Beavex, Inc. v. WCAB (Ramirez)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Beavex, Inc., :

Petitioner :

:

v. : No. 724 C.D. 2019

: SUBMITTED: November 1, 2019

Workers’ Compensation Appeal :

Board (Ramirez), :

Respondent :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE ELLEN CEISLER, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE CEISLER FILED: April 15, 2020

Beavex, Inc. (Beavex)1 petitions this Court for review of the June 12, 2019,

order of the Workers’ Compensation Appeal Board (Board), which affirmed the

decision of a workers’ compensation judge (WCJ). The WCJ, constrained by the

Board’s determination in a previous interlocutory appeal that an employer-employee

relationship existed, granted Hugo Ramirez (Claimant) benefits pursuant to the

Workers’ Compensation Act (Act).2 Beavex argues on appeal that Claimant is an

independent contractor ineligible for benefits under the Act and that the WCJ’s

finding to the contrary is not supported by substantial evidence. After careful

review, we reverse the Board.

1

Employer provides courier services to various clients throughout the United States.

Reproduced Record (R.R.) at 135a.

2

Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2710.

I. Background

a. Pertinent Facts

On March 11, 2016, Claimant filed a claim petition against Beavex alleging a

disabling injury to his right knee sustained in an August 1, 2013 motor vehicle

accident (2013 MVA), while working in the course and scope of his employment.

R.R. at 5a, 45a; Notes of Testimony (N.T.), 12/12/17, at 5. Beavex generally denied

liability for Claimant’s injury. R.R. at 9a-12a. Following assignment of the claim

to a WCJ, the case was bifurcated to determine the threshold issue of Claimant’s

employment status.3 R.R. at 19a. Claimant’s status as an employee or independent

contractor is the only issue before this Court.

Claimant testified he regularly drove three separate routes for Beavex. R.R.

at 38a. Two routes involved retrieving empty bags from Beavex’s office for delivery

to nearby banks, where they were filled and then returned to Beavex.4 Id. at 38a-

39a. On his third route, Claimant picked up medical specimens from several

hospitals and delivered them to the airport for transport to the Mayo Clinic. Id. at

41a. Security clearance from the federal Transportation Security Administration

(TSA) was a prerequisite for Claimant’s third route. Id. at 43a.

Claimant carried an identification (ID) badge issued by Beavex. Id. at 39a.

The ID badge was also required to enter Beavex’s building. Id. at 55a. Beavex

mandated that Claimant purchase a uniform shirt with Beavex’s logo to be worn at

all times while completing his routes. Id. at 73a. Claimant received no training for

3

An independent contractor is not entitled to benefits under the Act due to the absence of

a master/servant relationship. Section 104 of the Act, 77 P.S. § 22; Universal Am-Can, Ltd. v.

Workers’ Comp. Appeal Bd. (Minteer), 762 A.2d 328, 330 (Pa. 2000).

4

Claimant testified he did not know what the full bags contained, as they were closed when

he received them. N.T., 5/12/16, at 47.

2

his first two routes, as he previously held a similar job with Citizens Bank. Id. at

50a-51a. The hospital route, however, required Claimant first pass a qualifying test

then receive specialized training, which Beavex provided at its office. Id. at 41a-

42a, 51a-52a.

Beavex required Claimant acquire an occupational accident insurance policy

with Zurich Insurance (Zurich). Beavex provided no benefits such as a pension or

health care. Id. at 67a. Claimant owned the vehicle he used to make deliveries and

was responsible for the cost of insurance, fuel, registration, and maintenance. Id. at

59a-61a.

Claimant’s compensation was based on each route completed. Id. at 63a.

Beavex would reimburse Claimant for the cost of tolls if Claimant agreed to make a

delivery outside his regular routes. Id. at 62a. Beavex required Claimant provide

10 days’ notice if he could not perform one of his regular routes. Id. at 65a. Claimant

could substitute another driver to make his deliveries; however, that person had to

be approved by Beavex and pass a background and drug test. Id. at 75a.

If Claimant had to deviate from the established delivery route for traffic, or if

he was running late, he had to notify Beavex, which would then contact the customer.

Id. at 38a, 66a. Claimant did not have the option of taking a break if he wished to,

as his deliveries were very time sensitive. Id. at 66a. If one of Beavex’s customers

had an issue with Claimant’s job performance, the customer contacted Beavex

directly. Id. at 67a.

Claimant had no other employment during the period he worked for Beavex.

