Court Opinion

ID: 3161528
Source: CourtListenerOpinion
Date Created: 2015-12-10 16:09:58.783725+00
Date Added: 2024-06-11T12:02:07.892442
License: Public Domain

No. 55	                  December 10, 2015	431

             IN THE SUPREME COURT OF THE
                   STATE OF OREGON

                  BROADWAY CAB LLC,
                   Petitioner on Review,
                             v.
              EMPLOYMENT DEPARTMENT,
                  Respondent on Review.
           (EAB T71262; CA A150627; SC S062715)

   En Banc
   On review from the Court of Appeals.*
   Argued and submitted June 17, 2015.
   Thomas M. Christ, Cosgrave Vergeer Kester, LLP,
Portland, argued the cause for petitioner. Sean P. Ray,
Barran Liebman LLP, Portland, filed the brief. With him on
the brief were Thomas M. Christ, Cosgrave Vergeer Kester,
and Edwin A. Harnden, Barran Liebman.
   Peenesh H. Shah, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent. With
him on the brief were Ellen F. Rosenblum, Attorney General,
and Anna M. Joyce, Solicitor General.
   WALTERS, J.
   The decision of the Court of Appeals is affirmed.

______________
	  *  Judicial review from Employment Department Final Order, Amrit Mann,
Administrative Law Judge. 265 Or App 254, 336 P3d 12 (2014)
432	                     Broadway Cab LLC v. Employment Dept.

    Case Summary: An ALJ determined that Broadway Cab LLC was liable for
unemployment insurances taxes on the wages of certain taxicab drivers because
the drivers performed services for Broadway for remuneration. The Court of
Appeals agreed with the ALJ, and the Supreme Court affirmed. The court held
that the drivers performed driving services for Broadway and not solely for their
passengers, because the drivers’ services enabled Broadway to fulfill its obliga-
tions to the city and other entities with which Broadway had contracts. The court
further held that the drivers were not independent contractors because the driv-
ers were not “customarily engaged in an independently established business,” as
required by ORS 670.600(2). The drivers did not meet that statutory requirement
because they did not maintain a business location separate from Broadway’s loca-
tion; they did not “[provide] contracted services for two or more different persons
within a 12-month period” or “routinely [engage] in business advertising”; and
they did not have the authority to hire and fire “other persons to provide or to
assist in providing the [driving] services.” ORS 670.600(3).
    The decision of the Court of Appeals is affirmed.
Cite as 358 Or 431 (2015)	433

	          WALTERS, J.
	        In this case, an administrative law judge (ALJ)
determined that certain taxicab drivers performed ser-
vices for Broadway Cab LLC for remuneration and were
not independent contractors. Therefore, the ALJ concluded,
Broadway was liable for unemployment insurance taxes on
the drivers’ wages. The Court of Appeals agreed with the
ALJ, Broadway Cab LLC v. Employment Dept., 265 Or App
254, 336 P3d 12 (2014), and, for the reasons that follow, we
affirm the decision of the Court of Appeals.
	       The statutes that govern liability for unemploy-
ment insurance taxes are found in ORS chapter 657. Under
that chapter, an “employer” must pay unemployment insur-
ance taxes on “wages” paid for “services performed.” ORS
657.505(2).1 An “employer” is an “employing unit which
employs one or more individuals.” ORS 657.025(1).2 “Wages”
are “all remuneration for employment.” ORS 657.105(1).3
And “employment” is “service for an employer” that is “per-
formed for remuneration.” ORS 657.030(1).4 Thus, Oregon
	1
        ORS 657.505(2) provides: “An employer shall be liable for taxes on all wages
paid for services performed on or after the first day of a calendar quarter.”
	2
        ORS 657.025(1) provides:
    	    “As used in this chapter, unless the context requires otherwise, ‘employer’
    means any employing unit which employs one or more individuals in an
    employment subject to this chapter in each of 18 separate weeks during any
    calendar year, or in which the employing unit’s total payroll during any cal-
    endar quarter amounts to $1,000 or more.”
	3
        ORS 657.105(1) provides:
    	 “As used in this chapter, unless the context requires otherwise, and
    subject to ORS 657.115 to 657.140, ‘wages’ means all remuneration for
    employment, including the cash value, as determined by the Director of the
    Employment Department under the regulations of the director, of all remu-
    neration paid in any medium other than cash.”
	4
        ORS 657.030(1) provides:
    	 “As used in this chapter, except as provided in ORS 657.035, 657.040
    and 657.043 to 657.094, ‘employment’ means service for an employer, includ-
    ing service in interstate commerce, within or outside the United States,
    performed for remuneration or under any contract of hire, written or oral,
    express or implied.”
	   We note that the 2007 version of the statute applied in this case. The statute
has been amended since that time, Or Laws 2011, ch 106 § 3, but the amendment
does not affect our analysis, and we therefore cite to the current version.
	   The terms “employ,” and “employment” are defined differently for other pur-
poses. For instance, for the purpose of minimum wage law, the term “employ”
434	                     Broadway Cab LLC v. Employment Dept.

