Title: Harris v. State Ind. Acc. Comm.
Citation: 191 Or. 254, 230 P.2d 175
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: April 4, 1951

Reversed April 4, 1951.
*255 Ray H. Lafky, Assistant Attorney General, of Salem, argued the cause for appellant. With him on the brief were George Neuner, Attorney General; T. Walter Gillard, Assistant Attorney General; and Roy K. Terry, Assistant Attorney General, of Salem.
Ben Anderson argued the cause for respondent. On the brief were Anderson &amp; Franklin, of Portland.
Before BRAND, Chief Justice, and HAY, LUSK, LATOURETTE and WARNER, Justices.
REVERSED.
LUSK, J.
Plaintiff, claiming to be an employee of International Woodworkers of America, C.I.O., a voluntary association (hereinafter call International), and as such to be subject to the Workmen's Compensation Act, filed a claim with the defendant, the State Industrial Accident Commission (hereinafter called the Commission), for compensation for injuries arising out of and in the course of his alleged employment. The Commission denied the claim on the ground that there was no evidence of such employment. He appealed to the Circuit Court, where a jury trial resulted in a verdict and judgment in his favor. The Commission has appealed.
The plaintiff at the time in question was the salaried financial secretary and business agent of Local 7-140, a labor union chartered by International. He was also a member of the Northwest Regional Negotiating Committee (hereinafter called the Committee), *256 elected by and representing the membership of Southwestern Oregon District Council No. 7, an autonomous association composed of four local unions located in the southwestern section of the state of Oregon, each of which is an autonomous association chartered by International. As a member of the Committee he attended at various times negotiations meetings for the purpose of negotiating working agreements with employers. On March 15, 1949, while driving to Portland to attend such a meeting, he sustained personal injuries in an automobile accident. It is for these injuries that he claims compensation in this case.
Under date of January 15, 1945, International filed with the Commission its notice of election to contribute to the Industrial Accident fund and thereby became subject to the Workmen's Compensation Act as an employer engaged in a nonhazardous occupation. See § 102-1716, O.C.L.A. The notice stated that International "gives notice * * * of electing to contribute to the Industrial Accident fund to cover the following occupations: Executive Officers, Executive Administrative Staff, Organizers, Secretarial, Bookkeeping and Clerical Staff" and stated as the "Nature of occupation of business covered by this notice" "International Union engaged in administrative and organizational activities for woodworking industry." The notice is on a printed form furnished by the Commission.
The Commission assigns as error rulings of the Circuit Court denying its motions for a judgment of nonsuit and for a directed verdict, based upon the following grounds: (1) That the plaintiff was not a workman as that term is defined in the Act; (2) that he was an employee of his local Union; (3) that he *257 was not one of the persons intended to be covered by International in electing to become subject to the Act; and (4) that the plaintiff was "a member of a firm", to-wit, International, and had not made written application to the Commission to become entitled to coverage as a workman.
Since, in our view of the case, there is no substantial evidence to support the claim that the relation of employer and employee existed between plaintiff and International at the time he was injured, it will be necessary to discuss only the first ground of the motions.
The sole witness on the trial was the plaintiff. He testified in substance as follows: Negotiation of contracts with employers is carried on as a function of International and is in no way controlled by the local unions. During the course of his "employment" as one of the persons to carry on negotiations he worked under the direction of International. Directions usually came from the president or vice-president of International. He lived in Reedsport, and on the day he was injured received a wire from the president or vice-president of International instructing him to appear in the International office in Portland at 10:00 the following morning to attend a meeting. He started to Portland in obedience to this wire, and on the way received the injuries for which he seeks compensation. Each time that he had "functions" he waited for orders from International which directed him where to go. Generally there was one representative from each district in Washington, Oregon, California and Idaho engaged in negotiations. The orders directed whom he was to negotiate with, and he had no discretion in accepting or rejecting the proposals made by employers. *258 The points to be negotiated are determined by a broad conference in January of each year attended by delegates from each local union in Washington, Oregon, California and Idaho and a part of Montana. After propositions and counterpropositions were submitted he had no authority to determine whether or not they should go into effect. International paid him $12.00 a day while engaged in this work and eight cents per mile for traveling expense. The per diem was later increased to $17.00, and from it there were deducted withholding and Social Security taxes. It developed, however, on cross-examination that the only payment that he had received from International was for the day on which he was injured, although he testified that in each of the years 1947 and 1948 he had served as a member of the Committee for a period of twenty or thirty days. He said that there were many occasions when he waived his pay. Neither his local union nor district council had or exercised any power to direct his work of negotiation. This was exclusively a power vested in International. The president of International was usually the chairman of the negotiations meeting and directed the proceedings.
