Court Opinion

ID: 9724448
Source: CourtListenerOpinion
Date Created: 2023-08-26 10:56:46.873201+00
Date Added: 2024-06-11T18:25:00.444552
License: Public Domain

JUSTICE HARTMAN, dissenting: I must respectfully dissent from the majority opinion and would reverse the administrative findings of the agency and the orders of the circuit court in both cases; I would find that plaintiff AFM Messenger Service, Inc., has fulfilled the statutory requirements of section 212 of the Illinois Unemployment Insurance Act, recognizing the drivers engaged by plaintiff as independent contractors under the Act, rather than as employees. Our supreme court wisely and realistically noted that it would be difficult to conceive of any employment arrangement in which an employer does not exercise some modicum of control or direction over the performance of the questioned services, and that the application of this statute should not be construed so as to require total absence of control; rather, control must be considered with character and degree as frames of references. Eutectic Welding Alloys Corp. v. Rauch, 1 Ill. 2d 328, 115 N.E.2d 898 (1953). This court agreed with such construction of the statute just recently in Enesco Corp. v. Doherty, 314 Ill. App. 3d 123 (2000) (Enesco). The record in the instant case reveals the following facts: (1) drivers engaged by AFM drivers are required to own the vehicles used in their businesses; (2) they are required to execute “equipment leases” promulgated by the Illinois Commerce Commission, through which they become lessors of their vehicles and AFM becomes lessee; (3) their remuneration for services rendered is based upon an agreed percentage of the fees charged by AFM to their customers for delivery services, as set forth in the equipment leases; (4) they receive no salaries or draws against salaries or commissions; (5) they receive no compensation for items not delivered; (6) they pay all their own expenses, including auto insurance, fuel, and maintenance; (7) they arrange their own work schedules without any direction or suggestion by AFM; (8) they are given no quotas by AFM; (9) they are allowed to hire their own helpers, at their own expense; (10) they establish their own routes for pickup and delivery, without any direction or suggestion from AFM, subject only to the customer’s particular request; (11) they are permitted to work for competing delivery services; (12) they may accept or refuse any delivery opportunities without adverse consequences; (13) they are not required to wear AFM uniforms; (14) they are not required to identify themselves as AFM agents; (15) they are not required to attend AFM meetings; (16) they are not required to report to AFM offices or facilities for any reason; (17) no federal or state income taxes, or social security taxes, are withheld from their commissions; and (18) they file self-employment and business schedules “C” with their federal income tax returns. The foregoing facts demonstrate compliance with sections 212(A), (B) and (C) of the Illinois Unemployment Insurance Act, with respect to control or direction of performance by AFM over the lessee-drivers (A), services performed outside of AFM’s place of business (B), and independently established business operated by the lessee-drivers (C). The lessee-drivers should have been recognized as independent contractors under the facts and the law. The majority misconstrues section 212(C) in concluding that AFM failed to satisfy section 212(C) because “an economic interdependence between AFM and the drivers existed.” Satisfying the 212(C) requirement is not determined by the existence of “interdependence” between AFM and the drivers; rather, it is the drivers’ ability to operate without interference from any other person or of being able to sell or give away their enterprise that governs (O’Hare-Midway Limousine Service, Inc. v. Baker, 232 Ill. App. 3d 108, 596 N.E.2d 795 (1992)). AFM’s dependence on the drivers for its success does not enter into the analysis. Here, AFM satisfied 212(C), because the drivers could have performed delivery services without AFM, they were free to work for other delivery companies, and each owned an automobile and possessed the ability and right to deliver packages for other delivery companies. See United Delivery, 276 Ill. App. 3d at 589. Further, the foregoing circumstances place this case squarely within the precedent set by this court in United Delivery Service, Ltd. v. Didrickson, 276 Ill. App. 3d 584, 659 N.E.2d 82 (1995), appeal denied, 166 Ill. 2d 555 (1996) (United Delivery), as well as Enesco, and should be deemed controlled by both authorities. The majority gives no weight to United Delivery because that case failed to rely upon two other cases, which the majority deems significant: Zelney v. Murphy, 387 Ill. 492, 56 N.E.2d 754 (1944) (Zelney), and Rozran v. Durkin, 381 Ill. 97, 390 N.E.2d 333 (1942) (Rozran). Of course, when the supreme court denied review in United Delivery, it no doubt was well aware of its own decisions in both cases, yet found no bases for review, and with good reason. In Zelney, the drivers had no independent contractor agreements or equipment leases with their principal; they reported to work every day at the company offices, at regular times; the drivers were assigned by their employers to specific territories; they collected money for their employers for the delivery services rendered when C.O.D. delivery was specified; and they were instructed and directed specifically by their employers as to where to pick up and where to deliver packages. These facts are significantly dissimilar to the facts in the instant case, as they were in United Delivery. In Rozran, the drivers possessed no independent contractor agreements with their principal; they possessed no equipment leases with their employers; their work was governed by the suggestion, direction and will of their employer; they were required to pick up packages and deliver them within specified time limits when directed to do so by the company dispatcher; drivers were assigned certain sections of the delivery area; they were expected to return to the company offices and make further deliveries the same day; they collected delivery charges when directed to do so by their employers; and their employer carried workmen’s compensation insurance coverage for its drivers. As with United Delivery, and Zelney, the foregoing facts are significantly dissimilar to those in the present case. Of further significance to the case sub judice is the arrangement for engagement and compensation to the lessee-drivers by AFM. The drivers’ contracts and equipment leases with AFM require them to lease their vehicles and provide driver services to AFM for specified delivery functions; the rental fee payable and the only amount of compensation for driver’s services is a percentage of the charge made by AFM to its customer, as set forth as a term of the equipment lease. AFM is in no way liable for any other compensation to the drivers. The lease provisions are required by the Illinois Commerce Commission rules governing an equipment lease and provisions of the Illinois Vehicle Code (625 ILCS 5/1 — 100 et seq. (West 1996)). In John Gabel Manufacturing Co. v. Murphy, 390 Ill. 455, 460-61, 62 N.E.2d 401 (1945), the supreme court held, in analogous circumstances, that equipment lease payments as the only compensation payable from principal to contractor, similar to that mandated by the Illinois Commerce Commission, is rental income, from which drivers should not be considered employees, but independent contractors, the court noting, “This instrument does not purport to be other than what its language states, i.e., a lease of specific personal property. There is nothing in the language of the lease that can be said even to imply that [the lessor] was an employee of [the lessee].” Gabel, 390 Ill. at 460-61. Accordingly, I would reverse the Department and Board’s determinations that the lessee-drivers engaged by AFM were employees, rather than independent contractors, as clearly erroneous, and I would reverse the circuit court’s affirmance of those determinations as against the manifest weight of the evidence.