Court Opinion

ID: 4216509
Source: CourtListenerOpinion
Date Created: 2017-10-31 17:08:43.725693+00
Date Added: 2024-06-11T07:47:08.059747
License: Public Domain

FILED
                                                               Oct 31 2017, 10:10 am

                                                                    CLERK
                                                                Indiana Supreme Court
                                                                   Court of Appeals
                                                                     and Tax Court

ATTORNEYS FOR APPELLANT                               ATTORNEYS FOR APPELLEE
Andrew B. Murphy                                      Curtis T. Hill, Jr.
Faegre Baker Daniels LLP                              Attorney General of Indiana
Minneapolis, Minnesota
                                                      Abigail R. Recker
Angela N. Johnson                                     Deputy Attorney General
Faegre Baker Daniels LLP                              Indianapolis, Indiana
South Bend, Indiana
Paul D. Borghesani
Law Office of Paul D. Borghesani
Elkhart, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Company,                                                   October 31, 2017

Appellant,                                                 Court of Appeals Case No.
                                                           93A02-1703-EX-650

        v.                                                 Appeal from the Indiana
                                                           Department of Workforce
                                                           Development—Unemployment
Indiana Department of                                      Insurance Appeals
Workforce Development,                                     The Hon. Suzanne E. Manning,
Appellee.                                                  Liability Administrative Law Judge
                                                           Case No. 97920

Bradford, Judge.

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

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

      Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017   Page 3 of 18
      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,

      Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017   Page 4 of 18
              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

      Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017   Page 5 of 18
              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 6 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.

      Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017                  Page 7 of 18
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 8 of 18
                    II. Whether Indiana Code Section 22-4-8-1
                          is Preempted by Federal Law                                 2

[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 9 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 pre-
               emption occurs at least where state laws have a ‘significant
               impact’ related to Congress’ deregulatory and pre-emption-
               related 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 10 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
                                                                                     Employee
                                                     Contractor
                        Miles                        22,139,177                       22,139,177
                                                    $19,925,259                      $11,955,155
                    Driver Pay
                                                    ($0.90/mile)                    ($0.54/mile)
                                                                                      $6,228,643
                     Fuel
                                                                                       (8 mpg,
                 Reimbursement
                                                                                    $2.25/gallon)
                      Toll
                                                                                      $207,555
                 Reimbursement
                 Unemployment
                                                                                      $800,995
                   Insurance
                   Employee
                                                                                     $1,044,000
                    Benefits
                   Tools and
                                                                                      $174,000
                   Hardware
                  Driver Return
                                                                                    $11,955,155
                    Expense
                     Totals                          $19,925,259                    $32,363,504

       Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017                 Page 11 of 18
       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.

       Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017   Page 12 of 18
       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.

       Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017                         Page 13 of 18
       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;

       Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017   Page 14 of 18
                    (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

       Court of Appeals of Indiana | Opinion 93A02-1703-EX-650 | October 31, 2017   Page 15 of 18
       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 16 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 17 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.

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