Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 1 of 18

ATTORNEYS FOR APPELLANT

Andrew B. Murphy

Faegre Baker Daniels LLP

Minneapolis, Minnesota 

Angela N. Johnson

Faegre Baker Daniels LLP

South Bend, Indiana

Paul D. Borghesani

Law Office of Paul D. Borghesani

Elkhart, Indiana

ATTORNEYS FOR APPELLEE

Curtis T. Hill, Jr.

Attorney General of Indiana

Abigail R. Recker

Deputy Attorney General

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

Company,

Appellant,

v.

Indiana Department of 

Workforce Development,

Appellee.

October 31, 2017

Court of Appeals Case No.

93A02-1703-EX-650

Appeal from the Indiana 

Department of Workforce 

Development—Unemployment 

Insurance Appeals

The Hon. Suzanne E. Manning, 

Liability Administrative Law Judge 

Case No. 97920

Bradford, Judge.
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 2 of 18

Case Summary

[1] Appellant Company appeals from the determination that Claimant was an 

employee during the time she worked as a driver for Company, for purposes of 

Indiana’s unemployment compensation system, as enacted in Indiana Code 

article 22-4 (“the Act”). Company’s business is the provision of driveaway 

services, focusing on the delivery of recreational vehicles (“RVs”) to dealerships 

on behalf of manufacturers. To that end, Company uses drivers it classifies as 

independent contractors, one of whom was Claimant during parts of 2014 and 

2015. After no longer working for Company, Claimant applied for 

unemployment benefits in 2015, and Appellee the Indiana Department of 

Workforce Development (“DWD”) concluded that Claimant had been an 

employee of Company for purposes of the Act. The Company filed a tax 

protest, and after a hearing, a Liability Administrative Law Judge (“LALJ”) 

agreed that Claimant had been an employee. Company contends that (1) the 

LALJ erroneously determined that Claimant had been an employee and (2) 

operation of the Act is preempted by the Federal Aviation Administration and 

Authorization Act (“FAAAA”). Because we disagree, we affirm. 

Facts and Procedural History

[2] Company is in the business of pairing drivers with manufacturers who require 

driveaway services, focusing on arranging the transportation of RVs to 

dealerships. Claimant is a professional driver who has held a commercial 

driver’s license since 1997. On April 8, 2014, Claimant entered into a contract 
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with Company to deliver RVs (“the Contract”), which provides, in part, as 

follows: 

WHEREAS, Carrier does not employ and/or retain any 

individuals to provide driveaway services for the movement of 

motor vehicles over the road, outsourcing this responsibility to 

self-employed third parties with the required knowledge and 

skills as well as license to drive/operate commercial motor 

vehicles.

WHEREAS, the Contractor is a self-employed individual 

engaged in the business of providing over the road driving 

services, as a sole proprietor and independent contractor, to 

various motor carriers and/or manufacturing companies for the 

pickup, driving and/or operation of commercial motor vehicles 

and delivery including the maintenance, inspection and/or minor 

repair while the commercial motor vehicle is in the care, custody, 

and control of Contractor, on a trip to trip basis, (the “Services”) 

pursuant to Contracts and/or Agreements with the described

companies; and

WHEREAS, the Carrier and Contractor desire to enter into this 

Agreement to utilize and provide, respectively, the Services on a 

trip to trip arrangement, in an Independent Contractor 

relationship and nothing in this Agreement shall be construed as 

inconsistent with such status.

Ex. Vol. IV p. 23. Claimant performed work for Company from April 1, 2014, 

through March 13, 2015. 

[3] On March 19, 2015, Company was notified by DWD that Claimant had filed 

for unemployment benefits with the Missouri Department of Labor & Industrial 

Relations. On May 20, 2015, DWD issued a “Determination of Wage 

Investigation” in which it concluded that Company had misclassified 

Claimant’s wages. DWD concluded that Claimant had been an employee of 
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Company—not an independent contractor—and that Company was therefore 

liable for the payment of unemployment insurance tax for Claimant’s tenure. 

On June 8, 2015, Company filed an unemployment insurance tax protest with 

DWD. 

[4] On March 1, 2017, the LALJ heard evidence during a telephonic hearing on 

Company’s tax protest. On March 7, 2017, the LALJ issued its decision on 

Company’s appeal, which included, among others, the following findings of 

fact:

The employer is a registered motor carrier with the Department 

of Transportation (DOT). The employer’s DOT number is 

273286. The employer’s business is transportation of property, 

including recreational vehicles (also known as RVs) in interstate 

and intrastate commerce. The employer purchases driving 

services with manufacturers. The employer does not employ any 

individual to provide delivery of RV[]s. Department’s Exhibit 5. 

