868 N.W.2d 356
N.D.2015Background
- BAHA Petroleum Consulting referred landmen to perform title, lease negotiation, and right‑acquisition services for oil and gas clients.
- Job Service North Dakota audited BAHA and concluded the landmen were employees, assessing unemployment insurance taxes.
- BAHA appealed; an appeals referee held an evidentiary hearing and affirmed Job Service’s determination.
- The appeals referee applied N.D.C.C. § 52-01-01(18)(k) (landman exemption) and, because its written‑contract requirement was not met, applied the 20‑factor common‑law test in N.D. Admin. Code § 27-02-14-01(5)(b).
- The referee found a majority of the 20 factors supported employee status; the district court affirmed, and BAHA appealed to the North Dakota Supreme Court.
Issues
| Issue | Plaintiff's Argument (BAHA) | Defendant's Argument (Job Service) | Held |
|---|---|---|---|
| Whether the landmen qualified for the statutory landman exemption in N.D.C.C. § 52‑01‑01(18)(k) | Landmen were paid daily rates that related to task completion, so exemption should apply despite lack of written contract evidence | Exemption requires services performed under a written contract treating the individual as an independent contractor; no such contracts existed | Exemption inapplicable because landmen were not engaged under written contracts designating them independent contractors |
| Whether the 20‑factor common‑law test supports independent‑contractor status | Even if the statute is inapplicable, the daily‑rate structure and some factors favor independent contractor status | When weighed overall, the majority of the common‑law factors (including control, reporting, payment, reimbursement, lack of profit/loss, exclusivity) support employee status | Appeals referee’s factual findings on the 20 factors are supported by the evidence; landmen were employees |
| Whether payment by daily rate mandates independent‑contractor classification | Daily rate indicates task‑based pay under the exemption | Under the common‑law 20‑factor test, payment by hour/day generally indicates employee status; statute does not alter the common‑law factor absent the exemption | Payment by day does not control; under the common‑law test it generally points toward employee status |
| Whether the agency’s findings must be reweighed by the court | BAHA sought reweighing and new factual findings | Job Service argued appellate review is deferential to agency factfinding | Court applies deferential standard; will not substitute its judgment for agency’s reasonable factfindings; affirmed |
Key Cases Cited
- Willits v. Job Service North Dakota, 799 N.W.2d 374 (ND 2011) (court defers to agency factfinding and credibility determinations)
- Risovi v. Job Service North Dakota, 845 N.W.2d 15 (ND 2014) (describing deferential standard when facts are disputed)
- Myers‑Weigel Funeral Home v. Job Insurance Div. of Job Service of North Dakota, 578 N.W.2d 125 (ND 1998) (central question is who has the right to control; remedial statute favors employee status)
- BKU Enters., Inc. v. Job Service North Dakota, 513 N.W.2d 382 (ND) (discussing the 20‑factor common‑law test measuring right to control)
- Turnbow v. Job Service North Dakota, 479 N.W.2d 827 (ND) (the right to control is dispositive even if not exercised)
- Tronnes v. Job Service North Dakota, 813 N.W.2d 604 (ND 2012) (court will not reweigh evidence or make independent factual findings for the agency)