Cline v. Defiance Therapeutic Massage & Wellness Ctr. , 111 N.E.3d 1202 ( 2018 )

[Cite as Cline v. Defiance Therapeutic Massage & Wellness Ctr., 2018-Ohio-1891.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
DEFIANCE COUNTY
ANDREA L. CLINE, ET AL.,
APPELLEES, CASE NO. 4-17-19
v.
DEFIANCE THERAPEUTIC MASSAGE
& WELLNESS CENTER, LLC, OPINION
APPELLANT.
Appeal from Defiance County Common Pleas Court
Trial Court No. 16-CV-43657
Judgment Affirmed
Date of Decision: May 14, 2018
APPEARANCES:
Mark S. Barnes for Appellant
Eric A. Baum for Appellees
Case No. 4-17-19
PRESTON, J.
{¶1} Appellant, Defiance Therapeutic Massage & Wellness Center, L.L.C.
(“Defiance Therapeutic”), appeals the judgment of the Defiance County Court of
Common Pleas affirming the Unemployment Compensation Review Commission’s
(“Commission”) determination allowing claimant-appellee’s, Andrea L. Cline
(“Cline”), application for unemployment compensation benefits. For the reasons
that follow, we affirm.
{¶2} Cline’s employment as an acupuncturist with Defiance Therapeutic was
terminated on September 27, 2015. (Doc. No. 1, Ex. B). After her employment was
terminated, Cline filed an application for unemployment compensation benefits.
(Doc. No. 4).
{¶3} On November 20, 2015, appellee, the Ohio Department of Job &
Family Services (“ODJFS”), approved Cline’s application for unemployment
compensation benefits. (Id.). On December 10, 2015, Defiance Therapeutic
appealed ODJFS’s decision approving Cline’s application for unemployment
compensation benefits. (Id.). On January 4, 2016, ODJFS issued its
redetermination affirming its November 20, 2015 determination. (Id.). Defiance
Therapeutic appealed ODJFS’s redetermination on January 25, 2016. (Id.).
{¶4} On January 27, 2016, Defiance Therapeutic’s appeal was transferred to
the Commission. (Id.). After telephone hearings on February 12 and March 17,
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2016, the Commission issued its decision on May 2, 2016 affirming ODJFS’s
determination. (Id.). On May 23, 2016, Defiance Therapeutic requested that the
Commission review its May 2, 2016 decision. (Id.). On June 8, 2016, the
Commission denied Defiance Therapeutic’s request for review. (Id.).
{¶5} On July 6, 2016, Defiance Therapeutic appealed to the Defiance County
Court of Common Pleas the Commission’s denial of its request for review of its
May 2, 2016 decision affirming ODJFS’s determination allowing Cline’s
application for unemployment compensation benefits. (Id.).
{¶6} Defiance Therapeutic filed the administrative file on August 18, 2016.
(Doc. No. 4). Defiance Therapeutic filed its brief on October 17, 2016. (Doc. No.
10). ODJFS filed its response to Defiance Therapeutic’s brief on January 18, 2017.
(Doc. No. 19). On February 27, 2017, Defiance Therapeutic filed its reply to
ODJFS’s response. (Doc. No. 24).
{¶7} On October 25, 2017, the trial court denied Defiance Therapeutic’s
appeal and affirmed the May 2, 2016 decision of the Commission. (Doc. No. 25).
{¶8} Defiance Therapeutic filed its notice of appeal on November 22, 2017.
(Doc. No. 26). It raises one assignment of error for our review.
Assignment of Error
The Trial Court Erred in Affirming the Decision of the Review
Commission that Appellee Andrea L. Cline was an Employee of
Defiance Therapeutic, as Said Decision is Unlawful,
Unreasonable, and Against the Manifest Weight of the Evidence.
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{¶9} In its assignment of error, Defiance Therapeutic argues that the trial
court erred by affirming the Commission’s decision approving Cline’s application
for unemployment compensation benefits because the “Commission’s finding [that
Cline] worked in covered employment at Defiance Therapeutic Wellness Center
under R.C. 4141.01(B)(1) is unlawful, unreasonable, and against the manifest
weight of the evidence.” (Appellant’s Brief at 21). That is, Defiance Therapeutic
challenges the Commission’s conclusion that Cline was not an independent
contractor of Defiance Therapeutic.
{¶10} “An applicant seeking unemployment compensation benefits submits
to ODJFS an application for such benefits along with information in support of his
or her claim.” Henderson v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin
No. 12AP-154, 2012-Ohio-5382, ¶ 5, citing McGee v. Ohio Dept. of Job & Family
Servs., 10th Dist. Franklin No. 09AP-680, 2010-Ohio-673, ¶ 9. “Initially, ODJFS
makes findings of fact and conclusions of law as to whether the applicant is entitled
to unemployment compensation benefits.” Id., citing McGee at ¶
9, citing R.C. 4141.28(B). “Such decision is subject to an appeal to the commission
for a de novo hearing.” Id., citing McGee at ¶ 9, citing R.C. 4141.281(C)(1) and
(3).
{¶11} “A party dissatisfied with the commission’s final determination may
appeal to the appropriate court of common pleas, which shall hear the appeal on the
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record certified by the commission.” Id. at ¶ 6, citing McGee at ¶ 10, citing R.C.
4141.282(H).
Pursuant to R.C. 4141.282(H), “[i]f the court [of common pleas] finds
that the decision of the commission was unlawful, unreasonable, or
against the manifest weight of the evidence, it shall reverse, vacate, or
modify the decision, or remand the matter to the commission.
Otherwise, the court shall affirm the decision of the commission.”