Id. at 76a. He could not recall whether outside employment was permitted. Id. at

78a. However, Claimant executed an owner/operator agreement (Agreement) with

3

Beavex which indicated he was free to provide concurrent delivery services to other

entities or engage in any other trade or occupation. Id. at 91a.

Under the terms of the Agreement, Beavex exercised no control over

Claimant’s deliveries or the method of their performance, including the selection of

delivery routes; delivery services were subject to Claimant’s independent judgment

and discretion and the needs of Beavex’s customers. Id. at 82a, 84a. Claimant

agreed, however, to document his deliveries by means of a manifest, in which

Claimant would reconcile the number of items tendered at a given location with

those left at the delivery point. Id. at 94a-95a. Furthermore, Claimant could not

transport any individual in his vehicle unless that person was otherwise eligible to

provide services for Beavex’s customers. Id. at 85a.

Claimant agreed to provide all equipment required to perform delivery

services and to bear responsibility for all operational and maintenance costs of such

equipment. Id. at 83a. Claimant agreed to obtain vehicle and cargo insurance, as

well as occupational accident insurance. Id. at 87a-88a. Claimant bore the

responsibility of providing workers’ compensation or unemployment insurance for

his employees, if any. Id. Claimant also agreed to abide by any specialized

requirements of Beavex’s customers, including submission to drug testing, and to

bear the cost of compliance with such requirements. Id. at 83a. Claimant agreed to

indemnify Beavex for any claims in connection with Claimant’s delivery services.

Id. at 90a.

Claimant executed an “Affidavit of Independent Contractor Status,” affirming

he operated as an independent contractor and had the freedom to advertise delivery

services to the general public, including Beavex’s competitors. Id. at 99a. Claimant

acknowledged he signed the Affidavit. Id. at 58a.

4

In executing the policy with Zurich, Claimant certified he was an independent

contractor, not an employee, and he would receive a 1099 form, rather than a W-2

form. Id. at 103a. Claimant acknowledged he understood that coverage with Zurich

was conditioned on his status as an independent contractor, not an employee, and

coverage would be canceled if Claimant was an employee. Id. Subsequent to the

2013 MVA, Claimant filed a claim against his Zurich insurance policy for the

injuries he sustained. Id. at 71a. He received wage benefits in the amount of $222.96

per week, as well as coverage for medical expenses. Id. at 72a.

Angie Wheeler, Beavex’s Independent Contractor Services Manager

(Wheeler), testified that Beavex’s delivery services were exclusively performed by

independent contractors. Id. at 141a. Beavex screened prospective independent

contractors to ensure they carried any necessary licenses and insurance and

otherwise complied with the customer’s security requirements. Id. at 137a. The

bank bags collected by Claimant belonged to Beavex’s banking customers, not

Beavex. Id. at 145a. Delivery schedules, and any associated time constraints, were

imposed by Beavex’s customers and the driving route was left to the discretion of

the driver. Id. at 149a-50a. Any requirement that Claimant carry a Beavex-issued

ID badge and wear Beavex’s uniform shirt was customer-driven. Id. at 148a.

b. First WCJ Decision

In a decision circulated November 3, 2016 (First WCJ Decision), the WCJ

found that the credible evidence of record established Claimant was an independent

contractor and not an employee at the time of his August 1, 2013 accident. Certified

Record (C.R.), Item No. 5, Finding of Fact (F.F.) No. 7. The WCJ deemed

Claimant’s testimony credible to the extent it was consistent with the terms of the

Agreement and the testimony of Wheeler. F.F. No. 5. The WCJ found Wheeler

5

credible and persuasive, as she had personal knowledge of the Agreement’s terms

and of the contracting process between Beavex and its independent contractors, and

her testimony was consistent with the terms of the Agreement, the other

documentary evidence of record, and Claimant’s testimony. F.F. No. 6.

