Court of Appeals of Indiana | Opinion 93A02-1703-EX-556 | March 5, 2018 Page 1 of 20

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

Andrea E. Rahman

Deputy Attorney General

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

Q. D.-A., Inc.,

Appellant,

v.

Indiana Department of 

Workforce Development,

Appellee.

March 5, 2018

Court of Appeals Case No.

93A02-1703-EX-556

Appeal from the Indiana Department 

of Workforce Development,

Unemployment Insurance Appeals.

The Honorable Suzanne E. Manning, 

Liability Administrative Law Judge.

Case No. 93484

Friedlander, Senior Judge

[1] Appellant Q. D.-A., Inc. (“Company”) appeals from the determination of the 

Liability Administrative Law Judge (LALJ) that Claimant was an employee of 
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Company rather than an independent contractor, such that Company was liable 

to the State for unemployment insurance taxes. We reverse.

[2] Company presents one issue for our review, which we restate as: whether the 

LALJ’s conclusion that Claimant was an employee of Company under Indiana 

Code section 22-4-8-1 (2006) was unreasonable.

[3] Company acts as a middleman between qualified drivers and companies that 

manufacture recreational and other large vehicles. Specifically, Company pairs

drivers with companies for the transport of these vehicles to dealerships and 

customers—known in the industry as “drive-away services.” On January 9, 

2013, Claimant entered into a contract with Company to provide drive-away 

services. 

[4] Claimant subsequently filed for unemployment insurance benefits with the 

Indiana Department of Workforce Development (IDWD). On April 14, 2015, 

the IDWD issued a determination of wage investigation notifying Company 

that it had misclassified payments it made to Claimant. Company filed a 

protest to the IDWD’s determination, and the LALJ held a hearing on 

Company’s protest. Following the hearing, the LALJ concluded that the 

services provided by Claimant constitute employment such that Company 

owed to the State unemployment insurance taxes on payments made to 

Claimant. Company now appeals.

[5] The Indiana Unemployment Compensation Act provides that “[a]ny decision 

of the liability administrative law judge shall be conclusive and binding as to all 
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questions of fact.” Ind. Code § 22-4-32-9(a) (1995). When the LALJ’s decision 

is challenged as contrary to law, we are limited to a two-part inquiry into the 

sufficiency of the facts found to sustain the decision and the sufficiency of the 

evidence to sustain the finding of facts. Ind. Code § 22-4-32-12 (1990). 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 LALJ’s finding is a reasonable one. Bloomington Area 

Arts Council v. Dep’t of Workforce Dev., 821 N.E.2d 843 (Ind. Ct. App. 2005). 

Ultimate facts are conclusions or inferences from the basic facts. Id.

[6] Company argues the LALJ wrongly determined that Claimant was an 

employee of Company within the meaning of Indiana Code section 22-4-8-1. 

For purposes of determining when an employer is liable for unemployment 

taxes, employment is defined as “service . . . performed for remuneration or 

under any contract of hire, written or oral, expressed or implied.” Ind. Code § 

22-4-8-1(a). Further,

[s]ervices 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.
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(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; or 

(B) is a sales agent who receives remuneration solely 

upon a commission basis and who is the master of 

the individual’s own time and effort.

Ind. Code § 22-4-8-1(b). Thus, pursuant to the terms of the statute, all workers 

are presumed to be employees until an employer demonstrates that all three 

factors are fulfilled.

1. Freedom from Control

[7] To establish that an individual is not an employee, part (1) of the statutory test 

requires a putative employer to demonstrate that the individual has been and 

will continue to be free from control and direction in the performance of such 

service, both under the contract and in fact. See Ind. Code § 22-4-8-1(b)(1). To 

meet this requirement, an employer must show it lacks control and direction 

over the manner, method, and means in which the services are performed by 

the worker. Circle Health Partners, Inc. v. Unemployment Ins. Appeals of Ind. Dep’t of 

Workforce Dev., 47 N.E.3d 1239 (Ind. Ct. App. 2015).