law requires an employer to pay unemployment insur-
ance taxes on all sums paid for services performed for the
employer for remuneration. However, if the employer can
establish that an individual is an independent contractor,
as that term is defined in ORS 670.600, then the employer
is not liable for taxes on wages paid to that individual. ORS
657.040(1).5
	         In this case, the Employment Department issued
Broadway a Notice of Tax Assessment assessing unemploy-
ment insurance taxes for the first quarter of 2008 through
the fourth quarter of 2009 on the earnings of certain taxi-
cab drivers affiliated with Broadway. Broadway contested
its tax liability, and, in a hearing before an ALJ, argued that
the drivers performed services for the general public—the
passengers for whom the drivers provided transportation
and who paid the drivers for those services. Broadway took
the position that the drivers were not obligated to perform
services for Broadway, and that Broadway did not remuner-
ate them for services rendered. In fact, Broadway claimed,
the opposite was true: Broadway was obligated to perform
services for the drivers, and the drivers paid Broadway for
the services that they received. Furthermore, Broadway
argued, even if it employed the drivers, they were indepen-
dent contractors, and Broadway was not liable for unemploy-
ment insurance taxes on their earnings.
	       After the hearing, the ALJ made findings of fact,
which include the following. To lawfully drive a taxicab
within the City of Portland, a driver must either obtain
a taxicab company permit or associate with a permitted

means to “suffer or permit to work.” ORS 653.010(2). The Oregon Court of Appeals
has held that an “economic realities test” should be used to determine whether an
individual is “employed” under that definition. Cejas Commercial Interiors, Inc. v.
Torres-Lizama, 260 Or App 87, 103, 316 P3d 389 (2013). We do not apply that test
in this case.
	5
        ORS 657.040(1) provides:
    	    “Services performed by an individual for remuneration are deemed to be
    employment subject to this chapter unless and until it is shown to the satis-
    faction of the Director of the Employment Department that the individual is
    an independent contractor, as that term is defined in ORS 670.600.”
	   We quote and discuss the definition of “independent contractor” as defined in
ORS 670.600 later in this opinion.
Cite as 358 Or 431 (2015)	435

company.6 At the relevant time, none of Broadway’s driv-
ers had a taxicab company permit, and the city did not
issue new company permits during the period in question.
Broadway did have a taxicab company permit. The terms
of that permit required that Broadway be capable of fulfill-
ing requests for service from any location within the city,
24 hours per day, seven days per week. Broadway also was
obligated to fulfill requests for service by virtue of contracts
that it had with various other entities, including Tri-County
Metropolitan Transportation District of Oregon, Portland
Public Schools, and Multnomah County.
	        To fulfill its service obligations, Broadway con-
tracted with individual taxicab drivers. Broadway required
drivers to sign “Driver Agreements” in order to be included
on Broadway’s list of approved drivers. The “Driver
Agreements” all contained the same material and non-
negotiable provisions.7 The agreements permitted the driv-
ers to operate in association with Broadway and required
each driver to furnish and maintain a taxicab that was on
Broadway’s approved vehicle list. Drivers could own their
vehicles, lease vehicles from Broadway, or drive vehicles on
the approved vehicle list that were owned by other approved
drivers. The agreements required that all taxicabs, whether
driver-owned or leased, be painted with Broadway’s colors
and marked with Broadway’s name.
	       The “Driver Agreements” did not require that
the drivers drive their taxicabs for a minimum number of
hours, or even that they drive at all. The agreements did,
however, impose limits on the maximum number of hours