The WCJ relied on the following evidence in making her findings:

1. Claimant signed the Agreement expressly indicating his status as an independent

contractor;

2. Claimant contracted his own routes and had control over the specific routes

chosen to reach his destinations;

3. Claimant used his own personal vehicle, for which he was responsible to pay the

costs of maintenance, insurance, and gas;

4. Claimant could refuse any additional assignments beyond those for which he was

contracted and he was permitted to work for other entities besides Beavex;

5. Claimant could subcontract his services to other individuals;

6. Claimant paid his own taxes, received a 1099 form from Beavex, and described

himself as a sole proprietor on his tax documents;

7. Any requirements that Claimant obtain security clearances, wear Beavex’s ID

badge and uniform, and receive specialized training came from Beavex’s

customers, not Beavex;

8. Beavex’s customers dictated delivery times, schedules, and Claimant’s conduct

when performing delivery services;

9. Claimant was paid per route completed and Beavex provided no sick or vacation

leave, or other fringe benefits;

10. There was no evidence that Beavex supervised Claimant in any way or

controlled his day-to-day activities;

6

11. Beavex did not provide Claimant with any of the tools, supplies, or equipment

required for Claimant to perform his job.

F.F. No. 7.

As Claimant failed to establish he was an employee of Beavex, and the

evidence demonstrated he was an independent contractor, Claimant’s petition for

benefits under the Act was denied. First WCJ Decision, Conclusions of Law (COL)

Nos. 2-3. Claimant appealed to the Board, arguing Beavex exercised sufficient

control over Claimant’s work that he was an employee, not an independent

contractor. C.R., Item No. 6.

c. First Board Decision

In a decision rendered August 24, 2017 (First Board Opinion), the Board

agreed with Claimant, reversed the WCJ, and remanded the matter for a

determination on the merits of Claimant’s claim petition. Citing this Court’s

decision in B & T Trucking v. Workers’ Compensation Appeal Board (Paull), 815

A.2d 1167, 1171 (Pa. Cmwlth. 2003), the Board noted four elements should be

analyzed in determining the existence of an employment relationship: 1) the right

to select the employee; 2) the right and power to remove the employee; 3) the power

to direct the manner of performance of the employee’s duties; and 4) the potential

power to control the employee.5 C.R., Item No. 8 at 11. Having reviewed the record,

5

The claimant in B & T Trucking was a one-third owner of the employer and the WCJ

denied him workers’ compensation benefits on the basis of this ownership status. 815 A.2d at

1170. The Board reversed, concluding that the claimant’s status as a part owner did not preclude

a finding that he was also an employee. Id. In reviewing the Board’s decision, this Court cited

four factors to be analyzed when determining the existence of an employer-employee relationship:

(1) the right to select the employee; (2) the right and power to remove the employee; (3) the power

to direct the manner of performance; and (4) the potential power to control the employee. Id. at

1171. An analysis of these factors was not possible based on a review of the available record, as

it was not clear who directed the claimant’s performance of his job, to whom he had to report, who

7

the Board concluded Beavex had the right to select drivers and the right and power

to remove them. Id. Furthermore, the requirements of Beavex’s customers,

including security clearances and the use of Beavex’s ID badge and uniform shirt,

were those of a third party not bound by the Agreement between Claimant and

Beavex. Id. Claimant communicated with Beavex if he was behind schedule, not

the customer, and customers called Beavex if they had issues with Claimant’s

services. Id. Beavex had the right to terminate the Agreement for unsatisfactory

performance. Id. at 11-12. Such evidence demonstrated that Beavex imposed a high

level of control upon Claimant’s day-to-day activities to satisfy the requirements of

its customers. Id. at 12. Given Beavex’s right to terminate the Agreement at any

time, Claimant established the existence of an employment relationship. Id.

d. Second WCJ Decision

On remand, and after reviewing medical evidence,6 the WCJ circulated a

second decision on December 14, 2018 (Second WCJ Decision). C.R., Item No. 10.

The WCJ noted she was “constrained” by the Board’s remand order to find that

Claimant was an employee of Beavex at the time of the 2013 MVA. Id., F.F. No.

11(a). Further, the credible and unrebutted evidence demonstrated Claimant was

performing work duties at the time of the 2013 MVA. Id. Accordingly, the WCJ

awarded workers’ compensation benefits to Claimant.

Beavex appealed to the Board, which affirmed the WCJ on June 12, 2019.

C.R., Item No. 13. The Board declined to revisit the existence of an employer-

set his salary and schedule, and whether he was covered by the employer’s workers’ compensation

insurance. Id. at 1173. Accordingly, this Court vacated the Board’s order and remanded the matter

for further proceedings. Id.

6

As the sole issue before this Court is whether Claimant established the existence of an

employer-employee relationship, we need not summarize the medical testimony, or the WCJ’s

credibility determinations made thereupon.

8

employee relationship and reaffirmed as final its August 24, 2017 determination that

Claimant was Beavex’s employee. Id. at 4.