Rather, the employer contracts with individuals, such as the 

claimant, to provide delivery service. In addition, the employer 

has a broker’s license to subcontract with other motor carriers to 

provide delivery of RVs.

Ex. Vol. IV pp. 80-81. The LALJ concluded that, pursuant to the test detailed 

in Indiana Code section 22-4-8-1 of the Act, Claimant had been an employee of 

Company starting in 2014 and was therefore entitled to receive unemployment 

benefits related to her work. The LALJ concluded, in part, that 

the employer failed to establish that the claimant was performing 

work that was outside of the usual course of the employer’s 

business. The employer’s business is transportation of property, 

specifically RVs, in interstate and intrastate commerce. The 

employer does not employ[] any persons to do this work; rather, 
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the employer chooses to use contractors, such as the claimant, to 

provide this service. The employer has a broker’s license with 

the DOT to contract with a different motor carrier to provide the 

service. The employer could not perform the transportation of 

the property without contractors or subcontracting the work to 

another motor carrier. The claimant’s work was within the usual 

course of the employer’s business.

The Liability Administrative Law Judge concludes the services 

provided by the claimant constitute employment for purposes of 

unemployment insurance law. The employer’s protest is 

DENIED. The Determination of Wage Investigation is 

AFFIRMED.

Ex. Vol. IV p. 83.

Discussion and Decision

I. Whether the LALJ’s Conclusion that Claimant 

was an Employee is Reasonable

[5] While most of the facts related to this question are essentially undisputed, the 

Company does dispute the LALJ’s conclusion that Claimant was an employee 

in 2014 and 2015. 

“Any decision of the liability administrative law judge shall be 

conclusive and binding as to all questions of fact.” Ind. Code § 

22-4-32-9(a) (1995). However we “are not bound by an agency’s 

interpretation of the law.” Jug’s Catering, Inc. v. Indiana Dep’t of 

Workforce Dev., Unemployment Ins. Bd., 714 N.E.2d 207, 210 (Ind.

App. 1999), trans. denied. When a party challenges an 

administrative law judge’s decision as contrary to law, we may 

consider “both the sufficiency of the facts found to sustain the 

decision, and the sufficiency of the evidence to sustain the finding 

of facts.” Ind. Code § 2-4-32-12 (1990). When undertaking our 

review, we must look at the record in the light most favorable to 
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the administrative decision, and we may neither reweigh the 

evidence nor assess the credibility of the witnesses. Jug’s Catering, 

714 N.E.2d at 209. “Under this standard, basic facts are 

reviewed for substantial evidence, conclusions of law are 

reviewed for their correctness, and ultimate facts are reviewed to 

determine whether the ALJ’s finding is a reasonable one.”

Bloomington Area Arts Council v. Dep’t of Workforce Dev., 

Unemployment Ins. Appeals, 821 N.E.2d 843, 849 (Ind. Ct. App.

2005)[.]

Circle Health Partners, Inc. v. Unemp’t Ins. Appeals of Ind. Dep’t of Workforce Dev., 47 

N.E.3d 1239, 1242 (Ind. Ct. App. 2015) (footnote omitted). 

[6] Indiana Code section 22-4-8-1(1)(b) provides that, for purposes of the Act, the 

following applies: 

(b) Services performed by an individual for remuneration shall be 

deemed to be employment subject to this article irrespective of 

whether the common-law relationship of master and servant 

exists, unless and until all the following conditions are shown to 

the satisfaction of the department:

(1) The individual has been and will continue to be free from 

control and direction in connection with the performance of 

such service, both under the individual’s contract of service 

and in fact.

(2) The service is performed outside the usual course of the 

business for which the service is performed.

(3) The individual:

(A) is customarily engaged in an independently established 

trade, occupation, profession, or business of the same 

nature as that involved in the service performed.

