July 23, 2014

Tenth Circuit: Summary Judgment Appropriate Where No Employment Relationship Existed

The Tenth Circuit Court of Appeals issued its opinion in Knitter v. Corvias Military Living, LLC on Tuesday, July 15, 2014.

Lisa Knitter worked as a handyman for Lewis General Contracting (LGC) from March to October 2010. During this time, LGC’s sole client was Corvias Military Living, formerly known as Picerne Military Housing (Picerne). Ms. Knitter performed handyman services solely on Picerne properties. Picerne properties were divided into neighborhoods, and each neighborhood had a neighborhood manager and a maintenance supervisor. Ms. Knitter worked on several Picerne neighborhoods, but had disputes with Picerne staff in three of the neighborhoods. Ms. Knitter called Mr. Lamb, the Assistant Director of Maintenance Operations for Picerne, to complain about sexual harassment and gender discrimination in one of the neighborhoods. After this phone call, Mr. Lamb contacted Mr. Lewis to request that Ms. Knitter no longer be assigned to do handyman work at Picerne. Because LGC had no work outside Picerne, Ms. Knitter was terminated.

Ms. Knitter sued Picerne under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq, alleging that she was paid lower wages than her male counterparts and she was fired in retaliation for her discrimination claims, and also that she was denied vendor status after her firing in retaliation for her prior complaints of discrimination. The district court granted summary judgment to Picerne, finding that it was not Ms. Knitter’s employer, and dismissed her retaliation claims for the denial of vendor status because Ms. Knitter had never applied for employment with Picerne.

The Tenth Circuit affirmed the summary judgment and dismissal. It applied the joint employer test set forth in Bristol v. Board of County Commissioners, 312 F.3d 1213 (10th Cir. 2002), and found that at no time was Picerne Ms. Knitter’s employer. Because Picerne was not Ms. Knitter’s employer, her claims of gender discrimination and wrongful termination necessarily failed, since Title VII applies only to employers. The Tenth Circuit then examined Ms. Knitter’s claims that she was denied vendor status in retaliation for her discrimination claims. The Tenth Circuit determined that at no time did Ms. Knitter apply for employment with Picerne, so there could be no retaliation based on an employer-employee relationship. The district court’s grant of summary judgment was affirmed.

Colorado Court of Appeals: Prevailing Employee Presumptively Entitled to Attorney Fees Under Colorado Wage Claim Act

The Colorado Court of Appeals issued its opinion in Lester v. The Career Building Academy on Thursday, July 3, 2014.

Attorney Fees Under the Colorado Wage Claim Act.

Lester appealed a jury verdict awarding him $12,307.69 in unpaid compensation based on breach of an implied contract with defendant, The Career Building Academy (TCBA). TCBA is a Colorado nonprofit corporation that provides vocational training, with an emphasis on residential construction, to high school students.

In 2011, Lester orally agreed to work as TCBA’s chief operating officer. Rick Johnson, TCBA’s founder, promised to pay Lester an annual salary of $150,000, of which $75,000 would be paid by TCBA and $75,000 by Johnson Heating and Plumbing (JHP).

During his first six months, Lester was paid twice, totaling $7,884 in gross pay. Lester resigned and sent a wage demand to TCBA. TCBA rejected the demand, contending that Lester agreed to volunteer as chief operating officer. Lester sued TCBA and JHP, seeking unpaid wages and compensation, as well as penalties and attorney fees.

A jury determined Lester had entered into an implied contract with TCBA and returned a verdict in his favor for $12,307.69. The court dismissed Lester’s claim against JHP. Following the verdict, Lester requested that the court award him statutory penalties and attorney fees under the Colorado Wage Claim Act (CWCA). TCBA argued that the CWCA did not apply to an implied contract. After applying factors in Carruthers v. Carrier Access Corp., 251 P.3d 1199 (Colo.App. 2010), used to determine an award of attorney fees to prevailing employers, the trial court denied the request.

