State ex rel. Ugicom Ents., Inc. v. Morrison

2022 Ohio 1689, 203 N.E.3d 683, 169 Ohio St. 3d 244
CourtOhio Supreme Court
DecidedMay 24, 2022
Docket2021-0674
StatusPublished
Cited by3 cases

This text of 2022 Ohio 1689 (State ex rel. Ugicom Ents., Inc. v. Morrison) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Ugicom Ents., Inc. v. Morrison, 2022 Ohio 1689, 203 N.E.3d 683, 169 Ohio St. 3d 244 (Ohio 2022).

Opinion

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State ex rel. Ugicom Ents., Inc. v. Morrison, Slip Opinion No. 2022-Ohio-1689.]

NOTICE This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.

SLIP OPINION NO. 2022-OHIO-1689 THE STATE EX REL. UGICOM ENTERPRISES, INC., APPELLANT, v. MORRISON, ADMR., BUREAU OF WORKERS’ COMPENSATION, APPELLEE. [Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State ex rel. Ugicom Ents., Inc. v. Morrison, Slip Opinion No. 2022-Ohio-1689.] Workers’ compensation—Independent contractors and employees—Right to control manner or means of work—Some-evidence standard—Some evidence supported determination of Bureau of Workers’ Compensation that workers were company’s employees rather than independent contractors—Court of appeals’ judgment affirmed. (No. 2021-0674—Submitted January 25, 2022—Decided May 24, 2022.) APPEAL from the Court of Appeals for Franklin County, No. 17AP-895, 2021-Ohio-1269. __________________ Per Curiam. {¶ 1} The question presented in this appeal is whether some evidence supported the determination of appellee, Sarah Morrison, administrator of the SUPREME COURT OF OHIO

Bureau of Workers’ Compensation, that appellant, Ugicom Enterprises, Inc., an underground-cable-installation provider, had misclassified its workers for workers’ compensation purposes as independent contractors rather than as employees. The Tenth District Court of Appeals determined that some evidence supported the bureau’s determination that the workers were Ugicom’s employees and denied Ugicom’s request for a writ of mandamus ordering vacatur of the bureau’s decision. We affirm. I. BACKGROUND A. Ugicom I {¶ 2} In 2009, the bureau audited Ugicom to ensure that Ugicom had paid the correct amount of workers’ compensation premiums for the period of January 1, 2004, through June 30, 2009.1 Mary Jo Eyink, an auditor with the bureau, conducted the audit. Based on her findings, Eyink determined that Ugicom had exercised “too much control” over workers to whom it had issued Internal Revenue Service (“IRS”) Forms 1099, leading the bureau to designate those workers as Ugicom’s employees for workers’ compensation purposes and resulting in a $346,817.55 invoice to Ugicom for unpaid premiums.2 {¶ 3} After unsuccessfully challenging those findings through the bureau’s administrative process, Ugicom filed an original action in the Tenth District Court of Appeals, seeking a writ of mandamus ordering vacatur of the bureau’s decision that the workers were Ugicom’s employees. See State ex rel. Ugicom Ents., Inc. v. Buehrer, 10th Dist. Franklin No. 13AP-527, 2014-Ohio-4942, ¶ 1, 7-9 (“Ugicom I”). The court of appeals granted the writ on the ground that the bureau had erred

1. The bureau later extended the audit period through June 30, 2012, and then again through June 30, 2015. But the bureau stated that its decision concerned only Ugicom’s protest against the findings for the initial audit period.

2. “[A] Form 1099 is used by independent contractors to report income to the federal government.” Hopkins v. Duckett, D.N.J. No. 02-5589, 2006 WL 3373784 (Nov. 21, 2006), fn. 2.

2 January Term, 2022

in relying on the 20-factor test under R.C. 4123.01(A)(1)(c) for determining whether a “person who performs labor or services pursuant to a construction contract” is an employee for workers’ compensation purposes. Ugicom I at ¶ 14, 28. The court of appeals explained that the test was inapplicable because this “case does not concern a construction contract, as that term is defined in R.C. 4123.79(C)(2).” Id. at ¶ 14. The court of appeals directed the bureau to issue a new order addressing Ugicom’s challenge. Id. at ¶ 28. B. Ugicom’s operations {¶ 4} In response to Ugicom I, the bureau set the matter for a hearing before an adjudicating committee to assess Ugicom’s operations under the common-law right-to-control test for determining whether a worker is an employee or an independent contractor. See R.C. 4123.291(A) (empowering “[a]n adjudicating committee appointed by the administrator of workers’ compensation to hear any matter specified” within the statute). Both Eyink and Fred Kibuuka, Ugicom’s vice president, testified at the hearing. Eyink elaborated on her audit findings, and Kibuuka described Ugicom’s operations. The audit findings and hearing testimony reflect the following facts about Ugicom’s operations. {¶ 5} Ugicom performs underground-cable installations, mainly in residential areas, as a subcontractor for Time Warner Cable Company (“TWC”). TWC uses its website to dispatch jobs to Ugicom, which Ugicom then retrieves through its web-based system and assigns to cable installers. An installer logs on to the system each morning to obtain the job’s details and logs back on in the evening to confirm completion of the job, which generates an invoice from Ugicom to TWC. Ugicom does not require the installer to accept the job assignment. And Ugicom determines the amount that it will pay for a job; the installer does not submit a bid. {¶ 6} TWC provides a badge to each installer who passes a TWC- coordinated drug test and background check. The badge has an identification

3 SUPREME COURT OF OHIO

number that is registered with TWC’s dispatch department. After receiving clearance from TWC, the installer may begin working for Ugicom. Photographs in the record before us show a work van with a sign on its door that says “Ugicom Enterprises, Inc., Contractor for Time Warner Cable” and a vest worn by an installer that says “Contractor for Time Warner Cable.” {¶ 7} Ugicom requires the installers to sign a one-year independent- contractor agreement and to provide their own liability insurance. The contract contains a noncompete clause that forbids an installer from providing similar services to a competitor of Ugicom while the contract is in force. Either party may terminate the contract with 60 days’ written notice. The contract requires the installer to respond to service requests within two hours. {¶ 8} The installers furnish their own hand tools for the jobs (generally, a shovel and a spade) and provide their own transportation, cell phones, and laptop computers. The cable that the installers bury into the ground is custom to TWC, so the installers must obtain it from TWC. {¶ 9} The installers are permitted to work any day or time, provided they obtain the customer’s consent to be on the customer’s property, and they typically complete between six and ten jobs per day. According to Eyink, “[i]t’s just a matter of [the installers’] stand[ing] on a spade and lifting up some dirt and going down and lifting up some [more] dirt.” Kibuuka noted, however, that the installers also connect the cable to the outside of the home and test its connection. {¶ 10} The installers are paid by the job and earn on average between $50,000 and $60,000 per year, although some installers make as much as $90,000 per year. According to Eyink’s audit notes, Ugicom pays the installers once per month by direct deposit; but at the hearing, Eyink testified that the installers are paid weekly. Taxes are not withheld from the payments to the installers, and no benefits are provided, although sometimes Ugicom will deduct from a payment the costs attributable to damage caused by the installer.

4 January Term, 2022

{¶ 11} In addition to the installers, Ugicom uses the services of Paul Lule, who performs quality-control checks on 20 percent of the jobs, verifying that the lines were buried correctly.

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2022 Ohio 1689, 203 N.E.3d 683, 169 Ohio St. 3d 244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-ugicom-ents-inc-v-morrison-ohio-2022.