Opinion ID: 2504544
Heading Depth: 2
Heading Rank: 1

Heading: Employee Versus Independent Contractor

Text: Under South Carolina law, the primary consideration in determining whether an employer-employee relationship exists is whether the purported employer has the right to control the employee in the performance of the work and the manner in which it is done. Kilgore Group, Inc. v. South Carolina Employment Sec. Comm'n, 313 S.C. 65, 437 S.E.2d 48 (1993). The test is not the actual control exercised, but whether there exists the right and authority to control and direct the particular work or undertaking. Id. at 68, 437 S.E.2d at 49. [2] The four principal factors indicating the right of control are (1) direct evidence of the right to, or exercise of, control; (2) the method of payment; (3) the furnishing of equipment; and (4) the right to fire. South Carolina Workers' Comp. Comm'n v. Ray Covington Realtors, Inc., 318 S.C. 546, 459 S.E.2d 302 (1995); Chavis v. Watkins, 256 S.C. 30, 180 S.E.2d 648 (1971). In Wilkinson, this Court announced a return to our jurisprudence that evaluates the four factors with equal force in both directions to provide an even-handed and balanced approach. Wilkinson, 382 S.C. at 300, 676 S.E.2d at 702. This overruled the analytical framework previously set forth in Dawkins v. Jordan, 341 S.C. 434, 534 S.E.2d 700 (2000) on the basis it unduly weighted the factors in a manner that favored a finding of employment by providing the existence of any single factor was virtually proof of an employment relationship, while contrary evidence as to any one factor was only mildly persuasive evidence of contractorship. Id. In the current matter, the circuit court found the case of Nelson v. Yellow Cab Co., 349 S.C. 589, 564 S.E.2d 110 (2002) to be controlling. In Nelson, we considered the jurisdictional question whether a taxi driver, who had been murdered while driving his cab, was an employee or an independent contractor of Yellow Cab. We noted there was a split of authority as to the status of a taxi driver who leases a taxi under a per diem payment agreement and keeps his fares and tips as compensation, but observed that the majority of cases hold that under such circumstances the taxi driver is an employee by virtue of the cab company's exercise of control. Id. at 595, 564 S.E.2d at 113. Wilkinson expressly overruled Nelson to the extent it applied the Dawkins test, but this does not alter the fundamental principle established in Nelson regarding the taxi driver's employment status. Although the Nelson Court recited the Dawkins test, as a practical matter, it did not rely upon the presence of only one factor as being determinative of an employment relationship. Rather, it considered in detail all four factors and found by a preponderance of the evidence that these factors, on balance, were indicative of an employment relationship. Therefore, the result in Nelson would be the same under the approach announced in Wilkinson. Similarly, in the current appeal, the circuit court recited the Dawkins test in passing, [3] but it did not rely upon the presence of only one factor. Instead, the court evaluated all four factors before finding, by a preponderance of the evidence, that an employment relationship existed between Pikaart and A & A Taxi. Pikaart maintains that [i]t is clear when considering the Nelson factors, even when using the approach approved in [ Wilkinson ], that [he] was an employee of [A & A Taxi] and the decision of the Circuit Court should be affirmed. We agree. Appellants note in their brief that a number of former drivers testified that Pikaart was the general manager of A & A Taxi and also testified about the degree of control A & A Taxi exerted over them. Appellants concede: If one of those drivers had been injured, it is clear that under the Nelson case, they would have been considered employees. Nevertheless, Appellants argue those drivers' positions at A & A Taxi, Inc. differed from that of the Claimant, Robert Pikaart. Appellants deny that Pikaart was ever A & A Taxi's manager, but argue that, even if he was the manager, he was not injured in that role. He was allegedly injured while driving a cab. The fact that Pikaart was employed as the company's manager (which included duties such as driving a taxi and performing dispatching services when needed), as opposed to being employed solely as a taxi driver, does not negate his status as an employee, and Appellants have pointed to no specific evidence to support its assertion that being a manager somehow invalidated his employment status. Appellants further contend Pikaart was merely leasing five cabs from Liriani and operated those cabs for his own independent business. As in Nelson, the fact that Pikaart leased his cabs from A & A Taxi and split the fares with A & A Taxi to receive compensation is typical for the industry and is not determinative that he ran his own taxi company within Liriani's taxi company. As noted in Nelson, the majority of jurisdictions considering the question have held that such an arrangement constitutes an employment, not an independent contractor, arrangement. It is clear from the record, and Appellants conceded as much at oral argument, that Pikaart did perform tasks for the benefit of, and on behalf of, A & A Taxi, not strictly for himself. Further, Pikaart took nothing with him when he parted ways with A & A Taxi, and there is no evidence he operated his own independent business. Appellants next assert that Pikaart has started his own cab company, Red Top Cabs, since parting ways with A & A Taxi. However, Pikaart's activities after leaving A & A Taxi are not relevant to Pikaart's employment status at the time of the accidents at issue here. Appellants also state Pikaart has been in the taxi business for over twenty years and during that time he never purchased workers' compensation insurance for his drivers, but he now wants compensation for himself. This point likewise is not relevant to the jurisdictional question of whether Pikaart was an employee or an independent contractor with A & A Taxi at the time of his accidents. Appellants contend this information goes to credibility. But by the same token, Liriani admittedly has never provided workers' compensation coverage to anyone working for him, either, so he is in the same position as Pikaart in this regard. Although Appellants did not individually address the four factors, we now examine some of the pertinent evidence as it relates to the four individual factors in evaluating the right of control.