[8] Here, the LALJ found that Company “provides a two day orientation class to 

its independent contractors which includes ‘the appropriate training for the 

position,’” “a DOT [Department of Transportation] physical, drug screen, 

information on Federal Motor Carrier Safety Act (FMCS) regulations, 

employer policies, and a driving test” and that Company “provides the FMCSR 
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pocketbook to its independent contractors.” Appellant’s App. Vol. 2, p. 9. The 

LALJ then concluded that although Claimant was free to choose his routes and 

to hire other drivers to perform the service, the orientation “is evidence that the 

claimant was not free from the employer’s right to control.” Id. at 11. 

[9] On appeal, Company argues that the LALJ’s determination is not supported by 

the evidence. Specifically, Company contends that the basis of the LALJ’s 

conclusion—that the orientation provided by Company demonstrates employer 

control—is incorrect. 

a. Under the Contract

[10] Pursuant to the terms of the contract between the parties, Company does not 

employ any individuals to provide drive-away services; rather, it outsources this 

responsibility to third parties with the required experience, knowledge, skills, 

and license to operate commercial motor vehicles. Ex. Vol. 4, p. 14. Claimant 

is a self-employed individual operating as an independent contractor engaged in 

the business of providing drive-away services to various motor carriers and/or 

manufacturing companies on a trip-to-trip basis. Id. Furthermore, it was 

“expressly understood and agreed” that Claimant was an independent 

contractor for the services he provided to Company. Id. at 17, ¶ 1. Claimant

was “in control of and free to determine the means and manner by which” he 

performed the drive-away services, and he was required to furnish the necessary 

tools, supplies, or materials to do so, including towbars, emergency equipment, 

and cell phones. Id. at 15, ¶ 2 and 16, ¶ 4 a. Although free to determine the 

manner in which he performed, Claimant agreed that he was performing 
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subject to and in compliance with the laws, rules and regulations of both state 

and federal agencies, including but not limited to the FMCSA and the DOT. 

Id. at 16, ¶ 3. In addition, the contract required Claimant to maintain a bond 

account with a minimum balance of $1,000. Id. at 17, ¶ 2.

[11] Also under the terms of the contract, Claimant was permitted to provide driveaway services for other companies. Id. at 15-16, ¶ 2 a. Moreover, Claimant had 

the right to hire qualified drivers to perform drive-away services for him, and, in 

such cases, he would be responsible for the direction and performance of the 

other drivers’ activities. Id. at 15, ¶ 1. Further, Claimant assumed “full control 

and responsibility” for all hours scheduled and worked, wages, salaries, 

workers’ compensation insurance, unemployment insurance, state and federal 

taxes, and fringe benefits for any drivers he hired to provide drive-away 

services. Id. at 17, ¶¶ 1, 1 a.

b. In Fact 

[12] Jennifer Miller, Company’s Director of Administration, confirmed that 

Company does not employ any individuals with the license necessary to 

provide drive-away services but instead outsources this task to licensed third 

parties. Tr. Vol. 2, pp. 47-48. She testified that Claimant had complete 

discretion as to the route he took for deliveries and that no employee of 

Company oversees, supervises, or evaluates the work of the independent 

contractor drivers or rides with the independent contractors as they are 

performing their services. Id. at 51, 47. 
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[13] Miller further stated that Claimant was responsible for the expense and 

requirements of obtaining/maintaining a commercial driver’s license, lodging, 

fuel, tolls, meals, and return trip transportation. Id. at 80, 50. If Claimant 

towed his own vehicle for the return trip, he was required to provide all the 

proper hitch equipment, including the tow bar and light connectors, as well as 

insurance on the tow car, and the triangles and fire extinguisher required by the 

federal government. Id. Additionally, although Claimant indicated to the 

IDWD wage investigator that he did not have a bond account, Miller testified 

that in fact Claimant did have a bond account and that she was not aware of 

any independent contractor working with Company that did not have a bond 

account. Id. at 61. She explained that the bond account requirement remained 

in effect for the duration of Claimant’s contract and that, if there were any 

claims for which Claimant were liable, he would be responsible for the first 

$1,000 of the claim. Id. at 60.

[14] Compensation for drive-away services is negotiated on a per trip basis. Id. at 

51. Miller explained:

A: We pay on a per mile basis. There [are] times where –

depending upon where the – where the delivery is going, there’s 

some routes that aren’t as probably [sic] to drivers as desirable as 

other routes. Out East for example where there’s toll roads, and 

he may ask for an additional five or ten cents a mile at that point 

before he would agree to take the – the trip.

