Steel & Machinery Transportation, Inc. v. Illinois Workers Compensation Commisssion , 2015 IL App (1st) 133985WC ( 2015 )

Illinois Official Reports
Appellate Court
Steel & Machinery Transportation, Inc. v. Illinois Workers’ Compensation Comm’n,
2015 IL App (1st) 133985WC
Appellate Court STEEL AND MACHINERY TRANSPORTATION, INC., Appellant,
Caption v. THE ILLINOIS WORKERS’ COMPENSATION COMMISSION
et al. (Radomir Cvetkovski, Appellee).
District & No. First District, Workers’ Compensation Commission Division
Docket No. 1-13-3985WC
Filed May 1, 2015
Rehearing denied July 7, 2015
Decision Under Appeal from the Circuit Court of Cook County, No. 13-L-50386; the
Review Hon. Patrick J. Sherlock, Judge, presiding.
Judgment Affirmed.
Counsel on Paul A. Krauter, of Roddy, Leahy, Guill & Zima, Ltd., of Chicago, for
Appeal appellant.
Osvaldo Rodriguez, of Law Offices of Osvaldo Rodriguez, P.C., of
Elmwood Park, for appellee.
Panel JUSTICE HUDSON delivered the judgment of the court, with
opinion.
Justices Hoffman, Harris, and Stewart concurred in the judgment and
opinion.
Presiding Justice Holdridge dissented, with opinion.
OPINION
¶1 I. INTRODUCTION
¶2 Respondent, Steel & Machinery Transportation, Inc., appeals from the judgment of the
circuit court of Cook County confirming a decision of the Illinois Workers’ Compensation
Commission (Commission) awarding benefits to claimant, Radomir Cvetkovski, pursuant to
the Workers’ Compensation Act (Act) (820 ILCS 305/1 et seq. (West 2004)). On appeal,
respondent argues that the Commission erred in finding that an employer-employee
relationship existed between it and claimant. We affirm.
¶3 II. BACKGROUND
¶4 Claimant is an over-the-road truck driver who owns a tractor-trailer. Respondent is in the
business of transporting machinery and metal products from sellers to purchasers. On Friday,
June 10, 2005, respondent dispatched claimant to transport a shipment from Indiana to
Wisconsin. After claimant picked up the load in Indiana, he drove his vehicle to a truck stop
and went home for the weekend. Claimant resumed the delivery in the early morning hours
of Monday, June 13, 2005. While driving in Illinois, claimant was involved in a
motor-vehicle accident. As a result of the accident, claimant lost a portion of his left
extremity below the knee. On October 3, 2005, claimant filed an application for adjustment
of claim, seeking benefits for his injury. An arbitration hearing on claimant’s application for
adjustment of claim was held over two dates late in 2011. The following evidence relevant to
this appeal was presented at that hearing.
¶5 At the time of the accident, claimant was operating under an agreement with respondent
entitled “INDEPENDENT CONTRACTOR AGREEMENT” (Agreement). The Agreement
classified claimant as an independent contractor. Paragraph 1 of the Agreement provided
that, for the duration of the Agreement, claimant would provide respondent “transportation
related services and the Equipment set forth in SUPPLEMENT A.” Supplement A was an
equipment schedule listing claimant’s tractor and trailer. Paragraph 6(a) of the Agreement
provided that the equipment described in Supplement A “shall be for [respondent’s]
exclusive possession, control and use for the duration of this Agreement.” Paragraph 6(a)
further provided, “[t]his subparagraph is set forth solely to conform with Federal Motor
Carrier Safety Adm. regulations and shall not be used for any other purposes, including any
attempt to classify [claimant] as an employee of [respondent].” Paragraph 8 of the Agreement
provided that respondent, “having exclusive possession, control and use of the equipment
covered under this lease, under it’s [sic] sole discretion, may interchange this equipment to
other authorized carriers.”
¶6 The Agreement required respondent to maintain insurance to cover the equipment when it
was being operated in respondent’s service and claimant to acquire “bobtail” insurance to
cover the equipment when it was not operated in respondent’s service. In addition, the
Agreement required claimant to notify respondent of any accident “involving operations
under [the] Agreement.” The Agreement provided that claimant would be compensated a
specified percentage “of the transportation revenue after surcharges, if any.” Under the
Agreement, claimant was responsible for the cost of the equipment, including, but not limited
to, necessary licenses, permits, oil, fuel, tires, highway use taxes, weight taxes, fuel taxes,
and toll charges. In addition, claimant was required to keep the equipment “in clean
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appearance” at his sole cost and expense. Furthermore, the Agreement required claimant to
maintain the equipment in a safe condition and in compliance with all applicable laws and
regulations. The Agreement provided respondent with the right to place and maintain on the
equipment its name and lettering, advertisement, slogans or designs. The Agreement could be
terminated for any reason after 30 days from its effective date by giving one day’s written
notice to the other party either personally, by mail, or by facsimile machine. In addition, the
Agreement could be terminated at any time, by either party, in the event of a breach of the
Agreement by the other party.
¶7 At the arbitration hearing, claimant, a native of Macedonia, testified through an
interpreter. Claimant related that he began working for respondent in March 2005. Prior to
driving for respondent, claimant completed an application, underwent a medical examination,
and submitted to a drug test. Claimant testified that he paid for the medical examination, but
he was not sure who paid for the drug test. During his first week of work for respondent,
claimant met with Josephine Ramos, plaintiff’s safety representative. Claimant testified that
at this meeting, he and Ramos discussed “everything concerning *** the truck, everything
about safety and avoiding accidents.” Claimant related that he drove exclusively for
respondent between his date of hire and the date of the accident.
