Schaefer v. North Dakota Workers Compensation Bureau

• Decision Date: 31 October 1990
• Docket Number: No. 900243,900243
• Citation: 462 N.W.2d 179
• Parties: Ted SCHAEFER, d/b/a Fresh Air Enterprises, Appellee, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellant, and Kenneth Bedor, Respondent. Civ.
• Court: North Dakota Supreme Court

Page 179

462 N.W.2d 179

Ted SCHAEFER, d/b/a Fresh Air Enterprises, Appellee, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellant and Kenneth Bedor, Respondent.

Civ. No. 900243.

Supreme Court of North Dakota.

Oct. 31, 1990.

Anderson & Anderson, Bismarck, for appellee, argued by Sonna Anderson, Bismarck.

Dean J. Haas (argued), Asst. Atty. Gen., ND Workers Compensation Bureau, Bismarck, for appellant.

ERICKSTAD, Chief Justice.

The Workers Compensation Bureau [Bureau] appeals from a district court judgment reversing the Bureau's determination that Kenneth Bedor was an "employee" of Ted Schaefer, doing business as Fresh Air Enterprises [Schaefer], within the meaning of the Workers Compensation Act. We reverse the judgment of the district court and reinstate the Bureau's decision.

Schaefer was the Bismarck area distributor of the "Rainbow Household Cleaning System" [Rainbow], a multi-purpose machine that operates as a vacuum cleaner, air freshener, and humidifier. In March 1988 Bedor agreed with Schaefer to become an "independent dealer" of the Rainbow. Bedor subsequently filed an application for workers compensation benefits in connection with an alleged injury sustained on November 29, 1988, when he slipped on ice and fell while preparing for an in-home demonstration of the Rainbow.

Schaefer challenged the claim, asserting that Bedor was an independent contractor at the time of the injury rather than an employee. The Bureau held a hearing and determined that Bedor qualified as an employee of Schaefer within the meaning of the Workers Compensation Act. Schaefer appealed the Bureau's order granting employee status to the district court. The district court reversed the Bureau's decision, determining that Bedor was not an employee for workers compensation purposes. The Bureau has appealed from that judgment.

Under the Workers Compensation Act the relation of employer and employee must exist in order to make the provisions of the Act applicable. Starkenberg v. North Dakota Workmen's Compensation Bureau, 73 N.D. 234, 13 N.W.2d 395, 397 (1944). A person who is an independent contractor rather than an employee does not fall within the scope of the Act. Starkenberg, supra. Section 65-01-03, N.D.C.C., provides:

"65-01-03. Person performing services for remuneration presumed an employee. Each person who performs services for another for a remuneration, whether the same is paid as a salary, commission, or other considerations in lieu thereof, under any agreement or contract of hire, express or implied, shall be presumed to be an employee of the person for whom the services are performed, unless he shall maintain a separate business establishment or shall hold himself out to or shall render services to the general public.

"In determining whether a person is an independent contractor or employee the primary test to be employed is the 'right to control' test."

This court explained the right-to-control test in Mutual Life Ins. Co. of New York v. State, 71 N.D. 78, 298 N.W. 773, 776 (1941):

"If the person for whom the work is being done has the right of control, whether he exercise it or not, and is concerned not only with the result of the work but also with the manner and method of its doing, he is held to be an employer, and the person doing the work his employee. On the other hand, if he is concerned merely with the result of the work and has no control over the details of its doing, the person doing the work is held to be an independent contractor. It is true, of course, that in making this determination attention and consideration must be given to many elements. As, for instance, the nature of the work, where it is to be done, the terms of the contract under which it is done, whether the employment is for a stated period, or whether it is terminable at the will of the person for whom the work is being done, the manner of payment, and many other factors. But all of these things are to be considered chiefly for the purpose of determining whether in the final analysis the control of the details is in the person for whom the work is being done."

The Bureau concluded that Bedor was "an employee within the terms of the North Dakota Workers Compensation Act under the relative nature of the work test and control the details of the work test." Schaefer initially asserts that the Bureau erred in relying on the relative-nature-of-the-work test in determining Bedor's status because the only test to be used is limited by Sec. 65-01-03, N.D.C.C., to the right-to-control test. We disagree.