	6
       The ALJ did not make specific findings regarding the definition of a “taxi-
cab.” The ALJ did find, however, that drivers could provide airport shuttle trans-
portation and town car services within the city with only a city-issued driver
permit, and without associating with a permitted taxicab company. That finding
is consistent with section 16.40.030 of the Code of the City of Portland, which
defines a “taxicab” as “any vehicle that carries passengers for-hire where the
destination and route traveled may be controlled by a passenger and the fare is
calculated on the basis of an initial fee, distance traveled, waiting time, or any
combination thereof.”
	7
      All drivers executed a “Driver Agreement.” Drivers who owned their
own vehicles or leased vehicles from Broadway also executed either a “Vehicle
Agreement” or a “Vehicle Lease Agreement.” We refer to the agreements collec-
tively as “Driver Agreements.”
436	                    Broadway Cab LLC v. Employment Dept.

that a driver could work. Drivers who owned or drove a
driver-owned vehicle could work up to 14 hours per day, the
maximum set by the city; drivers who leased vehicles from
Broadway could work up to 12 hours per day.
	         Under the terms of the “Driver Agreements,” all
drivers were required to pay driver agreement fees; drivers
who owned their own vehicles or who leased vehicles from
Broadway also were required to pay vehicle fees.8 The driver
agreement fee was $160 per week for all drivers. The vehicle
fee was $420 per week for drivers who owned their vehicles,
$320 per week for vehicle owners who shared their vehicles
with another driver on Broadway’s approved driver list, and
$290 per week for drivers who leased their vehicles from
Broadway. In exchange for those fees, Broadway provided
liability insurance for the taxicabs on Broadway’s approved
vehicle list, routine maintenance and repairs on vehicles
leased from Broadway, and access to Broadway’s credit and
debit card processing system, its dispatch system, and its
“billing, accounting, marketing, and advertising services.”
Drivers were required to pay the fees whether they used all,
some, or even none of those services.
	        The drivers paid their driver agreement and vehicle
fees through accounts that Broadway maintained for each
driver. When drivers chose to use Broadway’s credit and
debit card processing services (and all drivers who accepted
credit and debit card payments did so, because none of the
drivers owned a separate credit and debit card machine or
an account to process such payments), Broadway credited
to the drivers’ accounts fares that passengers paid using
credit and debit cards. Broadway also credited to the driv-
ers’ accounts fares that passengers paid using accounts
that the passengers maintained with Broadway or vouch-
ers that passengers received from the agencies and other
entities with which Broadway had contracts. Drivers were
entitled to keep all cash fares and amounts credited to their
accounts in excess of the fees that they owed Broadway. At

	8
       Broadway does not contend that the distinction between drivers who paid
only driver agreement fees and those who also paid vehicle fees is material for
purposes of deciding whether the drivers’ earnings are subject to unemployment
insurance taxes.
Cite as 358 Or 431 (2015)	437

the end of each week, drivers were entitled to withdraw any
positive balance that remained in their accounts.
	        The fees that Broadway collected in 2008, including
the driver agreement and vehicle fees paid by its drivers,
constituted 91.5 percent of its revenue.9 On its company web-
site, Broadway touted itself as the city’s “oldest and largest
taxicab company, with “a fleet of more than 225 cars and
340 drivers.”
	         From those facts, the ALJ determined that the
drivers performed driving services for Broadway for remu-
neration, and that Broadway was liable for unemployment
insurance taxes on the drivers’ earnings. From those and
additional facts set forth below, the ALJ also determined
that Broadway had not demonstrated that the drivers were
independent contractors and concluded that Broadway was
liable for taxes on the drivers’ wages.10 Broadway appealed to
the Court of Appeals, which affirmed. Broadway Cab LLC,
265 Or App at 256. This court allowed Broadway’s petition
for review. Before this court, Broadway contends, as it did in
the Court of Appeals, that the ALJ erred in concluding that
Broadway was liable for unemployment insurance taxes on
the drivers’ wages.
	       We review the decision of the ALJ using the same
standard that we use for review of orders in contested
cases. ORS 657.684.11 Under that standard, we review