¶8 Claimant acknowledged that while driving for respondent, he was responsible for
maintaining and repairing his truck and trailer in a certain manner. For instance, claimant had
to take the tractor-trailer for inspections, keep inspection and maintenance records in
accordance with federal regulations, and post respondent’s name on the side of the
tractor-trailer. Claimant further testified that while respondent provided liability insurance to
cover the equipment while he was transporting loads for respondent, he was required to
provide his own insurance for the equipment when he was not delivering for respondent.
Claimant also acknowledged that he was responsible for truck repairs, plates, and licenses.
Claimant initially testified that he was also responsible for purchasing fuel and paying tolls
while he was working for respondent. However, claimant later indicated that respondent
reimbursed him for the fuel charges. Claimant also testified that respondent did not require
him to wear a uniform. He stated that he was paid by respondent on a weekly basis by
company checks.
¶9 Claimant testified that he obtained his work assignments from a dispatcher named Spiro
Krlevski (Spiro), who is also a native of Macedonia. According to claimant, Spiro would
provide him with “the numbers for the pick-up.” Claimant would then drive to the designated
pick-up location. When claimant picked up a load for respondent, he would identify himself
as the driver for “SMT,” the acronym by which respondent is known. After taking possession
of the goods, claimant would travel to the delivery location. Claimant testified that it was
Spiro’s responsibility to call him every two hours “to check on [his] location, find out where
[he is] and what’s going on.” Once claimant completed a delivery he would call Spiro to
obtain a new assignment. With respect to the frequency of the calls claimant would make to
respondent, claimant testified, “[i]t may happen three or five times a day that I would need to
call the company, for instance, when I needed to report if I am empty, if I delivered.”
Claimant further testified that Spiro gave him specific instructions to the address he was
delivering to on the night of the accident.
¶ 10 Claimant testified that it was not up to him to choose which loads he wanted to transport.
Moreover, claimant testified that he would not “dare” refuse a load. When asked about the
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consequences for declining a load, claimant responded that “there might be consequence [sic]
such as me losing my job or not getting any loads for like two days.” Claimant also testified
that he was not free to take loads for other companies and he could not use another driver to
transport a load for respondent. Claimant testified that respondent would provide him with a
general time frame for each pick-up and that each load had a delivery deadline. If claimant
delivered a load late, there would be a consequence, such as a late charge. According to
claimant, he was assessed a late charge with respect to the load he was delivering when the
accident at issue occurred.
¶ 11 During cross-examination, claimant initially denied entering into the Agreement with
respondent. However, after being shown the Agreement, claimant identified his signature on
the document. Although claimant testified through an interpreter, he acknowledged that he
reads, writes, and understands English. Claimant was shown the bill of lading for the load he
was carrying at the time of the accident. Claimant admitted that the bill of lading required
him to deliver the load between 7:30 a.m. and 3:30 p.m., Monday through Friday.
¶ 12 Respondent called three witnesses at the hearing–Ramos, Herbert Schaffer, and Spiro.
Ramos testified that, as respondent’s director of safety, she “pre-qualifies” drivers, sets up
contractor lease agreements, monitors maintenance files, and performs safety and compliance
duties on respondent’s behalf. Ramos described respondent’s “pre-qualification” process in
detail. She explained that this process involves having a prospective driver complete an
application, undergo a physical, and submit to a drug test. In addition, Ramos reviews the
applicant’s motor-vehicle record and employment history. Ramos testified that the applicant
pays for the physical and the drug screen. If an applicant is approved, he participates in an
orientation process. Ramos testified that once an applicant is qualified and executes an
independent-contractor agreement, it is respondent’s responsibility to “continuously monitor”
the driver’s status. For instance, Ramos explained that federal regulations limit the number of
hours a driver can drive and respondent monitors the number of hours driven. Moreover,
under federal law, respondent is required to ensure that leased equipment is operated in
compliance with federal guidelines. Thus, if a driver’s equipment is not in compliance with
federal standards, respondent would cancel the driver’s agreement.
¶ 13 Ramos testified that respondent did not require claimant to wear a uniform, shave, or
wear his hair in a particular manner. In addition, respondent had no input regarding how
claimant introduced himself while picking up a load. Ramos testified that the equipment
respondent leased from claimant would have had door signs with respondent’s name and
logo on it, as required by federal regulations. According to Ramos, claimant was required to
inspect his truck and trailer before each trip pursuant to federal regulations. Respondent
exercised no control over the type of fuel claimant purchased or where he parked. Moreover,
respondent did not provide claimant with any tools or equipment. Ramos testified that each
driver is responsible for obtaining his or her own bobtail insurance and workers’
compensation coverage.
¶ 14 Ramos testified that she knows Spiro, the dispatcher referenced by claimant. Ramos
described Spiro as an “independent agent” for respondent. Ramos testified that, in addition to
using independent agents to dispatch, respondent has its own dispatch system within the
company itself. Ramos testified that under the Agreement, claimant had the option to
dispatch through Spiro or respondent’s system. Ramos explained that, under either system,
the dispatch process is essentially identical. Initially, the driver calls in for a job. If the agent
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does not have a load the driver is interested in moving, he can contact a different agent or
respondent’s own dispatch. According to Ramos, a driver need only call dispatch when he
would like to pick up a load. Claimant was not required to call in daily to report his status or
work any particular shift, and he was not required to accept a particular shipment. Moreover,
Ramos denied that respondent required claimant to take a specific route in delivering a load.
¶ 15 Ramos testified that once a load is delivered and the driver presents proof of delivery and
log sheets, he receives payment. Payment is made by check or via a “ComData” card, which
Ramos likened to a debit card. According to Ramos, claimant elected to receive his payments
on a ComData card. Ramos stated that respondent did not withhold income taxes or any other
type of government deduction from claimant’s settlements. Respondent provided claimant
with a 1099 tax form at the end of the calendar year. Ramos acknowledged that a deduction
to claimant’s pay was made after the June 2005 accident. According to Ramos, however, the
deduction had nothing to do with the accident, but constituted charges for the late delivery of
a different load.