Q: So that would be sort of a bartering or a negotiation back 

and forth –

A: - Yes. –
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Q: - between [Company] and [Claimant] about the exact 

compensation?

A: Correct.

Q: And, if [Claimant] decided he didn’t want to take a trip 

because he wasn’t satisfied with the compensation, did he have 

the ability to do that?

A: Yes.

Q: And, do you know whether he in fact did that?

A: He has in fact.

Q: Are there any consequences for not taking a trip?

A: No.

Id. at 52. 

[15] Miller also confirmed Claimant’s right to provide drive-away services for 

Company’s competitors and occasions where Claimant did so, even on the 

same day. Id. at 53-56. Miller further testified that, under his contract, 

Claimant had the right to hire individuals to perform drive-away services for 

him, and in that situation Company was neither involved in the hiring process 

nor did it have the authority to reject someone hired by Claimant. Id. at 49. 

Company also was not involved in how Claimant paid the drivers he hired. Id.

at 51.

[16] Miller stated that Company has a DOT number and is a registered motor 

carrier with the DOT. Id. at 42. She testified that Claimant operated under 

Company’s DOT number, which is very common in the drive-away industry. 

Id. at 43. In addition, she explained that the federal motor carrier regulations 

apply to the drive-away industry, including but not limited to hours of service 
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(i.e., the number of hours per day a driver is permitted to drive), drug testing, 

log books, and a DOT physical. Id. at 42-43, 44-45. These regulations are 

mandated by the federal government, and Company is not at liberty to ignore 

them. Id. at 44.

[17] Specifically with regard to the orientation, Miller testified that the purpose of 

the orientation is to review with the drivers the federal regulations promulgated 

by the FMCSA (Federal Motor Carrier Safety Administration), such as the 

hours of service and the required DOT physical. Id. at 45-46. In addition, the 

orientation session includes policies of Company, which are based upon the 

federal regulations. For instance, the FMCSA has established time frames in 

which certain accidents must be reported to the DOT, and Company 

incorporated these requirements into its company policies. Id. at 46. At 

orientation, Company provides the independent contractor drivers with the 

phone numbers to report accidents, as well as the phone numbers and hours for 

Company’s dispatch offices. Id. Dawn Dennis, Dispatch Supervisor at 

Company, testified that contractor drivers received jobs either by calling in to 

Company’s dispatcher or by receiving a call from the dispatcher. Id. at 85, 87. 

Miller further testified that the orientation does not include: instruction to 

drivers on how to perform their job, instruction on how to plan a route, 

instruction on how to operate efficiently, instruction on how to maximize 

profits, instruction on how to hire driver/employees, or information on how to 

obtain the necessary licenses. Id. at 46-47.
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[18] IDWD’s sole witness, Investigator Marcia Wager, testified that she never 

inquired into what the orientation entailed, conceded she had no idea what 

Company’s policies were, and that, with the exception of what was contained 

in Claimant’s contract, she did not know specifically what Claimant was 

required to do. Id. at 29-30.

[19] It is clear from the evidence that Claimant possessed rights that employees do 

not generally enjoy. He had the right to negotiate his compensation for each 

job he agreed to undertake, he had the right to decline work, he had complete 

control over the routes and performance of his jobs, he was free from 

supervision and evaluation by Company or any of its employees, he had the 

right to hire people to perform the jobs for him, and he had the right to 

simultaneously work for Company and its competitors. Moreover, the evidence 

demonstrates that Company’s orientation and policies noted by the LALJ

simply incorporate the requirements imposed upon it and the independent 

contractor drivers by the federal government. It is undisputed that Company is 

licensed as a motor carrier and that it, as well as anyone it hires to perform 

drive-away services, is required to follow the federal regulations.

[20] We liken the facts in this case to those in Twin States Publishing Co., Inc. v. 

Indiana Unemployment Insurance Board, 678 N.E.2d 110 (Ind. Ct. App. 1997), 

trans. denied. There, a panel of this Court held that the LALJ erred in 

concluding that individuals who delivered newspapers and shopping guides 

published by Twin States were employees. The Court determined the delivery 

people were independent contractors because they were paid per delivery, and 
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they had complete discretion over the manner, method, and means of 

performing their work—even given the restrictions that they deliver the guides 

by 5:00 p.m. on Tuesdays, place the guides in a dry place, and perform the 

services in a workmanlike manner.