On appeal, Lester argued it was error to apply the Carruthers factors to a prevailing employee who is presumptively entitled to an award of attorney fees. The Court of Appeals agreed. CRS §8-4-110(1) allows a court to award costs and attorney fees to the prevailing party on a CWCA claim. Unlike a prevailing employer, a prevailing employee is presumptively entitled to attorney fees under the CWCA. The attorney fee issue was remanded for reconsideration under the correct standard by the trial court.

Lester also argued it was error for the trial court to have, sua sponte, dismissed his claims against JHP as a matter of law. The Court found no reversible error. It also determined that because JHP was neither a member of TCBA nor an individual, the alter ego doctrine could not be applied to it.

The Court held that if the trial court decides that Lester is entitled to attorney fees in the trial court, Lester also should be awarded appellate attorney fees. The denial of attorney fees under the CWCA was reversed and the case was remanded to the trial court to consider Lester’s request for attorney fees, incurred in the trial court and on appeal.

Summary and full case available here.

Tenth Circuit: County Violated Title VII by Terminating Employee After He Helped Colleague Pursue Sexual Harassment Claim Against Employer

The Tenth Circuit Court of Appeals issued its opinion in Barrett v. Salt Lake County on Friday, June 13, 2014.

Michael Barrett was employed by Salt Lake County for 14 years, where he received promotions and favorable reviews until he helped a colleague pursue a sexual harassment claim against her boss. After he assisted his colleague, he was demoted by the county. He sued, alleging the county violated Title VII by retaliating against him, and the jury found for Mr. Barrett.

The county appealed, asserting that it was entitled to judgment as a matter of law. The Tenth Circuit disagreed, noting that the case on which the county relied play no role in post-trial motions. The county also alleged that the jury instructions provided the wrong procedural framework for determining Title VII cases. However, the jury received instruction on the proper procedural framework and decided the case accordingly, so the county’s argument failed. The county also objected to another jury instruction, but this objection was not properly preserved at trial.

The county also disagreed with the district court’s award, not restoring Barrett to his former position since the position had been filled but instead restoring him to his prior level of pay. The county claimed that the result afforded Barrett a “windfall” for performing less work for more pay. However, the Tenth Circuit was unsympathetic to this argument, noting that the district court retains wide discretion in determining equitable relief.

The final argument raised by the county was that the district court’s award of attorney fees to Barrett for fees incurred during the internal grievance process was in error because it was an optional process, not a mandatory exhaustion of administrative remedies. On that limited point, the Tenth Circuit agreed. The Tenth Circuit remanded for redetermination of attorney fees and affirmed on all other points.

Bills Regarding Great-Grandparent Visitation, Workers’ Comp Treating Physicians, Marijuana Revenue, Segregation of Mentally Ill Inmates, and More Signed

The 2014 Legislative Session has now ended, and Governor Hickenlooper signed many bills into law this session. Over the past week, he signed 79 bills, allowed one to become law without a signature, and vetoed two bills. In total, the governor signed 396 bills, allowed one to become law without a signature, and vetoed four bills.

On Wednesday, June 4, 2014, the governor signed two bills. They are summarized here. The governor also vetoed one bill, SB 14-023Concerning an Authorization of the Voluntary Transfer of Water Efficiency Savings to the Colorado Water Conservation Board for Instream Use Purposes in Water Divisions that Include Lands West of the Continental Divide. The governor’s statement regarding SB 14-023 is available here.

  • SB 14-041Concerning the Creation of a USS Colorado License Plate for Motor Vehicles and, in Connection Therewith, Making an Appropriation, by Sen. Bernie Herpin and Reps. Bob Gardner & Spencer Swalm. The bill creates a special license plate to commemorate the USS Colorado.
  • SB 14-214Concerning the Studies Requested in the Department of Personnel’s Response to the Request for Information in the Fiscal Year 2013-14 Annual General Appropriation Act, and, in Connection Therewith, Making an Appropriation, by Sens. Kent Lambert & Pat Steadman and Reps. Cheri Gerou & Jenise May. The bill requires the state personnel director and the state auditor to conduct a compensation study to compare with similar workforce structures. The bill also requires PERA to provide member information and data to any third-party compensation consulting firm.