¶ 16 Ramos testified that it is respondent’s responsibility to observe and enforce all applicable
federal and state regulations in transporting goods. Ramos testified that respondent monitored
“paperwork” while claimant’s equipment was under lease pursuant to federal regulations.
Ramos testified that pursuant to a federal requirement, claimant’s equipment must meet state
and federal regulations before respondent can enter into a lease agreement. According to
Ramos, under the Agreement, respondent did not impose any requirements above and beyond
those of the federal Department of Transportation. Respondent could cancel a lease
agreement if the lessor is in violation of federal regulations.
¶ 17 Ramos testified that the Agreement allowed claimant to transport goods for another
company “through a brokerage operation.” Under such an arrangement, the other motor
carrier would pay respondent and respondent would then settle with claimant. Ramos
testified that, to her knowledge, claimant did not drive for anyone except respondent between
the time he first transported for respondent and the date of the accident.
¶ 18 Herbert Schaffer testified that he has been the vice-president of business development for
Transportation Employment Services (TES) for four years. Schaffer related that respondent
and TES are affiliated entities and that he “represent[s]” respondent as well. Schaffer testified
that he has worked in the trucking industry for 41 years.
¶ 19 Schaffer testified that under an independent contractor agreement, respondent does not
require drivers to wear any kind of uniform, to take a specific route to the delivery
destination, or to introduce themselves to customers in any particular way. Respondent does
not train the independent contractors. Moreover, the driver pays for the licensing of the
equipment leased to respondent. Schaffer also testified that under an independent contractor
agreement, respondent does not require drivers to shave or otherwise wear their hair in a
particular manner, clean their equipment on a specified schedule, or purchase a particular
type of fuel. Respondent does not instruct drivers where to park their equipment or how to
inspect or maintain the equipment in cold weather. Schaffer also related that respondent does
not provide drivers with any kind of tools or equipment. In addition, the drivers do not have
specific work shifts, and they are not required to call in daily to report their status. Schaffer
stated that a driver is not subject to any adverse consequences from respondent if he is late
with a delivery. Schaffer added that respondent does not impose any requirements above and
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beyond that which the federal government imposes pursuant to Department of Transportation
regulations.
¶ 20 Schaffer did not work for respondent at the same time as defendant. Nevertheless,
Schaffer testified that he had no reason to believe that the current dispatch process is any
different than the process used in 2005, when claimant was injured. Schaffer related that
under the dispatch system, a customer calls an agent and provides delivery information. A
driver then contacts dispatch to inquire about an available load, where it is going, and what it
pays. The driver then decides whether to take the load. If the driver does not want to take a
particular load, he is free to call back later or contact another carrier that respondent will
“broker freight to.”
¶ 21 With respect to the process for a driver to transport freight for a carrier other than
respondent, Schaffer explained as follows:
“If we did not have a load the [driver] wanted, he could let dispatch know that he’s
going to go look for a load from another carrier, and then we in turn–once he did find
one, he would call dispatch, say I have a load with this other carrier. We then would
reach out to that carrier, make sure that we have an agreement, do credit checks, et
cetera and so forth, and then release him to go haul that load for the other carrier.”
Schaffer stated that he has no personal knowledge of whether claimant drove for any other
carrier during the time he drove for respondent.
¶ 22 Schaffer testified that Spiro’s relationship with respondent is that of an “agent” or
“independent contractor.” Schaffer testified that once Spiro dispatches a driver, it is entered
into respondent’s computer system, known as the AS-400. According to Schaffer, the
AS-400 allows respondent to “know what the driver is doing and who’s moving what load.”
The AS-400 also indicates the time and the identity of the dispatcher.
¶ 23 Schaffer testified that a “bill of lading” is a contract of carriage. He explained that the
document authorizes the driver to possess the freight being transported. The bill of lading
also identifies the shipper, the destination of the goods, and any special instructions, such as
delivery times or if a delivery appointment is required. The driver presents the bill of lading
to the recipient of goods for signature to indicate that the freight was received. Respondent
then uses the bill of lading to settle payment with the driver. Schaffer noted that the bill of
lading for the load claimant was delivering on the date of the accident included special
shipping instructions. In particular, it stated that the recipient’s receiving hours were from
7:30 a.m. through 3:30 p.m., Monday through Friday, with no appointment required.
According to Schaffer, this meant there was no set time for the goods to be delivered.
¶ 24 Spiro testified that he has been an “agent” for respondent since January 2005 and that his
position consists of finding loads and assigning them to drivers. Spiro testified that, typically,
claimant would initiate contact with him by requesting a load to transport. Spiro denied that it
was his responsibility to check on claimant’s location during the delivery process.
Nevertheless, Spiro acknowledged that once claimant accepted a load, he might contact
claimant to check on the delivery status at the customer’s request. Spiro related that claimant
would also call him if he was “empty” and needed a new load. Spiro testified that claimant
was free to accept or decline a load and was not subject to any adverse consequences for
declining a load.
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¶ 25 Spiro testified that pick-up and delivery times are dictated not by respondent, but by the
customer’s needs. Spiro stated that some customers have delivery windows, while others do
not. Spiro noted that the bill of lading controls the time and place of delivery. Spiro testified
that the bill of lading for the load claimant was delivering on the date of the accident
provided that deliveries were accepted between 7:30 a.m. and 3:30 p.m., Monday through
Friday, with no appointment necessary. Spiro denied telling claimant that the load had to be
delivered at a particular time. Spiro further testified that under the Agreement, respondent did
not impose or in any way threaten to impose any monetary fines or consequences on claimant
for late deliveries.
¶ 26 Spiro testified that claimant was not required to wear a uniform, shave, or wear his hair in
a particular style. In addition, claimant was not required to take a specified route to a delivery
destination. Spiro stated that claimant was not required to call in daily to report his status.
Spiro denied that a driver would receive fewer loads in the future if he or she declined a load.
