Case # G0344284
Date of Accident: 10/28/2010
District Office: Peekskill
Employer: Metropolitan Transportation Co
Carrier: State Insurance Fund
Carrier ID No.: W204002
Carrier Case No.: 64554470-29
Date of Filing of Decision: 10/10/2012
Claimant's Attorney: Laurence Shaw, Esq.
Panel: Robert E. Beloten

The Full Board, at its meeting held on September 11, 2012, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed November 7, 2011.

ISSUE

The issue presented for Mandatory Full Board Review is whether the claimant was an employee of Metropolitan Transportation (Metropolitan), or an independent contractor.

By a decision filed on April 4, 2011, the Workers' Compensation Law Judge (WCLJ) found the claimant to be an employee of Metropolitan, found the injury occurred in the course of employment, and established the case for an injury to the claimant's left forearm.

The Board Panel majority, in a decision filed November 7, 2011, affirmed the WCLJ's decision.

The dissenting Board Panel member found that the claimant was an independent contractor and not an employee of Metropolitan

The carrier filed an application for Mandatory Full Board Review on December 6, 2011.

The claimant filed a rebuttal on January 6, 2012.

Upon review, the Full Board votes to adopt the following findings and conclusions.

FACTS

The claimant, a driver, sustained an injury to his left forearm when he was assaulted by another driver on October 28, 2010, while in the course of making delivery in Newark, New Jersey. Metropolitan is located in the Bronx. The carrier controverted the claim, contending the claimant was an independent contractor and not an employee.

The claimant testified at a hearing held March 30, 2011, that he drove a tractor trailer, which he owned, and picked up containers from Metropolitan for pier delivery. The dispatcher from Metropolitan would tell him when to pick up a container, and he only picked containers up at Metropolitan. He had to fill out an application to get the position, and was paid by check which Metropolitan made out to his company "R & E Transfer." Besides owning the tractor trailer, he also paid for the gas and "back tail" insurance, although Metropolitan paid for liability insurance which provided coverage once a trailer was hooked up to the truck. He confirmed owning R & E Transfer, but denied doing work for his own company on the date of injury. The claimant received a 1099 form from Metropolitan for tax purposes in both his name and for R & E. R & E had a federal tax identification DOT number. The claimant testified that no taxes were deducted from his check, but contended that Metropolitan did "deduct money for the Workers' Compensation" (Hearing Transcript, 3/20/11, p. 4). When asked how he knew Metropolitan "took out money for Workers' Compensation insurance," claimant responded, "Because they do it every driver work there, they do so, and they tell you, you got to take some money for the comp" (Hearing Transcript, 3/20/11, p. 5). Claimant further testified that Metropolitan took "deductions for the Workers' Compensation. That's only deduction because I can't get Workers' Compensation. It have to be through the company. I cannot get it my own" (Hearing Transcript, 3/20/11, p. 8).

Claimant testified that he would be responsible for the upkeep of his truck, which did have a Metropolitan insignia on it. The claimant stated that Metropolitan would not let him work anywhere else, and that he was paid per every trailer he moved. On October 28, 2010, he was attacked by another driver who was irate over the claimant being given an assignment he (the other driver) wanted. The attacker grabbed a stick and struck the claimant breaking his left arm. After he was hit, the claimant conceded he brandished a box cutter at his attacker.

The accounts payable clerk for Metropolitan also testified on March 30, 2011. She explained she was also responsible for workers' compensation at the company. She maintained the claimant was an independent contractor who owned his own company. He had to have a TWIC card (Transportation Workers' Identification Credential) that allowed him onto the piers. She confirmed the claimant would get a load assignment from a Metropolitan dispatcher. The reason she considered the claimant an independent contractor was because he owned his own truck. The claimant earned more than in-house employees who did not have their own truck. She also confirmed that the claimant had to exclusively work for Metropolitan and stated that the claimant was "leased" to them. She testified that, with one exception (when the 1099 form was made out in the claimant's name as Metropolitan did not yet have his company's name), the claimant received 1099 forms made out to the name of his business. The witness confirmed that Metropolitan took three percent (3%) from what it paid to the claimant for workers' compensation insurance, "[b]ecause he didn't have any for his own - for his own self. We gave him the option to either bring in your certificate of insurance for Workers' Compensation or we can pay into insurance for you" (Hearing Transcript, 3/20/11, p. 21). She testified that Metropolitan provided workers' compensation coverage for the claimant through its policy with State Insurance Fund (Hearing Transcript, 3/20/11, p. 22).

Following development of the record, the WCLJ, in a decision filed April 4, 2011, found that the claimant was an employee of Metropolitan, found the injury occurred in the course of employment, and established the case for an injury to the claimant's left forearm.