	9
         The driver agreement and vehicle fees collected in 2008 together totaled
$5,505,007. Broadway collected additional fees of $730,620 from drivers of cer-
tain specialized taxicabs, for total fees of $6,235,627. The total fees constituted
91.5 percent of Broadway’s revenue.
	10
          The department calculated the drivers’ wages by using the sums credited
to the drivers’ accounts, minus the vehicle and driver agreement fees. The ALJ
concluded that the department’s calculation did not accurately reflect the drivers’
wages, and therefore that the amount of the tax assessment was incorrect. The
department filed a cross-appeal in the Court of Appeals, assigning error to the
ALJ’s failure to provide the department with guidance as to how to properly cal-
culate Broadway’s taxable payroll. The Court of Appeals agreed and reversed and
remanded on that issue. Broadway Cab LLC, 265 Or App at 261-62. Broadway did
not seek review of that aspect of the Court of Appeals’ decision in this court, and
we therefore do not consider the accuracy of the department’s calculation of the
wages or taxes.
	11
         ORS 657.684 provides: “Judicial review of decisions under ORS 657.683
shall be as provided for review of orders in contested cases in ORS chapter 183
* * *.”
438	                     Broadway Cab LLC v. Employment Dept.

legal conclusions for errors of law, ORS 183.482(8)(a),12
and factual determinations for substantial evidence, ORS
183.482 (8)(c).13 In this case, Broadway does not argue that
the ALJ’s factual findings are not supported by substantial
evidence. Consequently, we consider the ALJ’s findings and
other uncontested facts in the record to determine whether
the ALJ committed errors of law. ORS 183.482(7).14
    I.  SERVICES PERFORMED FOR AN EMPLOYER
               FOR REMUNERATION
	      As noted, under ORS chapter 657, which pertains
to unemployment insurance, “employers” must pay unem-
ployment insurance taxes on “wages.” An “employer” is an
“employing unit which employs one or more individuals.”
ORS 657.025(1). “Wages” are “all remuneration for employ-
ment,” ORS 657.505(2), and “employment” is “service for
an employer” that is “performed for remuneration,” ORS
657.030(1). Read together, those statutes require Broadway
to pay unemployment insurance taxes on sums paid to driv-
ers for services performed for Broadway for remuneration.
	       In this court, Broadway relies on three primary
points to support its argument that its drivers did not
perform services for Broadway for remuneration. First,
Broadway argues, the drivers performed services only for
their passengers. The drivers were not obligated to perform
driving services for Broadway; they drove only when they
chose to do so. Second, the relationship between Broadway
	12
        ORS 183.482(8)(a) provides:
    	 “The court may affirm, reverse or remand the order. If the court finds
    that the agency has erroneously interpreted a provision of law and that a
    correct interpretation compels a particular action, the court shall:
    	    “(A)  Set aside or modify the order; or
    	 “(B)  Remand the case to the agency for further action under a correct
    interpretation of the provision of law.”
	13
        ORS 183.482(8)(c) provides:
    	    “The court shall set aside or remand the order if the court finds that the
    order is not supported by substantial evidence in the record. Substantial evi-
    dence exists to support a finding of fact when the record, viewed as a whole,
    would permit a reasonable person to make that finding.”
	14
        ORS 183.482(7) provides, in part: “Review of a contested case shall be con-
fined to the record, and the court shall not substitute its judgment for that of the
agency as to any issue of fact or agency discretion.”
Cite as 358 Or 431 (2015)	439

and the drivers was not an employment relationship; rather,
it was a relationship in which Broadway performed services
for the drivers, and the drivers paid Broadway for those ser-
vices. Third, Broadway did not pay the drivers for their driv-
ing services—the passengers did.
	         We begin with, and accept as true, Broadway’s con-
tention that the drivers provided services for their passen-
gers. We have more difficulty, however, with Broadway’s
contention that the drivers provided services for their pas-
sengers alone. The relevant statutes do not require that ser-
vices provided by a putative employee be provided for the
exclusive benefit of an employer, and many employees pro-
vide services that benefit both the recipients of the services,
such as clients or customers, and those who employ them.
See, e.g., Journal Pub. Co. v. State U.C. Com., 175 Or 627,
653, 155 P2d 570 (1945) (individual newspaper distributor
who supplied papers to subscribers performed services for
publishing company); Kirkpatrick v. Peet, 247 Or 204, 213,
428 P2d 405 (1967) (door-to-door vacuum salesmen who sup-
plied vacuums to individuals performed services for vacuum
distributor). Broadway contends that the drivers in this
case were different, however, because they drove only when
they chose to do so and not out of any legal obligation to
Broadway.
	        Broadway is correct that the “Driver Agreements”
did not explicitly require the drivers to provide driving ser-
vices for Broadway. However, the agreements were premised
on an assumption that the drivers would do so. The drivers
were not permitted to drive taxicabs in the City of Portland
unless they had a taxicab company permit or associated
with a permitted company. The drivers did not have taxi-
cab company permits, so the “Driver Agreements” provided
the necessary authorization. The taxicabs that the drivers
operated, whether driver-owned or leased, were marked
with Broadway’s colors and name. All drivers, including
those who owned their own vehicles, were required to pay
substantial fees; in 2008 those fees averaged $24,453 per
driver.15 Those fees were due whether or not the drivers
	15
      This figure is derived from a document that Broadway submitted in the
administrative hearing entitled “2008 Summary of Revenue Transactions.” That
440	                    Broadway Cab LLC v. Employment Dept.

