Southwood Motors, Relator, vs. Department of Employment and Economic Development, Respondent.

Southwood Motors, Relator, vs. Department of Employment and Economic Development, Respondent. A05-2182, Court of Appeals Unpublished, September 12, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2182

 

 

Southwood Motors,

Relator,

 

vs.

 

Department of Employment and Economic Development,

Respondent.

 

 

Filed September 12, 2006

Reversed

Toussaint, Chief Judge

 

Department of Employment and Economic Development

File No. 856305

 

 

Edward F. Kautzer, Ruvelson & Kautzer, Chtd., 510 Spruce Tree Centre, 1600 University Avenue West, St. Paul, MN 55104; and

 

Jack D. Nelson, 1563 Portland Avenue, St. Paul, MN 55104 (for relator)

 

Linda A. Holmes, Department of Employment and Economic Development, 332 Minnesota Street, Suite E200, St. Paul, MN 55101-1351 (for respondent)

 

 

            Considered and decided by Toussaint, Chief Judge; Stoneburner, Judge; and Worke, Judge.

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

            Relator Southwood Motors, a business that purchases used vehicles at auctions in the Twin Cities area and resells them in the St. Cloud area, challenges the decision of the unemployment law judge (ULJ) that the individuals who drive the vehicles from the auction lots to relator's lot are employees rather than independent contractors.  Because we conclude from the undisputed facts that no employment relationship exists between the individuals and relator, we reverse.

D E C I S I O N

            In [unemployment] insurance cases, whether a worker is an employee or independent contractor is a mixed question of law and fact. . . .

 

. . . .

 

. . . First, if the facts are disputed, we determine whether there is evidence reasonably tending to support the [ULJ's] findings of fact. . . .

 

            The second part of our two-step analysis involves a question of law: we apply the law to the facts to determine whether an employment relationship exists.  When the facts are undisputed, we move directly to step two, and the determination of whether an employment relationship exists is purely a legal question.

 

Neve v. Austin Daily Herald, 552 N.W.2d 45, 47-48 (Minn. App. 1996) (citations omitted).  On a purely legal question, this court does not defer to a ULJ.  Ress v. Abbott Nw. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).

The facts here are undisputed.  Relator has a list of drivers and calls one driver for each vehicle purchased on a given day, as well as an additional driver for the shuttle that takes the drivers to the auction lots.  Relator is free to call or not call any driver; drivers are free to accept or reject any trip.  Drivers are paid $20 for each trip they make and reimbursed for any gas they buy.  They choose their own route to relator's lot and may do personal errands before and during the trip provided that they notify relator ahead of time.  Drivers may take the shuttle or use other transportation, and, provided that the vehicle arrives at relator's lot on a given day, drivers decide when they make the trip.  The convenience of other drivers, not of relator, is the dispositive factor in when the shuttle leaves for the auction lots.

Neve concluded that a carrier for a newspaper was an independent contractor  based on

undisputed evidence that [the carrier]: (1) had no set working hours; (2) used her own vehicle when performing her task; (3) varied the time and order of delivery without penalty; (4) hired substitutes and helpers when necessary, [the newspaper's] only requirement being that they adhere to rules governing the end product; (5) was not subject to immediate discharge except for a breach of her contract; (6) received a flat fee based on the size and number of customers on her route; and (7) assumed sole responsibility for her tax obligations.

 

Id., 552 N.W.2d at 48.  Five of these criteria are analogous.  As to the first, relator does not set working hours for its drivers; as to the second, relator does not provide their equipment (ice scrapers or screwdrivers for attaching license plates); as to the third, relator does not require delivery at a certain time; as to the sixth, relator pays a flat fee based on the number of trips; and, as to the seventh, relator does not assume responsibility for drivers' tax obligations.  The fourth criterion is inapplicable because the drivers are free to turn down any trip they cannot or do not want to make and therefore have no need to hire substitutes; the fifth is inapplicable because relator simply stops calling drivers whom he does not want driving for him; he does not formally discharge them. 

Neve rejected the department's argument that the carrier was an employee because the newspaper instructed her as to the people to whom she was to deliver papers, whether papers were to be put in plastic tubes or left on doorsteps, the deadline for delivering, and how to bag papers in poor weather.  "Because these factors relate to the definition of [the carrier's] task and not to the means of accomplishing it, they are not relevant to the employment-status inquiry and do not support the . . . decision [that the carrier is an employee]." Id.  Relator testified that drivers are told in which auction lot to find the vehicle and are given a gate pass to retrieve it; drivers then "go to that location, find the vehicle and drive it back."  Like the newspaper's instructions in Neve, these instructions relate to the definition of the drivers' task, i.e., moving vehicles from the auction lots to relator's lot, rather than to the means of accomplishing that task. 

            In light of Neve, we conclude that the drivers are independent contractors.

Reversed.