Prior to 1967 this court usually stated that it was applying the right-to-control test in determining worker status. E.g., Bernardy v. Beals, 75 N.D. 377, 28 N.W.2d 374, 376 (1947); Janneck v. Workmen's Compensation Bureau, 67 N.D. 303, 272 N.W. 188, 189 (1937). In Brown v. North Dakota Workmen's Comp. Bureau, 152 N.W.2d 799, 803 (N.D.1967), we applied, in addition to the right-to-control test, the relative-nature-of-the-work test "in accord with the modern tendency of the courts to find employment when the work being done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service." The ingredients of the relative-nature-of-the-work test are described in 1C Larson, Workmen's Compensation Law Sec. 43.52, at p. 8-25 (1990) [Footnote omitted], as:

"the character of the claimant's work or business--how skilled it is, how much of a separate calling or enterprise it is, to what extent it may be expected to carry its own accident burden and so on--and its relation to the employer's business, that is, how much it is a regular part of the employer's regular work, whether it is continuous or intermittent, and whether the duration is sufficient to amount to the hiring of continuing services as distinguished from contracting for the completion of a particular job."

In 1977 the Legislature amended Sec. 65-01-03, N.D.C.C., to include the final paragraph of the statute: "In determining whether a person is an independent contractor or employee, the primary test to be employed is the 'right to control' test." 1977 N.D.Sess.Laws Ch. 579 Sec. 3. It is evident that the Bureau, which requested the amendment, expected the amendment "to eliminate the 'relative nature of the work' test and replace it with the 'right to control test.' " Minutes of the Senate Committee on Industry, Business & Labor; Senate Bill 2158; January 19, 1977; at p. 2 (Testimony of Dick Gross, attorney for the Bureau). See also Drafter's Notes to Senate Bill 2158, at pp. 3-4. Assuming for purposes of argument that the Bureau's expectations are indicative of the Legislature's intent in enacting the amendment [compare 2A Sutherland Stat. Const. Secs. 48.10, 48.12, and 48.15 (4th ed. 1984) ], they are not necessarily controlling. See Snyder's Drug Stores, Inc. v. North Dakota State Board of Pharmacy, 219 N.W.2d 140, 147 (N.D.1974). We have said that when a statute is clear and unambiguous it is improper for courts to attempt to go behind the express terms of the provision so as to legislate that which the words of the statute do not themselves provide. See Peterson v. Heitkamp, 442 N.W.2d 219, 221 (N.D.1989); Haider v. Montgomery, 423 N.W.2d 494, 495 (N.D.1988). In other words, the "letter of a clear and unambiguous statute cannot be disregarded under the pretext of pursuing its spirit, because the legislative intent is presumed clear from the face of the statute." Haider v. Montgomery, supra. See also Sec. 1-02-05, N.D.C.C.

Section 65-01-03, N.D.C.C., is clear and unambiguous. A statute must be construed so that an ordinary person reading it would get from it the usual, accepted meaning. Wills v. Schroeder Aviation, Inc., 390 N.W.2d 544, 545-546 (N.D.1986). The statute was amended to say that the right-to-control test is the "primary" test for determining worker status. Primary has been defined as "[b]eing or standing first in a list, series, or sequence;" "[b]eing first or best in degree, quality, or importance." American Heritage Dictionary, at p. 983 (2nd College Ed.1985). The word " 'primary' connotes the existence of plurality." Charvoz v. Bonneville Irr. Dist., 120 Utah 480, 235 P.2d 780, 782 (1951). Thus, "primary" test does not mean "sole" test. See Herbert v. Stephenson, 184 Va. 457, 35 S.E.2d 753, 756 (1945).

Moreover, the Legislature left intact the language in the first paragraph of Sec. 65-01-03 that a worker "shall be presumed to be an employee of the person for whom the services are performed, unless he shall maintain a separate business establishment or shall hold himself out to or shall render services to the general public." This statutory language is, in effect, a codification of the principles underlying the relative-nature-of-the-work test. See Brown, supra; 1C Larson, Workmen's Compensation Law, supra, Sec. 43.52, at pp. 8-28--8-29. The Legislature's 1977 amendment to Sec. 65-01-03 did not "eliminate" use of the relative-nature-of-the-work test in determining worker status.

We conclude that, although the right-to-control test is the primary test to be used under Sec. 65-01-03, the Bureau is not precluded from using the relative-nature-of-the-work test as an additional aid in judging worker status, particularly when application of the right-to-control test is not clearly determinative. The Bureau did not err in using the relative-nature-of-the-work test in addition to the right-to-control test in determining Bedor's status.

Schaefer asserts that the Bureau erroneously determined that Bedor was an employee rather than an independent contractor in his business relationship with Schaefer.

We must affirm a decision of an administrative agency unless its findings of fact are not supported by a preponderance of the evidence or its conclusions of law are not supported by its findings of fact. Mund v. Workers Compensation Bureau, 444 N.W.2d 706, 709 ...