Id., quoting McGee at ¶ 10.
{¶12} “This standard of review applies to all levels of appellate review in
unemployment compensation cases.” Id. at ¶ 7, citing Tzangas, Plakas & Mannos
v. Ohio Bur. of Emp. Servs., 73 Ohio St.3d 694, 696-97 (1995). “Applying the same
standard of review at both the common pleas and appellate court levels does not
result in a de novo review standard.” Id., citing Tzangas at 697. “In reviewing
commission decisions, a court may not make factual findings or determine witness
credibility.” Id., citing Tzangas at 696, citing Irvine v. State Unemp. Comp. Bd. of
Rev., 19 Ohio St.3d 15, 18 (1985). “Factual questions remain solely within the
province of the commission.” Id., citing Tzangas at 697. “Similarly, a court may
not substitute its judgment for that of the commission.” Id., citing McCarthy v.
Connectronics Corp., 183 Ohio App.3d 248, 2009-Ohio-3392, ¶ 16 (6th Dist.),
citing Irvine at 18. “The fact that reasonable minds might reach different
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conclusions is not a basis for reversing the commission’s decision.” Id., citing
McGee at ¶ 11, citing Tzangas at 696. “Instead, a court must ‘determine whether
[the Commission’s] decision is supported by the evidence in the record.’” Id.,quoting Tzangas at 696, citing Irvine at 18. “Judgments supported by some
competent, credible evidence on the essential elements of the controversy may not
be reversed as being against the manifest weight of the evidence.” Id., citing Houser
v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin No. 10AP-116, 2011-
Ohio-1593, ¶ 7, citing Carter v. Univ. of Toledo, 6th Dist. Lucas No. L-07-1260,
2008-Ohio-1958, ¶ 12, citing C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d
279 (1978), syllabus.
{¶13} “This court’s focus is on the commission’s decision, rather than on
that of the common pleas court.” Id. at ¶ 8, citing Howard v. Electronic Classroom
of Tomorrow, 10th Dist. Franklin No. 11AP-159, 2011-Ohio-6059, ¶ 12,
citing Moore v. Comparison Mkt., Inc., 9th Dist. No. 23255, 2006-Ohio-6382, ¶ 8.
“Thus, our task is to review the commission’s decision and determine whether it is
supported by evidence in the certified record and is unlawful, unreasonable or
against the manifest weight of the evidence.” Id., citing McGee at ¶ 12.
{¶14} Accordingly, the issue before us is whether the Commission’s
determination that Cline worked in covered employment with Defiance Therapeutic
is against the manifest weight of the evidence because it is not supported by some
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competent, credible evidence, or, conversely, whether it is unlawful or
unreasonable. See Clark v. Ohio Dept. of Job & Family Servs., 2d Dist.
Montgomery No. 25257, 2012-Ohio-5311, ¶ 7.
{¶15} On May 6, 2016, the Commission issued a written decision, which
included the following pertinent findings of fact:
[Cline] began performing [acupuncture services for Defiance
Therapeutic] with the understanding that she would be an independent
contractor. [Cline] did not sign an independent contractor agreement
with Carrie Radzik [(“Radzik”)], managing member[,] but rather
agreed to pay a share of the revenue she brought in, excluding tips.
[Cline] was given access to the facility and was able to set her own
hours. [Cline] was responsible for providing her own liability
insurance. [Cline] never discussed the prospect of performing work
at another facility.
[Cline] was asked to fill-in for the receptionist to answer the
telephone or schedule appointments when the receptionist was not
available. [Cline] did not solely schedule appointments for herself
when she filled in. [Cline] was responsible for cleaning the linens she
used and was asked to clean linens used by the other individuals who
provided services. [Cline] was informed as to a specific way to fold
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the linens. With respect to opening and closing, [Cline] was informed
of certain expectations which included opening and closing the blinds
at or by certain times, turning on an outside light when leaving for the
day and ensuring the back door is properly and completely shut.
During the period that [Cline] provided services she was asked
to pay Worker’s [sic] Compensation premiums and was encouraged
to attend regular staff meetings. During the time she provided
services the employer introduced a handbook which contained
expectations with respect to reporting for work no later than thirty
minutes prior to their first appointment, an approval process for
changing schedules, a corrective access procedure, checking facility
voicemail, and backroom cleaning responsibilities. The backroom
responsibilities included cleaning the back area, labeling food in the
refrigerator, and specific laundry instructions which included when
laundry should be started, how to best dry the laundry and specific
folding instructions. The manual also contains a provision for
rescheduling appointments if a provider is absent and does not state
that providers can bring in a substitute if they are not available.
[Cline] brought some clients to the facility when she began
performing services. She was required to complete documentation
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regarding the services which were placed in client charts. When
[Cline] was separated she was not permitted to remove client files
including information regarding the clients she brought to the facility
in April, 2010.
(Doc. No. 1, Ex. B); (Doc. No. 4).
{¶16} Based on those facts, the Commission concluded that an employer-
employee relationship existed between Defiance Therapeutic and Cline within the
meaning of the statute. In particular, based on the application of the 20 factors under
Ohio Adm.Code 4141-3-05-(B), the Commission concluded that Defiance
Therapeutic “did have the right to control” Cline. (Id.); (Id.). Regarding the
application of those 20 factors, the Commission reasoned:
[Defiance Therapeutic] operates a spa and the acupuncture services
performed by [Cline] were essential to the profitability of the
company. Those services were an integral part of the regular
functions of the company. [Cline] answered the telephone and
performed filing as needed. She further cleaned and folded laundry
not used by her and the client’s she serviced and was not permitted to
take her client files when the relationship was severed. [Cline] did
not have a written independent contractor agreement but rather was
governed by a manual which set forth opening and closing procedures,
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refrigerator cleaning, and other subjects that are not typically covered
in a business to business relationship. The manual exemplifies a level
of detail and control beyond what is found in a typical independent
contractor agreement. In addition, [Cline] engaged in a continuing
relationship, was paid regularly, was not permitted to bring substitutes
and had to pay money towards Worker’s [sic] Compensation
coverage.
