Mississippi Employment Security Commission v. Kevin Harbin
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2007-CC-01778-COA
MISSISSIPPI DEPARTMENT OF
EMPLOYMENT SECURITY
APPELLANT
v.
KEVIN HARBIN D/B/A H&H ELECTRONICS
DATE OF JUDGMENT:
TRIAL JUDGE:
COURT FROM WHICH APPEALED:
ATTORNEY FOR APPELLANT:
ATTORNEY FOR APPELLEE:
NATURE OF THE CASE:
TRIAL COURT DISPOSITION:
DISPOSITION:
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
APPELLEE
7/5/2007
HON. W. SWAN YERGER
HINDS COUNTY CIRCUIT COURT
ALBERT B. WHITE
A.E. (GENE) HARLOW
CIVIL - STATE BOARDS AND AGENCIES
REVERSED THE DECISION OF
MISSISSIPPI DEPARTMENT OF
EMPLOYMENT SECURITY FINDING
THAT CLAIMANT WAS AN EMPLOYEE
ENTITLED TO UNEMPLOYMENT
BENEFITS
AFFIRMED - 4/21/2009
BEFORE LEE, P.J., GRIFFIS AND BARNES, JJ.
BARNES, J., FOR THE COURT:
¶1.
The Mississippi Department of Employment Security (MDES) appeals the decision
of the Hinds County Circuit Court which found that Franklin Glasper, an unemployment
benefits claimant, was not an employee, but an independent contractor, of H&H Electronics
(H&H). Finding no error, we affirm.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
¶2.
On July 30, 2002, Glasper filed an unemployment benefits claim with MDES.1 In his
initial claim for benefits, Glasper reported that he was employed from April 15, 2002,
through June 12, 2002, as a satellite installer for Kevin Harbin, who owned H&H. However,
no wages were reported for Glasper for unemployment tax purposes by H&H. After
investigating the matter, MDES determined that there was an employer/employee
relationship between H&H and Glasper; thus, the agency determined that his wages and the
wages of all other employees in his class should be reported and unemployment taxes paid.
H&H appealed this decision.
¶3.
After a telephonic hearing on the matter, Timothy Rush, the MDES hearing officer,
issued an opinion on April 29, 2003, affirming the MDES decision. H&H appealed to the
MDES Board of Review (at that time the Commission), which affirmed the hearing officer’s
decision. On August 25, 2003, H&H appealed to the Hinds County Circuit Court. On July
6, 2007, the circuit court reversed the decision of MDES, finding that Glasper was an
independent contractor, not an employee of H&H.
¶4.
MDES now appeals to this Court, asserting that: (1) the circuit court erred in failing
to find the MDES decision was supported by substantial evidence and thus should have been
affirmed; (2) the circuit court erred in failing to affirm the MDES decision finding Glasper
was an employee of H&H; (3) H&H failed to meet its burden in proving that Glasper was
1
Glasper actually filed his claim with the “Mississippi Employment Security
Commission,” which was the name of the agency prior to its becoming a department of the
executive branch of government.
2
an independent contractor; and (4) the circuit court acted arbitrarily and capriciously in
substituting its opinion for that of MDES.
STANDARD OF REVIEW
¶5.
This Court’s standard of review for administrative appeals is well established. The
findings of fact from the MDES Board of Review’s opinion are conclusive in the absence of
fraud and if supported by the evidence. Miss. Employment Sec. Comm’n v. PDN, Inc., 586
So. 2d 838, 840 (Miss. 1991); Miss. Code Ann. § 71-5-531 (Supp. 2008). An administrative
agency’s conclusions will remain undisturbed unless the agency’s order is: (1) unsupported
by substantial evidence, (2) arbitrary or capricious, (3) beyond the scope or power granted
to the agency, or (4) in violation of the employee’s statutory or constitutional rights. Miss.
Dep’t of Employment Sec. v. Good Samaritan Pers. Servs., 996 So. 2d 809, 812 (¶6) (Miss.