Spiro testified that he never instructed claimant where to park his equipment. Spiro testified
that under the Agreement, claimant had the option of hauling for other motor carriers.
However, Spiro was not aware of claimant driving for any other company between March
and June 2005.
¶ 27 Based on the foregoing evidence, the arbitrator awarded benefits. Relevant here, the
arbitrator determined that the record contained some evidence indicative of an
independent-contractor status, such as the method of payment, the lack of a dress code, and
claimant’s ownership of the tractor-trailer. Nevertheless, the arbitrator concluded that
claimant ultimately established that he was respondent’s employee on the date of the
accident. In so finding, the arbitrator initially addressed the credibility of the parties, noting
that, although claimant was argumentative and “reversed himself” when confronted with the
Agreement, he was “credible overall.” In contrast, the arbitrator concluded that all three of
respondent’s witnesses “exhibited some degree of bias.” On the specific issue of the
employment relationship, the arbitrator relied primarily on the level of control respondent
exercised over claimant’s work and the nature of claimant’s work in relation to the general
business of respondent. With respect to the issue of control, the arbitrator found that: (1)
claimant drove exclusively for respondent; (2) claimant would have been subject to a number
of conditions if he hauled for another entity; (3) respondent monitored the whereabouts of its
drivers on its computer system; (4) claimant would be subject to reprisal for refusing a load;
(5) respondent’s hiring process required prequalification and participation in an orientation
program; and (6) respondent had the right to disqualify a driver for safety reasons. The
arbitrator also concluded that claimant owned the tractor-trailer “in name only” because,
under the Agreement, respondent had exclusive possession, control, and use of the equipment
for the duration of the Agreement and could, at its sole discretion, interchange the vehicle to
other authorized carriers. A majority of the Commission affirmed and adopted the decision of
the arbitrator. On judicial review, the circuit court of Cook County confirmed the decision of
the Commission. This appeal by respondent followed.
¶ 28 III. ANALYSIS
¶ 29 On appeal, respondent argues that the Commission’s finding that an employment
relationship existed between it and claimant at the time of claimant’s accident is against the
manifest weight of the evidence.
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¶ 30 Whether a claimant is classified as an independent contractor or an employee is crucial,
for it is the employment status of a claimant which determines whether he is entitled to
benefits under the Act. Earley v. Industrial Comm’n, 197 Ill. App. 3d 309, 314 (1990); see
also Roberson v. Industrial Comm’n, 225 Ill. 2d 159, 174 (2007) (noting that an employment
relationship is a prerequisite for an award of benefits under the Act). For purposes of the Act,
the term “employee” should be broadly construed. Ware v. Industrial Comm’n, 318 Ill. App.
3d 1117, 1122 (2000). Nevertheless, the question of whether a claimant is an employee
remains one of the most vexatious in the law of workers’ compensation. Roberson, 225 Ill.
2d at 174. The difficulty arises from the fact-specific nature of the inquiry. Roberson, 225 Ill.
2d at 174. Notably, many jobs contain elements of both an employment and an
independent-contractor relationship. Kirkwood v. Industrial Comm’n, 84 Ill. 2d 14, 20 (1981).
Since there is no clear line of demarcation between the status of an employee and an
independent contractor, no rule has been, or could be, adopted to govern all cases in this area.
Roberson, 225 Ill. 2d at 174-75; Kirkwood, 84 Ill. 2d at 20.
¶ 31 To assist in determining whether a person is an employee, the supreme court has
identified a number of factors. Among the factors cited by the supreme court are: (1) whether
the employer may control the manner in which the person performs the work; (2) whether the
employer dictates the person’s schedule; (3) whether the employer compensates the person
on an hourly basis; (4) whether the employer withholds income and social security taxes
from the person’s compensation; (5) whether the employer may discharge the person at will;
and (6) whether the employer supplies the person with materials and equipment. Roberson,
225 Ill. 2d at 175. Another relevant factor is the nature of the work performed by the alleged
employee in relation to the general business of the employer. Roberson, 225 Ill. 2d at 175;
Ware, 318 Ill. App. 3d at 1122. The label the parties place on their relationship is also a
consideration, although it is a factor of “lesser weight.” Ware, 318 Ill. App. 3d at 1122. The
significance of these factors rests on the totality of the circumstances, and no single factor is
determinative. Roberson, 225 Ill. 2d at 175. Nevertheless, the right to control the work and
the nature of the work are the two most important considerations. Kirkwood, 84 Ill. 2d at 21;
Ware, 318 Ill. App. 3d at 1122.
¶ 32 The existence of an employment relationship is a question of fact for the Commission.
Ware, 318 Ill. App. 3d at 1122. In resolving questions of fact, it is solely within the province
of the Commission to assess the credibility of witnesses, resolve conflicts in the evidence,
assign weight to be accorded the evidence, and draw reasonable inferences from the
evidence. Hosteny v. Illinois Workers’ Compensation Comm’n, 397 Ill. App. 3d 665, 674
(2009). We will overturn the Commission’s resolution of a factual issue only if it is against
the manifest weight of the evidence. Ware, 318 Ill. App. 3d at 1122. A factual finding is
contrary to the manifest weight of the evidence only if the opposite conclusion is clearly
apparent. Freeman United Coal Mining Co. v. Illinois Workers’ Compensation Comm’n, 2013
IL App (5th) 120564WC, ¶ 21. Consequently, when the evidence is “well balanced,” it is the
Commission’s province to weigh the evidence and decide among competing inferences, and
its decision will be upheld. Roberson, 225 Ill. 2d at 187; see also Kirkwood, 84 Ill. 2d at 20
(“[W]hen the facts of a particular case are susceptible to either interpretation, it is within the
Industrial Commission’s province to draw inferences and evaluate the credibility of the
witnesses in arriving at a decision.”).
