Miss. Dep't of Emp't Sec. v. Dover Trucking, LLC
| Decision Date | 24 February 2022 |
| Docket Number | 2020-CC-01267-SCT |
| Citation | 334 So.3d 61 |
| Parties | MISSISSIPPI DEPARTMENT OF EMPLOYMENT SECURITY v. DOVER TRUCKING, LLC |
| Court | Mississippi Supreme Court |
ATTORNEY FOR APPELLANT: ALBERT B. WHITE, Madison
ATTORNEY FOR APPELLEE: JAMES GARY McGEE, JR., Flowood
BEFORE RANDOLPH, C.J., MAXWELL AND BEAM, JJ.
BEAM, JUSTICE, FOR THE COURT:
¶1. The Mississippi Department of Employment Security (MDES) appeals from the circuit court's order reversing the MDES Board of Review's determination that Danny Leeton was an employee of Dover Trucking, LLC (Dover).
FACTS AND PROCEDURAL HISTORY
¶2. On November 25, 2015, Danny Leeton filed a claim for unemployment benefits with MDES. Leeton indicated that he worked for Dover as a truck driver from June 1, 2014, until he voluntarily quit on February 1, 2015.
¶3. Leeton reported that he was paid in cash directly by the owner and did not receive an IRS Form W-2 from Dover. Since Dover reported no wages paid to Leeton, the MDES Audit & Compliance Department investigated the facts and circumstances surrounding Leeton's work for Dover. Tax field representative Jacqueline Profitt investigated by sending independent contractor questionnaires to Leeton and Dover. Dover returned its completed questionnaire to MDES on December 3, 2015. Leeton did not.
¶4. Based on the investigation, Profitt recommended finding Leeton was an employee of Dover as a truck driver delivering loads for Dover. As a result, MDES issued and mailed an employee/employer relationship decision letter to Dover on December 15, 2015, finding Leeton and all similarly situated workers to be its employees under Mississippi Code Section 71-5-11(I)(14) (Rev. 2021). The letter informed Dover that it was obligated to file wage reports and pay taxes on all workers in this class.
¶5. Aggrieved, Dover appealed the determination on December 21, 2015. On May 10, 2016, Tiffany Dover, co-owner of Dover Trucking, and Eldridge Rose, MDES tax department representative, testified. Leeton was contacted to participate, but he was not available.
¶6. Based on the testimony and evidence presented during the hearing, the administrative law judge (ALJ) determined that an employer-employee relationship existed between Dover and Leeton.
¶7. Aggrieved by the ALJ's decision, Dover appealed to the MDES Board of Review, which affirmed the decision of the ALJ and adopted its findings of fact.
¶8. Aggrieved, Dover appealed the Board's decision to the Circuit Court of the First Judicial District of Hinds County. Special Judge David Chandler heard the case and summarily reversed the MDES decision.
¶9. MDES appealed to this Court.
DISCUSSION
Whether the circuit court erred by reversing the MDES Board's decision finding that an employer-employee relationship existed between Dover and Leeton.
¶10. A limited standard of review applies to appeals from administrative agencies, and an agency's decision will not be disturbed unless the decision "1) is not supported by substantial evidence; 2) is arbitrary or capricious, 3) is beyond the scope or power granted to the agency, or 4) violates one's constitutional rights." Sprouse v. Miss. Emp. Sec. Comm'n , 639 So. 2d 901, 902 (Miss. 1994) (citing Miss. Comm'n on Env't Quality v. Chickasaw Cnty. Bd. of Supervisors , 621 So. 2d 1211, 1215 (Miss. 1993) ). "A rebuttable presumption exists in favor of the agency, and the challenging party has the burden of proving otherwise." Id. (citing United Cement Co. v. Safe Air for the Env't , 558 So. 2d 840, 842 (Miss. 1990) ). "[I]n the absence of fraud, an order from a Board of Review of the Employment Security Commission on the facts is conclusive in the lower court, if supported by substantial evidence." Miss. Emp. Sec. Comm'n v. PDN, Inc. , 586 So. 2d 838, 840 (Miss. 1991).
¶11. The requirements to establish an employer-employee relationship are explained in Section 71-5-11(I)(14) of the Mississippi Code :
Services performed by an individual for wages shall be determined to be employment subject to this chapter unless and until it is shown to the satisfaction of the Commission that such individual has been and will continue to be free from control and direction over the performance of such services both under his contract of services and in fact; and the relation of employer and employee shall be determined in accordance with the principles of the common law governing the relation of master and servant.
