Henderson v. Ohio Dept. of Job & Family Servs.Henderson v. Ohio Dept. of Job & Family Servs.
Rendered on November 20, 2012
Kathleen C. McGarvey, for appellant.
Michael DeWine, Attorney General, and David E. Lefton, for appellee Director, Ohio Department of Job and Family Services.
Thomas S. Amato, for appellee Mid-Ohio Contracting Services, Ltd.
APPEAL from the Franklin County Court of Common Pleas.
SADLER, J.
{¶ 1} Appellant, Mark Henderson, appeals from a judgment of the Franklin County Court of Common Pleas affirming a decision of the Ohio Unemployment Compensаtion Review Commission (“commission“) denying appellant‘s request for unemployment compensation benefits. Because the decision is not unlawful, unreasonable or against the manifest weight of the evidence, we affirm.
{¶ 2} On July 8, 2010, appellant filed an application for determination of unemployment benefit rights with appellee, Director, Ohio Department of Job and Family Services (“ODJFS“). In his application, appellant named appellee, Mid-Ohio Contracting Services, Ltd. (“Mid-Ohio“), as his employer. ODJFS initially disallowed the application. Upon appellant‘s appeal, ODJFS transferred jurisdiction to the commission. Following a January 21, 2011 telephone hearing, a commission hearing officer issued a decision allowing appellant‘s application.
{¶ 3} Mid-Ohio appealed the decision. Following further administrative proceedings, an in-person hearing was held on July 12, 2011, after which a commission hearing officer rendered a decision disallowing appellant‘s application. After the commission denied his request for review, appellant appealed to the Franklin County Court of Common Pleas. In a decision and entry filed January 27, 2012, the common pleas court affirmed the commission‘s decision, effectively ruling that appellant worked for Mid-Ohio as an independent contractor rather than as an employee.
II. ASSIGNMENTS OF ERROR
{¶ 4} Appellant timely appeals, raising a single assignment of error:
The lower court‘s decision to affirm the denial of unemplоyment compensation benefits is erroneous because (1) Mr. Henderson worked under the direction and control of Mid-Ohio Contracting; and (2) the lower court improperly adopted the hearing officer‘s analysis which relied on her perception of the legislative intent rather than on the plain text of the statute.
III. DISCUSSION
{¶ 5} An applicant seeking unemployment compensation benefits submits to ODJFS an application for such benefits along with information in support of his or her claim. McGee v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 09AP-680, 2010-Ohio-673, ¶ 9. Initially, ODJFS makes findings of fact and conclusions of law as to whether the applicant is entitled to unemployment compensation benefits. Id., citing
{¶ 7} This standard of review applies to all levels of appellate review in unemployment compensation cases. Tzangas, Plakas & Mannos v. Ohio Bur. of Emp. Servs., 73 Ohio St.3d 694, 696-97 (1995). Applying the same standard of review at both the common pleas and appellate court levels does not result in a de novo reviеw standard. Id. at 697. In reviewing commission decisions, a court may not make factual findings or determine witness credibility. Id. at 696, citing Irvine v. State Unemployment Comp. Bd. of Rev., 19 Ohio St.3d 15, 18 (1985). Factual questions remain solely within the province of the commission. Tzangas at 697. Similarly, a court may not substitute its judgment for that of the commission. McCarthy v. Connectronics Corp., 183 Ohio App.3d 248, 2009-Ohio-3392, ¶ 16 (6th Dist.), citing Irvine at 18. The fact that reasonable minds might reach different conclusions is not a basis for reversing the commission‘s decision. McGee at ¶ 11, citing Tzangas at 696. Instead, a court must “determine whether [the commission‘s] decision is supported by the evidence in the record.” Tzangas at 696, citing Irvine at 18. Judgments supported by some competеnt, credible evidence on the essential elements of the controversy may not be reversed as being against the manifest weight of the evidence. Houser v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 10AP-116, 2011-Ohio-1593, ¶ 7, citing Carter v. Univ. of Toledo, 6th Dist. No. L-07-1260, 2008-Ohio-1958, ¶ 12, citing C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (1978), syllabus.
{¶ 8} This court‘s focus is on the commission‘s decision, rather than on that of the common pleas court. Howard v. Electronic Classroom of Tomorrow, 10th Dist. No. 11AP-159, 2011-Ohio-6059, ¶ 12, citing Moore v. Comparison Mkt., Inc., 9th Dist. No. 23255, 2006-Ohio-6382, ¶ 8. Thus, our task is to review the commission‘s decision and
{¶ 9} By his single assignment of error, appellant contends the common pleas court erred in affirming the commission‘s decision finding him to be an independent contractor rather than an employee of Mid-Ohio. More specifically, appellant contends the common pleas court‘s adoption of the commission‘s order was unlawful because (1) the commission failed to properly apply the factors set forth in
{¶ 10} “In order tо collect unemployment [compensation benefits], a claimant must have worked in covered employment for a specified number of weeks and have discontinued working for just cause.” Butts v. OBES, 7th Dist. No. 98 CO 7 (Aug. 19, 1999). The issue to be resolved in this case is whether appellant‘s position with Mid-Ohio constituted covered employment.