II. Issues

On appeal to this Court,7 Beavex argues the Board erred in concluding

Claimant was an employee and not an independent contractor.8 As such, Beavex

argues the Board erred in affirming the WCJ’s grant of benefits under the Act.

III. Analysis

In a claim petition, the burden of establishing a right to workers’

compensation benefits and proving all necessary elements to support such an award

rests with the claimant. Coyne v. Workers’ Comp. Appeal Bd. (Villanova Univ. and

PMA Grp.), 942 A.2d 939, 945 (Pa. Cmwlth. 2008). The claimant must establish

that his injury was sustained during the course and scope of employment and is

causally related to that employment. Id.

An independent contractor is not entitled to benefits because of the absence

of a master/servant relationship. Section 104 of the Act, 77 P.S. § 22; Universal Am-

Can, 762 A.2d at 330. Employee or independent contractor status is a crucial

threshold determination that must be made before workers’ compensation benefits

may be awarded and the claimant bears the burden of establishing the existence of

an employer-employee relationship. Universal Am-Can, 762 A.2d at 330. Such a

determination is a question of law governed by the facts of each case. Id. at 330-31.

As a determination regarding the existence of an employer-employee relationship is

7

Our review is limited to determining whether constitutional rights have been violated, an

error of law has been committed, and whether necessary findings of fact are supported by

substantial evidence. Universal Am-Can, 762 A.2d at 331 n.2.

8

Employer raises four separate issues; however, those issues are subsumed into the

overriding question of whether Claimant established the existence of an employer-employee

relationship.

9

a question of law, our scope of review is plenary and our standard of review is de

novo. Dep’t of Labor and Indus. v. Workers’ Comp. Appeal Bd. (Lin & E. Taste),

155 A.3d 103, 109 (Pa. Cmwlth. 2017).

While no hard and fast rule exists for determining whether a relationship is

that of employer-employee or owner-independent contractor, our Supreme Court has

established certain factors which must be taken into consideration:

Control of manner work is to be done; responsibility for

result only; terms of agreement between the parties; the

nature of the work or occupation; skill required for

performance; whether one employed is engaged in a

distinct occupation or business; which party supplies the

tools; whether payment is by the time or by the job;

whether work is part of the regular business of the

employer, and also the right to terminate the employment

at any time.

Hammermill Paper Co. v. Rust Eng’g Co., 243 A.2d 389, 392 (Pa. 1968), quoting

Stepp v. Renn, 135 A.2d 794, 796 (Pa. Super. 1957).9 Although no single factor is

9

The controversy in Hammermill involved the construction, and subsequent collapse, of a

brick curtain wall erected by Rust Engineering Company (Rust) at a plant owned by Hammermill

Paper Company (Hammermill). 243 A.2d at 391. Hammermill’s insurance carrier instituted an

action against Rust to recover funds it paid Hammermill for losses associated with the wall’s

collapse. Id. The trial court granted Rust’s motion for judgment on the pleadings on the basis that

Rust was an “employee agency” under the direct control of Hammermill, and Hammermill alone

was at fault, having retained control and responsibility for the construction of the wall. Id. The

Supreme Court disagreed, as the contract between Rust and Hammermill placed no responsibility

on the part of Hammermill with regard to the designs and specifications to be followed in

constructing the wall. Id. at 391-92. In considering whether the relationship between Rust and

Hammermill was that of employer-employee or owner-independent contractor, the Supreme Court

reviewed the following factors:

Control of manner work is to be done; responsibility for result only;

terms of agreement between the parties; the nature of the work or

occupation; skill required for performance; whether one employed

10

controlling, the right to control the manner in which the work is accomplished is the

most persuasive indication of the presence or absence of an employer-employee

relationship. Nevin Trucking v. Workmen’s Comp. Appeal Bd. (Murdock), 667 A.2d

262, 266 (Pa. Cmwlth. 1995). The right to control the work is significant, regardless

of whether such control is actually exercised. Universal Am-Can, 762 A.2d at 333.

Control exists where the alleged employer has the right to select the employee, the

right and power to discharge the employee, the power to direct the manner of

performance, and the power to control the employee. Am. Road Lines v. Workers’

Comp. Appeal Bd. (Royal), 39 A.3d 603, 611 (Pa. Cmwlth. 2012).