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¶ 33 We begin our analysis by addressing the right to control. Initially, we agree with the
Commission that, while claimant owned the tractor-trailer he used to transport loads for
respondent, claimant’s ownership was in name only and the control respondent had over the
equipment is indicative of an employment relationship. Significantly, the Agreement
expressly provided that claimant’s equipment was for respondent’s “exclusive possession,
control and use for the duration of [the] Agreement.” While respondent purported to include
this language in the Agreement solely to conform to federal regulations, it does not diminish
the fact that respondent had the right to control claimant’s activities. See Ware, 318 Ill. App.
3d at 1124 (“[T]he fact that [the employer] was acting to ensure compliance with federal
regulations *** does not diminish the fact that it exercised control over [the employee].”). In
this regard, we note that the Agreement allowed respondent, at its “sole discretion,” to
interchange the equipment respondent leased from claimant to other authorized carriers.
Further, while respondent’s witnesses testified that claimant was free to transport goods for
other companies, it is undisputed that, between his date of hire and the date of the accident,
claimant never actually hauled goods for any carrier other than respondent. More important,
the evidence shows that claimant’s ability to haul for another carrier was subject to a number
of conditions imposed by respondent. According to Schaffer, to seek approval to transport
goods for another company, the driver had to first notify respondent. Upon notification,
respondent would contact the other carrier, ensure that there was “an agreement” between it
and respondent, and conduct a credit check of the other carrier. The driver would then have
to be “release[d]” by respondent to haul for the other carrier. That the other motor carrier had
to have an “agreement” with respondent, the fact that a driver had to obtain a “release” from
respondent to haul for another carrier, and respondent’s right to interchange are strong
indications that respondent had the right to control claimant’s activities.
¶ 34 Other indicia of control evincing an employment relationship include the following. Prior
to hire, respondent subjected prospective drivers to a “pre-qualification” process, which
involved completing an application, undergoing a medical examination, and submitting to a
drug test. Once hired, respondent required claimant to attend an orientation program. Further,
respondent required claimant to display its name on his tractor while working for respondent,
maintain the equipment in clean appearance, and inspect the equipment prior to each trip.
The Agreement required claimant to notify respondent if an accident occurred, and
respondent restricted the number of hours claimant could drive. While some of these
requirements were mandated by federal regulations, as noted earlier, this does not diminish
the fact that respondent had control over claimant’s activities. See Ware, 318 Ill. App. 3d at
1124.
¶ 35 With respect to other indicia of control, we note claimant’s testimony that Spiro called
him every two hours to check on his location, that Spiro provided him specific instructions to
the address he was delivering on the night of the accident, and that respondent imposed
delivery deadlines. Claimant also indicated that he would not “dare” refuse a load or he
would face consequences such as termination or not being allowed to haul for respondent for
a period of time. Respondent’s witnesses disputed claimant’s testimony that respondent
regularly monitored the location of its drivers, required its drivers to take a particular route
when making a delivery, dictated delivery times, and punished drivers for rejecting a job. We
also note that there was conflicting evidence regarding whether claimant was responsible for
all costs and expenses associated with operating the tractor-trailer. In this regard, we noted
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that the Agreement provided that claimant was responsible for the operating expenses.
However, claimant testified that respondent reimbursed him for the cost of fuel, which is
undoubtedly one of the most expensive operating expenses. In any event, this dueling
evidence merely created a conflict for the Commission to resolve. See Hosteny, 397 Ill. App.
3d at 674 (noting that it is the function of the Commission to decide questions of fact, judge
the credibility of witnesses, and resolve conflicts in the evidence). The arbitrator concluded
that although claimant was occasionally argumentative at the arbitration hearing and changed
his testimony when confronted with the Agreement, he was “credible overall.” The arbitrator
also found that all three of respondent’s witnesses exhibited some degree of bias. For
instance, the arbitrator noted that Ramos was a long-time employee of respondent and
testified in “a somewhat robotic and ‘coached’ manner as to the driver application and
termination process.” The arbitrator also pointed out that, although Schaffer has extensive
experience in the trucking industry, he did not work for respondent during claimant’s tenure.
Finally, the arbitrator noted that Spiro “admitted to a fairly lengthy and ongoing relationship”
with respondent. Ultimately, a majority of the Commission affirmed and adopted the decision
of the arbitrator, including her credibility assessment. Thus, to the extent that claimant’s
testimony conflicted with that of respondent’s three witnesses, it was within the prerogative
of the Commission to credit claimant’s testimony over that of Ramos, Schaffer, and Spiro.
See Labuz v. Illinois Workers’ Compensation Comm’n, 2012 IL App (1st) 113007WC, ¶ 33.
¶ 36 Of course, there was also control-related evidence suggesting independent contractor
status. For example, respondent did not impose a dress code and it did not require claimant to
shave or wear his hair in a particular manner. In addition, respondent exercised no control
over the type of fuel claimant purchased or where he parked, and respondent did not instruct
drivers to clean their equipment on a specified schedule. However, where, as here, there is
conflicting evidence regarding a particular factor, we defer to the Commission’s findings.
Roberson, 225 Ill. 2d at 187; Kirkwood, 84 Ill. 2d at 20. Accordingly, we agree with the
Commission that the indicia of control point to an employment relationship.
¶ 37 Next, we examine the nature of the work performed by claimant in relation to the general
business of respondent. “Regarding this factor, our supreme court noted ‘because the theory
of workmen’s compensation legislation is that the cost of industrial accidents should be
borne by the consumer as a part of the cost of the product, this court has held that a worker
whose services form a regular part of the cost of the product, and whose work does not
constitute a separate business which allows a distinct channel through which the cost of an
accident may flow, is presumptively within the area of intended protection of the
compensation act.’ ” Ware, 318 Ill. App. 3d at 1124 (quoting Ragler Motor Sales v. Industrial
Comm’n, 93 Ill. 2d 66, 71 (1982)). Respondent’s business was transporting machinery and
metal products between sellers and buyers. Claimant’s job was transporting goods for
respondent’s customers. Although Schaffer testified that claimant could carry freight for
others, his ability to do so was subject to various conditions, and the evidence clearly
demonstrates that claimant hauled exclusively for respondent between his date of hire and the
date of the accident. Accordingly, we find that this factor points to an employment
relationship.
