2012 COA 186
Colo. Ct. App.2012Background
- Audit of 2008–2009 found ~220 drivers were in covered employment with Diligent; Diligent liable for unemployment premiums.
- Hearing officer found contracts labeled drivers as independent contractors were not true in fact.
- Hearing officer concluded drivers were not customarily engaged in a delivery business and were under Diligent’s direction.
- Panel held seven-day termination provision in contracts did not create a rebuttable presumption of independence under §8-70-115(2).
- Panel affirmed that Diligent failed to prove drivers were free from control and direction and not engaged in independent business, supporting covered employment finding.
- Softrock decision announced after hearing, but court chose to follow prior rule requiring actual/customary similar services to others to meet independent business requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether drivers were in covered employment under §8-70-115(1)(b). | Diligent contends drivers were independent contractors. | Panel found drivers were not free from control and did not independently operate similar businesses. | Yes; drivers were in covered employment as controlled by Diligent. |
| Whether lack of contemporaneous similar services is dispositive of independent business. | Softrock departure makes lack of similar work decisive. | Continue to treat lack of contemporaneous work as a factor; not dispositive. | Court follows pre-Softrock approach; lack of contemporaneous similar work generally dispositive in this context. |
| Whether the control and direction factors support coverage. | Evidence of independence in contracts and business setup. | Evidence shows Diligent controlled pricing, client assignment, dispatch, and reporting. | Substantial evidence supports control and direction, sustaining coverage. |
Key Cases Cited
- Long View Sys. Corp. USA v. Indus. Claim Appeals Office, 197 P.3d 295 (Colo.App.2008) (burden to prove independent business depends on two-part test; fact-intensive")
- Allen Co. v. Indus. Comm'n, 762 P.2d 677 (Colo.1988) (substantial evidence standard; review of agency findings)
- Carpet Exch. of Denver, Inc. v. Indus. Claim Appeals Office, 859 P.2d 278 (Colo.App.1998) (control/direction and economic realities factors in coverage analysis)
- Speedy Messenger & Delivery Serv. v. Indus. Claim Appeals Office, 129 P.3d 1094 (Colo.App.2005) (independent business usually requires actual concurrent similar work)
- Barge v. Indus. Claim Appeals Office, 905 P.2d 25 (Colo.App.1995) (occasional/insubstantial services do not establish independent business)
- SZL, Inc. v. Indus. Claim Appeals Office, 254 P.3d 1180 (Colo.App.2011) (multi-factor test; lack of contemporaneous work generally supports independence)
- Softrock Geological Services v. Industrial Claim Appeals Office, 2012 COA 97, 328 P.3d 222 (Colo.App.2012) (departed from traditional view; considered as non-dispositive factor in independent business analysis)