A tax filing that denotes self-employment is a relevant factor, but not

dispositive on the issue. Edwards v. Workers’ Comp. Appeal Bd. (Epicure Home

Care, Inc.), 134 A.3d 1156, 1163 (Pa. Cmwlth. 2016). The existence of an

is engaged in a distinct occupation or business; which party supplies

the tools; whether payment is by the time or by the job; whether

work is part of the regular business of the employer, and also the

right to terminate the employment at any time.

Id. at 392.

Under the terms of the agreement between the parties, Hammermill engaged the services

of Rust to accomplish a particular result – construction of a wall – and Hammermill’s reservation

of control over Rust’s work was solely aimed at limiting the costs of the project. Id. at 392. To

that end, Hammermill retained the right to add or subtract from the work performed and could

reduce the scope of the job if costs were greater than anticipated. Id. Rust was a specialist with

expertise in the business of industrial construction, whereas Hammermill was not an engineering

or construction firm but rather a manufacturer of paper products. Id. Rust supplied all the tools,

labor, and materials required to complete the work. Id. Rust controlled its own workers, the job

site, and the manner in which the work was to be performed. Id. The Supreme Court did not find

a measure of control on Hammermill’s part that would prohibit Rust from exercising its judgment

in construction matters. Id. at 393. The Supreme Court acknowledged that an employer-employee

relationship might be established if and when testimony was taken; however, judgment on the

pleadings was not appropriate given the terms of the contract. Accordingly, judgment of the trial

court was reversed. Id. at 395.

11

independent contractor agreement is likewise a factor to consider, but not

dispositive. Id. An agreement of the parties to a designation of their relationship

that is contrary to the otherwise-established employer-employee relationship cannot

act to effect a change in that regard. Nevin Trucking, 667 A.2d at 267. Inferences

favoring an employment relationship need only be slightly stronger than those which

oppose it. Universal Am-Can, 762 A.2d at 330.

Beavex argues that the WCJ’s initial determination that Claimant was an

independent contractor was supported by substantial evidence. Beavex points out

that the Board took no new evidence and was therefore required to affirm the WCJ

if her findings were supported by substantial evidence.10 Consequently, Beavex

contends the Board overstepped the limits of its appellate review by engaging in fact

finding and making new credibility determinations when it reversed the WCJ. By

way of example, Beavex notes that the WCJ found there was no evidence that

Beavex supervised Claimant or controlled his day-to-day activities. First WCJ

Decision, F.F. No. 7. The Board never determined that this finding of fact was

unsupported by substantial evidence but nevertheless opined that Beavex imposed a

high level of control over Claimant’s day-to-day activities to satisfy the requirements

of Beavex’s customers. First Bd. Op. at 12. In so doing, Beavex argues, the Board

“commandeered” the WCJ’s duties as factfinder. Beavex Br. at 40.

Beavex also contends the WCJ was not required to follow the Board’s

determination that an employer-employee relationship existed. Beavex maintains

that the WCJ should instead have made new findings with regard to Claimant’s

10

Employer cites Department of Labor and Industry v. Workers’ Compensation Appeal

Board (Lin and Eastern Taste) 155 A.3d 103, 107 (Pa. Cmwlth. 2017) (it is irrelevant whether the

record contains evidence to support findings other than those made by the WCJ so long as evidence

exists to support the findings actually made).

12

employment relationship. Beavex asserts the WCJ’s statement that she was

constrained by the Board’s August 24, 2017 conclusion did not meet the reasoned

decision provision of the Act11 and the Board should have reversed her decision on

that basis. Essentially, Beavex argues the WCJ had authority to revisit the issue of

Claimant’s employment status and she could exceed the Board’s order on remand

by finding Claimant was an independent contractor.12

Beavex’s arguments regarding Claimant’s employment status largely rely on

our Supreme Court’s decision in Universal Am-Can and this Court’s holding in

Johnson v. Workmen’s Compensation Appeal Board (Dubois Courier Express), 631

A.2d 693 (Pa. Cmwlth. 1993). We agree that these decisions support a conclusion

that Claimant was an independent contractor.

In Universal Am-Can, the claimant was the owner-operator of a tractor-trailer

unit leased to a motor carrier. 762 A.2d at 329. Following an injury sustained while

in the course of his duties, the owner-operator filed a claim petition seeking benefits

11

Section 422(a) of the Act provides, in pertinent part, that “[a]ll parties to an adjudicatory

proceeding are entitled to a reasoned decision containing findings of fact and conclusions of law

based upon the evidence as a whole which clearly and concisely states and explains the rationale

for the decisions so that all can determine why and how a particular result was reached.” 77 P.S.