(Id.); (Id.).
{¶17} After reviewing the record, we conclude that Commission’s
determination that Cline worked in covered employment with Defiance Therapeutic
is not unlawful, unreasonable, or against the manifest weight of the evidence. “R.C.
4141.01(B)(1) defines ‘employment’ as ‘service performed by an individual for
remuneration under any contract of hire, written or oral, express or implied, * * *
unless it is shown to the satisfaction of the director that such individual has been
and will continue to be free from direction or control over the performance of such
service, both under a contract of service and in fact.’” Henderson, 2012-Ohio-5382,
at ¶ 11, quoting R.C. 4141.01(B)(1).
{¶18} Consistent with the statutory definition of “employment” under R.C.
4141.01, Ohio Adm.Code 4141-3-05(A) provides, in relevant part:
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“[A] worker is in employment when an ‘employer-employee’
relationship exists between the worker and the person for whom the
individual performs services and the director determines that:
(1) The person for whom services are performed has the right to
direct or control the performance of such services; and
(2) Remuneration is received by the worker for services performed.”
Evans v. Dir. Ohio Dept. Job & Family Servs., 10th Dist. Franklin No. 14AP-743,
2015-Ohio-3842, ¶ 15, quoting Ohio Adm.Code 4141-3-05(A).
{¶19} “Ohio Adm.Code 4141-3-05(B) sets forth 20 factors ‘[a]s an aid to
determining whether there is sufficient direction or control present’ to establish
employment.” Id. at ¶ 16, quoting Ohio Adm.Code 4141-3-05(B).
Those factors, which “are designed only as guides” and “must be
considered in totality,” include:
(1) The worker is required to comply with the instructions of the
person for whom services are being performed, regarding when,
where, and how the worker is to perform the services;
(2) The person for whom services are being performed requires
particular training for the worker performing services;
(3) The services provided are part of the regular business of the
person for whom services are being performed;
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(4) The person for whom services are being performed requires that
services be provided by a particular worker;
(5) The person for whom services are being performed hires,
supervises or pays the wages of the worker performing services;
(6) A continuing relationship exists between the person for whom
services are being performed and the worker performing services that
contemplates continuing or recurring work, even if not full time;
(7) The person for whom services are being performed requires set
hours during which services are to be performed;
(8) The person for whom services are being performed requires the
worker to devote himself or herself full time to the business of the
person for whom services are being performed;
(9) The person for whom services are being performed requires that
work be performed on its premises;
(10) The person for whom services are being performed requires that
the worker follow the order of work set by the person for whom
services are being performed;
(11) The person for whom services are being performed requires the
worker to make oral or written progress reports;
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(12) The person for whom services are being performed pays the
worker on a regular basis such as hourly, weekly or monthly;
(13) The person for whom services are being performed pays
expenses for the worker performing services;
(14) The person for whom services are being performed furnishes
tools, instrumentalities, and other materials for use by the worker in
performing services;
(15) There is a lack of investment by the worker in the facilities used
to perform services;
(16) There is a lack of profit or loss to the worker performing services
as a result of the performance of such services;
(17) The worker performing services is not performing services for a
number of persons at the same time;
(18) The worker performing services does not make such services
available to the general public;
(19) The person for whom services are being performed has a right to
discharge the worker performing services;
(20) The worker performing services has the right to end the
relationship with the person for whom services are being performed
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without incurring liability pursuant to an employment contract or
agreement.
Id., quoting Ohio Adm.Code 4141-3-05(B).
{¶20} “The director shall make a determination, based on the factors listed
in this rule, as to whether or not an employment relationship exists for purposes of
Chapter 4141. of the Revised Code.” Hasch v. Vale, 5th Dist. Stark No.
2001CA00361, 2002 WL 1343262, *3 (June 17, 2002). “‘The burden of proving
entitlement to the independent contractor exemption is on the employer.’” BNA
Constr., Ltd. v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin No. 16AP-
317, 2017-Ohio-7227, ¶ 21, quoting Peter D. Hart Research Assocs., Inc. v. Admr.
Ohio Bur. of Emp. Servs., 10th Dist. Franklin No. 95APE06-736, 1995 WL 765202,
*3 (Dec. 28, 1995), citing McConnell v. Admr. Ohio Bur. of Emp. Servs., 10th Dist.
Franklin No. 95APE03-262, 1995 WL 584359, *3 (Oct. 5, 1995).
{¶21} Cline testified at the February 12, 2016 telephone hearing. (Feb. 12,
2016 Tr. at 13). On examination by the hearing officer, she testified that she
informed her existing clients that she would be performing acupuncture at Defiance
Therapeutic beginning in April 2010. (Id. at 14). Although Cline did not sign an
independent contractor agreement with Defiance Therapeutic, she “thought that we
were going to be independent contractors. That we would * * * control what we
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could and couldn’t do * * * and that although [Radzik] would supply all my supplies
* * *, that was my nature of my understanding when I began work there.” (Id.).
