Universal Am-Can, Ltd. v. WCAB (MINTEER)

• Decision Date: 27 November 2000
• Parties: UNIVERSAL AM-CAN, LTD. and National Union/AIAC, Appellants, v. WORKERS' COMPENSATION APPEAL BOARD (Clarence O. MINTEER), Appellee.
• Court: Pennsylvania Supreme Court

762 A.2d 328

563 Pa. 480

UNIVERSAL AM-CAN, LTD. and National Union/AIAC, Appellants, v. WORKERS' COMPENSATION APPEAL BOARD (Clarence O. MINTEER), Appellee.

Supreme Court of Pennsylvania.

Argued September 13, 1999.

Decided November 27, 2000.

Paul S. Mazeski, Pittsburgh, for Universal Am-Can, Ltd.

Mark Gordon, Pittsburgh, Michael A. Cohen, Philadelphia, Robert J. Goduto, Harrisburg, amici curiae.

John W. McTiernan, Daniel K. Bricmont, Pittsburgh, for Clarence Minteer.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN and SAYLOR, JJ.

OPINION

ZAPPALA, Justice.

The sole issue in this appeal is whether Claimant Clarence O. Minteer was an employee, or an independent contractor, of Appellant Universal Am-Can, Ltd. for the purposes of the Pennsylvania Workers' Compensation Act. For the reasons that follow, we determine that Minteer was an independent contractor. Thus, we reverse the order of the Commonwealth Court.

Minteer is an owner-operator of a tractor-trailer unit. Pursuant to an operating agreement, Minteer's tractor-trailer was under lease to Universal Am-Can. On April 16, 1993, Minteer fell from his truck while attempting to secure a tarp that covered his shipment. As a result of the fall, Minteer sustained serious injuries to his right arm, left wrist, and left leg. Minteer filed a claim petition under the Pennsylvania Workers' Compensation Act¹ on June 15, 1993, alleging that he became fully disabled because of these injuries. Universal Am-Can denied the allegations, specifically contending that Minteer was an independent contractor at the time of his injuries.

In addressing the issue of employee status, the workers' compensation judge concluded that Minteer had met his burden of establishing that he was an employee of Universal Am-Can at the time of the injury. Critical to the WCJ's decision was the finding that, to a significant degree, Universal Am-Can controlled Minteer's work. Thus, Minteer's petition was granted and Universal Am-Can was ordered to pay Minteer disability benefits.

The Workers' Compensation Appeal Board (Board) affirmed the decision of the workers' compensation judge on appeal. The Board opined that the key elements in determining employee status are whether the alleged employer has the right to control the work to be done and the manner in which it is performed. In affirming the WCJ's decision, the Board found that the facts indicating that Minteer's work was controlled to a large degree by Universal Am-Can were supported by substantial evidence. Thus, the Board too found Minteer to be an employee of Universal Am-Can.

On appeal, a unanimous panel of the Commonwealth Court affirmed. Without so stating, the court upheld the decision of the Board on two distinct bases. First, as did the workers' compensation judge and the Board below, the Commonwealth Court considered certain common-law factors traditionally used in considering employee status. Consistent with the Board's analysis, the Commonwealth Court noted that while all factors are important, the most persuasive indicator of a claimant's employee or independent contractor status lies in the right to control either the work to be done or the manner in which the work is to be accomplished, citing Lynch v. WCAB (Connellsville Area School District), 123 Pa.Cmwlth. 299, 554 A.2d 159 (1989). The Commonwealth Court concluded that in this case, Universal Am-Can had the right to control and to supervise the manner and method by which Minteer hauled cargo and completed his deliveries. However, the court went further in its decision and also conducted an analysis of federal and state regulations; the court concluded that these regulations predetermined Minteer's status as an employee of Universal Am-Can. In fact, the Commonwealth Court found that certain regulations regarding the use of a carrier's insignia upon the tractor-trailer create an "irrebuttable presumption" of employee status. Thus, the Commonwealth Court affirmed the order of the Board finding an employer/employee relationship between Universal Am-Can and Minteer.

We granted allocatur to review the legal analysis utilized by the Commonwealth Court in determining whether Minteer was an employee or independent contractor for purposes of the Workers' Compensation Act.