¶ 38 With respect to the remaining factors, there are aspects of both an employment
relationship and independent contractor status. Pointing to an independent contractor
relationship is the fact that claimant was paid a per-job commission rather than on an hourly
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basis, neither income nor social security taxes were withheld from claimant’s payments,
respondent did not provide any equipment or tools, and the Agreement referred to claimant
as an independent contractor. Pointing to an employment relationship is the right to
discharge. As noted above, here two clauses of the Agreement related to termination. One of
those provisions provided that either party could terminate the Agreement for any reason at
any time after 30 days after its effective date. This is indicative of an employment
arrangement. Ware, 318 Ill. App. 3d at 1125-26 (noting that an at-will employment
arrangement, which generally permits termination for any reason, is suggestive of an
employment relationship).
¶ 39 In short, the foregoing evidence establishes that there are factors that weigh both in favor
of and against a finding that claimant was an employee of respondent. However, it was the
Commission’s province to determine claimant’s employment status. See Roberson, 225 Ill.
2d at 186-87; Kirkwood, 84 Ill. 2d at 20; Earley, 197 Ill. App. 3d at 318. Ultimately, the
Commission concluded that an employment relationship existed between claimant and
respondent. Based on an analysis of the relevant factors, and in light of the totality of the
circumstances, we find that a conclusion opposite that of the Commission is not clearly
apparent. Thus, we reject respondent’s argument that the Commission’s determination that an
employment relationship existed between respondent and claimant at the time of the latter’s
injury is against the manifest weight of the evidence.
¶ 40 IV. CONCLUSION
¶ 41 For the reasons set forth above, we affirm the judgment of the circuit court of Cook
County, which confirmed the decision of the Commission.
¶ 42 Affirmed.
¶ 43 PRESIDING JUSTICE HOLDRIDGE, dissenting.
¶ 44 I dissent. In my view, the manifest weight of the evidence in this case establishes that the
claimant was an independent contractor, not an employee. The Commission’s finding to the
contrary (and the majority’s affirmance of that finding) demonstrate that, under our court’s
current interpretation of the law, it has become virtually impossible for a trucking company
and an independent driver/lessor to structure their relationship in a way that reliably
precludes a finding of an employment relationship, even if that is the clear and expressed
intent of both parties. Under our court’s current approach, the Commission can almost
always find an employment relationship and, once the Commission had made such a finding,
we will affirm the Commission’s determination so long as there is any evidence that even
arguably suggests an employment relationship. Thus, we will defer to the Commission’s
finding of an employment relationship even if the weight of the evidence supports the
opposite conclusion and even if the “evidence” in favor of an employment relationship
consists primarily of acts the trucking company was required to perform by law. I do not
believe that this expansive definition of “employment” or this undue deference to the
Commission is mandated by Illinois law. In any event, I find our current approach to be
unwise, unsound, and unfair. I write separately to suggest a different way forward.
¶ 45 In this case, the overwhelming weight of the evidence suggests that the claimant was an
independent contractor. The claimant owned his tractor-trailer and leased it to the respondent.
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The respondent did not provide the claimant with any tools or equipment and did not
withhold income taxes on the claimant’s behalf. The respondent did not control the work
performed by the claimant by specifying the routes to be taken or by requiring the claimant to
wear a uniform, shave, or wear his hair in any particular manner. Any required delivery times
were established by the customers, not the respondent. Moreover, the written Agreement
between the parties contains several hallmarks of an independent contractor relationship. For
example, the agreement provided that: (1) the claimant would be compensated a specified
percentage of the transportation revenue rather than paid a salary; (2) the claimant was
responsible for the cost of the equipment, including (but not limited to) necessary licenses
and permits, fuel, oil, tires, highway use taxes, weight taxes, fuel taxes, and toll charges; (3)
the claimant was required to acquire “bobtail” insurance to cover the equipment when it was
not operated in respondent’s service; and (4) the claimant could drive for other carriers,
subject to a credit check by the respondent.
¶ 46 In my view, the Commission’s finding of an employment relationship is flawed in several
respects. First, there was very little evidence suggesting that the respondent controlled the
work performed by the claimant. The Commission found that the claimant owned the
tractor-trailer “in name only” because, under the parties’ Agreement, the respondent had
“exclusive possession, control, and use” of the equipment for the duration of the Agreement.
The majority agreed with this finding. However, as the Agreement states, the respondent was
required by federal law to include this exclusivity provision in the Agreement. In fact, the
Agreement explicitly states that this provision was included “solely to conform with” federal
regulations and “shall not be used for any other purposes, including any attempt to classify
[claimant] as an employee of [respondent].” (Emphases added.) Most of the other acts that
purportedly demonstrate the respondent’s control over the claimant’s work in this case (e.g.,
the respondent’s “pre-qualification” process, its monitoring of the claimant’s hours and
driving status, and its requirement that the claimant inspect his truck) were also mandated by
federal law. Because the respondent was required to perform these actions by law, I believe
that they should not be taken as evidence of control by the respondent.
¶ 47 As the majority notes, we have previously ruled that a trucking company’s compliance
with regulations that require it to exercise control over a driver may be taken as evidence of
the company’s control, regardless of the company’s motivations in doing so. See, e.g., Ware
v. Industrial Comm’n, 318 Ill. App. 3d 1117, 1124 (2000) (“[t]he fact that [the company] was
acting to ensure compliance with federal regulations *** does not diminish the fact that it
exercised control over [the claimant]”); see also Earley v. Industrial Comm’n, 197 Ill. App.