{¶22} Cline testified that her employment with Defiance Therapeutic
transformed from an independent contractor to an employer-employee relationship
because “in the beginning it was assumed that * * * [Cline] would have control over
[her] hours, * * * how much [she] worked[,] advertising, things of that nature and
as time progressed that became less * * * an ability for” her because “[e]verything
had to be approved through Ms. Radzik.” (Id. at 19-20). More specifically,
if [Cline] wanted to do advertising it had to have [Defiance
Therapeutic’s] logo. It had to have all of [Defiance Therapeutic’s]
contact information on it * * * and we had to submit it, like if we were
going to do some kind of advertising we would have to give it to
[Radzik] first and she would then approve it. * * * [W]e had
mandatory meetings that would take place after [Cline’s] hours. [That
is,] typically when [she] would be done working then we’d have a
mandatory meeting that we had to attend. * * * [W]e had some
mandatory events, not all, sometimes we were allowed to choose if
we wanted to them [sic] but in the beginning there were a lot of
mandatory outings and by those I mean like marketing opportunities.
* * * [W]e had the chambers [sic] golf outing that we had to go to * *
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* and we had to wear our [Defiance Therapeutic] polos, so we had to
wear [Defiance Therapeutic’s] advertising while we were there * * *.
(Id. at 20). (See also id. at 32-34). According to Cline, she discussed multiple times
with Radzik that she was treating her as an employee as opposed to an independent
contractor. (Id. at 34-35). Cline testified that, in response, Radzik “would get very
defensive and just kind of say well this is how I run things * * * and it’s none of
[Cline’s] concern.” (Id. at 35).
{¶23} As compensation, Cline retained 60 percent of “the profits that [she]
brought in” and Defiance Therapeutic received 40 percent. (Id. at 15). She
renegotiated her rate to 66 percent in 2013. (Id.). Cline received a paycheck “every
two weeks” and also received compensation from tips. (Id. at 31). Her maternity
leave was unpaid and she was required to provide notice if she intended to take
vacation time. (Id. at 39).
{¶24} Cline paid for her own liability insurance. (Id. at 27-28). Defiance
Therapeutic deducted workers’ compensation insurance from Cline’s paycheck.
(Id. at 28). According to Cline, Radzik stated that she was paying that money toward
her individual workers’ compensation insurance account. (Id.). Cline contacted the
Ohio Bureau of Workers’ Compensation and was informed that “it was being paid
into a * * * group fund for [Defiance Therapeutic] and that there was no record of
* * * individuals having paid into Workers’ Comp[ensation].” (Id.). Further, Cline
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was required to purchase a Defiance Therapeutic polo shirt. (Id. at 20). Cline also
paid for the software system used by Defiance Therapeutic. (Id. at 37). She testified
that Radzik ordered business cards for Cline and that Cline was required to pay
Radzik for them. (Id. at 21-22).
{¶25} When she began practicing at Defiance Therapeutic, Cline brought “an
electric stem machine and heat lamp” as equipment with her. (Id. at 16). Defiance
Therapeutic initially provided her supplies—namely, acupuncture needles;
however, after she renegotiated her compensation in 2013, she provided her own
supplies. (Id. at 17). Cline was not permitted to decorate the room in which she
provided acupuncture services. (Id. at 31-32). She testified that she was required
to wear “gray or black” scrubs and “closed toed shoes” while working at Defiance
Therapeutic. (Id. at 20).
{¶26} In addition to performing acupuncture, Cline testified that she was
responsible for laundering linens—“we had a group pile of linens in the back and
then you were just in charge of washing linens * * * when you had time you were
supposed to put a load in and wash them and dry them for everybody.” (Id. at 18).
Cline further testified that she was required to provide receptionist-type work,
including answering the phone, scheduling and cancelling appointments for other
employees of Defiance Therapeutic, answering questions, selling products,
“check[ing] somebody else’s patient out for them,” and preparing rooms for other
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employees, when a receptionist was not available. (Id. at 24). Cline was also
required to clean the facility, including cleaning “the break room,” the bathrooms
and the washing machine, sweeping and mopping the rooms, and shoveling and
salting sidewalks. (Id. at 24-25). She testified that she was required to follow
procedures for opening and closing the office. (Id. at 30). She testified that she
spent approximately eight hours each week providing these ancillary services. (Id.
at 38). According to Cline, she assumed she would be fired for not attending the
events of which her attendance was mandatory. (Id. at 21).
{¶27} On examination by counsel representing ODJFS, Cline testified that
she received a standards of practice manual in August 2015 “that talked about
opening, closing, * * * disciplinary procedures, charting * * * and then at the end
[she] had to sign a paper that said [she] had * * * read through it.” (Id. at 42-43).
Cline did not receive any other document explaining her “relationship” with
Defiance Therapeutic. (Id. at 44).
{¶28} Cline did not work for any other business while employed by Defiance
Therapeutic and presumed that she would not be permitted to work for any other
business. (Id. at 41). She testified that she was required to provide her work
schedule to Radzik for approval. (Id. at 40).
{¶29} Cline further testified that “part of our understanding was that part of
my, why the percentage was the way it was to pay for the receptionist * * *.” (Id.
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at 54). According to Cline, Radzik did not require new employees to pay for the
software system even though she required Cline to pay for it. (Id. at 49).
{¶30} After Cline was terminated from her employment with Defiance
Therapeutic, Cline went to the office to retrieve her belongings; however, Radzik
refused to provide to Cline a list of her clientele. (Id. at 51-53). Cline testified that
she was never provided a list of her clientele or her clients’ files. (Id. at 53).
{¶31} On examination by counsel representing Defiance Therapeutic, Cline
testified that she directed how she provided acupuncture services for her clients.