LEGAL ANALYSIS

In its application for Mandatory Full Board Review, the carrier contends the claimant was an independent contractor and not an employee, citing Matter of Choto v Consolidated Lbr. Transp., Inc. (82 AD3d 1369 [2011]).

In rebuttal, the claimant argues that the employer conceded that it provided worker's compensation coverage to the claimant, and that the decision of the Board Panel majority should be affirmed.

In Choto, the Appellate Division reversed the Board's finding of an employer-employee relationship between a trucking company and a truck driver, who was also an owner-operator. The Court noted the Board's reliance on the fact that the trucking company's dispatcher told the claimant where to pick up and deliver materials on a daily basis, but found that this one factor was insufficient to support a finding of employer-employee relationship because, "[t]he record demonstrates that claimant owned, operated, maintained and repaired his own truck and trailer, he provided his own equipment, including the straps, tarps and chains used to secure a load, he paid for his own liability, bobtail and cargo insurance, he covered all of his own expenses, including fuel, fuel taxes and tolls, and he took breaks at his own discretion. Furthermore, claimant was issued an IRS 1099 form and indicated on his tax returns that he was self-employed, taking the commensurate deductions. Finally, the Court noted the applicable lease could be terminated by either party with 24 hours written notice" (id.).

In Choto the Board relied, in part, on evidence of a lease agreement between the claimant and the trucking company which stated that the claimant was not free to haul loads for other companies unless the lease agreement was cancelled with 24 hours' notice. However, "the lease agreement itself states that claimant could haul loads for another carrier with written permission from Consolidated, a policy that was confirmed by Consolidated's witness" (id.). The Court explained that this policy, as well as the requirements for the claimant to display the Consolidated logo on his truck, for Consolidated to pay for certain insurance coverage and deduct the amount for the coverage from claimant's check, and for Consolidated to have the right to inspect claimant's equipment, were "compelled by federal regulations that [are applicable to the trucking industry and] require that Consolidated have 'exclusive possession, control, and use of the equipment for the duration of the lease' and, thus, should not be found to be dispositive of an employee-employer relationship." (49 CFR 376.12 [c][1], [4]); see generally Matter of Leazard [TestQuest, Inc.-Commissioner of Labor], 74 AD3d 1414 [2010]; Matter of Wannen [Andrew Garrett Inc.-Commissioner of Labor], 57 AD3d 1029 [2008])" (Choto, 82 AD3d 1369, 1370 [2011]).

In the present case, many of the factors which indicate that claimant was an employee of Metropolitan are similar to the factors which the Choto Court found insufficient to support a finding of employer-employee relationship, as they are mandated by federal regulations applicable to all interstate truck drivers. Nevertheless, there are crucial factual distinctions between this case and Choto. One significant distinction is that Metropolitan concedes it agreed to provide workers' compensation coverage to the claimant through its policy with the State Insurance Fund, because claimant did not have his own coverage. Metropolitan acknowledged that it withheld 3% of all payments to the claimant in order to pay for workers' compensation coverage. That action violates Workers' Compensation Law (WCL) § 31, which prohibits any "agreement by an employee to pay any portion of the premium paid by his employer…[for] insurance, maintained for or carried for the purpose of providing compensation…"

Metropolitan's witness testified that it retained both drivers who were employees, and those who were independent contractors, who performed the same work. By agreeing to provide workers' compensation coverage to the claimant, taking deductions from his pay for the purpose of obtaining that coverage, and testifying that it had in fact obtained such coverage through the State Insurance Fund, Metropolitan treated claimant as an employee/driver and not as an independent contractor. Moreover, Metropolitan conveyed to claimant that it would obtain such coverage for the claimant, and that it considered claimant to be an employee for purposes of workers' compensation.

Additionally, in Choto the parties had the ability to terminate the lease upon 24 hours written notice. Here, the claimant leased his truck for a year with no provision for him to terminate the lease. In Choto, the lease provided the claimant could haul loads for other carriers with the permission of the employer. Here, the claimant testified he could not work for another carrier, and the employer agreed claimant worked exclusively for Metropolitan (Hearing Transcript, 3/20/11, p.20). In Choto, the claimant's pay was determined by the adjusted gross revenue of the loads he carried, a factor the Court noted he could control. Here, the claimant was paid based on the distance of his transport, a factor he did not control. Based on the totality of the evidence presented and the factual distinctions with Choto, there is substantial evidence to support the finding that Metropolitan exercised sufficient overall control over the claimant's services to establish his status as an employee (Matter of Short, 233 AD2d 676 [1966]).

Therefore, the Full Board finds that the preponderance of the evidence in the record supports a finding that claimant was an employee of Metropolitan at the time of his accident.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed April 4, 2011, is AFFIRMED. No further action is planned at the present time.