[7] Subsections (1)(b)(1), (1)(b)(2), and (1)(b)(3)(A) make up the three prongs of 

what is referred to as the “ABC” or “1-2-3” test. See Bloomington Area Arts 

Council, 821 N.E.2d at 849; see also Ex. Vol. IV p. 81. Pursuant to this test, 
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 7 of 18

which we will call the ABC test, all workers are presumed to be employees 

unless an employer establishes all three prongs of the ABC test. See id. (noting 

employing unit had burden of proof as to the three prongs). When we review 

an LALJ’s decision regarding employee status, we must consider the three 

statutory provisions “conjunctively.” Id. Because assessments made by DWD

against “employing units [are] prima facie correct,” Ind. Code § 22-4-29-2, 

Company has the burden of demonstrating that it established that Claimant met 

all three prongs. 

[8] Here, the LALJ concluded that Company established prong C, or that Claimant 

was customarily engaged in an independently established trade, occupation, 

profession, or business of the same nature as that involved in the service 

performed. Claimant does not dispute this conclusion. The LALJ also 

concluded, however, that Company failed to establish prongs A and B, that 

Claimant was free from Company’s direction and control or was performing 

work that was outside the Company’s usual course of business. We find the 

LALJ’s conclusion regarding prong B to be dispositive.1 

[9] To prevail, Company must have established that Claimant’s service for it—the 

transport and delivery of RVs—was outside Company’s usual course of 

business. We have little trouble concluding that Company failed to do this. 

Indeed, the provision of transport and delivery of RVs is not just Company’s 

 

1

 Because we conclude that the LALJ reasonably concluded that Company failed to establish prong B, we 

need not address Company’s argument with respect to prong A. 
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usual course of business, it seems that it is its only course of business. Company 

is registered as a motor carrier with the United States DOT, its name is 

“******* Transport,” Department’s Ex. 7A, and it would compete directly with 

companies who offered the same service provided by drivers who were 

employees. Company contends that its usual course of business is not the 

provision of transport services, but, rather, the provision of brokerage services. 

While perhaps technically true, we seriously doubt that customers with RVs to 

transport contact Company to act as a “middle man” between them and 

independent haulers; they call Company to have an RV moved from point A to 

point B and almost certainly do not care how Company accomplishes that task. 

From a common-sense standpoint, the Company’s business is transport, and 

this is the precise service that Claimant provided to Company. The LALJ’s 

conclusion that Claimant was, therefore, an employee for purposes of the Act is

reasonable. See Bloomington Area Arts Council, 821 N.E.2d at 852 (“The BAAC 

regularly offers the art classes as part of its mission to provide access to the arts 

in the community. The BAAC is in competition with other organizations that 

provide art classes and receives a substantial portion of its revenue from the art 

classes. Under these circumstances, we cannot say that the ALJ’s finding that 

the art classes were an integral part of the BAAC’s usual course of business is 

unreasonable.”). 
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 9 of 18

II. Whether Indiana Code Section 22-4-8-1 

is Preempted by Federal Law2

[10] Company also contends that even if we conclude (as we have) that Claimant’s 

services constituted employment, Indiana Code section 22-4-8-1(1)(b)(2) is 

preempted by the FAAAA. Company is a federally-registered motor carrier, 

and the FAAAA expressly preempts any state law “having the force and effect 

of law related to a price, route, or service of any motor carrier[.]” 49 U.S.C. § 

14501(c)(1). 

It has “long been settled” that a preemption analysis begins with 

the presumption that federal statutes do not preempt state law. 

Bond v. United States, ––– U.S. ––––, 134 S. Ct. 2077, 2088, 189 L.

Ed. 2d 1 (2014). The presumption against preemption comes 

from two concepts “central to the constitutional design”—the 

Supremacy Clause and federalism. See Arizona v. United States, 

567 U.S. 387, 132 S. Ct. 2492, 2500, 183 L. Ed. 2d 351 (2012). 

Although the Supremacy Clause gives Congress the power to 

preempt state law, federalism requires that we do not easily find 

preemption. See id. at 2501. In fact, we find preemption only if it 

is “the clear and manifest purpose of Congress.” Id. 

Kennedy Tank & Mfg. Co. v. Emmert Indus. Corp., 67 N.E.3d 1025, 1028 (Ind. 

2017) (footnote omitted). 

[11] Through the FAAAA, Congress has expressed a clear intent to preempt any 

state law that “relates to” a price, route, or service or any motor carrier; the 

 

2

 Although Company raised this issue in a written submission to DWD, the LALJ did not address it. Rather 

than remand to DWD for reconsideration, we choose to address it in this appeal in the interest of judicial 

economy. 
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 10 of 18

question before us is whether Prong B satisfies that requirement. While no 

Indiana court has addressed this precise FAAAA preemption question, the 

United States Supreme Court and several United States Circuit Courts of 

Appeal have, offering valuable guidance. See, e.g., Grp. Dekko Servs. LLC v. 

