Court Opinion

ID: 9914503
Source: CourtListenerOpinion
Date Created: 2024-01-02 15:06:47.928784+00
Date Added: 2024-06-11T13:13:24.864491
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Wilfredo Ayala,                         :
                         Petitioner     : No. 1037 C.D. 2022
                                        : Submitted: April 28, 2023
            v.                          :
                                        :
Fundamental Labor Strategies, Inc.      :
(Workers’ Compensation Appeal           :
Board),                                 :
                        Respondent      :

BEFORE:     HONORABLE ANNE E. COVEY, Judge
            HONORABLE MICHAEL H. WOJCIK, Judge
            HONORABLE STACY WALLACE, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE WALLACE                                    FILED: January 2, 2024

      Wilfredo Ayala (Claimant) petitions for review of the order of the Workers’
Compensation Appeal Board (Board) dated August 31, 2022, which affirmed the
decision and order of a workers’ compensation judge (WCJ), circulated February 16,
2022 (WCJ’s Decision). On appeal, Claimant argues it was error for the Board to
affirm the WCJ’s finding he was an independent contractor at the time of his injury
and, therefore, not entitled to workers’ compensation (WC) benefits. After review,
we affirm the Board’s order.
                                       BACKGROUND
         Claimant, a commercial truck driver, began working as a delivery driver for
Fundamental Labor Strategies, Inc. (FLS) in March 2019. Certified Record (C.R.),
Item No. 13. On February 17, 2021, Claimant filed a claim petition alleging on
February 6, 2020, he sustained a lumbar disc injury while unloading a window
during the course and scope of his employment with FLS. Id. Claimant then filed a
petition for penalties alleging FLS violated the Pennsylvania Workers’
Compensation Act1 by failing to timely file Bureau of Workers’ Compensation
documents accepting or rejecting liability for his work injury. Id. Claimant filed an
additional claim petition alleging that also on February 6, 2020, he sustained
adjustment disorder with anxious and depressed mood and chronic pain syndrome
from his work injury. Id. After each of Claimant’s filings, FLS filed an answer
denying an employment relationship with Claimant.
         In support of his two claim petitions, Claimant testified FLS was not a motor
carrier, and explained FLS sent him to different driving assignments with various
clients. Id. After finishing his previous assignment, FLS emailed Claimant his
assignments for the next day, which included the required arrival time, the address,
and the items he was to deliver. Id. Claimant first testified he was permitted to
accept or reject assignments, but later testified he did not feel he could decline an
assignment. Id. When carrying out an assignment, Claimant received routing
instructions from the motor carrier, and he drove trucks owned by the clients. Id.
         Regarding his employment relationship with FLS, Claimant understood FLS
treated him as an independent contractor, and he had worked as an independent
contractor for other companies. Id. Claimant testified FLS provided him a hat with

1
    Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.

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FLS’s logo, but he was not required to wear it. Id. Claimant never drove a truck
owned by FLS or displaying FLS’s logo. Id. FLS paid Claimant by check and
Claimant understood FLS made no tax deductions, and he was responsible for
paying his own taxes. Id. Claimant admitted he signed an independent contractor
occupational accident insurance enrollment form in March 2019, but claimed he did
not understand FLS would take deductions from his pay for the insurance. Id.
      In response, Curtis Ball (Ball), the president of FLS, testified FLS is a
transportation broker with two brokerage services. Id. FLS offers a dedicated driver
service, which private motor carriers use to haul their own goods, rather than hauling
another’s goods for a fee. Id. Ball testified FLS considers dedicated service drivers
employees of FLS and closely manages them. Id. FLS dictates the assignments and
hours of dedicated service drivers, and these drivers are required to report to work
to perform their assignments.      Id.   The dedicated service drivers receive life
insurance, disability insurance, and health benefits, and are subject to FLS’s internal
rules and regulations. Id. They also receive W2 tax forms. Id.
      Ball explained the other service offered by FLS is the flex driver brokerage
service. Id. This service matches motor carriers having a short term need for a driver
with drivers who want to work. Id. These assignments can range from a day to a
week or a month. Id. Ball indicated flex drivers determine how much they want to
work. Id. The flex drivers transport themselves to the clients’ locations and drive
the clients’ vehicles. Id. The client provides any trip sheet or routing information.
Id. The motor carrier or shipper sets the start time for the job and the number of
stops to be made during the assignment. Id. Flex drivers are paid a flat fee and
receive a 1099 tax form. Id. Flex drivers are free to accept or reject assignments.
Id. In order to provide flex drivers with as much information as possible to make