He became a member of the Committee through an election in which every member of the locals in his district was entitled to a vote. He could be removed at a recall election in which the same persons were entitled to participate. The method by which the members of the Committee are selected was devised through a resolution at the Everett convention of International.
There was the following additional evidence: A withholding statement (received over objection) apparently issued by International, showing that it had paid to W.L. Harris, the plaintiff, in 1949 total wages *259 (before payroll deductions) $34.00 and had withheld therefrom federal income tax in the amount of $4.10; monthly payroll and contribution reports made by International to the Commission, and covering the period beginning October, 1947, and ending June, 1949; a financial report of International for the three months' period ended September 30, 1948, which shows, among other things, that International during that year paid out of its "negotiating funds" the sum of $14.43 for State Industrial Accident insurance. It was explained by the plaintiff in his testimony that the moneys received by International are allocated to various funds  negotiating fund, general fund, strike fund  and that ten per cent of each dollar is set aside for negotiations.
It was conceded by counsel for the plaintiff that International had never paid to the Commission the sum of one cent a day on account of the plaintiff, which it was required to retain from his pay and so remit if plaintiff was one of its employees: § 102-1737, O.C.L.A.
The court admitted in evidence a five-page document entitled "Memorandum", a part of which consists of a resolution adopted by International at its tenth annual convention held in Portland, Oregon, September 10-13, 1946, while the remainder is a statement, partly factual, partly expression of opinion by an officer of International, of the plaintiff's relationship to that organization. This document was offered in evidence by the plaintiff. After having been received without objection, counsel for the respective parties entered into a stipulation, the purport of which was that the opinions therein expressed by International upon the question of whether there was an employer-employee relationship between it and the plaintiff *260 should be disregarded as having no probative value. While the stipulation is somewhat ambiguous, we are satisfied that that is the correct construction of it because counsel for the plaintiff in his argument to the jury said with reference to this exhibit:
The defendant's brief puts the same construction on the stipulation, and that construction has not been questioned by plaintiff in this court.
The Mr. Carl Winn referred to by counsel for the plaintiff was secretary-treasurer of International.
It was further stipulated that the resolution was "the authority upon which the composition and authority of the negotiating committee was authorized by the International."
The record shows that under date of March 21, 1949, the plaintiff executed on a form furnished by the Commission a report of the accident and application for compensation. This he sent to the office of International in Portland for the purpose of having it complete the report by furnishing the answers to certain questions on the form which are designed to be answered by an injured workman's employer. Instead of answering on the form, International prepared *261 the "Memorandum", attached it to the report, and forwarded both to the Commission. The following is a copy of the entire memorandum:
A careful examination of the resolution discloses direct and irreconcilable conflict between the "authority" of the Committee and the plaintiff's theory that he was subject to the direction and control of International as a member of the Committee. The resolution created a self-governing body with limited powers and functions, and contained provisions for the procedure to be followed by it in conducting its negotiations and submitting its recommendations to the "membership involved". It provided for election to membership on the Committee, not by International or its officers, but by the district to be represented, which means, as shown in the plaintiff's testimony, by members of the locals in the particular district, all autonomous associations. Such an election was "equivalent to an appointment to the designated employment." Standard Acc. Ins. Co. v. Hoage, 66 F.2d 275. A "roll call vote" was to be established. In general, the resolution  the law of the Committee's being  contemplates that, so far as International or its officers were concerned, the Committee members were free agents, functioning independently and subject to the orders of no one unless it was those who chose them and had the power to recall them. As to this the "Memorandum" sent by International to the Commission says, "Members of this Committee do the bidding of the District Council which elects them." And further, "W.L. Harris attends negotiations meetings *267 at the mutual convenience of the employers or their representative and the members of the Northwest Regional Negotiating Committee."