An independent contractor is not entitled to benefits because of the absence of a master/servant relationship. 77 P.S. § 21; 77 P.S. § 22; Cox v. Caeti, 444 Pa. 143, 279 A.2d 756, 757 (1971). Thus, employee or independent contractor status is a crucial threshold determination that must be made before granting workers' compensation benefits. It is a claimant's burden to establish an employer/employee relationship in order to receive benefits. Johnson v. WCAB (Dubois Courier Express), 158 Pa.Cmwlth. 76, 631 A.2d 693, 695 (1993). Although it is a claimant's burden to demonstrate an employer/employee relationship, our court has decided that "neither the compensation authorities nor the courts should be solicitous to find contractorship rather than employment, and that inferences favoring the claim need make only slightly stronger appeal to reason than those opposed." Diehl v. Keystone Alloys Co., 398 Pa. 56, 156 A.2d 818, 820 (1959); see also Southland Cable v. WCAB (Emmett), 142 Pa.Cmwlth. 612, 598 A.2d 329, 331 (1991)

. Moreover, a determination regarding the existence of an employer/employee relationship is a question of law that is determined on the unique facts of each case. JFC Temps, Inc. v. WCAB (Lindsay and G & B Packing), 545 Pa. 149, 680 A.2d 862, 864 (1996).

We will first address Universal Am-Can's contention that the Commonwealth Court erred in its finding that federal and state regulations mandate a finding of employee status and that an "irrebuttable presumption" of employee status is created when a driver places the carrier's insignia on his or her vehicle. We will then consider Universal Am-Can's argument that the evidence of record failed to establish that Universal Am-Can exercised the requisite degree of control necessary to create an employer/employee relationship under common law principles.²

In support of its finding that Minteer was an employee, the Commonwealth Court found that Universal Am-Can leased vehicles for use in its hauling business and operated under both Interstate Commerce Commission (ICC) and Pennsylvania Department of Transportation (DOT) permits. In order for Minteer to operate under Universal Am-Can's ICC and DOT permits, Minteer and Universal Am-Can were required to enter into a Contractor Operating Agreement. By the terms of this agreement, and pursuant to federal regulations, Universal Am-Can, as a motor carrier operating pursuant to an ICC permit, was required to maintain exclusive possession, control and use of its leased vehicles. 49 C.F.R. § 376.12(c)(1). Similarly, the Commonwealth Court opined that Pennsylvania law confers the same possession, control, and use responsibility upon a carrier lessee operating equipment under a DOT permit. 52 Pa. Code § 31.32(c)(2)(iv)(A).

Universal Am-Can contends that the Commonwealth Court erred in this statutory analysis which led the court to find an employer/employee relationship. Contrary to the Commonwealth Court's finding that the federal regulation regarding exclusive possession, control, and use of the equipment is dispositive, Universal Am-Can offers a different regulation, not addressed by the Commonwealth Court, which renders this basis for requiring a conclusion of an employer/employee relationship nugatory. Universal Am-Can aptly points to 49 C.F.R. § 376.12(c)(4) which provides that:

Nothing in the provisions of paragraph (c)(1) of this section is intended to affect whether the lessor or driver provided by the lessor is an independent contractor or an employee of the authorized carrier lessee. An independent contractor relationship may exist when a carrier complies with 49 U.S.C. 11107 and the attendant administrative requirements.

Simply stated, we agree with Universal Am-Can that based upon the unequivocal language contained in § 376.12(c)(4), the regulation found at § 376.12(c)(1), relating to possession, control, and use does not mandate a determination of employee status.

The Pennsylvania DOT regulation regarding operation of motor vehicles echoes its federal counterpart. 52 Pa. Code § 31.32(c)(2)(iv)(A). Although the Pennsylvania regulation does not contain a provision such as that found in 49 CFR § 376.12(c)(4), after review of the Pennsylvania regulation relied upon by the Commonwealth Court to determine employee status, we believe that this state regulation was not intended to be dispositive as to employee/independent contractor status for workers' compensation purposes.

As a final aspect of its statutory analysis, the Commonwealth Court looked to 49 C.F.R. § 376.11(c) and found that this regulation mandates identification of the leased vehicle in the carrier's service by displaying the name of the carrier and the ICC permit number on the vehicle. The Commonwealth Court, seizing on this regulation, concluded that Minteer's display of Universal Am-Can's insignia and ICC and DOT permits on the outside of his truck established an "irrebuttable presumption" of an employment relationship between Universal Am-Can and Minteer, citing Carolina Casualty Insurance Company v. Insurance Company of North America, 595 F.2d 128, 137 n. 29 (3rd Cir.1979).

Universal Am-Can faults the Commonwealth Court's reliance upon this regulation and upon Carolina Casualty for the proposition that an "irrebuttable presumption" of employment status is created when a driver displays a motor carrier's insignia. According to Universal Am-Can, Carolina Casualty is inapposite to this matter. Again, we agree.

In Carolina Casualty, the Court of Appeals for the Third Circuit stated that federal law, in effect, creates an "irrebuttable presumption" of an employment relationship between the driver and a motor carrier...