§ 834.

12

Employer’s argument that the WCJ, following remand, could reject the Board’s

determination that Claimant was an employee and make contrary findings is not supported by the

precedent of this Court. A WCJ should restrict remand proceedings to the purpose indicated by

the remand order. Del. Cty. v. Workers’ Comp. Appeal Bd. (Baxter-Coles), 808 A.2d 965, 968

(Pa. Cmwlth. 2002). While the WCJ was not precluded from taking additional evidence on

remand, such evidence should only address the issues contained in the Board’s remand order. Riley

v. Workers’ Comp. Appeal Bd. (Dep’t of Pub. Welfare/Norristown State Hosp.), 997 A.2d 382,

389 (Pa. Cmwlth. 2010) (WCJ exceeded his scope of remand by receiving testimony and ruling

on an issue not contained in the Board’s remand order). Presently, the Board concluded Claimant

established the existence of an employer-employee relationship. Consequently, the Board reversed

the WCJ’s order and remanded the matter for further proceedings. Nothing in the Board’s order

suggests the WCJ could revisit the issue of Claimant’s employment status.

13

under the Act. Id. In granting the claim petition, the WCJ found that the motor

carrier controlled the owner-operator’s work to a significant degree. Id. at 330. The

Board affirmed, as did this Court. Id. In concluding the motor carrier exercised

control over the work performed by the owner-operator, thus establishing the

existence of an employer-employee relationship, this Court placed emphasis on the

motor carrier’s mandate that the owner-operator comply with federal and state

regulations. Id.

The Supreme Court reversed, noting that the applicable regulations reflected

the exercise of control by the government, not the motor carrier. Id. at 336.

Compliance with such regulations was merely a factor to be considered in an analysis

of employee status. Id. at 332. The Supreme Court determined that the record

otherwise failed to establish the motor carrier exercised any control over the work

to be done by the owner-operator or over the manner in which it was to be performed.

Id. at 336.

Johnson concerned a claim petition filed by a 13-year-old boy hit by a car

while delivering newspapers. 631 A.2d at 694. In determining the claimant was an

independent contractor, not an employee of the newspaper, the Referee13 found the

newspaper had no right to control the claimant’s performance of his duties and

exercised no control over the manner in which he performed those duties. Id. at 695.

The newspaper supplied the bag used to carry papers and the claimant was assigned

a specific delivery route which he was required to complete by 6:00 p.m. Id. at 694.

The claimant’s hours were not fixed beyond an instruction that papers be delivered

13

WCJs were previously referred to as referees under the Act. See Section 401 of the Act,

amended by the Act of July 2, 1993, P.L. 190, 77 P.S. § 701 (the term referee shall mean a WCJ

and any reference to a workmen’s compensation referee shall be deemed to be a reference to a

WCJ).

14

by 6:00 p.m. Id. at 695. The claimant was free to choose his own route of travel

and the manner in which he delivered papers, whether by foot, bicycle, or other

vehicle. Id. at 694-95. Any special instruction on where to deliver the paper was

provided by the individual customer and not the newspaper. Id. at 695. The

newspaper imposed no uniform or dress code to follow while delivering papers and

the claimant was paid for each paper delivered. Id. No taxes or other charges were

withheld from the claimant’s pay and he received no fringe benefits. Id. at 695.

Customers paid the newspaper directly and the claimant handled no money. Id. at

694. Service issues, whether general or relating to the claimant’s performance, were

made by the customer to the newspaper directly. Id. at 695. The claimant could

substitute another person to deliver papers without notice to, or approval by, the

newspaper. Id.

The Board affirmed the Referee. This Court agreed with the Board,

concluding the claimant’s work was not controlled in such specific detail that his

relationship with the newspaper could be considered anything other than a contract

for service delivery. Id. at 697. In affirming, this Court focused on two factors

relating to control – that the newspaper did not prohibit the claimant from delivering

its competitors’ papers at the same time and the claimant could substitute another

person to deliver papers without notice or prior approval. Id. Ultimately, the

newspaper was concerned only with the result of having its papers delivered, and

not the manner in which delivery was accomplished. Id. at 698.