These statements may be considered as evidence coming from the alleged employer in conflict with the plaintiff's testimony, but they accord with the terms of the resolution, for Harris was a "representative" of his district council and the Committee of which he was a member was "empowered to call special conferences and shall set the time and place." The plaintiff, it must be assumed, had as much voice in that matter as any other member of the Committee. The two senior International officers present at a conference by virtue of their offices had "full voice and vote" on the committee, while the International president, it was provided, should be chairman and, in his absence, one of the International vice-presidents should act as chairman. But any powers which they had and exercised were powers vested in them, not as officers of International, but as officers of the Committee; and there is nothing in the resolution to suggest that, apart from the usual authority of a presiding officer in controlling procedure, they were given any authority to direct or control the plaintiff whether as to his "voice", his "vote", or in any other respect.
To establish his claim it was necessary for the plaintiff to prove that International was his "employer" and he a "workman" as those words are defined in § 102-1703, O.C.L.A., which reads:
We said in Landberg v. S.I.A.C., 107 Or. 498, 502, 215 P. 594:
The foregoing language has been quoted with approval in Vient v. S.I.A.C., 123 Or. 334, 336, 262 P. 250, and Smith v. S.I.A.C., 144 Or. 480, 482, 23 P.2d 904, 25 P.2d 1119. See, also, Bowser v. S.I.A.C., 182 Or. 42, 47, 185 P.2d 891.
1. The ultimate test of the employer-employees relation "is not the actual exercise of control, but the right to exercise control  not the actual interference by the employer with the manner and method of accomplishing the result, but the right to interfere." Becker v. I.A.C., 212 Cal. 526, 531, 298 P. 979, quoted with approval in Brothers v. S.I.A.C., 139 Or. 658, 664, 12 P.2d 302, and Bowser v. S.I.A.C., supra, 182 Or. 50. *269 See, also, Journal Publishing Co. v. S.U.C.C., 175 Or. 627, 663, 155 P.2d 570; Streby v. S.I.A.C., 107 Or. 314, 329, 215 P. 586; Anderson v. S.I.A.C., 107 Or. 304, 312, 215 P. 582; 1 Labatt, Master &amp; Servant (2d ed.) § 18; 71 C.J., Workmen's Compensation, 423, § 165 (b).
In this case, if it can be said that there is evidence that the legal entity, International (see Standard Acc. Ins. Co. v. Hoage, supra), rather than its officers, acting in their capacity as members and officers of the Committee, undertook to interfere with the conduct of the plaintiff in the discharge of his duties as a member of the Committee and to "order" him when and where to go and how to perform his duties, such evidence is of no significance if in fact International did not have the right of control which it thus assumed to exercise.
That it did not have such right is shown, not only by the terms of the resolution but by the fact that International had no power to discharge the plaintiff. That right was committed to his district council. The possession of such right, or the want of it, is considered of such high importance in determining whether the employer-employee relation is established that some courts hold that the relation does not exist unless it includes the right to discharge. Densby v. Bartlett, 318 Ill. 616, 149 N.E. 591, 42 A.L.R. 1406. This court has not gone so far, though we have said that in determining whether the right of control exists "no single fact is more conclusive * * * than the unrestricted right of the employer to end the particular service whenever he chooses, without regard to the final result of the work itself". Journal Publishing Co. v. S.U.C.C., supra, 175 Or. 663. Mr. Labatt, reflecting *270 the views of most of the courts, says that it is not a conclusive test, but he adds:
See, also, note to Hardy v. Shedden Co., 78 Fed. 610, 37 L.R.A. 33, 40; 35 Am. Jur., Master and Servant, 446, § 3.