performed driving services, but it was only when the drivers
performed driving services for Broadway that they earned
the sums that were necessary to pay them. Thus, although
the “Driver Agreements” did not explicitly require the driv-
ers to provide driving services, and although the drivers
controlled the number of hours they drove, the drivers could
not fulfill their financial obligations to Broadway without
driving for Broadway for a significant number of hours.
The reality of the parties’ agreement, therefore, was that
the drivers would “perform” driving “services” for Broadway
within the meaning of ORS 657.030(1).
	        We turn next to Broadway’s argument that its
arrangement with its drivers was not an employer/employee
relationship, but rather a provider/purchaser relationship.
As Broadway describes it, Broadway provided services to
the drivers, and the drivers purchased those services for a
fee. Such a relationship, Broadway asserts, is akin to the
space-sharing relationship that this court considered in
Golden Shear Barber Shop v. Morgan, 258 Or 105, 481 P2d
624 (1971). In that case, a barber shop apprentice paid the
proprietor a weekly fee that went into a fund used only for
“[s]hop expenses, or alterations and additions agreed to by the
barbers,” id. at 107 n 1, and none of the barbers in the shop,
including the proprietor, could profit from the contributions
to that common fund, id. at 112. The court concluded from
those facts that the parties had not entered into an employ-
ment relationship; instead, they had negotiated a bona-fide
space-sharing arrangement, and the proprietor was not lia-
ble for unemployment insurance taxes. Id. at 112-13.
	        The facts in this case are significantly different.
Although Broadway is correct that it provided certain admin-
istrative services and that the drivers paid fees in consider-
ation for those services, that exchange of services for fees
was not the only way in which the parties benefitted from
their contractual relationship. The “Driver Agreements”

document shows that in 2008, Broadway received $2,468,307 in driver agree-
ment fees, $1,561,736 in vehicle fees from drivers who leased their vehicles, and
$1,474,963 in vehicle fees from drivers who owned their vehicles. Broadway also
received an additional $730,620 in fees from drivers of certain specialized taxi-
cabs. Broadway had 255 drivers in 2008. To calculate the average amount paid in
fees, we divided Broadway’s total fee revenue by the total number of drivers.
Cite as 358 Or 431 (2015)	441

enabled Broadway to fulfill its obligations to the city and
other public entities, and they enabled the drivers to drive
taxicabs within the city.
	        Moreover, unlike the proprietor in Golden Shear
Barber Shop, Broadway did not establish that the weekly
fees that drivers paid covered only the cost of the services
that Broadway provided. Broadway did not adduce evidence
of the cost of providing the required services or demonstrate
that its fees bore a relationship to the value of the services
that the drivers actually used. Drivers were not required
to use Broadway’s administrative services, such as its dis-
patch or credit and debit card processing services, and there
was no showing that drivers who took greater advantage of
those services paid more in fees than did those who used the
services to a lesser extent or not at all. Drivers who owned
their own vehicles paid a higher weekly vehicle fee ($420,
or $320 if the driver permitted another approved driver to
drive his or her vehicle) than did drivers who leased vehicles
from Broadway ($290). Broadway did not establish that its
relationship with its drivers was solely a provider/purchaser
relationship.
	        Finally, we consider and reject Broadway’s argu-
ment that because the passengers, and not Broadway, paid
the drivers for their services, the drivers did not provide ser-
vices for Broadway for remuneration. In making that argu-
ment, Broadway seems to assume that, to constitute “wages”
subject to unemployment insurance taxes, payments for
services must come directly from the putative employer.
Broadway is incorrect in that assumption; the text of the rel-
evant statutes does not impose that requirement. “Wages”
are “all remuneration for employment,” ORS 657.105(1),
and “employment” means “service for an employer” that
is “performed for remuneration.” ORS 657.030(1). Neither
statute requires that the putative employer pay the putative
employee directly for services provided, and this court has
declined to read such a requirement into the statute. Journal
Pub Co., 175 Or at 659; see also Columbia Management Co.
v. Morgan, 270 Or 109, 119, 526 P2d 571 (1974) (employ-
ment relationship may exist “even though the wages of such
an individual are paid by someone else, either directly or
indirectly”).
442	               Broadway Cab LLC v. Employment Dept.