[21] Similarly, in Alumiwall Corporation v. Indiana Employment Security Board, 130 Ind. 

App. 535, 167 N.E.2d 60 (1960), this Court reversed the Liability Referee’s 

determination that siding applicators were employees of the corporation that 

sold the roofing and siding materials. The applicators received work 

assignments by contacting the office of Alumiwall; they were paid according to 

the amount of siding they installed; and they furnished their own trucks and 

equipment. The applicators could also hire whatever help they deemed 

necessary with Alumiwall having no control over the number of helpers hired, 

the amount the helpers were paid, or whether helpers were retained or fired. In 

addition, the applicators had complete discretion as to the manner and means 

of performing their work, and Alumiwall had no control over the applicators’ 

work hours, number of jobs they accepted, or whether they accepted any jobs at 

all.

[22] In Circle Health Partners, Inc., a panel of this Court reached the opposite 

conclusion. 47 N.E.3d 1239. In that case, the Court affirmed the LALJ’s 

determination that nurses and phlebotomists were employees of Circle Health. 

This decision was based on the fact that the nurses and phlebotomists who 

contracted with Circle Health were given eighteen specific steps to complete in 

conducting health screenings and collecting certain information. In addition, 
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the nurses and phlebotomists were paid an hourly rate for their hours worked, 

were entitled to reimbursement for travel and other expenses, and could not 

conduct the screenings at times other than the hours scheduled.

[23] With specific regard to the incorporation of and requisite compliance with the 

federal regulations, we find guidance from two cases in particular. In Equal 

Employment Opportunity Commission v. North Knox School Corp., 154 F.3d 744 (7th

Cir. 1998), the court held that school bus drivers were independent contractors 

and not employees. In looking at the control factor, the court discussed the 

state’s extensive regulation of school bus drivers and stated that the imposition 

of the regulations was insufficient to show the drivers were employees because 

the regulations reflected control by the state, not control by the putative 

employer. Essentially, the employer’s hands were tied by the state because it 

could not contract with a person who did not satisfy the state regulations.

[24] In SIDA of Hawaii, Inc. v. National Labor Relations Board, 512 F.2d 354 (9th Cir. 

1975), the court reviewed the determination of the National Labor Relations 

Board that taxi drivers were employees instead of independent contractors. In 

doing so, the court recognized that the primary test was the extent of control 

exercised by the alleged employer and disagreed with the Board’s conclusion 

that certain rules and regulations evidenced SIDA’s control over the drivers. 

Rather, the court concluded, the rules and regulations were designed to enforce 

standards of conduct. Most relevant to the present case is the court’s 

recognition that several of the regulations simply incorporated requirements 

imposed on SIDA by its commercial contracts and state and local ordinances. 
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Notably, the court affirmed the concept that “the fact that a putative employer 

incorporates into its regulations controls required by a government agency does 

not establish an employer-employee relationship.” Id. at 359. 

[25] In light of this precedent and the totality of the facts and circumstances of the 

case before us, we determine Company’s one-time orientation session does not 

demonstrate the kind of ongoing control over work methods needed to show 

control and direction under Indiana Code section 22-4-8-1(b)(1). Moreover, we 

do not find the incorporation of federal regulations into Company’s policies to 

be inconsistent with an independent contractor relationship but rather an

enforcement of standards mandated by the federal government with regard to 

which Company has no authority. Thus, we conclude the LALJ’s 

determination that Claimant was not free from Company’s control and 

direction is contrary to the substantial evidence.

2. Usual Course of Business

[26] The second factor required to establish that an individual is not an employee is 

a demonstration that the service performed by the individual is performed 

outside the putative employer’s usual course of business. See Ind. Code § 22-4-

8-1(b)(2). Thus, here, Company was required to establish that the drive-away 

services provided by Claimant were outside of Company’s usual course of 

business.

[27] With regard to the second factor, the LALJ concluded:
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The employer is a provider of one-way transportation of 

commodities. The employer chooses to use independent 

contractors to provide the deliver[y] service of the commodities. 

The independent contractors provide those services to the clients 

on behalf of the employer. The employer could not perform the 

work without the independent contractors such as the claimant. 

