Henn v. State Accident Insurance Fund Corp.

654 P.2d 1129, 60 Or. App. 587, 1982 Ore. App. LEXIS 4110
CourtCourt of Appeals of Oregon
DecidedDecember 8, 1982
DocketWCB 80-05494, CA A24058
StatusPublished
Cited by24 cases

This text of 654 P.2d 1129 (Henn v. State Accident Insurance Fund Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Henn v. State Accident Insurance Fund Corp., 654 P.2d 1129, 60 Or. App. 587, 1982 Ore. App. LEXIS 4110 (Or. Ct. App. 1982).

Opinions

[589]*589VAN HOOMISSEN, J.

Claimant appeals from an order of the Workers’ Compensation Board that held that her work as a magazine salesperson was as an independent contractor, not an employe. In January, 1980, she answered a classified ad in a newspaper for a job as a sales representative for the company. She went to work as an “authorized representative” of the company, selling subscriptions. She allegedly suffered tendonitis following a fall that occurred while she was making her rounds as a salesperson.

A company “Representatives’ Agreement” signed by claimant provides that, as an “authorized representative” of the company, she agreed to comply with a company policy prohibiting various types of false, misleading and deceptive representations in her sales work and had to account for materials provided by the company and to fill out and properly process subscription forms. She was required to forward to the company any down payments received from subscribers. The agreement further provided that she had to abide by all applicable laws and that authorization to represent the company could be withdrawn for violation of any of the requirements of the agreement. Finally, the agreement provided:

“I recognize that, as an independent contractor, I am self-employed, that Federal, State and local taxes are not deducted from my commissions and that I may, if I wish, engage in other remunerative endeavors without jeopardizing my authorization to represent Parents Home Service Institute, Inc.”

The company considered representatives to be independent contractors. The company encouraged, but did not require, representatives to work eight hours a day. No particular hours were specified. Claimant worked for four to five hours on some days and about eight hours on other days. She was not penalized for working less than eight hours a day.

The company did not require any experience for the representative position, nor did claimant have any previous experience in sales work. The company provided a three-day training session in sales technique, given at its Portland offices. The training was designed to minimize [590]*590the possibility of representatives misinforming customers. She was taught how to present the product and was required to memorize the essential elements of a sales pitch. Representatives were encouraged to personalize their sales efforts so long as the presentations were not too lengthy.

The company agreed that, once claimant had put in 172 hours of work (the equivalent of one month of regular work in her first month), her commission would exceed $516; if not, the company would pay her the difference between $516 and the commission she actually earned. After 172 hours of work she would also be paid a mileage allowance of about $30. No other benefits were provided. Other than the one-time guaranteed minimum payment for 172 hours (which comes to $3.00 per hour) she was paid only on the basis of commissions. Representatives were allowed to draw on their commissions at any time; at the end of each month any commissions not drawn would be paid. Claimant did not work for 172 hours, so she never received the minimum payment of $516, and she never received the mileage allowance.

In order to show claimant what was to be done and how to do it, a supervisor accompanied her on her first three days of sales work. The supervisor did not actually accompany her to the homes. Instead, claimant visited certain homes while the supervisor visited other homes nearby. After the first three days she worked entirely on her own.

Claimant’s job was to visit homes and to offer a simple gift (a growth chart) initially if the resident would allow her to make a sales presentation. As part of the sales presentation, she would offer the prospect a “free” copy of Mothers’ Home Encyclopedia if the prospect agreed to subscribe to Parents’ Magazine. The encyclopedia and the magazine were the only publications offered by the company. If the prospect agreed to subscribe, she presented the encyclopedia, had the prospect sign a completed subscription contract and collected a down payment. As part of the sales effort, she showed the prospect a notebook filled with pages taken from previous issues of the magazine. The company provided the gift growth charts, encyclopedias and subscription contract forms. At the suggestion of the [591]*591company, she displayed the sample magazine pages supplied by the company in a photo album supplied by her.

From time to time an area representative visited claimant to replenish her supplies. The area representative also occasionally provided her with leads to potential customers, consisting of lists of previous subscribers to Parents’ Magazine. Claimant was supposed to telephone a person at the company offices every day in order to report her sales results. She called in on most days but failed to do so on some days. Consistent with the authorization agreement, representatives were allowed to engage in other work and could represent other companies during their sales rounds. Some did so, but claimant did not choose to. The company preferred that she work around her home area and advertised “work in your area” as an aspect of the job. However, she was allowed to sell wherever she wished and to whomever she wished. She chose to work in her home area, consisting of McMinnville and several nearby towns. She was the only person covering the McMinnville area. She used her own automobile in her representative work.

By the express provisions of the Oregon Workers’ Compensation Act,1 the right to direct and control the services of a person is an essential ingredient in the test for determining who is an employer within the meaning of the Act. Woody v. Waibel, 276 Or 189, 196, 554 P2d 492 (1976). The principal factors showing right of control are: (1) direct evidence of the right to or the exercise of control; (2) the method of payment; (3) the furnishing of equipment; and (4) the right to fire. Marcum v. SAIF, 29 Or App 843, 845, 565 P2d 399 (1977); 1C Larson, Workmen’s Compensation Law §44.00.

Direct evidence of control is slight. Although the employer preferred that claimant work eight hours and phone in receipts every day, she was not required to do so and often did not. Further, she was free to use her own [592]*592sales technique as long as her representations were not “false, misleading, or deceptive” and did not otherwise violate the law. She also had discretion in choosing the sales area she covered and the customers she solicited. Further evidence on the parties’ relationship is found in their agreement, which provided that she was a self-employed independent contractor and that taxes were not to be deducted from her commissions. While the fact that either or both of the parties considered their relationship to be that of independent contractor is not controlling, Woody v. Waibel, supra, a plain statement that the parties intend the relationship of independent contractor and not employe is not always to be disregarded. In a close case, it may swing the balance. 1C Larson, Workmen’s Compensation Law § 46.30.

Claimant was being paid on commission.2 When payment is by quantity or percentage, the method of payment test largely becomes neutral.

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Bluebook (online)
654 P.2d 1129, 60 Or. App. 587, 1982 Ore. App. LEXIS 4110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/henn-v-state-accident-insurance-fund-corp-orctapp-1982.