Ct. App. 2008) (citing Miss. Comm’n on Envtl. Quality v. Chickasaw County Bd. of
Supervisors, 621 So. 2d 1211, 1215 (Miss. 1993)). On appeal, “[a] rebuttable presumption
exists in favor of the administrative agency, and the challenging party has the burden of
proving otherwise.” Id. (quoting Sprouse v. Miss. Employment Sec. Comm’n, 639 So. 2d
901, 902 (Miss. 1994)).
ANALYSIS
¶6.
As all of MDES’s issues relate to whether there was substantial evidence to support
MDES’s decision that Glasper was an employee of H&H, we shall discuss them together.
¶7.
The requirements for an employer-employee relationship to be established are
explained in section 71-5-11(J)(14) (Supp. 2008) of the Mississippi Code Annotated:
Services performed by an individual for wages shall be deemed to be
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employment subject to this chapter unless and until it is shown to the
satisfaction of the department that such individual has been and will continue
to be free from control and direction over the performance of such services
both under his contract of service and in fact; and the relationship of employer
and employee shall be determined in accordance with the principles of the
common law governing the relation of master and servant.
The factors this Court must consider when determining whether an employee-employer or
independent contractor relationship exists are as follows:
(1) The extent of control exercised over the details of the work;
(2) Whether or not the one employed is engaged in a distinct occupation or
business;
(3) The skill required in the particular occupation;
(4) Whether the employer supplies the tools and place of work for the person
doing the work;
(5) The length of time for which the person is employed;
(6) The method of payment, whether by the time or by the job; and
(7) Whether or not the work is a part of the regular business of the employer.
PDN, Inc., 586 So. 2d at 841-42 (citing Miss. Employment Sec. Comm’n v. Plumbing
Wholesale Co., 219 Miss. 724, 732, 69 So. 2d 814, 818 (1954)). In determining whether an
individual is an employee or an independent contractor, the central issue is “whether the
employer has the right to exercise control over the work of the employee.” Estate of Dulaney
v. Miss. Employment Sec. Comm’n, 805 So. 2d 643, 646 (¶13) (Miss. Ct. App. 2002).
¶8.
On MDES’s “workers independent contractor questionnaire,” Glasper indicated he
was paid by commission and by the job; his hours and days of work were listed as “any,” and
he was not given instructions or directions on the daily performance of his duties. However,
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Glasper stated that he believed he was an employee of the company because “[he] worked
for the company and they cut [his] checks.”
¶9.
At the telephonic hearing in January 2003, the following individuals participated:
Jimmy Taylor, Field Tax Representative for MDES;2 Harbin; Harbin’s attorney; and Glasper.
Information was gathered about Harbin’s business and the installers’ work. H&H is a
satellite television installation company, which had been in business since 2001. It holds
contracts with multiple companies that sell satellites, such as Radio Shack. Glasper was
hired by Harbin, the sole proprietor of the business, to perform installations for H&H.
Harbin had five or six individuals working as installers, and he testified that he considered
all of these workers to be independent contractors. Harbin testified that Glasper signed an
independent contractor agreement upon his hiring, but he not could find the executed copy,
only a blank form, which was submitted into evidence.
¶10.
How the business worked is that Harbin would contact Glasper, or another installer,
and provide a work order and the customer’s information, such as preferred time of
installation. The installer would then set up a time with the customer to install the satellite.
If an installer was busy, Harbin testified he would merely send the order to another installer.
Harbin provided the satellite itself and connecting cables. The installer provided all of his
own tools. Generally, the installers would call Harbin at the end of each day, at their
convenience, to ascertain if any work orders had been placed for the next day. Glasper stated
2
Taylor acknowledged that he had never personally spoken with Glasper; he stated
that he was testifying solely based on documents that were completed by Glasper. He had
no personal knowledge about the facts to which he testified.
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the reason he no longer worked for H&H is that Harbin stopped sending him work.
¶11.