The claimant’s work was within the usual course of the 

employer’s business.

Appellant’s App. Vol. 2, p. 11.

[28] In support of the LALJ’s conclusion that Company is a provider of one-way 

transportation of commodities, IDWD notes in its brief that Company’s 

contract with Claimant states in the introductory recital paragraphs that 

Company is a licensed company authorized to engage in the transportation of 

motor vehicles. See Ex. Vol. 4, p. 14. However, Miller specifically testified to 

the meaning of this recital at the hearing. She explained that this provision 

means that Company is licensed/authorized to transport because it has a DOT 

number but that Company is not in the business of transporting. Tr. Vol. 2, p. 

47. This is confirmed by the terms of the contract as well as by Miller’s 

testimony that Company does not employ any individuals to provide driveaway services. Ex. Vol. 4, p. 14; Tr. Vol. 2, pp. 47-48. In fact, one-way 

transportation of commodities is the precise description of the services Claimant 

and the other contractor drivers provide to Company for its clients.

[29] Miller further testified that Company’s business is assisting its customers by 

pairing them with contractor drivers so that their customers can get their 

product from point A to point B. Tr. Vol. 2, p. 42. IDWD Investigator Wager
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agreed that, based on her investigation, one way to describe Company’s 

business is that of a middleman between manufacturers and drivers like 

Claimant. Id. at 19.

[30] Thus, the evidence established that Company’s business is providing brokerage 

services between its customers and those individuals licensed and authorized to 

provide drive-away services. Stated another way, Company functions as an

intermediary or middleman by employing people to pair its customers 

(manufacturers of RVs and other commercial motor vehicles) with individuals 

who are properly licensed to do the work (Claimant and other drivers).

Accordingly, Company’s business and Claimant’s business, while 

complementary, are distinct. Therefore, the LALJ’s determination that 

Claimant performed services that are within Company’s usual course of 

business is contrary to the substantial evidence.

3. Independently Established Trade or Occupation

[31] The LALJ concluded that Company established the third factor that Claimant 

was customarily engaged in an independently established trade, occupation, 

profession, or business of transporting commodities. Neither Company nor the 

IDWD disputes this conclusion.

[32] Accordingly, as Company has established all three factors of the section 22-4-8-

1(b) test, we conclude that Claimant performed drive-away services for 

Company as an independent contractor and not an employee. Here we pause 

to acknowledge that another panel of this Court recently reached the opposite 
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conclusion in a case similar to this. Company v. Indiana Department of Workforce 

Development, 86 N.E.3d 204 (Ind. Ct. App. 2017) also involved a company and 

contractor driver in the drive-away services industry. There, the Court affirmed 

the LALJ’s determination that claimant was an employee of company because 

company had failed to establish factor 2 regarding the company’s usual course 

of business. In short order, the panel concluded that the transport and delivery 

of large motor vehicles by licensed contractor drivers was not outside 

company’s usual course of business because company was registered as a motor 

carrier with the DOT and competed with companies who offered the same 

drive-away services provided by employee drivers. Nevertheless, we conclude 

that, pursuant to the facts and circumstances presented in this case, Claimant 

was an independent contractor not an employee, and the LALJ’s conclusion to 

the contrary is unreasonable.

[33] Decision reversed.

Najam, J., concurs.

May, J., dissents with separate opinion.
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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

Andrea E. Rahman

Deputy Attorney General

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

Q. D.-A., Inc.,

Appellant,

v.

Indiana Department of 

Workforce Development,

Appellee.

Court of Appeals Case No.

93A02-1703-EX-556

May, Judge, dissenting.

[34] Because I would affirm the LALJ’s conclusion that Claimant was an employee 

of Company under Indiana Code section 22-4-8-1, I must respectfully dissent. 
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[35] As the majority notes, Indiana Code section 22-4-8-1 requires we consider every 

paid worker an employee unless an employer can demonstrate three factors. 

The second of these factors is that the Claimant’s “service is performed outside 

the usual course of the business for which the service is performed.” Ind. Code 

§ 22-4-8-1(b)(2). With regard to that factor, the LALJ concluded:

[T]he employer failed to establish that the claimant was 

performing work that was outside of the usual course of the 

employer’s business. The employer is a provider of one-way 

transportation of commodities. The employer chooses to use 

independent contractors to provide the deliver[y] service of the 

commodities. The independent contractors provide those 

services to the clients on behalf of the employer. The employer 

could not perform the work without the independent contractors 

such as the claimant. The claimant’s work was within the usual 

course of the employer’s business.

