2012 COA 97
Colo. Ct. App.2012Background
- Softrock seeks review of a final order reclassifying Waterman Ormsby’s services as employment under Colorado Employment Security Act.
- Ormsby provided well-site geological services to Softrock 2007–2010 under a written contract; he used his own tools and did not present as Softrock employee.
- Ormsby had his own business and clients, and did not train under Softrock; he maintained own insurance and business cards.
- In March 2011, a Division of Employment audit concluded Ormsby was a covered employee; Softrock appealed and a hearing occurred.
- The hearing officer found a rebuttable presumption of independent contractor status due to the contract aligning with §8-70-115(1)(d); Panel later reversed, finding Ormsby’s work did not survive independently of Softrock because he worked only for Softrock during 2007–2010.
- The Colorado Court of Appeals vacates the Panel’s decision and remands for consideration of all factors under §8-70-115(1)(c), including whether Ormsby provided similar services to others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Panel erred by substituting its factual findings for the hearing officer’s. | Softrock contends Panel misread facts and relied on a single factor. | Ormsby’s status was not independently established by multiple factors. | Remanded for full factor analysis; error in sole-factor reasoning. |
| Whether the Panel properly applied the multi-factor test for independent trade or business. | Softrock argues multiple factors support independent contractor status. | Ormsby’s long-term exclusive relationship with Softrock undermines independence. | Remand required to evaluate all nine factors. |
| Whether reliance on a test requiring actual provision of similar services to others was correct. | Softrock argues Carpet Exchange-type test is inappropriate. | Ormsby’s lack of other clients should not be dispositive. | Carpet Exchange test not controlling; remand to consider all factors. |
| Whether exclusivity in a finite period can still support independent contractor status. | Softrock points to exclusive but finite contracts as compatible with independence. | Exclusive, finite-period contracts can still allow independent status. | Language permitting exclusive work is not determinative; remand for full factor review. |
Key Cases Cited
- Speedy Messenger & Delivery Serv. v. Indus. Claim Appeals Office, 129 P.3d 1094 (Colo. App. 2005) (presumption of employment; need to prove control and independence)
- Long View Sys. Corp. USA v. Indus. Claim Appeals Office, 197 P.3d 295 (Colo. App. 2008) (multi-factor test; not a single-factor test)
- Barge v. Indus. Claim Appeals Office, 905 P.2d 25 (Colo. App. 1995) (identifies multi-factor approach; emphasizes independence considerations)
- Carpet Exchange of Denver, Inc. v. Industrial Claim Appeals Office, 859 P.2d 278 (Colo. App. 1998) (early formulation of the independence-with-others test; not sole determinant)
- Locke v. Longacre, 772 P.2d 685 (Colo. App. 1989) (discusses simultaneous provision of services and evidence sufficiency)
- SZL, Inc. v. Indus. Claim Appeals Office, 254 P.3d 1180 (Colo. App. 2011) (exclusive contract context; distinguishes from other tests)
- National Claims Associates, Inc. v. Division of Employment, 786 P.2d 495 (Colo. App. 1989) (addresses evidence related to independent status)
- Home Health Care Professionals v. Colo. Dep't of Labor & Emp't, 937 P.2d 851 (Colo. App. 1996) (discusses purpose of independence requirement; liberalization caveats)
- Auto Damage Appraisers, Inc. v. Industrial Commission, 666 P.2d 1113 (Colo. App. 1983) (policy underpinnings for safety-net protections)
- Dow Chem. Co. v. Gabel, 746 P.2d 1357 (Colo. App. 1987) (principle against strained readings of clear language)