On Thursday, June 5, 2014, the governor signed 24 bills into law. Some of these are summarized here.

  • SB 14-125Concerning the Regulation of Transportation Network Companies, and, in Connection Therewith, Requiring Transportation Network Companies to Carry Liability Insurance, Conduct Background Checks on Transportation Network Company Drivers, Inspect Transportation Network Company Vehicles, and Obtain a Permit from the Public Utilities Commission; and Making an Appropriation, by Sens. Cheri Jahn & Ted Harvey and Reps. Dan Pabon & Libby Szabo. The bill creates a limited structure for transportation network companies, which use digital networks to connect riders to drivers who provide transportation in their area.
  • SB 14-172Concerning Employer-Paid Benefits to a Firefighter for Cardiac Illnesses Resulting from a Strenuous Work Event, and, in Connection Therewith, Making an Appropriation, by Sens. Lois Tochtrop & Linda Newell and Rep. Tracy Kraft-Tharp. The bill requires any municipality, special district, fire authority, or county improvement district employing firefighters to provide benefits for heart and circulatory malfunctions.
  • SB 14-213Concerning Increasing the Statutes of Limitations for Commencing Procedures Against a Person who, After Committing a Vehicular Homicide, Leaves the Scene of the Accident, and, in Connection Therewith, Requiring a Post-Enactment Review of the Implementation of this Act. The bill increases the statute of limitations for persons who leave the scene of a vehicular homicide from five years to ten years.
  • HB 14-1214Concerning an Increase in the Penalties for Certain Offenses Committed Against an Emergency Medical Services Provider, and, in Connection Therewith, Making an Appropriation, by Rep. Cheri Gerou and Sen. David Balmer. The bill adds working emergency medical service providers to the list of victims that trigger enhanced sentencing for first degree murder, first degree assault, and second degree assault.
  • HB 14-1228Concerning the Repeal of Certain Requirements for Defensive Driving Schools Attended in Accordance with a Court Order Resulting from a Violation of a Law Regulating the Operation of a Motor Vehicle and, in Connection Therewith, Reducing an Appropriation, by Reps. Cherylin Peniston & Libby Szabo and Sens. Lois Tochtrop & Steve King. The bill removes the requirement that the Department of Revenue monitor, evaluate, and report on the effectiveness of court-ordered driving programs, and eliminates the penalty surcharge on people who attend the courses.
  • HB 14-1260Concerning the Creation of Three Mandatory Minimum Presumptive Ranges for Defendants Convicted of a Felony Sex Offense Involving Intrusion Against a Child who is Under Twelve Years of Age when the Adult Defendant is At Least Ten Years Older that has One of the Ranges Starting at Ten Years as the Minimum in the Range, and, in Connection Therewith, Creating an Indeterminate Lifetime Sentence with a Mandatory Minimum Presumptive Range of Ten to Sixteen Years for a Class 4 Felony; a Mandatory Minimum Presumptive Range of Eighteen to Thirty-Two Years for a Class 3 Felony; and a Mandatory Minimum Presumptive Range of Twenty-Four to Forty-Eight Years for a Class 2 Felony, by Rep. Mike Foote  and Sen. Mike Johnston. The bill changes the sentencing parameters for adults who commit felony sex offenses on children under age 12.
  • HB 14-1279Concerning the Creation of a State Income Tax Credit to Reimburse a Business for Personal Property Taxes Paid in the State, by Reps. Dianne Primavera & Dave Young and Sens. Rollie Heath & Mark Scheffel. The bill creates a state income property tax credit to reimburse businesses for the amount of business personal property tax paid in Colorado.
  • HB 14-1383Concerning the Required Number of Physicians that Must Be Provided to an Injured Employee for Selection of a Treating Physician in Workers’ Compensation Cases, by Rep. Angela Williams and Sens. Lois Tochtrop & Jessie Ulibarri. The bill requires employers to provide injured workers a choice of at least four physicians at two or more distinct locations, with exceptions for rural areas.