{¶ 11}
{¶ 12} As relevant here,
{¶ 13} The transcript of testimony from the January 21, 2011 commission telephone hearing, at 1, states that “Claimant appeared and offered testimony. No representative of Mid-Ohio Contracting Services Ltd[.] appeared.” At that hearing, appellant testified that he worked for Mid-Ohio, a company providing residential and commercial renovation services, from October 1, 2006 until he was terminated on June 21, 2010. Appellant performed general labor for Mid-Ohio. Appellant averred that he did not bid on jobs either individually or in the aggregate; rather, he was paid an hourly wage.
{¶ 15} Appellant further testified that he was required to work a minimum of 40 hours per week, Mоnday through Friday. Mid-Ohio determined his work hours, requiring him to report to work no later than 7:30 a.m. He was required to take a 30-minute lunch break at a designated time and could not leave work without permission before 4:00 p.m. Appellant further testified that he was required to keep track of his hours on a daily time log supplied by Mid-Ohio, on which he reported his starting and ending times, his lunch break, and at what job site he worked. (Appellant‘s exhibit D.) He reported directly to a Mid-Ohio supervisor. He was paid weekly, and his paychecks were made out to him personally. His take-home pay was reduced by the amount of child support Mid-Ohio deducted pursuant to a court order. Appellant‘s child support order designates Mid-Ohio as his employer. (Appellant‘s exhibit F.)
{¶ 16} Appellant further averred that although he provided his own hand tools, Mid-Ohio provided him with materials and the major tools required in performing his work. Mid-Ohio required him to wear a company T-shirt while at work. Appellant had to notify Mid-Ohio if he missed work due to illness, and оther leave had to be approved in advance by Mid-Ohio. Appellant declined Mid-Ohio‘s offer of insurance because it was too expensive. In February 2010, appellant received, signed, and was required to follow the employee handbook. (Appellant‘s exhibit G.)
{¶ 17} After the hearing, a commission hearing officer rendered a written decision allowing appellant‘s application. The hearing officer concluded that, based on the totality of the circumstances, appellant was not an independent contractor, as he worked under sufficient direction or control of Mid-Ohio. Accordingly, the hearing officer determined that appellant‘s work for Mid-Ohio constituted employment under
{¶ 18} Following Mid-Ohio‘s appeal, a different commission hearing officer held an in-person hearing on July 12, 2011. Both appellant and Brad DeHays, president of Mid-Ohio, testified at that hearing.
{¶ 20} According to DeHays, appellant worked for and was paid by other individuals during the time he worked for Mid-Ohio. Appellant occasionally turned down projects offered by Mid-Ohio because he was working on projects for others. Appellant provided Mid-Ohio with proof that he carried his own liability and workers’ compensation insurance.
{¶ 21} DeHays further testified that in January 2010, Mid-Ohio‘s business structure changed, and at that time he offered appellant full-time employment with Mid-Ohio. Appellant declined the offer, opting to remain self-employed in order to obtain tax benefits reserved for Native Americans. DeHays averred that he continued to assign projects to appellant after he declined emрloyment; however, he terminated his relationship with appellant in June 2010, due to complaints from clients dissatisfied with appellant‘s work.
{¶ 22} Appellant testified that prior to working for Mid-Ohio, he owned two businesses, Galaxy Drywall and ProPunch. He began working for Mid-Ohio in October 2006 on a contract basis. In late 2006, after performing several projects for Mid-Ohio, appellant explained to DeHays that he needed full-time employment. DeHays eventually hired appellant, paying him an hourly wage and setting his work schedule of 7:30 a.m. to 4:00 p.m. Although Mid-Ohio did not provide any training to appellant, it furnished all the materials and large tools appellant utilized on the job.
{¶ 23} Appellant further testified that during the four years he worked for Mid-Ohio, he performed only four or five outside jobs, all on the weekends; most were done in
{¶ 24} In response to the hearing officer‘s question about whether he declined Mid-Ohio‘s 2010 offer of employment, appellant testified that “the offer that was made was everyone was going to follow the employee handbook. * * * [I]f you did not become an employee, you would have to get Worker[s‘] Comp and * * * your own insurance and that was the option that I took because yes I do get * * * a tax deferment for being half Native American.” (July 12, 2011 Tr. 28.) He further testified that he “declined the offer of being W2‘d as аn employee and getting their * * * company insurance and all that. I did not decline being an employee. I already was an employee.” (July 12, 2011 Tr. 28.) He acknowledged that his wages were reported on a 1099 tax form and that he obtained workers’ compensation and liability insurance in his own name in January 2010. He averred that he did not bid on jobs, was paid an hourly wage, was under the direct supervision of a Mid-Ohio employee, and worked on projects as assigned by Mid-Ohio.