(Mar. 17, 2016 Tr., Vol. I, at 10, 13). She identified Exhibits F and H as documents
that she created instructing other Defiance Therapeutic staff members as to how to
schedule acupuncture patients. (Id. at 14-15).
{¶32} According to Cline, she interpreted her employment with Defiance
Therapeutic as an employer-employee relationship because she was responsible for
“cleaning the whole facility or cleaning the back room, answering phones, staff
meetings, and there’s a practice that [employees] were supposed to be held to,
mandatory charting, mandatory meetings, mandatory events, it sounds like an
employee.” (Id. at 29). However, she testified that she filed her taxes from 2009
through 2014 as a sole proprietor. (Id. at 34-35).
{¶33} Cline is the owner of Acupuncture Zen, a limited liability company
that she formed in 2009. (Id. at 32). (See also Employer Ex. A). Yet, Cline was
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not permitted to operate under Acupuncture Zen while she was employed with
Defiance Therapeutic. (Mar. 17, 2016 Tr., Vol. I, at 33). Cline testified that she
was permitted to donate her acupuncture services to charity. (Id. at 31). (See also
Employer Ex. B).
{¶34} Next, Michael Goosey (“Goosey”) testified that he is a supervisor in
the compliance section of ODJFS. (Mar. 17, 2016 Tr., Vol. I, at 41). According to
Goosey, an investigation regarding Defiance Therapeutic was initiated after Cline
filed her application for unemployment compensation benefits because “no
unemployment account ha[d] been established” by Defiance Therapeutic for Cline.
(Id. at 42). In particular, ODJFS investigated whether Cline “should be deemed an
employee and then covered employment.” (Id. at 42-43). Goosey identified ODJFS
Exhibits A and B as the initial unemployment compensation benefits rate
determination letters regarding Defiance Therapeutic. (Id. at 44). (See also ODJFS
Exs. C-O).
{¶35} Goosey identified ODJFS Exhibit P as a letter sent by Radzik’s father
to the Ohio State Representative that represented the district in which Defiance
Therapeutic is located regarding Cline’s application for unemployment
compensation benefits. (Mar. 17, 2016 Tr., Vol. I, at 58-59). According to Goosey,
the letter is replete with “evidence establishing [that an] employee-employer
relationship” existed between Defiance Therapeutic and Cline. (Id. at 60-63). (See
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ODJFS Ex. P). In particular, Goosey testified that “when you apply the law
correctly in those relationships, * * * you quickly determine that * * * there is an *
* * employer-employee relationship and not a business-to-business relationship”
because “the right to direct and control these * * * individuals was paramount
throughout the entire relationship.” (Mar. 17, 2016 Tr., Vol. I, at 63).
{¶36} Goosey addressed whether the 20 factors under Ohio Adm.Code 4141-
3-05 indicate whether an employer-employee relationship existed between Defiance
Therapeutic and Cline. (See id. at 64-78). Regarding the first factor, Goosey
testified that Cline, based on the instructions contained in the “independent
contractor manual” was given instruction on when, where, and how to perform
services. (Id. at 65-70). Indeed, Goosey testified that the manual “really should
read employee manual.” (Id. at 70). According to Goosey, because an individual
“has been given training as an acupuncturist” or has “a license” does not mean that
the person is an independent contractor. (Id.). Goosey testified that Cline could not
“bring in anybody to replace her.” (Id. at 71). He testified that Defiance Therapeutic
hired Cline and paid Cline for her services “on a 1099 basis.” (Id.). According to
Goosey, even though Defiance Therapeutic did not control how Cline performed
her acupuncture services, Defiance Therapeutic hired Cline “to come in and perform
[her] particular services and [she was] expected to perform those services under the
direction and control of the employer who knew exactly what was going on and, *
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* * knew what clients were being scheduled, services received and performed by
[Cline].” (Id. at 72-73). As to the sixth factor, Goosey testified that a continuing
relationship existed between Cline and Defiance Therapeutic. (Id. at 73). Under
the seventh factor, Goosey testified that although Cline “did not have set hours, she
was able to inform her employer her hours of availability” and “if scheduled [sic]
changed [sic] needed to be made, those scheduled changes had to be approved by
the employer or the office manager.” (Id. at 73). Goosey testified that,
notwithstanding her attendance at outside functions, Cline primarily performed her
services full-time at the Defiance Therapeutic offices. (Id. at 73-74). Defiance
Therapeutic required Cline to generate case notes after providing a service for a
client, those notes were reviewed by the office manager, and those case files “were
deemed the property of the employer.” (Id. at 74). Goosey testified that although
Defiance Therapeutic paid “some of the basic overhead costs,” “some of the
expenses were being borne by the contractors.” (Id. at 75). As to the fourteenth
factor, Defiance Therapeutic provided a massage table and linens for all of its
service providers to use. (Id. at 75-76). Cline paid for her licensure and insurance.
(Id. at 75). Cline did not have any investment in the Defiance Therapeutic facility.
(Id. at 76). Under the sixteenth factor, aside from her tax returns, Goosey could not
specifically identify a profit or loss to Cline as a result of her acupuncture services.
(Id.). Goosey testified that “there is no way to know” whether Cline was performing
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the services for any other persons or entities as described by the seventeenth factor.
(Id. at 77). He testified that “[o]ther than the * * * word of mouth,” there is no way
to know whether she was making her services available to the general public apart
from her advertising through Defiance Therapeutic. (Id.). Goosey testified that,
under the manual, advertising had to be approved by Defiance Therapeutic. (Id.).
Goosey testified that Defiance Therapeutic had the right to discharge Cline and that
Cline had the right to resign from her employment with Defiance Therapeutic
without incurring liability “because there was no binding contractual relationship
between the parties.” (Id. at 77-78).
