2014 CO 31
Colo.2014Background
- Diligent Delivery Systems (Western Logistics) runs auto-parts deliveries using a pool of drivers who supply their own trucks; drivers signed agreements labeling them "independent contractors."
- Colorado Division of Insurance audited Diligent for 2008–2009 and concluded 220 drivers should have been classified as employees for CESA purposes; assessed unpaid unemployment premiums.
- A hearing officer found the signed agreements did not reflect the true relationship and ruled the drivers were employees. An ICAO panel affirmed, relying principally on the fact drivers did not contemporaneously work for others.
- The Colorado Court of Appeals affirmed both that drivers were not customarily engaged in an independent business and that Diligent exercised control over them.
- The Colorado Supreme Court granted certiorari to review whether the drivers were independent contractors under § 8-70-115(1)(b) and whether Diligent exercised control.
Issues
| Issue | Petitioner (Diligent) Argument | Respondent (Division/ICAO) Argument | Held |
|---|---|---|---|
| Whether drivers were "customarily engaged in an independent trade, occupation, profession, or business" | Single-factor evidence (lack of contemporaneous work for others) is insufficient; drivers were independent businesspeople despite not always working elsewhere | Drivers were not customarily engaged in independent business because they did not perform services for others while working for Diligent | Court rejected the single-factor contemporaneous-work test; remanded to apply a totality-of-the-circumstances test (Softrock) |
| Whether drivers were free from employer "control and direction" | Diligent argued drivers were independent and not subject to its control | ICAO/court of appeals found sufficient control to classify drivers as employees | Court declined to decide/control prong because it remanded for proper analysis of independent-business prong first; vacated appellate ruling on control and remanded to ICAO |
Key Cases Cited
- Indus. Claim Appeals Office v. Softrock Geological Servs., Inc., 325 P.3d 560 (Colo. 2014) (announces totality-of-the-circumstances test for independent-business prong)
- Long View Sys. Corp. USA v. Indus. Claim Appeals Office, 197 P.3d 295 (Colo. App. 2008) (employer bears burden to prove independent-contractor status)
- Davison v. Indus. Claim Appeals Office, 84 P.3d 1028 (Colo. 2004) (standard of appellate review for questions of law vs. fact)
- Allen Co. v. Indus. Comm'n, 762 P.2d 677 (Colo. 1988) (ICAO findings supported if by substantial evidence)
- Colo. Div. of Emp't & Training v. Accord Human Res., Inc., 270 P.3d 985 (Colo. 2012) (background on employer-funded unemployment insurance under CESA)