Reyes v. D.C. Dep't of Emp't Servs., No. 10–AA–1244.

• Decision Date: 12 July 2012
• Docket Number: No. 10–AA–1244.
• Citation: 48 A.3d 159
• Parties: Jaime REYES, Petitioner, v. DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.
• Court: D.C. Court of Appeals

48 A.3d 159

Jaime REYES, Petitioner,

v.DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent.

No. 10–AA–1244.

District of Columbia Court of Appeals.

Submitted Sept. 13, 2011.

Decided July 12, 2012.

Neil J. Fagan was on the brief for petitioner.

Irvin B. Nathan, Attorney General for the District of Columbia, Michael A. Milwee, Senior Assistant Attorney General, Todd S. Kim, Solicitor General, and Donna M. Murasky, Deputy Solicitor General, were on the brief for respondent.

Before BLACKBURNE–RIGSBY, Associate Judge, and BELSON and REID, ^* Senior Judges.

BLACKBURNE–RIGSBY, Associate Judge:

On June 1, 2007, petitioner Jaime Reyes (“Reyes”) was injured while pouring concrete at the home of Manuel Gonzalez, the sole proprietor of Manual Gonzalez Home Improvement (“MG Home Improvement” or “Employer”) and the brother-in-law of petitioner. After an evidentiary hearing, the Administrative Law Judge (“ALJ”) determined that no employer/employee relationship existed between Reyes and MG Home Improvement, and therefore, denied Reyes's claim for benefits without reaching the other issues raised at the hearing. Reyes sought review of the compensation order from the Compensation Review Board (“CRB”), whose members subsequently affirmed the ALJ's ruling that no employer/employee relationship existed, relying on the ALJ's analysis of the “relativenature of the work” test.¹ We conclude that the CRB erred in affirming the compensation order because some of the ALJ's factual findings were not supported by substantial evidence, and the ALJ's conclusions did not flow rationally from those findings of fact that were supported by the evidence. Instead, we conclude that there was an employee/employer relationship. Therefore, we remand this case to the CRB for further consideration of the evidence and additional fact-finding, if necessary, to address the remaining issues regarding Reyes's workers' compensation claim, namely whether Reyes's injury was causally related to the June 1, 2007 incident, the nature and extent of Reyes's injury, a calculation of Reyes's weekly wage, and whether penalties should be assessed for unreasonable delay.

I.FACTUAL BACKGROUND

Reyes and Gonzalez are brothers-in-law. In 2004, Gonzalez helped Reyes get hired at Alkhan Construction, where Gonzalez supervised Reyes. A few months later, Gonzalez started his own remodeling company, MG Home Improvement, and hired Reyes to work at his new company.² On June 1, 2007, the date of the injury giving rise to the workers' compensation claim, Reyes and several other MG Home Improvement workers were performing remodeling work at Gonzalez's home, and were pouring a concrete floor. Reyes tripped on the netting used to secure the concrete and injured his shoulder, rendering him unable to work.

Reyes filed a claim for workers' compensation benefits on July 18, 2007. Both parties conceded that an injury occurred, but disputed whether Reyes was an employee of MG Home Improvement at the time of the injury and also whether the injuries were as extensive as Reyes claimed. After an informal conference, a Claims Examiner determined that Reyes had an employer/employee relationship with MG Home Improvement, and was entitled to workers' compensation benefits. MG Home Improvement challenged the claim determination, asserting, among other things, that Reyes was not an employee.

The ALJ conducted an evidentiary hearing on November 19, 2009. Reyes testified that he began working for MG Home Improvement in 2005, when Gonzalez decided to start his own remodeling company. Reyes performed several tasks for MG Home Improvement, including driving a company truck, pouring asphalt, installing plumbing, handling cement construction, and “all kinds of jobs related to remodeling.” Reyes was paid weekly by company check, at a rate of $12.50 per hour. Reyes also testified that he performed tasks for Gonzalez, generally on the weekend, for which he was not paid. Such work included driving Gonzalez around, organizing tools in Gonzalez's workshop, cutting grass, directing traffic, and cleaning up after Gonzalez's dog.

Gonzalez's testimony at the hearing largely corroborated Reyes's characterization of their relationship. Gonzalez explained that he started MG Home Improvement as a side business and the company performed “remodeling, painting house[s] sometime[s], anything, any remodeling.” Reyes worked for MG Home Improvement from May 2005 until June 1, 2007, the date of the injury. As the sole proprietor of MG Home Improvement, Gonzalez determined Reyes's hours, and paid him weekly at a rate of $12.50 per hour, when work was available, but did not deduct taxes or make any other withholdings. At the time of Reyes's injury, business for MG Home Improvement was slow, so Gonzalez offered Reyes and two other employees work remodeling Gonzalez's home. Each worker, including Reyes, was paid by company check for the hours worked on the date of the injury. After the injury, Reyes continued to work for Gonzalez on three or four other occasions, but Reyes's work responsibilities were limited due to his injury, and the checks Reyes received from MG Home Improvement were mostly to assist with Reyes's medical expenses, and not necessarily in payment for any work he performed.