{¶ 25} Following the hearing, the hearing officer issued a written decision which included the following pertinent findings of fact:
Mr. DeHayes [sic] left his employment and founded the construction company named Mid-Ohio Contracting Services LTD with another partner in January 2010. During the formation of the company, Mr. DeHayes [sic] gave each contractor that was working for him a handbook and asked the individual to complete W2 forms and officially go on to the company‘s payroll. Claimant refused. He would not sign the handbook. He refused to switch to a W2 and told his employer that he wanted to be paid by a 1099.
Mr. DeHayes [sic] tells him then he would be required to show proof of worker[s‘] compensation insurance. Claimant pays for worker[s‘] compensation insurance. It is listed under his previous company‘s name of ProPunch. Claimant provides proof to Mid-Ohio Contracting that he had the proper insurance in order to work. Claimant continues to work in the same capacity. He is paid by 1099. Mid-Ohio Contracting became unhappy with the сlaimant‘s work after several client[s] complained of the quality of his work. The company informed the claimant that they were no longer using his services.
* * *
Claimant was not precluded from outside work. Claimant advertised for contract services on Craig‘s list and never formally dismantled his previous company. He had no set hours but was provided use of a uniform. During the child support proceedings, the claimant did not list Mid-Ohio Contracting Services LTD as his employer.
(Hearing Officer Decision at 3-4.)
{¶ 26} Upon these facts, the hearing officer denied appellant‘s application, reasoning as follows:
The governing law over whether the money paid to claimant should be considered wages is Ohio Revised Code Section 4141.01(B)(2)(k). The Hearing Officer believed the legislative intent was two-fold. First, it was designed to protects [sic] innocent workers from being ineligible for unemployment compensation. In addition, it was enacted to prevent scrupulous [sic] employers from avoiding taxing liability by setting criteria concerning when a contractor has engaged in covered employment.
At the hearing, each side presented valid arguments for each side. Although there was a close split concerning the criteria, the Hearing Officer considered the employer‘s testimony as more credible in this case. At the hearing, Mr. DeHayes [sic] presented credible testimony that the employer put a good faith effort to place the claimant on the payroll of the company in January 2010 when the company was fоrmerly formed. Both parties agree that the claimant declined the offer. He refused to go on the payroll and acknowledge a handbook. The claimant went * * * so far as to acquire and maintain worker[s‘] compensation insurance to avoid being considered an employee. Based upon the documentation, the claimant never mentioned that he was “employed” by Mid-Ohio Contracting to the court system in an independent matter. An additional consideration was that thе claimant was free to perform side work without penalty.
To hold this [sic] Mid-Ohio Contracting [Ltd.] liable when the claimant has done nothing but disavow that he worked for the company would be contrary to the legislative intent of the statute. There is no evidence that the employer had any selfish motivation. In this case, the employer has presented a stronger argument on why the claimant was an independent contractor. Therefore, the Hearing Officer [finds] that wages
from Mid-Ohio Contracting [Ltd.] are еxcluded for purposes of unemployment compensation.
(Hearing Officer Decision at 7.)
{¶ 27} Upon its review, the common pleas court affirmed the commission‘s decision disallowing appellant‘s request for review. The court quoted extensively from the hearing officer‘s factual findings and concluded that such findings were supported by the record. The court rejected appellant‘s argument that the evidence supported his position that he was an employee, noting that such claim was founded upon his intеrpretation of the evidence. The court also rejected appellant‘s contention that the hearing officer failed to apply the correct legal standard, stating “it is clear to this Court that the Hearing Officer followed the law and applied the correct standard of review. The Decision references
{¶ 28} On appeal to this court, appellant essentially asserts the same arguments presented to the common pleas court. Appellant first maintains that the evidence presented at the commission hearings establishes at least 10 of the 20 criteria set forth in
{¶ 29} Although appellant argues that the commission‘s order was unlawful because it failed to properly apply the factors set forth in
{¶ 30} Appеllant secondly contends that the commission‘s decision was unlawful because the hearing officer relied upon her perception of the legislative intent of
IV. CONCLUSION
{¶ 31} Upon thorough examination of the record, we conclude, in concurrence with the common pleas court‘s ruling, that the commission‘s determination was not unlawful, unreasonable or against the manifest weight of the evidence. Accordingly, appellant‘s sole assignment of error is overruled, and the judgment of the Franklin County Court of Common Pleas is hereby affirmed.
Judgment affirmed.
BROWN, P.J., and DORRIAN, J., concur.