Kilgore Group, Inc. v. South Carolina Employment Sec. Com'n

• Decision Date: 07 June 1993
• Docket Number: No. 23925,23925
• Citation: 313 S.C. 65,437 S.E.2d 48
• Court: South Carolina Supreme Court
• Parties: KILGORE GROUP, INC., Appellant, v. SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION, Respondent. . Heard

Page 48

437 S.E.2d 48

313 S.C. 65

KILGORE GROUP, INC., Appellant, v. SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION, Respondent.

No. 23925.

Supreme Court of South Carolina.

Heard June 7, 1993.

Decided Aug. 23, 1993.

M. Lee Daniels, Jr., of Daniels & Brandon, Greenville, for appellant.

H. Williams Funderburk, Jr., of South Carolina Employment Sec. Com'n, Columbia, for respondent.

TOAL, Justice:

This is an appeal of an administrative ruling by the Employment Security Commission finding the temporary workers of the appellant, Kilgore Group, were employees and not independent contractors during the year of 1987. We affirm.

FACTS

During the applicable time period, the appellant, Kilgore Group Inc. (hereinafter "Kilgore"), was in the business of supplying temporary workers. Following an audit by the Employment Security Commission's Field Service assessing Kilgore $97,193.27 in employment taxes for the year 1987, Kilgore sought administrative review.

At the administrative hearing, the president of Kilgore testified the skilled and unskilled workers performed a variety of tasks, including construction work, machine operation, truck driving, cleaning, stocking, and assembly. When clients contacted Kilgore with their specific employment needs, Kilgore negotiated with the client a fee for providing a worker or workers to meet the client's demands. Kilgore then contracted with the individual workers to fill the positions required by the client. According to Kilgore's president, the contract could be based on an hourly wage or on a fixed amount for the job. However, all workers were required to turn their hours in to Kilgore. Hourly workers were permitted to take "draws" on the amount they had worked. Kilgore's president testified that the contracts expressly provide that the relationship is one of an independent contractor.

The clients controlled the day-to-day activities of the workers. Kilgore provided workers' compensation coverage for the workers but did not withhold any taxes from their wages. Besides the president of Kilgore's general assertion, the only direct evidence regarding the workers in 1987 was the testimony of two clients of Kilgore during that year. Ms. Collins, personnel director at The State newspaper, testified she used Kilgore workers in the mail room to stuff inserts and bundle newspapers. She testified that if they had any problem with a Kilgore worker, they went through the agency and did not deal directly with the worker. She also testified the workers took breaks with the other regular employees at the time designated by The State managers. Ms. Rawls, the personnel manager for State Printing Company, testified the Kilgore temporaries worked along side the company's regular employees under the direction of the supervisors for the various departments. The State and State Printing supervisors indicated they felt free to tell Kilgore not to send a worker back if they were ever dissatisfied with his work.

The Assistant Deputy Executive Director for the Commission issued an administrative ruling declaring the workers to be employees. The Employment Security Commission affirmed this ruling. Appeal was taken to the Circuit Court which likewise affirmed finding the ruling was supported by substantial evidence. Kilgore appeals to this Court.

LAW/ANALYSIS

In reviewing the Employment Security Commission's decision, we must affirm the factual findings of the Commission if they are supported by substantial evidence. Merck v. S.C. Employment Sec. Comm'n, 290 S.C. 459, 351 S.E.2d 338 (1986). Our limited standard of review applies to facts establishing jurisdiction. Todd's Ice Cream v. S.C. Employment Sec. Comm'n, 281 S.C. 254, 315 S.E.2d 373 (Ct.App.1984); cf. Givens v. Steel Structures, Inc., 279 S.C. 12, 301 S.E.2d 545 (1983) (facts establishing the jurisdiction of the Worker's Compensation Commission are reviewed by the appellate court based on the preponderance of the evidence standard).

Under the South Carolina Employment Security Law, employment is defined to include "any service performed by any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee...." S.C.Code Ann. § 41-27-230(1)(b) (1986). Under South Carolina common law, the primary consideration in determining whether an employer-employee relationship exists is whether the purported employer has the right to control the servant in the performance of his work and the manner in which it is done. Felts v. Richland County, 303 S.C. 354, 400 S.E.2d 781 (1991). The test is not the actual control exercised, but whether there exists the right and authority to control and direct the particular work or undertaking. Anderson v. West, 270 S.C. 184, 241 S.E.2d 551 (1978). The principal factors indicating...