Miss. Code Ann. § 71-5-11(I)(14) (Rev. 2021).
¶12. Employee status is considered on a case-by-case basis. Miss. Emp. Sec. Comm'n v. Total Care, Inc. , 586 So. 2d 834, 837 (Miss. 1991). "[ Section 71-5-11(I)(14) ] directs us to the common-law principles of master and servant, and here we find a flexible, functional test." Id. at 837. The following factors are considered in determining whether an employer-employee relationship exists:
Miss. Emp. Sec. Comm'n v. Plumbing Wholesale Co. , 219 Miss. 724, 69 So. 2d 814, 818 (1954) (quoting Restatement of Agency § 2020).
¶13. "Among the most prominent factors we have considered is ‘control,’ that is, to what extent does the putative employer control in substance and in detail the work activities of the person said to be an employee[?]" Total Care , 586 So. 2d at 837.
¶14. Here, the evidence before the Commission consisted, for the most part, of testimony from Dover co-owner, Tiffany Dover and MDES representative, tax specialist Eldridge Rose.
¶15. Tiffany Dover testified for the trucking company. She stated that Leeton contacted Dover for work and submitted an application in accordance with federal Department of Transportation (DOT) Regulations. Dover and Leeton executed an agreement entitled "Self-Employment Tax Agreement," which stated he was self-employed and leased to Dover as a contract driver. According to Dover, he would receive an IRS Form 1099 and be responsible for paying his own taxes.
¶16. Dover testified that Leeton drove all types of routes, which were chosen at his discretion. He was not required to report to any central location or obligated to haul or accept certain loads. Dover explained that she personally did not have any contact with Leeton but that Dover used a dispatch company, Bluebird Express, which regularly communicated with its drivers.
¶17. Dover provided an unsworn, signed, written statement from Gregory Luss, owner of Bluebird Xpress, regarding his communication practices with Leeton such that Leeton had the authority to accept or deny any load presented to him, that there was no set time he had to report in, and that Leeton was not on any type of schedule for hauling loads because doing so was at Leeton's discretion. He was not supervised by anyone nor did he have to report to anyone, but he did have to communicate with the dispatcher for loads. Leeton was also supposed to, at his discretion, notify the dispatcher if he would be out for a few days.
¶18. Dover further testified that Leeton was not required to maintain and submit time sheets to Dover other than the logs required under federal DOT regulations. The ALJ asked Dover whether she had the right to terminate Leeton's services, and she stated that they could be terminated by either party at any time.
¶19. Dover testified that it was responsible for providing the truck itself, but Leeton was responsible for any other tools or equipment he might need. Leeton was responsible for his own tarps and his own on-the-road expenses, for which he would not be reimbursed. Leeton drove a Dover-owned truck, which included the Dover name on the door, and he operated under Dover's federal DOT/MC number. Leeton was not required to wear a name badge or uniform.
¶20. Dover explained that Leeton was in a minority of drivers who did not own his truck. Dover has multiple arrangements with its drivers including: (1) owner-operated truck drivers who are paid 80 percent of their loads hauled; and (2) lease-to-own drivers who operate a Dover-owned truck and pay a monthly lease payment. She did not testify that Leeton leased to own or provided proof of a lease between Leeton and Dover, but on cross-examination, Dover confirmed that Leeton was not operating the truck under a lease-to-own arrangement.
¶21. The regular day-to-day maintenance on the Dover-owned truck was done at and by Dover's shop, but according to Dover, Leeton was not required to make the truck available to Dover at any certain time or day in order to conduct such maintenance. Leeton could have alternatively elected to receive 80 percent and be responsible for covering maintenance costs; however, he elected to receive 25 percent and not be responsible. Under that arrangement, Dover testified that the earnings from each load were distributed as follows: 25 percent earnings, less a 10 percent factoring fee, and a 4 percent dispatcher fee.
¶22. Lastly, Dover testified that Leeton was permitted to use Dover's truck to haul loads for his own contacts/customers. According to Dover, Leeton was free to hire someone to help him without the need for authorization from Dover.
¶23. MDES representative, tax specialist Eldridge Rose explained that the MDES evaluates an employment relationship using the common-law factors to determine whether an employer-employee relationship exists. Rose testified that Leeton reported he worked for Dover as an hourly wage truck driver. According to Leeton's application for unemployment benefits, he stated he operated a Dover-owned truck for which Dover covered...
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