Beavex suggests adherence to its customers’ security and business

requirements may be likened to the federal and state regulations imposed on the

claimant in Universal Am-Can. Any control imposed on Claimant’s performance of

his deliveries came from Beavex’s customers, not from Beavex. Beavex asserts that

15

Johnson presents a similar factual scenario to the present dispute, particularly with

regard to Claimant’s ability to work for other entities and to subcontract his routes.

We agree.

Given that our scope of review is plenary and our standard of review is de

novo, whether Claimant is an independent contractor or an employee is a question

of law fully reviewable by this Court, and we are not bound by the WCJ’s or the

Board’s conclusions in that regard. Johnson, 631 A.2d 696. To determine whether

Claimant established the existence of an employer-employee relationship, we apply

the factors set forth in Hammermill, with emphasis on Beavex’s right, if any, to

control the manner by which Claimant performed delivery services.

As to the first Hammermill factor, control over the manner in which work is

to be done, Beavex dictated to some extent how Claimant performed his job.

Claimant could not transport in his vehicle any individual not also authorized to

perform delivery services for Beavex. R.R. at 85a. Beavex required Claimant to

obtain automobile, cargo, and occupational accident insurance. Id. at 87a. Claimant

was required to wear an ID badge and uniform so that Beavex’s customers could

identify him as a person authorized to pick up and deliver packages. Id. at 84a.

Claimant’s receipt of compensation was conditioned upon submission of a driver’s

manifest, the format and contents of which were dictated by Beavex. Id. at 85a.

Although Beavex did not provide training as such, it did provide “orientation as to

the specific needs and requirements” of the customers Claimant would serve. Id. at

84a.

In general, however, Claimant was not subject to Beavex’s control. Claimant

supplied the vehicle used to make deliveries, and he was solely responsible for the

costs associated with operating and maintaining that vehicle. Id. at 83a. Claimant

16

chose his own driving route, and his schedule was dictated by the customers, not by

Beavex. Id. at 84a. Claimant maintained his own insurance coverage on his vehicle,

as well as his own work injury insurance. Id. at 87a-88a. Claimant’s receipt of

benefits under the Zurich policy was conditioned upon his status as an independent

contractor. Id. at 103a. Claimant was responsible for any loss incurred by Beavex

through any defective service by Claimant to Beavex’s customers. Id. at 90a.

Claimant was paid by the job, and Beavex deducted no taxes from Claimant’s

compensation. Id. at 85a-86a. Claimant’s tax and insurance documents, as well as

the Agreement executed between Claimant and Beavex, declared Claimant’s status

as an independent contractor. Id. at 82a-104a. We therefore conclude the first factor

– control over the manner in which work is to be done – weighs in favor of the WCJ’s

November 3, 2016 finding that Claimant was an independent contractor.

The second Hammermill factor looks to whether Beavex was concerned only

with the result of the work, thus indicating Claimant was an independent contractor.

This factor, to a certain degree, ties in with the first, as Claimant had clear restrictions

and obligations imposed on the methods used to complete deliveries. However, the

evidence indicates Beavex was primarily concerned with the end result that the

property of its customers arrived at the correct destination. Claimant’s use of a

Beavex-issued ID badge and uniform shirt was ultimately a customer mandate which

allowed the customer to immediately identify Claimant as an individual authorized

to pick up and deliver its items. R.R. at 84a. Similarly, Beavex’s requirement that

Claimant document in a manifest the items tendered and delivered would help

effectuate delivery of a customer’s items.

With regard to the third Hammermill factor, the terms of agreement between

the parties, the Agreement explicitly provided that Claimant was an independent

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contractor. Id. at 82a. Claimant also signed an affidavit acknowledging independent

contractor status. Id. at 99a. The Agreement further provided that Claimant was

solely responsible for the payment of federal, state, and local taxes, and he agreed to

submit to Beavex a W-9 form. Id. at 85a-86a. Any compensation received from

Beavex would be reflected in 1099 form. Id. at 86a. Claimant was not covered by

workers’ compensation insurance or entitled to unemployment insurance. Id. at 87a-

88a. In addition, Beavex’s limited control over Claimant’s work, discussed above

concerning the first factor, was documented in the Agreement. Thus, the third factor

also weighs in favor of a conclusion that Claimant was an independent contractor.