Miller, 717 N.E.2d 967, 969 (Ind. Ct. App. 1999) (“U.S. Supreme Court 

decisions regarding federal questions ... are binding on state court, while the 

decisions of lower federal courts are available for their consideration as 

persuasive authority.”). 

[12] The Seventh Circuit case of Costello v. BeavEx, Inc., 810 F.3d 1045, 1051 (7th 

Cir. 2016), summarizes federal jurisprudence in the area: 

The preemptive scope of the FAAAA is broad. [See Morales v. 

Trans World Airlines, Inc., 504 U.S. 374, 383–84, 112 S. Ct. 2031, 

2036 (1992)]. A state law is preempted if it has a direct 

connection with or specifically references a carrier’s prices, 

routes, or services. Id. at 384, 112 S. Ct. 2031. More 

expansively, a state law may be preempted even if the law’s effect 

on prices, routes, or services “is only indirect.” Id. at 386, 112 S. 

Ct. 2031 (quotation marks omitted). This means “that preemption occurs at least where state laws have a ‘significant 

impact’ related to Congress’ deregulatory and pre-emptionrelated objectives.” [Rowe v. New Hampshire Motor Transp. Ass’n, 

552 U.S. 364, 371, 128 S. Ct. 989, 995 (2008)] (quoting Morales, 

504 U.S. at 390, 112 S. Ct. 2031).

[13] The Costello court’s summary of cases from the Seventh Circuit and its sister 

circuits is that “[l]aws that affect the way a carrier interacts with its customers 

fall squarely within the scope of FAAAA preemption. Laws that merely govern 

a carrier’s relationship with its workforce, however, are often too tenuously 
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 11 of 18

connected to the carrier’s relationship with its consumers to warrant preemption.” 

Costello, 810 F.3d at 1054 (emphasis in Costello). Because Indiana Code section 

22-4-8-1 governs Company’s relationship with its workforce, the precise 

question presented is whether its application here has “a significant impact on 

the prices, routes, and services that [Company] offers to its customers.” Costello, 

810 F.3d at 1055. 

[14] Company argues that classification of its drivers as employees pursuant to 

Indiana Code section 22-4-8-1 would, in fact, have a significant impact on the 

prices it must charge its customers. Specifically, Company points to its Exhibit 

G1, which is an analysis of what its costs would have been in 2016 to use 

independent contractors versus employees and is summarized here:

Independent 

Contractor Employee

Miles 22,139,177 22,139,177

Driver Pay $19,925,259 

($0.90/mile)

$11,955,155

($0.54/mile)

Fuel 

Reimbursement

$6,228,643

(8 mpg, 

$2.25/gallon)

Toll 

Reimbursement $207,555

Unemployment 

Insurance $800,995

Employee 

Benefits $1,044,000

Tools and 

Hardware $174,000

Driver Return 

Expense $11,955,155

Totals $19,925,259 $32,363,504
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According to Company, Exhibit G1 indicates that it would have to charge its 

customers an estimated additional $0.56 per mile. DWD argues, and we agree, 

that this claimed increase in labor costs is not supported by the evidence. 

[15] Company’s Exhibit G1 lists several additional expenses that it claims it would 

incur were drivers like Claimant to be classified as employees for purposes of 

the Act, including fuel reimbursement, toll reimbursement, employee benefits, 

tools and hardware, and driver return expenses. The Costello court addressed a 

similar claim about additional labor expenses, and we find its approach to be 

sound. In that case, BeavEx was a same-day delivery service who sought to 

make certain deductions from the wages of its couriers, who were classified by 

BeavEx as independent contractors. Costello, 810 F.3d at 1048. When couriers

for BeavEx sued to be classified as employees under Illinois law (which would 

have rendered the wage deductions illegal), BeavEx countered that the Illinois 

law was preempted by the FAAAA. Id. BeavEx claimed, inter alia, that the 

Illinois law would have a significant effect on BeavEx’s prices by subjecting it 

to numerous legal obligations toward those couriers that do not 

currently apply, including minimum wage, maximum hour, and 

overtime requirements, mandated payroll tax payments and 

withholding requirements, mandated workers’ compensation and 

medical insurance, and mandated contributions to state 

unemployment insurance, in addition to remedies specifically 

requested in Plaintiffs’ complaint, which include requirement 

[sic] BeavEx to purchase or lease, store, and maintain 

automobiles for its couriers.
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Id. at 1056 (citation omitted; brackets in Costello). The court noted that 

“[c]onspicuously absent from BeavEx’s parade of horrors is any citation of 

authority showing that it would be required to comply with this slew of federal 

and state laws.” Id. In the end, the court did “not accept BeavEx’s bare 

assertion that its couriers will need to be classified as employees for all 

purposes.” Id. 