As far as payment, the installer was paid by the job as follows: fifty dollars per
satellite receiver box and seventy dollars for a two-receiver box installation. The customers
received free installation when they bought their equipment. The company where the
satellite was purchased would pay H&H, and H&H would then pay the installer. Harbin kept
a portion of the money paid to H&H by the satellite sales companies. The installers received
1099 tax forms, not W-2s.
¶12.
Harbin testified there was no set time for the installers’ work schedule. He would
merely fax or hand-deliver the work orders to the installers, who would then contact the
customers on their own phones, in their own time and work out an installation time. The
installers’ only investment in terms of expenses was for their vehicles, cell phone, and tools
used on the job. The parties acknowledged there was no workshop at H&H, and Harbin did
not provide Glasper a “place to work.” The installers were also required to provide their own
independent contractor insurance; Glasper, however, did not carry such insurance because
when Harbin hired him, Glasper was in a “bind.” Thus, Harbin told him he could purchase
it later. Harbin explained that he did not train installers; he only hired individuals with
experience in the business and who were familiar with the national electrical code and its
guidelines.
¶13.
Before the installer was paid by H&H, there was a process of verifying that the
installation was complete and the customer was satisfied, which entailed receiving the
customer’s signature on the work order stating such. The installer would return the work
order to H&H, which would then hold back the installer’s payment for two weeks. If the
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customer was not satisfied, the installer had to return and remedy the problem. If he did not,
another installer was sent, and the original installer’s paycheck would be deducted. Glasper
could hire other individuals to assist him in his work if he desired.
¶14.
The MDES Board of Review adopted the hearing officer’s decision, finding that an
employer-employee relationship existed based on the following:
The mere fact that the claimant might have signed an independent contractual
agreement does not in any way negate the direction and control that the
employer had over the claimant in assigning him his work task and requiring
that he adhere to strict guidelines in completing his work before he was
compensated. The claimant did not have the freedom to go directly to the
source from which the employer was receiving their work orders. The
employer, not the residential customer, was paying the claimant a portion of
the money that the employer received for installing the satellite equipment.
The employer did provide the materials and supplies needed to install the
system. The claimant was subject to the control and direction of the employer
in the way that the equipment was to be installed and the standards to which
he was to adhere to. . . . It is without dispute that the duties performed by the
claimant were an integral part of the employer’s daily operations and services.
The mere fact that the claimant may be issued a Form 1099 for tax purposes
does not mean the claimant was not subject to this employer or under the
conditions of master/servant relationship. The employer reserved the right to
exercise control over the end result of the claimant’s job performance by
holding the claimant to standards accepted and used by the employer to install
the satellite systems. The claimant could not deviate from these standards
without recourse from this employer.
¶15.
We find, however, after studying the record, that MDES’s decision is not supported
by substantial evidence. According to the factors enumerated in PDN, Inc., the evidence
shows Glasper was acting as an independent contractor, not an employee of H&H. Foremost,
Harbin did not exercise any control over the installation of the satellite dishes; he merely took
the work orders. If a dish was installed incorrectly, the installer had to correct it at his own
expense. Glasper had the freedom to hire subcontractors if he needed assistance. Glasper
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had specialized training, which was not provided by Harbin, to install the equipment, and he
had to meet certain safety and electrical guidelines. Glasper could work for others if he
desired, and he made his own schedule. Harbin did not supply tools or a place of work for
Glasper, who was employed for approximately two months by Harbin. Glasper was paid by
the job by H&H. We find, as did the circuit court, the right of control Harbin exercised over
Glasper did not rise to the level of an employer-employee relationship.
¶16.
We affirm the circuit court’s reversal of the MDES’s decision that Glasper was an
employee of H&H, as there is a lack of substantial evidence in the record to support the
MDES’s decision.
¶17. THE JUDGMENT OF THE HINDS COUNTY CIRCUIT COURT IS
AFFIRMED.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, ISHEE, ROBERTS,
CARLTON AND MAXWELL, JJ., CONCUR.
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