On Friday, June 6, 2014, the governor signed 53 bills, allowed one to become law without a signature, and vetoed one bill. The bill he allowed to become law without a signature was HB 14-1371 Concerning Property Taxation of Oil and Gas Leaseholds and Lands and, in Connection Therewith, Specifying that the Wellhead is the Point of Valuation and Taxation for Such Leaseholds and Lands, which changed the point of taxation for oil and gas wells from the production point to the wellhead. The governor issued a statement about the bill (available here).

The bill the governor vetoed Friday was HB 14-1375Concerning Modifications to Statutory Provisions Governing Urban Redevelopment to Promote the Equitable Financial Contribution Among Affected Public Bodies in Connection with the Tax Increment Financing of Urban Redevelopment Projects. The governor’s statement regarding this bill is available here.

Summaries of some of the bills the governor signed on Friday are available here.

  • HB 14-1269Concerning the Circumstances Under Which a Person who Sells Items Subject to Sales Tax Must Collect Such Sales Tax on Behalf of the State, by Reps. Lois Court & Angela Williams and Sen. Mike Johnston. The bill expands the definition of “nexus” for sales tax purposes, broadening the types of business activity that create taxable sales.
  • HB 14-1280Concerning Limits on Liability for Agritourism, by Rep. Timothy Dore and Sen. Gail Schwartz. The bill renames “agricultural recreation activities” as “agritourism” and excludes marijuana-related activities from its definition.
  • HB 14-1321Concerning the Membership of the Colorado Task Force on Drunk and Impaired Driving, by Rep. Dave Young and Sen. Steve King. The bill changes the name of the Interagency Task Force on Drunk Driving to the Colorado Task Force on Drunk and Impaired Driving and makes several changes to membership requirements.
  • HB 14-1333Concerning the Funding of Colorado Water Conservation Board Projects and, in Connection Therewith, Making an Appropriation, by Reps. Randy Fischer & Don Coram and Sens. Gail Schwartz & Ted Harvey. The bill appropriates funds from the Colorado Water Conservation Board Construction Fund for specific projects and authorizes certain other transactions.
  • HB 14-1343Concerning Workers’ Compensation Coverage for Post-Traumatic Stress Disorder for Peace Officers, by Reps. Jonathan Singer & Jared Wright and Sen. Lois Tochtrop. The bill allows firefighters and peace officers to file workers’ compensation claims for post-traumatic stress disorder and specifies parameters for filing such claims.
  • HB 14-1356Concerning an Increase in the Colorado Oil and Gas Commission’s Penalty Authority and, in Connection Therewith, Making an Appropriation, by Rep. Mike Foote and Sen. Matt Jones. The bill increases the penalties for violations of the Oil and Gas Conservation Act.
  • HB 14-1362Concerning Great-Grandparent Visitation with Great-Grandchildren, by Rep. Dominick Moreno and Sen. Jessie Ulibarri. The bill allows great-grandparents to seek visitation rights with their great-grandchildren under the same circumstances as grandparent visitation rights are allowed.
  • HB 14-1387Concerning Revisions of Capital Related Statutes in the Colorado Revised Statutes and, in Connection Therewith, Amending or Repealing Obsolete, Inconsistent, and Conflicting Provisions of Law and Clarifying the Language to Reflect Legislative Intent and Current Application of the Law, by Reps. Libby Szabo & Randy Fischer and Sen. Gail Schwartz. The bill updates statutes related to capital construction projects and makes additional changes.