[16] As BeavEx failed to do in Costello, Company provides us with no authority for 

the proposition that it would be required to treat drivers like Claimant as 

employees for all purposes, and we are aware of none. Seeing no reason to treat 

this situation differently than the situation presented in Costello, we do not 

accept Company’s bare assertion that its drivers must be classified as employees 

for all purposes. Claimant’s only claim is that she is entitled to be classified as 

an employee with respect to unemployment benefits, and that is the only 

question we reach. 

[17] After the expenses unrelated to unemployment insurance premiums are taken 

out of the equation, Company has established, at most, that estimated labor 

costs would increase by $800,995 per year,3 or approximately $0.036 per mile. 

At the Company’s labor cost of $0.90 per mile, Company’s Ex. G1, such an 

 

3

 It is not entirely clear how Company arrived at this figure. We assume that it is an estimated contribution 

based on Company’s assertion that it would pay “employee” drivers $0.54/mile for each delivery and return 

mile. Although we recognize that Company’s contribution rate is lower if it is based on independent 

contractor wages, it does not seem that the difference would be great, and it does not affect our disposition of 

this case in any event. 
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increase is a modest 4%. Therefore, even assuming that Company charges its 

customers only what it pays its drivers (which, of course, it does not do), the

increase of what Company charges its customers would be no more than 4%. 

That leaves us with the question of whether a maximum 4% increase in the 

prices Company charges to customers has a “significant” impact for purposes of 

FAAAA preemption. 

[18] Review of relevant precedent reveals a clear Congressional intent that certain 

state laws are not to be preempted by the FAAAA despite having some impact 

on shipping rates. “Because ‘everything is related to everything else,’ [Cal. Div. 

of Labor Standards Enf’t v. Dillingham Const., N.A., Inc., 519 U.S. 316, 335, 117 S. 

Ct. 832, 843 (1997)] (Scalia, J., concurring), understanding the nuances of 

congressional intent is particularly important in FAAAA preemption analysis.” 

Dilts v. Penske Logistics, LLC, 769 F.3d 637, 643 (9th Cir. 2014). 

[19] The statutory language itself explicitly excludes several types of state laws and 

regulations:

(2) Matters not covered.--Paragraph (1)--

(A) shall not restrict the safety regulatory authority of a State 

with respect to motor vehicles, the authority of a State to 

impose highway route controls or limitations based on the 

size or weight of the motor vehicle or the hazardous nature of 

the cargo, or the authority of a State to regulate motor carriers 

with regard to minimum amounts of financial responsibility 

relating to insurance requirements and self-insurance 

authorization;
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(B) does not apply to the intrastate transportation of 

household goods; and

(C) does not apply to the authority of a State or a political 

subdivision of a State to enact or enforce a law, regulation, or 

other provision relating to the regulation of tow truck 

operations performed without the prior consent or 

authorization of the owner or operator of the motor vehicle.

49 U.S.C. § 14501(c)(2). 

[20] The Congressional Conference Report on the FAAAA elaborates on the intent 

behind this statutory language:

[These provisions emphasize] that State authority to regulate 

safety, financial responsibility relating to insurance, 

transportation of household goods, vehicle size and weight and 

hazardous materials routing of air carriers and carriers affiliated 

with a direct air carrier through common controlling ownership 

is unchanged, since State regulation in those areas is not a price, 

route or service and thus is unaffected.... This list is not intended 

to be all inclusive, but merely to specify some of the matters 

which are not “prices, rates or services” and which are therefore 

not preempted.

H.R. Conf. Rep. No. 103-677, at 84 (1994), reprinted in 1994 U.S.C.C.A.N. 

1715, 1756. 

