State Ex Rel. Workforce Safety & Insurance v. Larry's on Site Welding

2014 ND 81, 845 N.W.2d 310, 2014 WL 1687757, 2014 N.D. LEXIS 86
CourtNorth Dakota Supreme Court
DecidedApril 29, 2014
Docket20130292
StatusPublished
Cited by10 cases

This text of 2014 ND 81 (State Ex Rel. Workforce Safety & Insurance v. Larry's on Site Welding) is published on Counsel Stack Legal Research, covering North Dakota 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. Workforce Safety & Insurance v. Larry's on Site Welding, 2014 ND 81, 845 N.W.2d 310, 2014 WL 1687757, 2014 N.D. LEXIS 86 (N.D. 2014).

Opinion

VANDE WALLE, Chief Justice.

[¶ 1] Workforce Safety and Insurance appealed from a district court judgment affirming an administrative law judge’s order finding William Snook and other similarly situated welders were independent contractors. We affirm the judgment, concluding the ALJ’s findings of fact are supported by a preponderance of the evidence and the conclusions of law are supported by the facts.

I

[¶ 2] In October 2010, Snook was injured when he fell off a ladder while working on an oil rig platform. Snook submitted a claim for injury form to WSI. WSI conducted an investigation to determine Snook’s employment status with Larry’s On Site Welding (“Larry’s”). Larry’s did not have coverage with WSI. Snook reported to WSI that he worked for Larry’s at the time of the injury. Larry Bumpous, the owner, claimed Snook was an independent contractor. WSI issued a notice of decision establishing employee status and *312 accepting claim and awarding benefits. Larry’s submitted a request for reconsideration. WSI entered an order finding Snook was injured in the course of employment. The WSI order directed that Snook was to receive worker’s compensation benefits, and that Larry’s was required to establish an account with WSI and pay premiums for its employees.

[¶ 8] Larry’s filed a demand for a formal hearing. Following a hearing, the ALJ reversed the WSI order and determined that Snook and other similarly situated welders were independent contractors and not employees. The ALJ also made over thirty fact findings. Among the findings, the ALJ found that Larry’s provided on location welding services to oil rigs in North Dakota. Bumpous, the owner, provided the welding services himself and through other welders. There are no written contracts between Larry’s and the welders that worked with Larry’s. According to the ALJ, each welder’s amount and type of work was directed by the oil rig foreman upon the welder’s arrival at the respective rig site.

[¶4] The ALJ also found that, each time Larry’s provided welding services to the oil rigs, he was required to enter into a Master Service Agreement. The Master Service Agreement was required whether Bumpous provided welding services himself or through others. According to the ALJ, “Larry’s provides the umbrella insurance coverage required by the MSAs and is on the vendor’s list for several drilling companies. Individuals seeking to work on the rigs must either be on the vendor’s list or go through Larry’s or other similarly situated businesses.”

[¶ 5] Larry’s paid the welders at an hourly rate. The ALJ found that the welder’s time sheets showed their work with Larry’s was sporadic. Workers were paid each week based on their hourly billings from the previous week. According to the ALJ, “Mr. Bumpus [sic] is able to do this because he uses a factoring company and absorbs the 1.5% cost of the money he receives. If the workers contracted directly with the rigs they might have to wait up to 120 days to be paid.” Larry’s generally received $95 per hour for services performed, and paid the welders $80 less per hour. The ALJ found it is more cost effective to have subcontractors than employees because of high turnover, and that welders “bounce around a lot from vendor to vendor and from state to state.”

[¶ 6] The ALJ found that safety meetings were not conducted or required by Larry’s, but were held by the “tool pusher or the company man and were held at the rigs.” Welders working with Larry’s paid for their own travel costs, lodging expenses and equipment. The ALJ found, “The workers provide their own supplies and they have their own equipment, tools and vehicles. Mr. Bumpus can discharge them at any time and they can quit at any time.”

[¶ 7] Although Bumpous stated he did not train individuals, the ALJ found Bum-pous did teach one individual how to weld and also provided advice to other welders. The ALJ found Bumpous did not direct workers how to do their jobs. According to the ALJ, the “tool pusher” at the rig directed the welders. “[Bumpous’s] workers report after the rig pusher determines the job is completed and signs off on their work invoice. [The welders] turn in the signed invoices and tell [Bumpous] they are ready for another job.”

[¶ 8] The ALJ found “Snook is a welder who worked for Larry’s once on February 10, 2010, for 10.5 hours and once from October 26, 2010, through October 29, 2010, for a total of 20 hours.” The ALJ found Snook’s 2010 W-2 forms evidenced that he worked several other jobs and *313 earned much more money from those positions. Snook had his own welding truck, welder, acetylene torch, oxygen, acetylene, welding rods, and other miscellaneous tools required for welding. Snook paid for his own supplies, received no welding training from Bumpous, and was directed how “to perform the work by individuals at the rig and not by Mr. Bumpus.” The ALJ found Snook fueled his vehicle and did not receive reimbursement for fuel.

[¶ 9] The first time Snook worked for Larry’s in February 2010, Snook ceased working after the first day because his welding machine broke down. Bumpous did not provide Snook with a replacement welder to complete the work, and Snook did not return to the job site. The ALJ found the second time Snook worked for Larry’s, in October 2010, Bumpous drove Snook out to the oil rig work site and instructed Bumpous “to put clips on the wing walls.” Snook was not paid for the time spent driving to the rig, but was paid for his welding. Snook was brought on to weld the clips “because a welder who regularly worked under Larry’s vendor’s lists was hunting and was unavailable and Mr. Bumpus knew Mr. Snook needed work.” The ALJ found that, on Snook’s last day of work, “October 29, 2010 — he was injured and unable to complete work that day. The greater weight of the evidence shows that Mr. Snook went and came when he chose to do so and that Mr. Snook and Larry’s do not have an ongoing relationship.”

[¶ 10] The ALJ noted, when Snook went to the doctor following his injury, the medical report stated that Snook told the doctor he could not have an MRI “due to uncertainty about ability to pay. He is not sure if this is going to be covered by Workforce Safety or the company he is working for since he is an independent contractor.” The ALJ found “[t]he greater weight of the evidence shows that Mr. Snook did not perform his work on any location owned or controlled by Larry’s.” Finally, the ALJ noted, “Snook acknowledged he could decline work from Larry’s. He understood that he could quit or be terminated at any time without penalty.”

[¶ 11] Following these factual findings, the ALJ applied each factor of the common law employment test set out in N.D. Admin. Code § 92-01-02-49. The ALJ stated, “When considered in light of the 20 part common law test ... the preponderance of the evidence shows that while Mr. Bumpus controls to whom he gives work and he can terminate his relationship with them at any time, he does not control how that work is performed.” The district court affirmed the decision of the ALJ, finding that Snook was an independent contractor and not an employee of Larry’s On Site Welding.

II

[¶ 12] “Courts exercise limited appellate review of a final order by an administrative agency under the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32.” Parsons v. Workforce Safety & Ins. Fund, 2013 ND 235, ¶ 12, 841 N.W.2d 404.

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Cite This Page — Counsel Stack

Bluebook (online)
2014 ND 81, 845 N.W.2d 310, 2014 WL 1687757, 2014 N.D. LEXIS 86, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-workforce-safety-insurance-v-larrys-on-site-welding-nd-2014.