Shatto v. Mcleod Reg'l Med. Ctr. & Key Risk Mgmt. Servs., Inc.

• Decision Date: 18 December 2013
• Docket Number: No. 27341.,27341.
• Parties: Mildred H. SHATTO, Petitioner, v. McLEOD REGIONAL MEDICAL CENTER and Key Risk Management Services, Inc., Respondents, and Staff Care, Inc. and Travelers Insurance, Defendants. Appellate Case No. 2011–201186.
• Court: South Carolina Supreme Court

406 S.C. 470

753 S.E.2d 416

Mildred H. SHATTO, Petitioner,

v. McLEOD REGIONAL MEDICAL CENTER and Key Risk Management Services, Inc., Respondents,andStaff Care, Inc. and Travelers Insurance, Defendants.Appellate Case No. 2011–201186.

No. 27341.

Supreme Court of South Carolina.

Heard Oct. 2, 2013.

Decided Dec. 18, 2013.

Blake A. Hewitt and Margaret M. Bluestein, both of Bluestein, Nichols, Thompson & Delgado, LLC, of Columbia for Petitioner.

Walter H. Barefoot, of Florence, and Carmelo B. Sammataro, of Columbia, both of Turner, Padget, Graham & Laney, PA, for Respondents.

Justice KITTREDGE.

In this workers' compensation case, we granted a petition for a writ of certiorari to review the decision of the court of appeals in Shatto v. McLeod Regional Medical Center, 394 S.C. 552, 716 S.E.2d 446 (Ct.App.2011). This case presents the familiar tension in the workers' compensation arena in distinguishing between an employee and an independent contractor. Petitioner Mildred H. Shatto sought workers' compensation benefits, claiming she was an employee of Respondent McLeod Regional Medical Center (McLeod Regional) when she fell in an operating room and was injured. McLeod Regional opposed the claim on the basis of Shatto's purported status as an independent contractor. The Workers' Compensation Commission (Commission) found that every factor of the common law employment analysis supported Shatto's contention of an employment relationship. The court of appeals reversed, finding that every factor of the common law employment analysis supported McLeod Regional's contention of an independent contractor relationship.

Because we find that the evidence, although not one-sided, preponderates in favor of an employment relationship, we reverse the court of appeals. We remand to the court of appeals to address McLeod Regional's additional assignment of error initially presented to, but not reached by, the court of appeals concerning whether Shatto's “idiopathic fall constitutes a compensable injury by accident arising out of and in the course and scope of [Shatto's] employment.”

I.FACTUAL/PROCEDURAL BACKGROUND

Petitioner Mildred H. Shatto is a certified nurse anesthetist. She has worked in the nursing profession for over twenty years, including a twenty-one year stint at a hospital in Pennsylvania. She moved to South Carolina to care for her sister and worked several short-term nursing jobs. After working as a nurse anesthetist in Charlotte, North Carolina for approximately five years, she sought an employment position through a nurse staffing agency, Defendant Staff Care, Inc.

Through Staff Care, Shatto was hired to work as a nurse anesthetist for McLeod Regional in Florence, South Carolina. Shatto did not have an express contract of employment directly with McLeod Regional. Instead there were two relevant contracts: Shatto's contract with Staff Care (“the Provider Agreement”) and Staff Care's contract with McLeod Regional (“the Staffing Agreement”).

On December 21, 2007, Shatto was helping anesthetize a patient in an operating room. In the process, Shatto fell and was injured. She was treated at McLeod Regional and was released from employment shortly after the injury.

Shatto brought workers' compensation claims against McLeod Regional and Staff Care. Staff Care answered with a general denial, and McLeod Regional initially admitted that Shatto was a hospital employee, but later amended its position and denied the existence of an employment relationship. The claims were consolidated, and the matter was heard by a single commissioner.

The single commissioner found that Shatto was an employee of McLeod Regional and that her injuries were compensable. McLeod Regional was ordered to pay Shatto's workers' compensation benefits.¹

McLeod Regional appealed the single commissioner's decision, and the appellate panel affirmed the commissioner's decision in its entirety. McLeod Regional then appealed to the court of appeals, which reversed the Commission's finding and concluded that Shatto was an independent contractor—not an employee of McLeod Regional. The court of appeals did not reach the question of whether Shatto's injuries were compensable. The court of appeals remanded the case to the Commission to address Shatto's claim against Staff Care. We granted a petition for writ of certiorari to review the court of appeals' decision. ²

II.ANALYSIS

Common Law Employment Test

We are presented with the question of whether Shatto was, at the time of her injury, an employee of McLeod Regional or an independent contractor. “No award under the Workers' Compensation Law is authorized unless the employer-employee or master-servant relationship existed at the time of the alleged injury for which claim is made.” McLeod v. Piggly Wiggly Carolina Co., 280 S.C. 466, 469, 313 S.E.2d 38, 39 (Ct.App.1984) (citing Cooper v. McDevitt, 260 S.C. 463, 196 S.E.2d 833 (1973); Alewine v. Tobin Quarries, 206 S.C. 103, 33 S.E.2d 81 (1945)). “Because the question is jurisdictional, the Court may take its own view of the preponderance of the evidence.” Wilkinson ex rel. Wilkinson v. Palmetto State Transp. Co., 382 S.C. 295, 299, 676 S.E.2d 700, 702 (citing S.C. Workers' Comp. Comm'n v. Ray Covington Realtors, Inc., 318 S.C. 546, 547, 459 S.E.2d 302, 303 (1995)).

