Wednesday, January 03, 2007, 6:29 AM

Circumstances, Not Agreements, Determine Employee / Independent Contractor Status

In Gilreath v. Yellow Cab of Charlotte, an unpublished opinion filed yesterday, the COA issued a reminder to businesses that a contract declaring someone an independent contractor, by itself, establishes nothing, and that courts look beyond such contracts to the circumstances of the relationship to determine whether someone is an independent contractor or an employee.

The COA noted that factors considered in determining whether an independent contractor or employer-employee relationship exists include whether the person employed: (a) is engaged in an independent business, calling, or occupation; (b) is to have the independent use of his special skill, knowledge, or training in the execution of the work; (c) is doing a specified piece of work at a fixed price or for a lump sum or upon a quantitative basis; (d) is not subject to discharge because he adopts one method of doing the work rather than another; (e) is not in the regular employ of the other contracting party; (f) is free to use such assistants as he may think proper; (g) has full control over such assistants; and (h) selects his own time.

In this case, the would-be independent contractor, a taxi driver: did not have special skills, training, or prior experience; did not work for a lump sum or on a quantitative basis, but rather was paid on commission; was subject to discharge if he failed to perform his duties in a manner other than what was described to him; was required to report to work by 7:00 a.m. six days a week; was required to drive a particular route and obtain permission from defendant's dispatcher if he traveled to a destination other than the airport; and was required to contact defendant's dispatcher to obtain the appropriate fare for passengers.

The COA held "these factors, considered with the circumstances, indicates that Gilreath was defendant's employee and not an independent contractor[,]" and the fact that the would-be independent contractor signed an independent contractor acknowledgment did not change that. The would-be independent contractor / employee was therefore entitled to worker's compensation for an accident arising out of his employment.

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