2018 Ohio 1890
Ohio Ct. App.2018Background
- Alissa M. Knapp worked as a massage therapist at Defiance Therapeutic from 2010 until her termination in September 2015; she was paid a commission (50% later 60%) and performed ancillary duties (scheduling, answering phones, laundry, opening/closing).
- Knapp did not sign a written independent-contractor agreement; a 2015 "standards of practice" manual (and predecessor "gray binder") set procedures, disciplinary steps, and expectations; payroll and workers’ compensation premiums were processed by the business.
- Knapp applied for unemployment benefits; ODJFS initially allowed benefits, briefly redetermined, then reaffirmed allowance; the Unemployment Compensation Review Commission held hearings and concluded Knapp was an employee.
- Defiance Therapeutic appealed to the Defiance County Court of Common Pleas, which affirmed the Commission; Defiance then appealed to the Third District Court of Appeals.
- The primary legal question was whether Knapp was an employee (covered employment) or an independent contractor under R.C. 4141.01(B)(1) as guided by the 20-factor test in Ohio Adm.Code 4141-3-05(B).
Issues
| Issue | Plaintiff's Argument (Knapp/ODJFS) | Defendant's Argument (Defiance Therapeutic) | Held |
|---|---|---|---|
| Whether Knapp was an employee or independent contractor | Knapp/ODJFS: totality of facts (manual, control over hours/schedule approval, mandatory meetings, payroll deductions, continuing relationship, inability to remove client files) show employer-employee relationship | Defiance: therapists were independent contractors — set own hours, paid commission, provided own liability insurance, allowed flexibility and no written employment contract | Held: Court affirmed Commission — some competent, credible evidence supports finding of employer-employee relationship; Commission reasonably applied 4141-3-05(B) factors |
| Whether the Commission failed to identify which of the 20 factors it relied on | Defiance: order did not state which factors compelled the decision | ODJFS: decision referenced facts tied to multiple factors; totality shows the factors were considered | Held: Court rejected challenge — explicit factual findings correspond to the factors and satisfied review requirements |
| Whether reliance on a hearsay questionnaire was improper | Defiance: questionnaire answers constituted hearsay and contradicted live testimony; reliance was unreasonable | ODJFS: administrative proceedings admit hearsay if reliable; questionnaire corroborated testimony and was not the sole basis for the decision | Held: Court held questionnaire admissible and not inherently unreliable; even if ignored, other evidence supports the result |
| Whether errors in the Commission’s written reasoning (references to an acupuncturist) required remand | Defiance: Commission confused reasoning with another claimant (acupuncturist), showing carelessness and prejudicial error | ODJFS: misstatements were clerical/harmless and the decision can be severed from the stray language | Held: Harmless error — misstatements did not affect substantial rights and outcome stands |
Key Cases Cited
- Tzangas, Plakas & Mannos v. Ohio Bur. of Emp. Servs., 73 Ohio St.3d 694 (1995) (standard of appellate review of unemployment compensation commission decisions)
- Irvine v. State Unemp. Comp. Bd. of Rev., 19 Ohio St.3d 15 (1985) (courts may not reassess witness credibility or make new factual findings)
- C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (1978) (judgments supported by competent, credible evidence will not be reversed as against the manifest weight)
- Durgan v. Ohio Bur. of Emp. Serv., 110 Ohio App.3d 545 (9th Dist. 1996) (error is reversible only if it affects substantial rights; prejudice must be shown)