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decisions about accepting assignments, FLS obtains as much information about the
assignment from the client as possible including the work days available, the start
times, the equipment that will be operated, the number of deliveries to be made,
whether the equipment is temperature controlled, the type of transmission in the
vehicle, and any other relevant information. Id. There are no repercussions if a flex
driver rejects an assignment. Id. Additionally, flex drivers are permitted to drive
for other companies. Id.
      Regarding Claimant’s work with FLS, Ball testified Claimant was a flex
driver and received driving assignments from FLS in 2019 and 2020. Id. Claimant
executed a W2 in July 2018 on which he indicated he was a sole proprietor or LLC.
Id. Additionally, Ball testified Claimant executed an application for independent
contractor occupational accident insurance. Id. In his testimony, Ball explained flex
drivers provide FLS with proof they are insured so FLS knows the driver is covered
in the event of a loss, but FLS does not provide coverage or require specific accident
insurance coverage for flex drivers. C.R., Item No. 26. Ball testified that as a flex
driver, Claimant was permitted to accept or reject assignments, and he had
documentation Claimant rejected 11 assignment offers. C.R., Item No. 13. There
were no repercussions for Claimant rejecting the assignments. Id.
      Based on the testimony presented, the WCJ found Claimant did not establish
an employment relationship with FLS and dismissed Claimant’s claim petitions and
petition for penalties. Id. The WCJ noted that to the extent “Claimant and [Ball’s
testimony] differs, [Ball’s] testimony is accepted as credible, particularly where he
testified that there were at least 11 instances of refused assignments, but ongoing
assignments offered to Claimant.” Id. The WCJ found Ball’s testimony regarding

                                          4
the flex driver program crucial in establishing Claimant was an independent
contractor rather than FLS’s employee. Id.
      Claimant appealed to the Board. Ultimately, the Board determined the WCJ
did not err in finding Claimant was an independent contractor. C.R., Item No. 16.
The Board rejected Claimant’s challenges to the WCJ’s weight and credibility
determinations, which determinations are binding on appeal. Id. Noting the WCJ’s
findings were supported by substantial, competent evidence, the Board affirmed the
WCJ’s Decision. Id.
      Claimant now petitions this Court for review of the Board’s order. On appeal,
Claimant argues the Board erred in concluding he was an independent contractor at
the time of his injury. Claimant’s Br. at 10. Specifically, Claimant contends he was
not an independent contractor because FLS exercised control over his work. Id. at
18. In response, FLS contends the Board properly affirmed the WCJ’s Decision as
substantial evidence supported the WCJ’s finding Claimant was an independent
contractor. FLS’s Br. at 6.
                                  DISCUSSION
      Our review in WC appeals is limited to “determining whether the WCJ’s
findings of fact were supported by substantial evidence, whether an error of law was
committed, or whether constitutional rights were violated.” Pierson v. Workers’
Comp. Appeal Bd. (Consol Pa. Coal Co. LLC), 252 A.3d 1169, 1172 n.3 (Pa.
Cmwlth.), appeal denied, 261 A.3d 378 (Pa. 2021). Relevant to this appeal, the
question of whether an employee-employer relationship exists is a question of law
subject to our plenary, de novo review. Am. Rd. Lines v. Workers’ Comp. Appeal
Bd. (Royal), 39 A.3d 603, 610-11 n.6 (Pa. Cmwlth. 2012). However, where
substantial evidence supports the WCJ’s findings, we defer to those findings as the

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WCJ is the ultimate fact finder in workers’ compensation cases and “has exclusive
province over questions of credibility and evidentiary weight.”         Anderson v.
Workers’ Comp. Appeal Bd. (Penn Ctr. for Rehab.), 15 A.3d 944, 949 (Pa. Cmwlth.
2010). The WCJ is free to accept or reject the testimony of any witness, Edward v.
Workers’ Compensation Appeal Board (Epicure Home Care, Inc.), 134 A.3d 1156,
1161 (Pa. Cmwlth. 2016), and this Court is bound by those credibility
determinations. A&J Builders, Inc. v. Workers’ Comp. Appeal Bd. (Verdi), 78 A.3d
1233 (Pa. Cmwlth. 2013).
      For a claimant to receive WC benefits, the claimant must prove an employer-
employee relationship exists because “[a]n independent contractor is not entitled to
benefits.” Universal Am-Can v. Workers’ Comp. Appeal Bd. (Minteer), 762 A.2d
328, 330 (Pa. 2000). Whether an employer-employee relationship exists depends on
the unique facts and circumstances of each case. 3D Trucking v. Workers’ Comp.
Appeal Bd. (Fine and Anthony Holdings Int’l), 921 A.2d 1281 (Pa. Cmwlth. 2007).
In considering whether a claimant is an independent contractor versus an employee,
we consider many factors, including:

      (1) control of manner the work is done; (2) responsibility for result
      only; (3) terms of agreement between the parties; (4) nature of the
      work/occupation; (5) skill required for performance; (6) whether one is
      engaged in a distinct occupation or business; (7) which party supplies
      the tools/equipment; (8) whether payment is by time or by the job; (9)
      whether work is part of the regular business of employer; and, (10) the
      right to terminate employment.