It is said in plaintiff's brief:
We may assume that International, having by resolution at its annual convention provided for the organization and functioning of the Committee, could in similar manner have decreed its dissolution. But we are not concerned with such a remote contingency nor with the existence of such an overriding power. The determinative question here is who had the right to *271 discharge the plaintiff as long as the Committee endured, and there can be no doubt that this right was lodged in the members of the district council.
As shown by the "Memorandum", and testified to by plaintiff, International paid the members of the Committee by allocation of revenue to its negotiating fund "transportation, per diem expenses and a certain fixed amount for time lost from regular employment." The plaintiff was so paid but once, and that was for the day on which he was injured.
2. The payment of wages is considered the least conclusive of the tests for determining whether the relation of employer and employee exists. It is not decisive where it is shown that the employee was actually under the control of another person during the progress of the work. Arnett v. Hayes Wheel Co., 201 Mich. 67, 166 N.W. 957; Independence Indemnity Co. v. I.A.C., 203 Cal. 51, 58, 262 P. 757; Klemmens v. Workmen's Compensation Bureau, 54 N.D. 496, 500, 209 N.W. 972. See 35 Am. Jur., Master and Servant, 446, § 3. It is said in 1 Labatt's Master &amp; Servant (2d ed.) 60, § 19:
*272 In the note to Hardy v. Shedden Co., supra, 37 L.R.A. 39, the author says:
Many decisions are cited in support of this statement.
The principle to be deduced from the authorities is that, when the remaining evidence shows beyond dispute that the alleged employee is subject to the control and direction of one person, evidence that his wages were paid by another should be disregarded. That, we think, is precisely the state of this case.
Neither the pay roll and contribution reports made to the Commission by International nor its financial report gives any aid whatever to the plaintiff's case. The pay roll and contribution reports do not disclose that the plaintiff was one of the persons on account of whom contributions were made by International to the Workmen's Compensation Fund. The classes of employees listed in the application for coverage under the Act made by International do not include the plaintiff, and, as already stated, it was conceded by plaintiff's counsel on the trial that the cent a day which International would have been required to retain from plaintiff's wages and remit to the Commission, had he been International's employee, was never so retained and remitted. The financial report merely shows that during the period covered by it International disbursed out of its negotiating fund the sum of $14.43 for "State Industrial Accident Insurance." It does not definitely show that the disbursement was made to the Oregon *273 fund instead of to a similar fund in one of the other states in which International carries on its activities. Assuming, however, that it was the Oregon fund, the entry falls far short of being evidence that the disbursement was made on account of the plaintiff or of any other member of the negotiating committee. It could just as well be assumed that this was a payment on account of employees of International such as secretaries, stenographers and the like, who may have been assigned to perform services in conjunction with the meetings of the Committee.
3. But, even though the documents referred to could be interpreted as evidence that International had made a contribution to the Industrial Accident fund on account of the plaintiff, this could avail him nothing because, as stated by Mr. Chief Justice RAND in Smith v. S.I.A.C., supra, 144 Or. 483:
4. It is apparent that at the time International applied for coverage under the Act and at the time it declined to fill out the plaintiff's application for compensation, but instead sent its "Memorandum" to the Commission, it did not consider the plaintiff its employee. It could be argued, on the other hand, that, *274 when International deducted from the payment of $34.00 to the plaintiff the sum of $4.10 as federal income tax withheld and issued to the plaintiff a withholding statement, it considered that he was in its employ, at least so far as the provisions of the federal income tax law are concerned. But, regardless of International's varying opinions on that subject, the evidence, to our mind, demonstrates conclusively that he was not a workman in the employ of International within the definition of employer and workman in the Act. The jury could not have drawn a contrary inference without ignoring uncontradicted evidence which showed where the right of control over the plaintiff in the performance of his work lay, and that, if the plaintiff was in the employ of any one, it was those who chose him to represent them and had the power to discharge him.
The court erred in denying the motion for a directed verdict.
The judgment will be reversed with directions to enter judgment for the defendant.