Opinion ID: 1268788
Heading Depth: 2
Heading Rank: 1

Heading: Employee/Independent Contractor

Text: Meeks and Harrell argue that summary judgment was not appropriate because there is a genuine issue of material fact as to whether Floyd was an employee under Arkansas law. Although agency is a question of fact ordinarily determined by the trier of fact, where the facts are undisputed, and only one inference can reasonably be drawn from them, it becomes a question of law. Howard v. Dallas Morning News, Inc., 324 Ark. 91, 918 S.W.2d 178, 185 (1996); accord Cotton v. Commodore Exp., Inc., No. 02-604, 2007 WL 283135, at  (E.D.Ark. Jan. 30, 2007) (stating that an agency determination is a legal conclusion, requiring both a determination of facts and application of law, and where the material undisputed facts permit only one reasonable legal conclusion, summary judgment is appropriate) (citing Howard, 918 S.W.2d at 185). Because the facts attendant to Floyd's employment relationship are undisputed, we now review de novo the district court's legal conclusion that Floyd was Harrell's employee. Applying Arkansas law to determine whether Floyd was an employee or an independent contractor, we consider the totality of the circumstances by applying Arkansas's ten-factor test. See Shelter Mut. Ins. Co. v. Jones, 343 F.3d 925, 926 (8th Cir.2003) (per curiam). The factors we consider are: (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business. Blankenship v. Overholt, 301 Ark. 476, 786 S.W.2d 814, 815 (1990) (citing Restatement (Second) of Agency § 220 (1958)). The primary factor in this analysis is the extent of control an employer may exercise over his worker. Shelter, 343 F.3d at 926 & n. 2. It is the right to control, not the actual control, that determines the relationship. Ark. Transit Homes, Inc. v. Aetna Life & Cas., 341 Ark. 317, 16 S.W.3d 545, 548 (2000). Applying these factors, we conclude that the district court did not err in determining that Floyd was Harrell's employee. Significantly, Harrell had and exerted full control over the critical details of Floyd's work. Harrell could terminate Floyd's employment at will, and he prohibited Floyd from subcontracting his work. Harrell also received all customer orders, assigned all delivery requests and required the drivers to complete each delivery within one week. Floyd had to charge all fuel purchases to Harrell's account at a specified gas station, which limited the routes available to Floyd. Furthermore, Harrell instructed Floyd on proper load handling and required Floyd to contact him directly in case of any problem or emergency. In addition to the control Harrell established over Floyd, the remaining factors also support the determination that Floyd was an employee. Floyd hauled exclusively for Harrell and was not engaged in an independent hauling business. While Floyd needed some skill to drive a tractor-trailer, that skill was not unique and not more prevalent among independent contractors than employees. Harrell also supplied all necessary equipment to Floyd and paid all operating costs. Although Harrell hired Floyd only for harvest season, Floyd was employed for the entire season and not for one specific job. Additionally, Floyd was paid even if a customer failed to pay Harrell. The loads Floyd hauled were integral and essential to Harrell's hauling business. The parties understood that Floyd worked directly for Harrell and that Floyd himself, not a worker Floyd subcontracted, would make the deliveries. While Floyd physically controlled the tractor-trailer during transport, Harrell retained ultimate authority and his drivers follow[ed his] instructions. Harrell also was the sole proprietor of his trucking business. Notwithstanding these undisputed facts, Meeks and Harrell argue that the record fails to establish that Floyd was Harrell's employee. They claim that a fact-finder could reasonably conclude that Floyd was an independent contractor after considering the ten factors. In support of this argument, they claim that Harrell's issuance of 1099 tax forms, instead of W-2 forms, proves that Floyd was an independent contractor. However, we previously have held that use of a 1099 tax form does not undermine the conclusion that a worker is an employee and not an independent contractor. Shelter, 343 F.3d at 926. In reaching this conclusion, we noted that in construing [an] insurance policy's definition of `employee,' economic reality rather than legalistic form should be determinative. Id. (quoting Eagle Star Ins. Co. v. Deal, 474 F.2d 1216, 1220 (8th Cir.1973)). We likewise conclude that the fact that Floyd received a 1099 tax form does not alter our analysis that Floyd was an employee. Meeks and Harrell also argue that several other facts support a finding that Floyd was an independent contractor, such as Floyd's ability to determine the exact route and timing of the deliveries and Floyd's ability to keep the truck at his house between deliveries. However, these facts do not undermine our conclusion regarding the extent to which Harrell had the right to and did, in fact, exercise control over Floyd. Therefore, we find that the totality of the circumstances supports the district court's conclusion that the only reasonable inference to be drawn from the undisputed facts is that Floyd was an employee of Harrell, not an independent contractor. [2]