Am. Rd. Lines, 39 A.3d at 611 (internal citation omitted). While no factor is
dispositive, control over the work and the manner it is performed are primary factors
in determining employment status. Universal Am-Can, 762 A.2d at 333. Where an
alleged employer has the right to select the employee, the right and power to

                                         6
discharge the employee, the power to direct the manner of performance, and the
power to control the employee, there is sufficient control to establish an employer-
employee relationship. 3D Trucking, 921 A.2d at 1288. Additionally, payment of
wages and payroll deductions are a significant consideration, as is a tax filing noting
self-employment.    Id.   See also Guthrie v. Workers’ Comp. Appeal Bd. (The
Travelers’ Club, Inc.), 854 A.2d 653, 662-63 (Pa. Cmwlth. 2004).
      Because of the relationships among drivers, owner-operators and motor
carriers and the thorough regulation of them, the trucking industry presents unique
challenges in determining whether an employer-employee relationship exists. Am.
Rd. Lines, 39 A.3d at 611. In these cases, in addition to the previously outlined
factors, we also consider the degree of supervision and control over delivery routes
and the timing of work or schedule. Id.
      Here, the WCJ analyzed and weighed the testimony and each of the WCJ’s
findings are supported by evidence in the record. See generally C.R., Item No. 13.
Accordingly, we conclude substantial evidence supports the WCJ’s factual findings
about Claimant’s employment relationship with FLS. Because the Board is bound
by the same standard of review we are, it did not err in reaching the same conclusion.
      Turning to the WCJ’s legal conclusion Claimant was an independent
contractor, we note the WCJ rejected Claimant’s testimony to the extent it conflicted
with Ball’s testimony. Ball testified Claimant had no guarantee of work and was
free to refuse work or even work for another company. He also testified FLS paid
Claimant by check and took no tax deductions, instead FLS provided Claimant a
Form 1099 and he was responsible for paying his own taxes. As to the amount of
control, FLS provided Claimant with assignments and information from the client
about pick-up and drop-off locations. While requests about the manner of work may

                                          7
have come from the clients, FLS did not dictate to Claimant which assignments to
accept, how to complete the assignments, what routes to travel, and what times to
drive each day or for how long. FLS did not provide a uniform or the vehicles for
Claimant to drive, nor did FLS train Claimant. While none of these facts are
individually dispositive, taken as a whole, these findings reflect Claimant controlled
the time and manner of his work, primarily by his ability to accept or reject
assignments.
      In analyzing the WCJ’s legal conclusion Claimant was an independent
contractor at the time of his injury, the Board explained:

      Herein, the WCJ credited the testimony of Claimant and [Ball] that
      Claimant signed an independent contractor occupational accident
      insurance form so he would have his own insurance in the case of an
      accident since he was treated as an independent contractor with [FLS]
      similar to his prior independent contractor driving jobs. Additionally,
      the credible testimony of Claimant and [Ball] supports the Claimant did
      not drive [FLS’s] truck, since [FLS] did not own any trucks, trailers, or
      warehouses, and the hat provided by [FLS] with the company logo on
      it was a gift which was not required to be worn by Claimant during
      driving assignments as a uniform. Moreover, the credible testimony
      establishes that [FLS] had no control over Claimant’s daily routes,
      starting or ending times, etc., and that Claimant was entitled to, and in
      fact took advantage of, rejecting job assignments without
      repercussions. This credible evidence constitutes substantial evidence
      to support the WCJ’s finding that Claimant was an independent
      contractor rather than an employee for [FLS] based on the terms of the
      agreement that Claimant would be an independent contractor for [FLS],
      that [FLS] did not supply Claimant’s tools to perform his job, and [FLS]
      did not retain control [over] the manner of Claimant’s driving on
      assignments. Consequently, the WCJ properly determined Claimant
      failed to meet his burden establishing an employment relationship with
      [FLS].

C.R., Item No.16. We agree with the Board’s determination.

                                          8
                                 CONCLUSION
      Because this Court may not reweigh the evidence or second-guess the WCJ’s
credibility determinations, and because substantial evidence in the record supports
the WCJ’s findings of fact and conclusions of law, we discern no error by the Board
in affirming the WCJ’s Decision Claimant was an independent contractor. As an
independent contractor, Claimant was not entitled to WC benefits. Accordingly, we
affirm the Board’s Order.

                                             ______________________________
                                             STACY WALLACE, Judge

Judge Fizzano Cannon did not participate in the decision of this case.

                                         9
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Wilfredo Ayala,                       :
                       Petitioner     : No. 1037 C.D. 2022
                                      :
           v.                         :
                                      :
Fundamental Labor Strategies, Inc.    :
(Workers’ Compensation Appeal         :
Board),                               :
                        Respondent    :

                                    ORDER

     AND NOW, this 2nd day of January 2024, the Order of the Workers’
Compensation Appeal Board dated August 31, 2022, is AFFIRMED.

                                      ______________________________
                                      STACY WALLACE, Judge