a motor carrier to haul goods interstate were engaged in covered employment under Idaho’s Employment Security Law

. 145 Idaho at 418, 179 P.3d 1074. The Court in Giltner recognized that owner/operators were “solely dependent” on the motor carrier’s “DOT authority
to haul goods in interstate commerce ” and then determined that “[t] herefore
, as a matter of law
, they could not be engaged in an independentl y established trade, occup ation, profession or
business.” Id. at 420, 179 P.3d a t 1076. Due to this new bright

- line rule, the Court concluded that
the owner/operators were engaged in covered employment because the motor carrier could not satisfy the second prong in I.C. § 72

- 1316(4). Id.
This rule from Giltner , which relied on the source of the owner/operator’s DOT authority to determine whether the owner/operator w as engaged in an independently established trade,

oc cupation, profession or business, ha d wide application in the trucking industry. Giltner4 categorically de termined any motor carrier t hat used owner/operator s to haul goods with the

motor carrier’s DOT authority w ould be unable to demonstrate that those owner/operators were engaged in an indepe ndently established trade, oc cupation, profession or business under the second prong in I.C. § 7 2

- 1316(4) , unless the owner/operator had his own DOT authority.
Giltner
, 145 Idaho at 420 n.2 , 179 P.3d at 1076 n.2 ; Hernandez v. Triple Ell Transport, Inc. , 1 4 5 Idaho 37, 175 P.3d 199 (2007). Unable to satisfy th e second prong, a motor carrier with owner/operators hauling goods with the motor carrier’s DOT authority was effectively precluded
from demonstrating that the owner/operators were exe mpt from covered employment

— even if other material facts pertaining to the second prong support ed a contrary conclusion. In the present case the Commission strongly indicated the evidence supported the independence of the owner/operators, but it was bound by the per se rule of Giltner and therefore ruled the owner/operators were employees of Western as a matter of law.

“ When there is controlling prece dent on questions of Idaho law ‘ the rule o f stare decisis
dictates that we follow it, unless it is manifestly w rong, unless it has proven over time to be unjust or unwise, or unless overruling it is necessary to vindicate plain, obvious principles of law and remedy continued injustice.’” Greenough v. Farm Bureau Mut. Ins. Co. of Idaho , 142 Idaho 589, 592, 130 P.3d 1127, 1130 (2006) (quoting Houghland Farms, Inc. v. Johnson , 119 Idaho
72 , 77, 803 P.2d 978, 983 (1990)). “ While we are cognizant of the importance stare decisis plays in the judicial process , we are not hesitant to reverse ourselves when a doctrine, a def ense, or a holding in a case has proven over time to be unjust or unwise.” State v. Maidwell , 137 Idaho 42 4, 426, 50 P.3d 439, 441 (2002). Employing the single factor of the source of the owner/operator’s DOT authority has

proven unjust
, unwise , and incorrect because it fai l s to consider the nature of the owner/operator’s business, which serves a distinct market in the interstate trucking industry

. The
business or service provided by an owner/operator is not the transportation of goods for
manufacture rs or shippers ; r ather, it is the transportati on of goods for motor carriers

— a point never raised by either party or discussed in the Giltner decision. M any owner/operators are solely dependent on the motor carrier’s DOT authority, and this dependence is a n intentional and fundamental part of the motor carrier

- owner/operator relationship. The fact that a n owner/operator may or may not have his own DOT authority is completely inconsequential and irrelevant for him to provide his services to a motor carrier , whereas it would be critical in5 hauling for a manufacturer or shipper. In that case the owner/ operator would use his own DOT authority. Moreover, f ederal law and regulations require that an owner/operator operates under the motor carrier’s DOT authority
, even if the owner/operator has his own DOT authority

. 49 U.S.C. § 14102; 49 C.F.R. §§ 376.1

– 376.2, 376.11

– 376.12, 39 0.11

. In other words, an owner/operator hauling goods for a motor carrier is prohibited by law from operating with his

own DOT authority. I n determining whether an owner/operator is engaged in an independently established trade, occupation, profession, or business, the focus has to be on the market served by the owner/operator. If the business served by the owner/operator is a manufacture r or shipper of goods, th e n the owner/operator must have his own DOT authority to operate in that market. That point was never raised or argued in the Giltner case. In serving the motor carrier market as a trucker, the owner/operator must use the motor carrier ’s DOT authority. That federal requirement is no more an indication of control or lack of independence than the other types of federal regulations discussed in Giltner where it was recognized that those federal requirements
do not affect whether one is an independent owne r/operator. See Giltner
, 145 Idaho at 419

– 20,
179 P.3d at 1075

– 76.
This Court now recognizes that Giltner ’s bright

- line rule improperly focused on the
source of the owner/operator’s DOT authority as a single determinative factor
, when in fact the source of an owner/operator’s DOT authority has no effect on the owner/operator’s service to the
motor carrier market and neither the owner/operator nor the motor carrier has any control over the federal regulations governing DOT authority. Giltne r ’s determination that owner/operators “solely dependent” on a motor carrier’s “DOT authority to haul goods in interstate commerce ”
cannot “as a matter of law . . . be engaged in an independently established trade, occ upation, profession or business ” was c learly incorrect and Giltner ’s holding on that point is overruled. 145 Idaho at 420, 179 P.3d at 1076. The source of an owner/operator’s DOT or other federal or state authority to haul goods interstate for a motor carrier is not a relevant fact or for the a nalysis of the second prong in I.C. § 72

- 1316(4). No other part of the Giltner decision is overruled.
In this case the Commission determined that Western had demonstrated that its owner/operators were free fro m its control, thus meeting the first prong for the covered employment exemption in I.C. § 72

- 1316(4)

. This finding is not challenged on appeal. For the second prong, the Commission found that Western’s owner/operators used Western’s DOT authority to haul goods. Neither party challenges this factual fi nding. The Commission then6 determined that Western failed to demonstrate that the owner/operators were engaged in an indep endently established trade, occupation, profession, or business under the second prong

— despite that significa nt evidence suggested oth erwise

— because the Comm ission was bound by
Giltner

. With Giltner now overruled in part
, this Court remand s this case to the Commission for further proceedings consistent with this opinion . On remand , the Commission should determine whether Western satisfied the second prong of the covered employment exemption test in I.C. §
72

- 1316(4) without considering DOT authority as a factor

. The Department s eek s an award of attorney fees pursuant to I.C. § 12

- 117. As the non

prevaili ng party, t he Department is not entitled to an award of attorney fe es. Western seeks an award of attorney fees and costs pursuant to Idaho Appellate Rule (I

. A

. R

. ) 41. Western has not cited any statutory provision authorizing such award. I

. A

. R

. 41 does not provide the Court with the authority to award attorney fees. Gilman v. Davis , 138 Idaho 599, 603 , 67 P.3d 78, 82 (2003).
I

. A

. R

. 41 simply “ specifies the procedure for requesting an award of attorney fees on appeal.” Id.
V

. C ONCLUSION The decision of the Commission is vacated and this case is remanded for further proceeding s consistent with this opinion. We award Appellant costs, but not attorney fees, on appeal. Chief Justice BURDICK, Justices EISMANN, J. JONES and HORTON, concur.