BMS Ltd. 1999, Inc. v. Department of Workforce Services
2014 UT App 111
| Utah Ct. App. | 2014Background
- RLS Limited 1999, Inc. (RLS) contracted with James R. Capson under a 2010 "Independent Contractor Agreement (Co-Op)" for on-demand delivery of automotive parts.
- Capson provided his own truck and trailer, could realize profit or loss, but did not have a prior delivery business, business license, separate place of business, or advertising.
- Capson filed for unemployment benefits in May 2012; the Department of Workforce Services found he was an employee.
- An ALJ and the Workforce Appeals Board reviewed the record, applied Utah Admin. Code R994-204-303(1)(b)’s seven factors, and concluded Capson was not "independently established" and thus was an RLS employee eligible for benefits.
- RLS appealed, arguing the Board improperly required prior establishment of the business, misapplied/weighted the regulatory factors, and relied on pre-contract activities. The court declined to disturb the Board.
Issues
| Issue | Plaintiff's Argument (RLS) | Defendant's Argument (Board/Capson) | Held |
|---|---|---|---|
| Whether Capson was "independently established" in a similar trade | Board erroneously required Capson to have an independent business before contracting with RLS | Board permissibly considered whether Capson had an independent business and other factors under the regulation | Held: Board did not err; Capson was not independently established |
| Whether Board could consider activities prior to contract | Board argued regulations use present tense so pre-contract evidence was irrelevant | Board may consider pre-contract activities as probative of whether a trade is independently established | Held: Court approved Board’s consideration of pre-contract conduct |
| Whether Board misapplied or misweighted regulatory factors | Board should have given greater weight to factors favoring independent contractor status (owning vehicle, profit/loss) | Weighting is fact-specific; factors are aids and may be assigned different weights based on context | Held: Court defers to Board’s fact-intensive weighting; no error |
| Standard of review for Board’s interpretation and fact-findings | (Implicit) Challenge to Board’s statutory/regulatory interpretation and fact application | Agency interpretations reviewed for correctness; factual weighting receives deference as a fact-like mixed question | Held: Court reviewed interpretation de novo and deferred to Board on fact-weighting; affirmed decision |
Key Cases Cited
- Superior Cablevision Installers, Inc. v. Industrial Comm'n, 688 P.2d 444 (Utah 1984) (Act construed liberally in favor of benefits; prior-business evidence may be considered)
- Carlos v. Department of Workforce Servs., 316 P.3d 957 (Utah Ct. App. 2013) (agency interpretation of statute/regulation reviewed for correctness)
- Murray v. Utah Labor Comm'n, 308 P.3d 461 (Utah 2013) (deference to agency on fact-like mixed questions)
- Jex v. Utah Labor Comm'n, 306 P.3d 799 (Utah 2013) (deference to administrative fact-intensive determinations)
- State v. Mooney, 98 P.3d 420 (Utah 2004) (regulation interpretation reviewed for correctness)