3d 309, 315 (1990). However, our supreme court has cautioned that a trucking company’s
compliance with such federal regulations, standing alone, does not compel a finding of an
employment relationship. Roberson v. Industrial Comm’n, 225 Ill. 2d 159, 177-79 (2007).
Although compliance with such regulations is mandatory, “the federal requirements are not
so radically intrusive as to absolve lessors *** of otherwise existing obligations under ***
contracts allocating financial risk among private parties.” (Emphasis and internal quotation
marks omitted.) Id. at 178. “Freedom of contract requires that parties may structure their
relationship as they see fit, provided they do not neglect the requirements of federal law.” Id.
Indeed, the governing regulations themselves make clear that a trucking company’s
compliance with the written lease requirements of the Federal Motor Carrier Safety
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Regulations does not resolve the question of a driver’s employment status. Section
376.12(c)(4) of those regulations provides:
“Nothing in the provisions required by paragraph (c)(1) of this section[1] 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 lessee complies with 49 U.S.C. 14102 and
attendant administrative requirements.” 49 C.F.R. § 376.12(c)(4) (2005).
Accordingly, our supreme court has ruled that a trucking company’s compliance with federal
regulations is “merely a factor that may be considered in a common law analysis of whether a
driver is an employee of [the] trucking company.” Roberson, 225 Ill. 2d at 178. It should not
be given undue weight or deemed dispositive particularly where, as here, there is ample
evidence (including a written contract) suggesting that the parties intended the driver to be an
independent contractor. See id. at 177-79.
¶ 48 Courts in other jurisdictions have taken an even stricter approach. These courts have held,
as a matter of law, that a trucking company’s compliance with federal regulations should not
be considered evidence of the company’s control over a driver’s work for purposes of
determining the driver’s employment status. For example, in Universal Am-Can, Ltd. v.
Workers’ Compensation Appeal Board, 762 A.2d 328 (Pa. 2000), a Pennsylvania Workers’
Compensation Judge found that a trucking company had exercised sufficient control over a
driver’s work to give rise to an employment relationship where, inter alia, the parties signed
a Contractor Operating Agreement providing that the company “took exclusive control” over
the driver’s tractor-trailer and the company performed other actions required by federal
regulations. The Workers’ Compensation Appeals Board and the trial court affirmed.
However, the Supreme Court of Pennsylvania reversed. The court ruled that “[b]ecause a
motor carrier has no ability to negotiate aspects of the operation of leased equipment that are
regulated, these factors may not be considered in resolving whether an owner-operator is an
independent contractor or employee.” Id. at 334. The court reasoned that “[n]either party has
bargaining power, or the ability to control the work to be done, when dealing with matters
subject to regulation.” Id. at 334-35. Moreover, the court ruled that “[t]he obligations
imposed by law upon a motor carrier *** when leasing equipment from an owner-operator
are not probative of the question of whether the carrier exercises control over the manner of
the work to be performed by the owner-operator” because “[t]he regulations reflect the
control of the government, not the motor carrier.” Id. at 336.
¶ 49 Other courts have reached the same conclusion. See, e.g., Hernandez v. Triple Ell
Transport, Inc., 175 P.3d 199, 205 (Idaho 2007) (“[Respondent trucking company’s]
adherence to federal law is no evidence of its control over [claimant driver]. The federal
government–not [respondent]–exerted control over [claimant].”); National Trailer Convoy,
Inc. v. Employment Security Agency, 360 P.2d 994, 997 (Idaho 1961) (“Requirements that
truck and driver meet Interstate Commerce Commission standards *** point toward
compliance with governmental regulations, and are not indicia of an employer-employee
1
Section 376.12(c)(1) provides that “[t]he lease shall provide that the authorized carrier lessee shall
have exclusive possession, control, and use of the equipment for the duration of the lease. The lease
shall further provide that the authorized carrier lessee shall assume complete responsibility for the
operation of the equipment for the duration of the lease.” 49 C.F.R. § 376.12(c)(1) (2005).
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relationship.”). Similarly, in an appeal of a National Labor Relations Board decision finding
that a trucking company committed an unfair labor practice, the United States Court of
Appeal for the District of Columbia Circuit ruled that:
“[R]estrictions upon a worker’s manner and means of performance that spring
from government regulation (rather than company initiatives) do not necessarily
support a conclusion of employment status. [Citation.] Indeed, employer efforts to
ensure the worker’s compliance with government regulations, even when those
efforts restrict the manner and means of performance, do not weigh in favor of
employee status. [T]he employer cannot evade the law *** and in requiring
compliance with the law he is not controlling the driver. It is the law that controls the
driver. [Citation.]” (Internal quotation marks omitted.) North American Van Lines,
Inc. v. National Labor Relations Board, 869 F.2d 596, 599 (D.C. Cir. 1989).
¶ 50 I find these decisions to be well reasoned. A trucking company cannot choose to
disregard or negotiate its way around the requirements of federal law. These requirements are
mandatory and binding upon the company and the driver alike. Accordingly, a company’s
compliance with regulations that require it to exercise control over a driver do not evidence
the company’s control over the driver. Rather, they evidence the government’s control over
the both the driver and the company. As such, they should not be considered evidence of the
company’s control for purposes of determining the driver’s status as an employee or an
independent contractor.
