Oregon Supreme Court: Minimum Wage Law May Not Be Used to Determine Claimant’s Status as “Worker”

A commercial truck driver, who sustained injuries during an unpaid pre-employment drive test that consisted of an actual delivery for the prospective employer, was not a “worker,” as that term is defined by the Oregon Workers’ Compensation Act [Or. Rev. Stat. § 656.005(30)] and, accordingly, was not entitled to workers’ compensation benefits for the injury, held the Supreme Court of Oregon [Gadalean v. SAIF Corp., 364 Ore. 707, 2019 Ore. LEXIS 271 (Apr. 18, 2019)]. Citing Larson’s Workers’ Compensation Law, §§ 60.01, 60.04, the Supreme Court reversed a ruling by the state’s Court of Appeals that held the driver was an employee because, under the circumstances, he would have been entitled to minimum wage compensation for the drive.

Background

Claimant electronically responded to the employer’s job advertisement for a truck driver position, completed a drug screen, and provided the employer with copies of his current Commercial Driver’s License, medical card, social security card, and DMV records, along with the results of the drug screen.

Soon thereafter, the employer’s owner had claimant come to his office for an interview, where they discussed his application and the requirements of the job. Claimant was scheduled to take a mandatory U.S. Department of Transportation (DOT) pre-employment driving test.

Approximately one month later, claimant met with one of the employer’s truck drivers for the driving test. Claimant drove one of employer’s trucks, with the other driver as a passenger, to a designated delivery location. While disconnecting hoses from the trailer at that location, claimant fell four or five feet from the truck to the ground. He landed on his left hip and experienced significant pain.

Claimant could not continue the drive, so the other driver drove to the next stop, where they picked up an empty container before returning to employer’s premises. The owner of the employer did not ask claimant to come back to finish the driving test, nor did claimant ever fill out any employment tax forms. Claimant received no written offer of employment.

ALJ’s Decision Affirmed by Board

SAIF Corp. denied claimant’s workers’ compensation claim, indicating claimant had not been a subject worker at the time of the injury because he did not meet the definition of “worker” in Or. Rev. Stat. § 656.005(30). The ALJ affirmed SAIF’s denial of the claim after determining, inter alia, that at the time of his injury, claimant had not been hired and had not received any kind of remuneration or promise of future remuneration. The Board affirmed on review and claimant appealed.

Court of Appeals Decision

The Court of Appeals reversed, concluding that claimant indeed had qualified as a worker at the time of his injury because he had been “put to work” under the minimum wage laws. The Court of Appeals stressed that claimant had furnished services to the employer requiring remuneration because the employer had conceded that claimant had performed the activities of a regularly employed driver, that the delivery had been performed in the ordinary course of the employer’s business, and that the employer probably had been compensated for the delivery. Moreover, the employer had received the benefit of being able to evaluate claimant’s driving without disrupting its ordinary delivery schedule or expending resources to administer a separate driving test.

Contentions on Appeal

On appeal, SAIF argued that the Court of Appeals improperly used the minimum wage law to find a contract implied at law and that because the Workers’ Compensation Law is a creature of statute, common-law remedies could not be substituted for its requirements. SAIF argued further that remuneration must be a part of the agreement between employer and claimant in order for a claimant to be characterized as a worker. Claimant countered that an entitlement to remuneration, by way of the minimum wage law, was sufficient to satisfy the “for a remuneration” requirement and that the only agreement that must exist between the parties is for the claimant to be put to work.

Supreme Court’s Decision

The Supreme Court disagreed that minimum wage law operated to convert claimant into a “worker” under ORS 656.005(30). The question, stressed the high court, was “not whether the agreement required remuneration, but whether, in engaging to furnish services, a claimant reasonably expected remuneration [Opinion, p. 17, emphasis by the Court]. SAIF was correct that claimant’s proposed application of the minimum wage statute would improperly substitute the definition of “employ” under minimum wage law for the legislature’s chosen definition of “worker” in the workers’ compensation scheme.

Citing Larson, the Court noted that prior to the enactment of the Workers’ Compensation Law, the employer-employee relationship was defined and used at common law primarily to establish vicarious liability against an employer by a third party. In enacting the Workers’ Compensation Law, the legislature expanded on the common-law definition of “employ” to bring a claim within the scope of the act, requiring evidence of the elements of a contract as well as requiring a right to control.

The Court concluded:

Returning to this case, the board found that employer had told claimant that he would not be paid for the pre-employment drive test and discredited claimant’s assertion that he would be paid twenty-five percent of the gross profit for the delivery. As the board stated, “[T]he record only establishes that claimant had a possibility of employment dependent on whether he passed the safe driving test, which he did not.” Because the board found, based off the ALJ’s determination, that claimant had been told by employer that he was to perform the test and to do so without remuneration, claimant did not qualify as a “worker” under ORS 656.005(30) for the purpose of the Workers’ Compensation Law.

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