	         This court’s decision in Journal Pub. Co. is effec-
tively on point. In that case, this court considered whether
a newspaper publisher was liable for unemployment insur-
ance taxes based on the earnings of an individual distrib-
utor. Journal Pub Co., 175 Or at 630. The publisher sold
its papers to the distributor, who then resold the papers
to subscribers. Id. at 635. The distributor’s earnings were
the difference between the wholesale and retail price of the
papers. Id. at 635-36. The court held that, even though the
subscribers, and not the publisher, paid the distributor the
retail price of the papers, the distributor received remuner-
ation for his services. Id. at 660. In reaching that conclusion,
the court found guidance in an Iowa case that concerned
taxicab drivers. Id. at 655. In the Iowa case, certain taxicab
drivers paid the putative employer $3.00 for each 12-hour
period they worked, and then retained, as their compensa-
tion, all sums that they collected from passengers in excess
of that fee and the cost of the gasoline that the drivers fur-
nished. Id. The Iowa court concluded that the drivers’ net
earnings were “remuneration of wages for their services”
under Iowa law. Id. at 656. In Journal Pub. Co., this court
quoted with approval the Iowa court’s determination that
“[i]t is not required that the remuneration be paid by the
employer.” Id.
	         Broadway does not address the holding in Journal
Pub. Co. or offer any reason to question it, and we adhere to
it. The fact that the drivers received fares from their passen-
gers does not mean that the drivers did not provide services
for Broadway or receive remuneration for those services. We
conclude that the ALJ did not commit legal error in conclud-
ing that Broadway employed the drivers.
   II.  INDEPENDENT CONTRACTOR EXCLUSION
	        Broadway next argues that, even if Broadway had
an employment relationship with its drivers, it was not
required to pay unemployment insurance taxes on wages
paid to those drivers because they were independent con-
tractors. ORS 657.040(1) provides:
   	 “Services performed by an individual for remuneration
   are deemed to be employment subject to [the unemploy-
   ment insurance] chapter unless and until it is shown to
Cite as 358 Or 431 (2015)	443

   the satisfaction of the * * * Employment Department that
   the individual is an independent contractor, as that term is
   defined in ORS 670.600.”
Under ORS 670.600(2), an “independent contractor” is “a
person who provides services for remuneration and who, in
the provision of the services:”
   	 “(a)  Is free from direction and control over the means
   and manner of providing the services, subject only to the
   right of the person for whom the services are provided to
   specify the desired results;
   	 “(b)  * * * [I]s customarily engaged in an independently
   established business;
   	 “(c)  Is licensed under ORS chapter 671 or 701 if the
   person provides services for which a license is required
   under ORS chapter 671 or 701; and
   	 “(d)  Is responsible for obtaining other licenses or cer-
   tificates necessary to provide the services.”
(Emphasis added.) Because the elements are conjunctive, it
is Broadway’s burden to establish that its drivers met the
requirements of each of those four criteria. Failure to meet
the requirements of any one of the criteria defeats indepen-
dent contractor status for purposes of the statute.
	         In this case, the ALJ concluded that Broadway’s
drivers were not independent contractors because Broadway
failed to demonstrate three of the four criteria: under para-
graph (a), that the drivers were free from Broadway’s direc-
tion and control; under paragraph (b), that the drivers were
customarily engaged in an independently established busi-
ness; and under paragraph (d), that the drivers were respon-
sible for obtaining other licenses or certificates necessary to
provide the services. The ALJ found that the fourth criterion,
specified in paragraph (c), did not apply, because the drivers
provided services for which a license was not required under
ORS chapter 671 or 701. The Court of Appeals affirmed, but
focused solely on Broadway’s failure to demonstrate one of
the required criteria—the requirement of paragraph (b) that
the drivers “were customarily engaged in an independently
established business.” Broadway Cab LLC, 265 Or App at
268.
444	                Broadway Cab LLC v. Employment Dept.