  • HB 14-1390Concerning the Legal Standing of a Member of the Public in Challenging a Violation of the Open Meeting Requirements, by Reps. Crisanta Duran & Bob Gardner and Sens. Greg Brophy & Rachel Zenzinger. The bill clarifies that anyone denied rights provided by the Open Meetings Law has standing to challenge the denial.
  • HB 14-1398Concerning the Provision of Financial Services to Licensed Marijuana Businesses, and, in Connection Therewith, Making an Appropriation, by Rep. Jonathan Singer and Sens. Pat Steadman & David Balmer. The bill allows for the creation and regulation of marijuana financial services cooperatives referred to as “cannabis credit co-ops” or CCCs, a new type of financial services entity with membership restricted to licensed marijuana businesses.
  • SB 14-021Concerning the Treatment of Persons with Mental Illness who are Involved in the Criminal Justice Systems, and, in Connection Therewith, Making an Appropriation, by Sens. Lois Tochtrop & Steve King and Rep. Jared Wright. The bill extends the repeal date of the Legislative Oversight Committee for the Continuing Examination of the Treatment of Persons with Mental Illness who are Involved with the Criminal and Juvenile Justice Systems. The bill also specifies areas of examination for the committee.
  • SB 14-064Concerning Restricting the Use of Long-Term Isolated Confinement for Inmates with Serious Mental Illness, and, in Connection Therewith, Making an Appropriation, by Sen. Jessie Ulibarri and Rep. Joseph Salazar. The bill requires the DOC to review the mental health status of offenders in segregation every 90 days, and requires that prior to placing an inmate in segregation, a review of the inmate’s mental health status should occur to determine if such placement is allowed.
  • SB 14-117Concerning the Reauthorization of the Regulation of Real Estate Appraisers by the Board of Real Estate Appraisers through a Recreation and Reenactment of the Relevant Statutes Incorporating no Substantive Amendments other than those Approved During the First Regular Session of the 69th General Assembly, by Sen. Cheri Jahn and Rep. Randy Fischer. The bill corrects an oversight from Senate Bill 13-155 and extends the repeal date of the Board of Real Estate Appraisers (board) in the Department of Regulatory Agencies (DORA) through September 1, 2022.
  • SB 14-129Concerning Changes to Criminal Provisions Related to Marijuana and, in Connection Therewith, Making an Appropriation, by Sen. Pat Steadman and Rep. Jenise May. The bill affects a number of criminal provisions related to marijuana, including adding penalties for underage consumption and possession.
  • SB 14-193Concerning Conforming Colorado Law on Location Information with the Fourth Amendment as Interpreted by the United States Supreme Court in United States v. Jones, by Sens. Morgan Carroll & Kevin Lundberg and Rep. Jonathan Singer. The bill prohibits a state agency from obtaining location information from an electronic device without first obtaining a search warrant, with some exceptions.
  • SB 14-215Concerning the Disposition of Moneys Collected by the State in Connection with the Legal Marijuana Industry, and, in Connection Therewith, Making an Appropriation, by Sen. Pat Steadman and Reps. Crisanta Duran & Cheri Gerou. The bill creates the Marijuana Cash Tax Fund for tax revenue collected by the legal marijuana industry, and identifies the purposes for which funds may be appropriated from the Marijuana Cash Tax Fund.