[21] The Ninth Circuit has interpreted the statutory language and legislative history 

this way: “Congress did not intend to preempt generally applicable state 

transportation, safety, welfare, or business rules that do not otherwise regulate 

prices, routes, or services.” Dilts, 769 F.3d at 644. Or, to put it another way, 

“even if state laws increase or change a motor carrier’s operating costs, ‘broad 

law[s] applying to hundreds of different industries’ with no other ‘forbidden 
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connection with prices[, routes,] and services’—that is, those that do not 

directly or indirectly mandate, prohibit, or otherwise regulate certain prices, 

routes, or services—are not preempted by the FAAAA.” Id. at 647 (quoting Air 

Transp. Ass’n of Am. v. City & Cty. of San Francisco, 266 F.3d 1064, 1074 (9th Cir. 

2001)). 

[22] With this in mind, we have little trouble concluding that while even a 4% 

increase in labor costs may have some impact on the prices Company charges its 

customers, Company has failed to establish that the impact will be 

“significant.” As mentioned, it seems to us that a maximum 4% increase in 

labor costs is modest. Second, the Act is one of general applicability, as 

“unemployment insurance benefits are funded by a tax contribution imposed 

upon Indiana employers.” Indpls. Concrete, Inc. v. Unemp’t Ins. Appeals of Ind. 

Dep’t of Workforce Dev., 900 N.E.2d 48, 50 (Ind. Ct. App. 2009). Companies in 

the transport business are not singled out by the Act; Indiana employers, no 

matter their business, are subject to its provisions. 

[23] Third, the Act is clearly intended to maintain the welfare of Indiana workers 

who find themselves out of work through no fault of their own:

Economic insecurity due to unemployment is declared hereby to 

be a serious menace to the health, morale, and welfare of the 

people of this state and to the maintenance of public order within 

this state. Protection against this great hazard of our economic 

life can be provided in some measure by the required and 

systematic accumulation of funds during periods of employment 

to provide benefits to the unemployed during periods of 

unemployment and by encouragement of desirable stable 
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 17 of 18

employment. The enactment of this article to provide for 

payment of benefits to persons unemployed through no fault of 

their own, to encourage stabilization in employment, and to 

provide for integrated employment and training services in 

support of state economic development programs, and to provide 

maximum job training and employment opportunities for the 

unemployed, underemployed, the economically disadvantaged, 

dislocated workers, and others with substantial barriers to 

employment, is, therefore, essential to public welfare; and the 

same is declared to be a proper exercise of the police powers of 

the state. To further this public policy, the state, through its 

department of workforce development, will maintain close 

coordination among all federal, state, and local agencies whose 

mission affects the employment or employability of the 

unemployed and underemployed.

Ind. Code § 22-4-1-1. Finally, nothing in the Act directly or indirectly 

mandates, prohibits, or otherwise regulates certain prices, routes, or services. 

Dilts, 769 F.3d at 647. Because we conclude that Company has failed to 

establish that the Act would have a substantial impact on the prices it charges 

its customers, its operation is not preempted by the FAAAA.4

 

4

 Company also argues that reclassification of Claimant (and other drivers) would significantly impact the 

routes taken by its drivers. This argument, however, is premised on Company’s assertion that a ruling in 

Claimant’s favor will mean that she must be classified as an employee for all purposes, an assertion we have 

rejected. This is the same reason we conclude that Company’s reliance on Schwann v. FedEx Ground Package 

Sys., Inc., 813 F.3d 429 (1st Cir. 2016), a case in which FAAAA preemption was found, is unavailing. In that 

case, unlike here, reclassification of the independent-contractor drivers as employees would have had much 

more impact, including requiring 

various days off, parental leave, work-break benefits, and a minimum wage[.] The employer must 

also track and record hours worked and amounts paid. According to the Massachusetts Attorney 

General, under Plaintiffs’ proposed application of the Massachusetts Statute, Chapter 149 would 

require FedEx to pay for or reimburse all out-of-pocket expenses incurred for the benefit of FedEx 

such as the maintenance and depreciation of the vehicles they used to perform their services. The 

statute also bars the employer from excepting itself from this mandate by contract. 

Id. at 433. Because reclassification in this case is limited to the Act, Schwann is easily distinguished. 
Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017 Page 18 of 18

Conclusion

[24] We conclude that the LALJ’s determination that Claimant was an employee of 

Company when she performed services for them is reasonable. We also 

conclude that operation of the Act in this case is not preempted by the FAAAA. 

Consequently, we affirm the determination of the LALJ. 

[25] Affirmed. 

May, J., and Barnes, J., concur.