{¶37} On examination by counsel for Defiance Therapeutic, Goosey testified
that he is not an attorney. (Id. at 79). He clarified that he established a conclusion
regarding the relationship between Defiance Therapeutic and Cline based on those
20 factors because “as a compliance supervisor,” he is required to review
compliance determinations. (Id. at 106-107). He further clarified that he considers
the requirement that employees attend staff meetings to be indicative of an
employer-employee relationship because the manual indicates that there are
consequences for failing to attend those meetings. (Id. at 90-91).
{¶38} Next, Melissa Constein (“Constein”) testified that she was the office
manager of Defiance Therapeutic from 2014 through 2015. (Mar. 17, 2016 Tr., Vol.
II, at 7). On examination by the hearing officer, she testified that she prepared the
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payroll for Defiance Therapeutic and that Cline was paid every other Friday. (Id. at
8). According to Constein, Cline and the other therapists were required to answer
the phone and check the voicemail when Constein was not in the office. (Id.).
Constein testified that, although the manual “was not put in place until August of
2015, there was * * * some procedures up in a gray binder [that] specifically went
over how to answer the phone, how to take messages * * *.” (Id. at 9). She further
testified that the therapists were required to attend staff meetings and that there were
repercussions for missing those meetings. (Id. at 17). Constein testified that the
issue of whether Cline was an employee or independent contractor was exposed
when Defiance Therapeutic “started incorporating the [new] software” system. (Id.
at 11).
{¶39} On examination by counsel for ODJFS, Constein testified that the
therapists were not permitted to have input on the manual. (Id. at 21). She testified
that she was required to “micromanage[]” the therapists, including the time when
they reported to work and whether they folded sheets correctly. (Id. at 24-26).
{¶40} On examination by counsel for Defiance Therapeutic, Constein
testified that she was an employee of Defiance Therapeutic. (Id. at 31). As an
employee, she did not have to pay for the software, did not pay 30 to 40 percent of
her income to Defiance Therapeutic, and was issued a W2. (Id. at 31-32). She
testified that, in her opinion, Radzik’s control of the therapists exceeded the bounds
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of an independent contractor relationship. (Id. at 38-39). As an example, Constein
cited Radzik’s constant pressure to sell more products—that is, although the
therapist “was an independent contractor but yet she was being controlled by how
much money she needed to bring into the center.” (Id. at 39). Regarding the manual,
which Constein assisted Radzik in preparing, Constein testified that Radzik
“googled employee handbook, downloaded one and changed everything to
independent contractor.” (Id. at 29).
{¶41} Radzik testified on behalf of Defiance Therapeutic. (Id. at 60-61). On
examination by the hearing officer, she testified that she initially retained 40 percent
of Cline’s earnings but later agreed to retain 34 percent when Cline requested “to
have more supply write off.” (Id. at 61). Although she did not pay for Cline’s
liability insurance, Radzik required that Cline provide “copies of [her] insurance”
“just to keep in [her] file * * *.” (Id. at 67).
{¶42} Regarding the therapists’ performance of receptionist duties, Radzik
testified that she “expected that they pick up the phones, but they were never told
that they had to * * *.” (Id. at 62). She testified that she did not require Cline to
maintain records beyond the medical documentation required by the State. (Id. at
63). Regarding the linens, Radzik testified that they “were generally put into one,
one basket” and that Cline “did more laundry but she was also there more, so she
would have more laundry to do.” (Id. at 65). She further testified that she required
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that the linens be folded a certain way because there was limited storage space. (Id.).
She also required the therapists to follow certain opening and closing procedures,
including snow removal because “[i]t was their responsibility to clean [the
sidewalks] off and if it got deeper, they would just have to call the snow guy again.”
(Id. at 66). According to Radzik, Cline did not “raise concerns * * * that she felt
she was doing employee-type duties instead of independent contractor duties.”
(Id.).
{¶43} Radzik admitted that she edited an employee-handbook template that
she found on the internet to apply to an independent contractor. (Id. at 69-70).
Specifically, she testified
that a lot of the verbiage that was in the paragraph under the employee
manual, [she] would take that paragraph and understand the
justification as to why that paragraph was in there, implement it if
[she] felt it was necessary for an independent contractor, and [she]
would re-write the entire paragraph. [She] wouldn’t just take words
out and delete it and enter it in.
(Id.). She testified that she included language in the manual regarding a
probationary period for new independent contractors because she was experiencing
a lot of turnover. (Id. at 70).
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{¶44} On examination by counsel for Defiance Therapeutic, Radzik testified
that she did not direct Cline as to how to perform her acupuncture services and
permitted her to establish her own work schedule. (Id. at 73-75). She did not
supervise Cline’s work or review Cline’s notes for accuracy. (Id. at 76). Although
Radzik did not require approval for Cline to take time off from work, she required
Cline to notify Radzik “so that [she] could look at the schedule as a whole and make
sure that the rooms weren’t overbooked.” (Id. at 75). Radzik conducted staff
meetings but asserted that they were not mandatory. (Id. at 76).
{¶45} She testified that the manual was meant to set forth a standards of
practice and not “a list of rules and regulations.” (Id. at 79). Radzik did not
terminate anyone for failing to follow the manual. (Id.). According to Radzik, she
“did not make anybody use the [Defiance Therapeutic] logo [for business cards] and
if they wanted to go out to another company to get their own business cards, they
could.” (Id. at 81). Regarding the Defiance Therapeutic polo shirt, Radzik asserted
that “some of the girls said, I want to have one of those too” after seeing Radzik
wear it at an event. (Id.). Regarding the software system, she testified that she
“brought each individual therapist into [her] office and [she] asked them how much
they would want to invest in a software system [and Cline] said that [she] would
pay anywhere from $100.00 a month.” (Id. at 82). She further testified that “[t]hey
were happy to do this because it was a tax write off for them * * *.” (Id.).
