O'Dell v. Director, Department of Workforce Services
2014 Ark. App. 504
| Ark. Ct. App. | 2014Background
- Arkansas Court of Appeals reversed the Board of Review and remanded regarding unemployment tax liability of O’Dell’s typists.
- O’Dell d/b/a Professional Transcription provided medical-transcription services; typists transcribed tapes provided by physicians and delivered results to O’Dell for final processing.
- Arkansas Department of Workforce Services initially determined Polston and similarly situated workers were employees for employer tax purposes.
- Board of Review affirmed the Director’s decision; O’Dell appealed, arguing Board findings were not supported by substantial evidence.
- The three-prong test in Ark. Code Ann. § 11-10-210(e) governs whether services are employment for unemployment benefits, creating a presumption of employee status.
- The Court reverses and remands because the Board misapplied the statute and did not address all three prongs, particularly the third.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the typists were free from control under prong (1). | O’Dell contends evidence shows limited control over format and deadlines and no ongoing supervision. | Board held O’Dell’ exercised control over formatting and timely delivery, failing prong (1). | O’Dell met prong (1); Board erred in finding lack of freedom from control. |
| Whether the typists performed services outside the enterprise’s places of business under prong (2). | Services could be performed at typists’ own locations; enterprise did not require work at its premises. | Board reasoned services were performed where the enterprise operates, applying Mamo and Home Care. | Board misapplied prong (2); the second prong was not satisfied in this case. |
| Whether the typists were independently established professionals under prong (3). | Polston and others operated as independent contractors with independent business status. | Board did not sufficiently analyze prong (3) due to findings on prongs (1) and (2). | Court remands to consider prong (3) independently. |
Key Cases Cited
- Morris v. Everett, 7 Ark. App. 243, 647 S.W.2d 476 (Ark. App. 1983) (presumption of employee status; to overcome must prove all three prongs)
- Baldor Elec. Co. v. Ark. Emp’t Sec. Dep’t, 71 Ark. App. 166, 27 S.W.3d 771 (Ark. App. 2000) (defer to Board findings; substantial evidence standard for factual review)
- Mamo Transportation, Inc. v. Williams, 375 Ark. 97, 289 S.W.3d 79 (Ark. 2008) (place of business; case-by-case enterprise location analysis)
- Home Care Professionals of Arkansas, Inc. v. Williams, 95 Ark. App. 194, 235 S.W.3d 536 (Ark. App. 2006) (enterprise place of business analysis; contrasts with Mamo)