(Appellant’s App. Vol. 2 at 11.)

[36] In support of those ultimate facts and conclusions, the LALJ entered the 

following findings of fact:

The employer is a registered motor carrier with the Department 

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

[******]. The employer provides one-way transportation of 

commodities. The commodities the employer transports are 

commercial vehicles including motor homes, buses, etc. This is 

referred to as drive away or tow away service. Employer’s Exhibit 

S. 

The employer contracts with clients to provide delivery of the 

commodities. The employer uses independent contractors to 

perform the delivery service. If a commercial vehicle exceeds 

26,000 pounds, it must be operated by someone who has a 
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Commercial Driver’s License (CDL). The employer does not 

employ any employees that have a CDL. The employer could 

not provide the delivery of the commodity without the 

independent contractors. The employer’s contract with the 

claimant specifies that the employer is a company that engages in 

transportation of property, including motor vehicles. 

Department’s Exhibit 3. 

(Id. at 9) (italics in original). 

[37] As the majority notes, another panel of this court recently affirmed an LALJ’s 

decision, based on similar facts, that a driver for another drive-away company 

was an employee of that company. See Company v. Indiana Department of 

Workforce Development, 86 N.E.3d 204 (Ind. Ct. App. 2017). In analyzing 

whether that company proved its driver’s service was outside that company’s 

usual course of business, we stated:

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 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.

Id. at 208-9. 
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[38] Because the facts herein are not appreciably different from the facts in that case, 

I would reach the same result and affirm the LALJ’s conclusion that Claimant’s 

service was within the Company’s usual course of business, such that Claimant 

was an employee of Company. Accordingly, I respectfully dissent from the 

majority’s reversal of the LALJ’s determination.1

__________________________

1 Were I writing a majority opinion affirming the LALJ’s decision, I would also need to address the other 

issues raised by Company on appeal: (1) whether the Internal Revenue Service (“IRS”) determination that 

Claimant was not an employee should be binding in this proceeding; (2) whether Indiana Code section 22-4-

8-1 is preempted by federal law regarding regulation of motor carriers; and (3) whether the LALJ denied 

Company due process when the LALJ failed to use its subpoena power to require Claimant to appear and 

produce documents demonstrating he was not an employee of Company. Because my opinion herein cannot 

create binding precedent, I will address each of those issues only briefly.

I would hold the IRS determination of Claimant’s status for federal unemployment tax purposes is not 

binding in Indiana unemployment tax proceedings because, while the two systems are intended to work 

cooperatively to create “a unitary plan for unemployment relief,” Buckstaff Bath House Co. v. McKinley, 308 

U.S. 358, 363 (1939), the two systems have different definitions of “employee.” Compare Ind. Code § 22-4-8-

1 with 26 U.S.C. § 3306(i) (“‘[E]mployee’ has the meaning assigned to such term by section 3121(d), except 

that paragraph (4) and subparagraphs (B) and (C) of paragraph (3) shall not apply.” Section 3121(d) defines 

an employee based on the common law definition.). See also Department of Labor, Licensing & Regulation v. Fox, 

697 A.2d 478, 485 (Md. 1997) (declining to apply federal test of employment instead of the three-factor test 

adopted by the Maryland legislature). 

I would follow this Court’s reasoning in Company v. Indiana Dep’t of Workforce Dev., 86 N.E.3d at 209-214, and 

hold Indiana Code section 22-4-8-1 is not preempted by the Federal Aviation Administration and 

Authorization Act. And, finally, I would hold any possible error that may have been created by the LALJ’s 

refusal to enforce the subpoena for Claimant’s documents was at most harmless because Company has not 

suggested how Claimant’s documents could be relevant to a determination whether Claimant’s services were 

“outside the usual course of” Company’s business. See Ind. Appellate Rule 66(A) (“No error . . . is ground 

for granting relief or reversal on appeal where its probable impact, in light of all the evidence in the case is 

sufficiently minor so as not to affect the substantial rights of the parties.”).