“Under settled law, the determination of whether a claimant is an employee or independent contractor focuses on the issue of control, specifically whether the purported employer had the right to control the claimant in the performance of his work.” Id. (emphasis added) (citing Ray Covington Realtors, 318 S.C. at 547, 459 S.E.2d at 303;Chavis v. Watkins, 256 S.C. 30, 32, 180 S.E.2d 648, 649 (1971)). Under the controlling common law rubric of the right of control, “the Court examines four factors which serve as a means of analyzing the work relationship as a whole: (1) direct evidence of the right or exercise of control; (2) furnishing of equipment; (3) method of payment; (4) right to fire.” Id. (citing Ray Covington Realtors, 318 S.C. at 548, 459 S.E.2d at 303;Chavis, 256 S.C. at 32, 180 S.E.2d at 649;Tharpe v. G.E. Moore Co., Inc., 254 S.C. 196, 200, 174 S.E.2d 397, 399 (1970)).

In Wilkinson, we overruled the analysis previously used in Dawkins v. Jordan, 341 S.C. 434, 534 S.E.2d 700 (2000), which mandated a finding of employment upon the mere presence of one of the factors favoring an employment relationship.³See Wilkinson, 382 S.C. at 300, 676 S.E.2d at 702 (“We overrule Dawkins' analytical framework, for it most assuredly skews the analysis to a finding of employment.”). Thus, we “return[ed] to our jurisprudence that evaluates the four factors with equal force in both directions.” Id. We now analyze the factors “in an evenhanded manner in determining whether the questioned relationship is one of employment or independent contractor.” Id. at 307, 676 S.E.2d at 706.

It is instructive to review the facts and holding of Wilkinson. In Wilkinson, an employee of a trucking company desired to alter his status to that of an independent contractor. Id. at 298, 676 S.E.2d at 701. Wilkinson and the trucking company entered into a contract setting forth his preferred status as an independent contractor. Id. The parties honored the independent contractor arrangement in every respect, such that each of the four “right of control” factors favored the finding of an independent contractor relationship. Id. at 300, 676 S.E.2d at 702. In addition, Wilkinson carried the equivalent of his own worker's compensation coverage. Id. at 298, 676 S.E.2d at 701. We addressed “the existence of federal law in the trucking industry ... to support our ultimate determination as well as inform the narrow reach of our decision.” Id. at 304, 676 S.E.2d at 704. Moreover, Wilkinson owned his own tractor and “assumed responsibility for all costs, including fuel, oil, repairs, insurance, road taxes, fuel taxes, mileage taxes, and any weight violations.” Id. at 303 n. 5, 676 S.E.2d at 704 n. 5.

As discussed below, we find that in this case the totality of the evidence preponderates in favor of a finding of employment between Shatto and McLeod Regional. We find that only one factor—method of payment—supports a finding of Shatto as an independent contractor with respect to McLeod Regional. We find the other factors, especially evidence of control and furnishing of equipment, compellingly support a finding of an employment relationship.

Direct Evidence of the Right or Exercise of Control

While evidence of actual control exerted by a putative employer is evidence of an employment relationship, the critical inquiry is “whether there exists the right and authority to control and direct the particular work or undertaking.” Young v. Warr, 252 S.C. 179, 189, 165 S.E.2d 797, 802 (1969) (emphasis added). “The right to control does not require the dictation of the thinking and manner of performing the work. It is enough if the employer has the right to direct the person by whom the services are to be performed, the time, place, degree, and amount of said services.” Nelson v. Yellow Cab Co., 343 S.C. 102, 110, 538 S.E.2d 276, 280 (Ct.App.2000) (emphasis added) (citing 3 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 61.01 (1999)), overruled on other grounds by Wilkinson, 382 S.C. at 300 n. 3, 676 S.E.2d at 702 n. 3.

We find the evidence of McLeod Regional's control of Shatto weighs heavily in favor of an employment relationship. Immediately upon assignment to McLeod Regional, Shatto executed a series of documents, which uniformly and compellingly speak to McLeod Regional's right to control Shatto. For example, Shatto executed a McLeod Regional form acknowledging that she was “perform[ing] my duties as an [sic] temporary employee of McLeod Health.” Other McLeod Regional documents referred to Shatto as its temporary employee. Shatto was further provided a “new employee packet” wherein it was agreed that Shatto was an employee...