After considering this testimony and other evidence presented at trial, including testimony by another worker present during Reyes's injury and documentary evidence showing paychecks Reyes received from MG Home Improvement over the course of twenty-six months, the ALJ denied Reyes's request for workers' compensation benefits. Applying the “relative nature of the work” test, the ALJ concluded that Reyes did not have an employer/employee relationship with MG Home Improvement because the work Reyes performed for MG Home Improvement was independent from the operation of MG Home Improvement's business. Relying heavily on Reyes's paychecks, the ALJ determined that Reyes's work was “not continuous or regular,” and “not a regular and continuous part of the cost of the product Employer produces.”

Reyes appealed the ALJ's determination to the CRB, which affirmed the compensation order in a split decision. The majority decision agreed with the ALJ that Reyes did not have an employer/employee relationship with MG Home Improvement. The majority of CRB members concluded that although the ALJ did not fully address whether Reyes satisfied the first part of the “relative nature of the work” test (the nature and character of the claimant's work), the CRB could affirm on the basis of the ALJ's ruling that Reyes did not satisfy the second part of the test (the relationship of the claimant's work to the purported employer's business). Because Reyes had the burden of satisfying both parts of the test to establish that an employer/employee relationship existed, the CRB reasoned that Reyes's failure to satisfy the second part of the test was “fatal” to his claim. One concurring CRB member wrote separately to note that he believed Reyes satisfied the first part of the “relative nature of the work” test, but agreed with the majority that Reyes did not satisfy the second part. The third CRB member dissented, and would have held that Reyes satisfied the first and second parts of the test, and therefore was an employee of MG Home Improvement. This petition for review followed.

II.ANALYSIS

A. Standard of Review

Our review of a final order of the CRB is limited to determining whether the decision is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Asylum Co. v. District of Columbia Dep't of Emp't Servs., 10 A.3d 619, 624 (D.C.2010). Although our review in a workers' compensation case is of the decision of the CRB, not that of the ALJ, “we cannot ignore the compensation order which is the subject of the [CRB's] review.” Georgetown Univ. Hosp. v. District of Columbia Dep't of Emp't Servs., 916 A.2d 149, 151 (D.C.2007). We will affirm the CRB's decision if “(1) the agency made findings of fact on each contested material factual issue, (2) substantial evidence supports each finding, and (3) the agency's conclusions of law flow rationally from its findings of fact.” District of Columbia Dep't of Mental Health v. District of Columbia Dep't of Emp't Servs., 15 A.3d 692, 696 (D.C.2011) (quoting Georgetown Univ. v. District of Columbia Dep't of Emp't Servs., 971 A.2d 909, 915 (D.C.2009)) (internal quotation mark omitted). “Substantial evidence ‘means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Wiley v. District of Columbia Dep't of Emp't Servs., 984 A.2d 201, 204 (D.C.2009) (quoting Children's Defense Fund v. District of Columbia Dep't of Emp't Servs., 726 A.2d 1242, 1247 (D.C.1999)). If the factual findings are not supported by substantial evidence, we will not defer to them, but we also may not consider the evidence de novo and substitute our view of the facts for that of the ALJ. See Marriott Int'l v. District of Columbia Dep't of Emp't Servs., 834 A.2d 882, 885 (D.C.2003). Instead, we must remand to the agency for further consideration of the evidence and additional factual findings, if necessary. Gross, supra note 1, 826 A.2d at 397. Our review of legal conclusions, however, is de novo.

The CRB has the statutory responsibility of reviewing compensation orders in the first instance. SeeD.C.Code § 32–1521.01(d) (2004 Supp.); see also7 DCMR § 266.2 (2005). The CRB must affirm a compensation order if the ALJ's factual findings are supported by substantial evidence and the ALJ's legal conclusions flow rationally from those facts. SeeD.C.Code § 32–1521.01(d)(2)(A); see also7 DCMR § 266.2. The issue on appeal is whether the CRB erred in affirming the compensation order denying Reyes's workers' compensation benefits.

B. Legal Framework

The CRB affirmed the ALJ's determination that Reyes did not have an employer/employee relationship with MG Home Improvement by...