The fourth, fifth, and sixth factors used to determine whether an employer-

employee relationship exists concern the nature of the work or occupation, the skill

required for performance, and whether the person employed is engaged in a distinct

occupation or business. As a delivery driver, Claimant had to acquire some

additional training and TSA security clearance to deliver hospital specimens to the

airport. Id. at 41a-43a, 51a-52a. However, there is no evidence to suggest any

specialized skill was required to make these deliveries. Beavex’s business is

providing courier services for customers located throughout the United States. Id.

at 135a. As one of Beavex’s contracted delivery drivers, it cannot be said that

Claimant was engaged in an occupation or business distinct from that of Beavex.

These factors do not weigh strongly in favor of either employee or independent

contractor status.

The seventh factor analyzes which party supplied the tools required for

performance of the job at hand. Claimant unquestionably used his personal vehicle

to make deliveries. Id. at 59a-60a. All other equipment, such as bank bags and

medical specimens, were furnished by Beavex’s customers. Id. at 41a, 145a.

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Claimant’s ID badge and uniform shirt were provided by Beavex, although Claimant

was required to pay for the uniform shirt. Id. at 39a, 73a. We conclude this factor

weighs in favor of the WCJ’s November 3, 2016 finding that Claimant was an

independent contractor.

The remaining factors concern whether payment is by time or by the job,

whether the work is part of the regular business of the employer, and whether the

employer has the right to terminate the employment at any time. There is no dispute

Claimant was paid for each route completed. Claimant’s work is clearly part of

Beavex’s regular business. As to Beavex’s right to terminate the employment at any

time, the Agreement granted Beavex the right to terminate the Agreement only upon

a breach by Claimant. Id. at 91a-92a. Material breaches of the Agreement, resulting

in immediate termination, included loss by Claimant of any customer property,

failure to pay for any such loss, failure to maintain insurance required under the

Agreement, and “failure to service entire route as agreed.” Id. While Beavex’s

method of compensation favors a conclusion that Claimant was an independent

contractor, the nature of Claimant’s work and Beavex’s right to terminate the

Agreement favors a contrary determination that Claimant established an employer-

employee relationship.

Viewing all of the above factors, disposition of the ultimate issue here rests

on the level of control exercised by Beavex. We cannot agree with the Board that

the record demonstrates such a high level of control upon Claimant’s day-to-day

activities that an employer-employee relationship has been established. Rather,

Claimant’s day-to-day tasks were largely controlled by Beavex’s customers or by

Claimant himself. Like the claimant in Johnson, Claimant was not told when to

begin his route. Rather, he typically arrived at Beavex’s office between 1:20 and

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1:45 in the afternoon. Id. at 37a. Any time constraints imposed on Claimant’s

deliveries originated with the customer. Id. at 84a. Use of a Beavex-issued ID badge

and uniform shirt enabled identification by Beavex’s customers of those individuals

permitted to make deliveries. Id. While Claimant’s right to subcontract his routes

was not wholly unfettered, substitution was only limited to those persons meeting

the customer’s security requirements. Id. A condition that Claimant contact Beavex

should he encounter delivery delays does not evidence Claimant’s inability to choose

the specific route he travelled on a given day. Beavex’s requirement that Claimant

submit a manifest reconciling the number of items tendered with those delivered

merely suggests Beavex controlled the method by which Claimant proved he

successfully completed his routes. Simply put, the evidence supporting the existence

of an employer-employee relationship is not stronger than that which opposes it.

Universal Am-Can.

IV. Conclusion

Beavex imposed some restrictions upon the method of Claimant’s work

performance. When making deliveries, Claimant wore a Beavex-issued ID badge

and uniform top. Claimant documented his deliveries in a manifest and he could

only substitute his services with a driver meeting the customer’s service and security

needs. Overall, however, the evidence establishes Beavex was primarily concerned

with the result of Claimant’s work – successful pickup and delivery of items on his

routes. Having reviewed the record as a whole, we conclude it fails to establish that

Beavex exercised such control over Claimant’s work that it assumed responsibility

for the manner in which Claimant performed that work. Therefore, Claimant has not

demonstrated the existence of an employer-employee relationship, and we are

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constrained to reverse the Board’s June 12, 2019 order affirming the WCJ’s award

of benefits under the Act.

__________________________________

ELLEN CEISLER, Judge

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IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Beavex, Inc., :

Petitioner :

:

v. : No. 724 C.D. 2019

:

Workers’ Compensation Appeal :

Board (Ramirez), :

Respondent :

ORDER

AND NOW, this 15th day of April, 2020, the June 12, 2019 order of Workers’

Compensation Appeal Board is hereby REVERSED.

__________________________________

ELLEN CEISLER, Judge