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{¶46} On examination by counsel for ODJFS, Radzik testified that she
required all of the therapists to sign an acknowledgement form agreeing “to abide
by those provisions” stated in the manual. (Id. at 96). Further, although Radzik
testified that the staff meetings were not mandatory, she testified that the manual
describes a progressive ladder of discipline for failing to attend those meetings. (Id.
at 97-98). In addition, she agreed that the manual states that Defiance Therapeutic
“has the right to terminate independent contractors who compete or interfere in any
way with the sale of products or services that [Defiance Therapeutic] provides” and
that the manual “references performance as salary review for independent
contractors[.]” (Id. at 104).
{¶47} According to Radzik, after consulting the state medical board, she
concluded that patient charts “are the property of the patient and the facility that
they are in.” (Id. at 100). She further testified that the manual explicitly states that
“patient charts are the property of” Defiance Therapeutic. (Id. at 101).
{¶48} On appeal, Defiance Therapeutic advances three arguments
challenging the Commission’s determination. First, Defiance Therapeutic contends
that the Commission’s order is unlawful because it wrongly applied the statutory
definition of employment in its analysis to include the ancillary services provided
by Cline. Second, Defiance Therapeutic argues that the Commission’s order is
unlawful “[b]ecause the hearing officer failed to articulate how he applied the 20
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factors to appellee’s services as an acupuncturist.” (Appellant’s Brief at 15). Third,
Defiance Therapeutic contends that the Commission’s decision that Cline’s work
for Defiance Therapeutic constituted employment under R.C. 4141.01(B)(1) is
unreasonable and against the manifest weight of the evidence based on the
application of the factors under Ohio Adm.Code 4141-3-05(B).
{¶49} Defiance Therapeutic’s first argument is meritless. R.C.
4141.01(B)(1) cannot be examined in a vacuum. See, e.g., Gress v. Gress, 9th Dist.
Wayne No. 95CA0069, 1996 WL 285373, *1 (May 29, 1996) (noting that the
application of the division-of-marital-property statute cannot be examined in a
vacuum, but must be considered under the totality of the circumstances); Sabino v.
WOIO, L.L.C., 8th Dist. Cuyahoga No. 102571, 2016-Ohio-491, ¶ 47 (noting that
statements are not to be judged in a vacuum, but must be based on the totality of the
circumstances). Thus, although Cline and Radzik’s testimony reflects that Cline’s
rate of pay was based on her provision of acupuncture services, it is clear from the
totality of the testimony that Cline’s ability to practice acupuncture at Defiance
Therapeutic and receive her rate of pay was conditioned on her performance of
ancillary services. Accordingly, Defiance Therapeutic’s argument that Cline’s
performance of her acupuncture duties should be examined separately from her
performance of the ancillary services is erroneous.
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{¶50} Also erroneous is Defiance Therapeutic’s argument that the
Commission’s order is unlawful because “the hearing officer failed to set forth
which, if any, of [the Ohio Adm.Code 4141-3-05(B) factors] compelled the Review
Commission’s decision.” (Appellant’s Brief at 14). Although the Commission’s
order does not explicitly state which factors the hearing officer relied on, the
Commission’s order generally references the Ohio Adm.Code 4141-3-05(B) factors
and it is apparent from the analysis contained in the order that the hearing officer
applied those factors to the testimony presented at the telephone hearings. Stated
another way, it is clear that the hearing officer considered the Ohio Adm.Code 4141-
3-05(B) factors because the order explicitly sets forth facts relevant to several of the
factors. See Misleh v. Badwan, 9th Dist. Summit No. 24693, 2009-Ohio-6949, ¶ 9
(concluding that it was “clear” that the trial court considered the statutory factors
“as it explicitly provided facts relevant to several of the factors”). Compare Evans,
2015-Ohio-3842, at ¶ 17 (discussing the facts that the trial court relied on in
concluding that the 20 Ohio Adm.Code 4141-3-05(B) factors “established that
Evans did not have the right to direct or control the drivers”).
{¶51} Turning to Defiance Therapeutic’s argument that the Commission’s
determination that Defiance Therapeutic directed and controlled Cline’s work is
unreasonable and against the manifest weight of the evidence, we reject Defiance
Therapeutic’s argument. First, based on our conclusion above, the Commission’s
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order is not unreasonable for analyzing the totality of the services Cline performed
in rendering its ultimate conclusion.
{¶52} Second, there is some competent, credible evidence supporting the
Commission’s decision. On appeal, in challenging the weight of the evidence
supporting the Commission’s conclusion, Defiance Therapeutic essentially requests
that this court conduct a de novo review of the Commission’s application of the
Ohio Adm.Code 4141-3-05(B) factors. In other words, Defiance Therapeutic
contends that this court should reweigh the facts in a light more favorable to it. “[I]t
is not the function of this court to reweigh the evidence.” Cassaro v. Ohio Dept. of
Job & Family Servs., 3d Dist. Crawford No. 3-16-08, 2016-Ohio-7643, ¶ 27, citing
Hicks v. Ohio Dept. of Job & Family Servs., 10th Dist. Franklin No. 13AP-902,
2014-Ohio-2735, ¶ 13. “The fact that reasonable minds might reach different
conclusions is not a basis for reversing the commission’s decision.” Henderson,
2012-Ohio-5382, at ¶ 29, citing McGee, 2010-Ohio-673, at ¶ 11. Indeed, this court
is not permitted to substitute its judgment for that of the Commission; rather, this
court is required to determine whether there is some competent, credible evidence
supporting the Commission’s conclusion. See Cassaro at ¶ 27.