¶ 51 I acknowledge that our supreme court has not adopted these sound principles. I hope that
it will do so in the near future. However, even under our supreme court’s current approach,
the evidence in this case does not establish that the respondent controlled the claimant’s
work. The vast majority of acts that the majority and the Commission have relied upon to
establish the respondent’s control were mandated by federal law.2 The Commission and the
majority have placed undue emphasis on these factors and ignored the overwhelming weight
of the evidence suggesting an opposite conclusion. For example, the Commission and the
majority declined to enforce the plain terms of the parties’ written Agreement which stated
that: (1) the claimant was an independent contractor; and (2) the respondent’s compliance
with a federal regulation requiring it to assert exclusive control over the claimant’s
2
In concluding that the claimant was an employee, the Commission relied upon certain facts aside
from the respondent’s compliance with federal regulations. However, several of these facts are either
irrelevant or highly suspect. For example, the Commission noted that the claimant drove exclusively for
the respondent between his date of hire and the date of the accident. However, this proves very little,
because the accident occurred only two months after the claimant was hired. Moreover, the
Commission relied on the claimant’s testimony that he was not free to drive for other carriers and that
he “dared not” refuse loads from the respondent for fear of adverse consequences. These claims were
refuted by several of the respondent’s witnesses. Although it is for the Commission to resolve conflicts
in the evidence and determine the credibility of witnesses, the Commission’s credibility determinations
in this case were inexplicable. The Commission found the claimant to be more credible than the
respondent’s witnesses (whom the Commission assumed were “biased”) even though: (1) it
acknowledged that the claimant was “argumentative” and that he “reversed himself” when confronted
with the Agreement; and (2) as the dissenting Commissioner noted, there is no reason to suspect that the
respondent’s witnesses were any more “biased” than the claimant, who stood to gain financially from a
finding that he was an employee.
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equipment could not be taken as evidence of an employment relationship. Even assuming
that the respondent’s compliance with federal regulations has some minimal probative value
under Roberson, this does not change the fact that the manifest weight of the evidence
established that the claimant was an independent contractor rather than an employee. Thus,
under Roberson, the Commission’s decision should be overturned.
¶ 52 In support of its holding, the majority also stresses the connection between the nature of
the work performed by the claimant and the nature of the respondent’s business. Supra ¶ 38.
The majority concludes that, because the respondent’s business was transporting machinery
and metal products and the claimant transported the same type of goods exclusively for the
respondent and its customers, this factor weighs in favor of finding an employment
relationship. Id. I disagree. As the majority notes, our supreme court has ruled that:
“because the theory of workmen’s compensation legislation is that the cost of
industrial accidents should be borne by the consumer as a part of the cost of the
product, this court has held that a worker whose services form a regular part of the
cost of the product, and whose work does not constitute a separate business which
allows a distinct channel through which the cost of an accident may flow, is
presumptively within the area of intended protection of the compensation act.” Ragler
Motor Sales v. Industrial Comm’n, 93 Ill. 2d 66, 71 (1982).
See also Ware, 318 Ill. App. 3d at 1124. Applying this rule, our supreme court and our
appellate court have repeatedly found an employment relationship where, inter alia, the
claimant performs work that is “an integral part of” or is “intimately related to” the
respondent’s business. Ware, 318 Ill. App. 3d at 1125.
¶ 53 I question the logic of these decisions. The purpose of finding an employment
relationship under such circumstances is, purportedly, to ensure that that “the cost of
industrial accidents [is] borne by the consumer as a part of the cost of the product.” Ragler
Motor Sales, 93 Ill. 2d at 71. However, that result could be achieved just as effectively
without finding an employment relationship. A driver may obtain his own workers’
compensation insurance as an independent contractor. Presumably, the cost of such insurance
would be reflected in the price that he charges the trucking company for his services and then
passed on to the company’s customers. Thus, the cost of the accident will be “borne by the
[trucking company’s] consumers as part of the cost of the product” regardless of whether the
claimant is deemed an employee or an independent contractor. Moreover, under the rule
currently applied by our courts, this factor will always cut in favor of finding an employment
relationship in cases involving truck drivers because the driver’s work will always be “an
integral part of” the trucking company’s business. Because of the importance that our courts
attach to this factor, this stacks the deck heavily in favor of an employment relationship in
every instance. Thus, in my view, courts should stop considering this factor in trucking
industry cases like the case at bar.
¶ 54 One final point bears mentioning. As I mentioned above, I am concerned that we are
applying an overly deferential standard of review to Commission determinations regarding a
claimant’s employment status. In this case, the majority appears to take the position that we
must affirm the Commission’s finding of an employment relationship if there is any
conflicting evidence in the record. E.g., supra ¶ 37. That is not what manifest weight of the
evidence review requires. It is true that, under manifest weight review, we must affirm the
Commission’s decision if there is “sufficient evidence” to support it, and we will overturn the
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decision only if “an opposite conclusion [is] clearly apparent.” Dig Right In Landscaping v.
Illinois Workers’ Compensation Comm’n, 2014 IL App (1st) 130410WC, ¶ 27. However,
although we are reluctant to set aside the Commission’s decision on a factual question, “we
will not hesitate to do so when the clearly evident, plain, and indisputable weight of the
evidence compels an opposite conclusion.” Id.; Montgomery Elevator Co. v. Industrial
Comm’n, 244 Ill. App. 3d 563, 567 (1993). Thus, we need not affirm a Commission’s
decision merely because there is some evidence, however slight, that arguably supports the
Commission’s decision. Even if some such evidence exists, we should reverse if “the clearly
evident, plain, and indisputable weight of the evidence compels an opposite conclusion.”
¶ 55 The same rule applies to Commission determinations of a claimant’s employment status.
We must uphold the Commission’s decision in such cases when the evidence is “well
balanced” (Roberson, 225 Ill. 2d at 187), i.e., “when the facts of a particular case are
susceptible to either interpretation” (internal quotation marks omitted) (Earley, 197 Ill. App.
3d at 314). However, we may overturn the Commission’s decision where, as here, the
opposite conclusion is “clearly apparent,” even if there is some small amount of evidence
that arguably supports the Commission’s decision. We should not affirm where the
overwhelming weight of the evidence supports the opposite conclusion.
¶ 56 A contrary rule would unduly restrict our review by according greater deference to the
Commission than is required under manifest weight review. It would also make it virtually
impossible for a party to obtain reversal of a Commission decision regarding a claimant’s
employment status.
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