	         A person is “customarily engaged in an inde-
pendently established business if any three of the following
[five] requirements are met:”
   	   “(a)  The person maintains a business location:
   	 “(A)  That is separate from the business or work loca-
   tion of the person for whom the services are provided; or
   	 “(B)  That is in a portion of the person’s residence and
   that portion is used primarily for the business.
   	 “(b)  The person bears the risk of loss related to the
   business or the provision of services * * *[.]
   	 “(c)  The person provides contracted services for two or
   more different persons within a 12-month period, or the
   person routinely engages in business advertising, solici-
   tation or other marketing efforts reasonably calculated to
   obtain new contracts to provide similar services.
   	 “(d)  The person makes a significant investment in the
   business * * *[.]
   	 “(e)  The person has the authority to hire other persons
   to provide or to assist in providing the services and has the
   authority to fire those persons.”
ORS 670.600(3). The ALJ determined that Broadway’s
drivers failed to meet four of those five criteria: under para-
graph (a), that they maintained business locations separate
from Broadway or in a portion of their residences; under
paragraph (c), that they provided contracted services for
two or more persons within a 12-month period or routinely
engaged in business advertising; under paragraph (d), that
they made a significant investment in the business; and,
under paragraph (e), that they had the authority to hire
and fire other persons to provide or assist in providing the
services.
	        On appeal to the Court of Appeals, Broadway
argued that the ALJ had erred in its analysis of all four of
those criteria. In affirming the ALJ’s decision, the Court of
Appeals relied on Broadway’s failure to meet three of the five
criteria. The court reasoned that if the uncontested facts
demonstrated that Broadway did not meet three of the five
statutory criteria, then, by process of elimination, Broadway
could meet only two of the required three criteria. Broadway
Cite as 358 Or 431 (2015)	445

Cab LLC, 265 Or App at 268-69. The court concluded that
the uncontested facts demonstrated that Broadway’s drivers
did not, under paragraph (a), maintain business locations
separate from Broadway or in a portion of their residences;
under paragraph (c), provide contracted services for two or
more persons within a 12-month period or routinely engage
in business advertising; and, under paragraph (e), have
the authority to hire and fire other persons to provide or to
assist in providing the services. Id. at 269.
	          On review before this court, Broadway does not
argue that its drivers met the criteria specified in paragraph
(c),16 or, under subparagraph (a)(B), that its drivers main-
tained business locations in a portion of their residences.17
Thus, we focus on whether the uncontested facts demon-
strated that, as required by subparagraph (a)(A), the driv-
ers maintained business locations separate from Broadway,
and, as required by paragraph (e), had the authority to hire
and fire other persons to provide or assist in providing the
services. We consider those provisions in turn.
A.  Separate business location
	        Broadway argues that its drivers met the require-
ments of subparagraph (a)(A) of ORS 670.600(3) because
a taxicab operator’s work “location” is his or her vehicle.
The department responds that vehicles are not “locations,”
because that term refers to a physical area typically recogniz-
able as real property and fit for occupancy. And, the depart-
ment asserts, even if the word “location” is ambiguous, the
vehicles were not “separate” from Broadway, because they
were always either physically in Broadway’s possession or in
use in furtherance of Broadway’s business.

	16
        Paragraph (c) requires that the person either provide contracted services
for two or more different persons within a 12-month period or routinely engage
in business advertising. In its brief in this court, Broadway does not contend that
either requirement was met.
	17
        In a footnote in its brief, Broadway asserts that “[s]ome operators testified
that they also maintain fully functioning home offices or at least have devoted
particular space in their homes for a desk, a computer, a file cabinet, and other
standard equipment one could be expected to find in such an office.” However,
Broadway makes no argument that those facts are sufficient to establish that
those drivers maintained a business location in a portion of their residence and
used that portion primarily for the business.
446	               Broadway Cab LLC v. Employment Dept.