{¶53} Although no individual factor or combination of factors under Ohio
Adm.Code 4141-3-05 controls, the Commission’s findings supporting its
conclusion that Defiance Therapeutic directed and controlled Cline are within the
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province of the Commission. Compare Hasch, 2002 WL 1343262, at *3 (“Although
no individual factor in [Ohio Adm.Code] 4141-3-05 controls, the specific findings
of the Review Commission hearing officer that Vale was told to work 9AM to 5PM
hours and directed where to report to work were within the province of said finder
of fact.”); Henderson at ¶ 29 (“Although no individual factor or combination of
factors in R.C. 4141.01(B)(2)(k) controls, the specific findings of the commission
that appellant declined Mid-Ohio’s offer to be placed on the company’s payroll, that
Mid-Ohio did not set appellant’s hours, and that appellant was free to perform
outside work without penalty, were within the province of the commission.”). “On
close questions, ‘[w]here the [commission] might reasonably decide either way, the
courts have no authority to upset the [commission’s] decision.’” Henderson at ¶ 29,
quoting Irvine, 19 Ohio St.3d at 18, citing Charles Livingston & Sons, Inc. v.
Constance, 116 Ohio App. 437 (7th Dist.1961). Because the specific facts and
circumstances of this case constitute a close question in which the commission
might reasonably decide either way, we have no authority to upset the
Commission’s decision, and Defiance Therapeutic has not directed us to any
authority permitting us to overturn the Commission’s decision. See Edan Farms,
Inc. v. Toth, 7th Dist. Mahoning No. 99-CA-185, 2000 WL 1809050, *3 (Dec. 5,
2000) (“These factors set out in Ohio Adm.Code 4141-3-05(B) are to be used by the
[commission], but they are not necessarily the factors utilized by courts in
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determining whether reasonable minds could find that a claimant was or was not
subject to direction and control over the performance of his services.”).
{¶54} After reviewing the record, we conclude that there is some competent,
credible evidence supporting the Commission’s conclusion that an employer-
employee relationship existed between Defiance Therapeutic and Cline. First, the
record reflects that the compliance division of ODJFS independently determined
under Ohio Adm.Code 4141-3-05(B) that an employer-employee relationship
existed between Defiance Therapeutic and Cline. Moreover, there was significant
testimony presented at the telephone hearings regarding the manual that Cline was
expected to adhere to. The record reflects the manual existed in some form
throughout Cline’s tenure with Defiance Therapeutic. Radzik eventually updated
the manual by editing an “employee” manual template that she found on the internet.
The manual directs when, where, and how duties are to be performed. The record
reflects the duties beyond acupuncture that Cline was expected to perform as part
of her relationship with Defiance Therapeutic, including administrative activities
for other therapists working at Defiance Therapeutic; community laundry, cleaning,
and snow removal; and specific opening and closing procedures.
{¶55} Our review of the record also reveals that Defiance Therapeutic
required that acupuncture be performed only by Cline because Cline was not
permitted to have any other person substitute for her during the times in which she
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could not perform acupuncture services at Defiance Therapeutic. Moreover,
Defiance Therapeutic required that Cline comply with the regulations imposed on
acupuncturists. Compare Miracle Home Health Care, L.L.C. v. Ohio Dept. of Job
& Family Servs., 10th Dist. Franklin No. 12AP-318, 2012-Ohio-5669, ¶ 25
(“Because federal and state law mandates particular training and documentation,
Miracle imposes those requirements on its home caregivers. The fact that federal
and state law motivated Miracle to adopt the requirements at issue does not negate
the control and direction that Miracle exercises in enforcing the requirements.”).
There was also testimony presented that Cline was required to receive Radzik’s
approval for her schedule, advertising, and outside work. See Edan Farms, 2000
WL 1809050, at *5 (Donofrio, J., concurring) (concluding that the determination
that Toth was an employee rather than an independent contractor was supported by
some competent, credible evidence because, in part, the record reflected that Edan
Farms, Inc. “exercised significant control over Toth’s work schedule”). Further,
Cline was expected to attend regular staff meetings and hold herself out as a
representative of Defiance Therapeutic.
{¶56} The record further reflects that Cline engaged in a continuing
relationship with Defiance Therapeutic from 2010 through 2015. Cline received a
paycheck from Defiance Therapeutic every two weeks. Group workers’
compensation premiums were deducted from her paycheck. When her relationship
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with Defiance Therapeutic was terminated, Cline was not permitted to obtain her
clients’ files or obtain a list of her clients.
{¶57} For these reasons, there is some competent, credible evidence
supporting the Commission’s determination that Cline worked in covered
employment with Defiance Therapeutic—namely, there is some competent,
credible evidence that Defiance Therapeutic exercised direction and control over
Cline. As such, the Commission’s decision is not against the manifest weight of the
evidence.
{¶58} For the foregoing reasons, we conclude that the Commission’s order
is not unlawful, unreasonable, or against the manifest weight of the evidence.
Therefore, the trial court did not err by affirming the Commission’s decision.
{¶59} Defiance Therapeutic’s assignment of error is overruled.
{¶60} Having found no error prejudicial to the appellant herein in the
particulars assigned and argued, we affirm the judgment of the trial court.
Judgment Affirmed
WILLAMOWSKI, P.J. and SHAW, J., concur.
/jlr
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