	        In our view, the department’s final point is per-
suasive. To determine whether Broadway’s drivers “main-
tain[ed] a business location” that was “separate” from
Broadway’s business location, ORS 670.600(3)(a)(A), we
must consider not only the location of the drivers’ busi-
nesses, but also the location of Broadway’s business. As we
explained above, Broadway’s business was not limited to
providing administrative services; Broadway’s business was
to provide taxicab services throughout the City of Portland.
Broadway operated that business by employing individual
taxicab drivers who drove their vehicles throughout the city.
It follows that Broadway’s business was located not only at
its administrative offices, where its administrative functions
were performed, but also in the field, where its taxicabs were
operating. Thus, even if the drivers’ businesses were located
in their taxicabs, those vehicles were not “separate from the
business or work location of [Broadway].” Id.
B.  Authority to hire and fire
	         To satisfy the criterion set out in paragraph (e) of
ORS 670.600(3), Broadway was required to establish that its
drivers “ha[d] the authority to hire other persons to provide
or to assist in providing the services and ha[d] the authority
to fire those persons.” Broadway argues that its drivers met
the requirements of paragraph (e) because Broadway did
not restrict the drivers’ ability to hire their own employees
and sub-contractors to assist in the operation of the drivers’
taxicab businesses. Therefore, Broadway contends, its driv-
ers had authority to hire and fire “persons to provide or to
assist in providing the services.” Id. The referenced services,
Broadway asserts, are those services necessary to the driv-
ers’ businesses. On that point, the department disagrees. It
argues that “the services” to which paragraph (e) refers are
the services that a person provides to the employer—in this
case, the driving services that the taxicab drivers provided
to Broadway—and that the drivers did not have authority to
hire other persons to provide driving services in the drivers’
stead.
	       We agree with the department. A person who
provides services for an employer for remuneration is in
an employment relationship with the employer unless the
Cite as 358 Or 431 (2015)	447

person is an independent contractor under ORS 670.600.
ORS 657.040(1). Under ORS 670.600(2)(b), an “indepen-
dent contractor” is “a person who provides services for
remuneration and who, in the provision of the services * * *
is customarily engaged in an independently established
business.” (Emphasis added.) Thus, the task at hand is to
determine whether a person who provides certain services
for an employer is providing those services as an employee
or as an independent contractor. One of the indicators that
a person is an independent contractor is that the person has
the authority to hire “other persons to provide or to assist
in providing the services.” ORS 670.600(3)(e). The services
to which paragraph (e) refers can only be the services that
are the subject of the inquiry and to which ORS 670.600(2)
refers—the services that the person provides to the employer
for remuneration. In this case, those services are the driving
services that the drivers provided to Broadway.
	        Therefore, the question presented is whether the
drivers had authority to hire other persons to “provide or
to assist in providing” the driving services that the drivers
provided to Broadway. ORS 670.600(3)(e). That question is
directly addressed by a provision of the “Driver Agreements”
that precluded persons other than approved drivers who had
themselves entered into “Driver Agreements” from driving
vehicles on Broadway’s approved vehicle list. In this court,
Broadway does not contend that its drivers had authority
to hire individuals to provide or assist in providing driv-
ing services, nor does Broadway argue, as it did before the
ALJ, that its authority to hire other professionals provided
the necessary authority. Before the ALJ, Broadway relied on
a provision of the “Driver Agreements” that granted driv-
ers the authority to hire professionals, such as mechanics,
accountants, and tax professionals, to assist in their taxicab
businesses. Reliance on that provision in this court would be
unpersuasive. Authority to hire individuals to perform ser-
vices other than driving services is not the kind of author-
ity to which paragraph (e) refers. The relevant authority is
the authority to drive, and, under the terms of the “Driver
Agreements,” only Broadway could decide who could drive the
taxicabs on its approved vehicle list. Broadway did not estab-
lish that its drivers met the requirements of paragraph (e).
448	              Broadway Cab LLC v. Employment Dept.

	        In summary, we conclude that the drivers provided
services for Broadway for remuneration and that Broadway
did not establish that its drivers were independent contrac-
tors. We therefore conclude that Broadway is obligated to
pay unemployment insurance taxes on the wages earned by
those drivers for the first quarter of 2008 through the fourth
quarter of 2009.
	       The decision of the Court of Appeals is affirmed.