For a list of Governor Hickenlooper’s legislative decisions, click here.

Tenth Circuit: First Amendment Retaliation Claims Fail when Additional Grounds Exist for Termination

The Tenth Circuit Court of Appeals issued its opinion in Trant v. State of Oklahoma on Wednesday, May 28, 2014.

Dr. Collie Trant became Oklahoma’s Chief Medical Examiner during a time when the Office of the Chief Medical Examiner was recovering from several scandals. Trant was soon terminated by the Board of Medicolegal Investigations. He filed suit in Oklahoma state court, alleging First Amendment retaliation claims under 42 U.S.C. § 1983, breach of implied contract, and violation of the Oklahoma Open Meetings Act. The case was voluntarily removed to federal court. The district court granted summary judgment for defendants on the First Amendment retaliation claim, dismissed the breach of implied contract claim for failure to state a claim under Oklahoma law, and dismissed the Open Meetings Act claim for lack of standing. Trant then appealed to the Tenth Circuit.

The Tenth Circuit first addressed the summary judgment on the First Amendment retaliation claims. Trant asserted that he was terminated for statements made by him and his attorney threatening to reveal information to authorities regarding the grand jury investigation of the prior scandals. The Tenth Circuit applied the Garcetti/Pickering analysis and concluded that, because the Board had several legitimate reasons for terminating him and would have terminated him regardless of whether the protected statements were made, Trant did not meet his burden and summary judgment for the Board was appropriate.

Trant had also alleged that three other people took retaliatory actions against him because of his protected speech. However, the Tenth Circuit analyzed each individual and determined that no impropriety occurred.

Next, the Tenth Circuit evaluated Trant’s claims regarding the violation of the Open Meetings Act. He  sought a declaratory judgment that his termination was invalid because of the Board’s failure to comply with the Open Meetings Act. On this point, the Tenth Circuit reversed the dismissal and remanded the case to the district court to determine whether Oklahoma waived its immunity from liability.

The Tenth Circuit affirmed the district court’s grant of summary judgment on the First Amendment retaliation claims, affirmed dismissal of the breach of implied contract claims, and reversed and remanded the dismissal of the Open Meetings Act claims.

Tenth Circuit: No First Amendment Violation for Non-Mandatory Attendance Order

The Tenth Circuit Court of Appeals issued its opinion in Fields v. City of Tulsa on Thursday, May 22, 2014.

Paul Fields was a captain in the Tulsa, Oklahoma police department (TPD). At the time of the events in question, Captain Fields commanded 26 officers and five supervisors. The chain of command above him was Major Julie Harris, Deputy Chief Webster, and Chief Jordan. After the FBI reported a threat against Tulsa’s Islamic Society, TPD provided protection for the mosque and the school next door. The Society decided to host a “Law Enforcement Appreciation Day” on March 4, 2011, to thank law enforcement for its protection during the threat, and distributed a flyer offering refreshments, mosque tours, and presentations about Islam upon request. The event was not mandatory but RSVPs were requested. When there were no RSVPs by February 17, Major Harris forwarded an email from Webster ordering each shift to send two officers and a supervisor or commander to the event.

Fields responded with an email to his lawyer, Webster, Harris, Jordan, and several of his subordinates, indicating that he would not follow the directive to attend the event and that he felt the requirement to attend the Society event violated his civil rights. Webster responded the following day, noting that the Islamic Society was going to great pains to host the event, Fields was not himself required to attend because he could order his subordinates to attend, and if he continued with his refusal, Fields would be subject to discipline. Fields responded that he had conferred with his counsel and would not attend. He also refused to order subordinates to attend. He was then served with discipline papers transferring him to another division and stating that he would be investigated by TPD Internal Affairs.

Fields filed a complaint, naming Webster as the only defendant, but subsequently amended it to include the City of Tulsa and Chief Jordan. Fields alleged violations of his First Amendment right to free exercise of religion, the Establishment Clause, his right to free association, and the Equal Protection Clause. Fields sought damages, a declaration that his rights had been violated, an injunction prohibiting the enforcement of the policies that led to his punishment, and the expungement from his personnel file of all references to the incident. After some litigation, the district court granted summary judgment for defendants, and Fields appealed to the Tenth Circuit.

First, the Tenth Circuit evaluated Fields’ claim that defendants violated his right to free exercise of religion because of the attendance order. However, Fields was not personally required to attend the Society program — he could have ordered a subordinate to attend in his place — therefore his rights were not violated. Because the attendance order did not violate Fields’ right to free exercise of religion, he was rightly subjected to punishment for his refusal to comply with the attendance order: “An invalid religious objection to an order that does not burden your free exercise of religion does not immunize you from punishment for violation of the order.”

Next, the Tenth Circuit evaluated Fields’ Establishment Clause argument. Fields claimed that the attendance order constituted an official endorsement of Islam by TPD. But the Tenth Circuit responded that Fields’ interpretation was unreasonable given the history, purpose, and context of the order. The Tenth Circuit then analyzed Fields’ free association violation claims, and rejected them because the attendance order did not require Fields to associate with the Islamic Society; he was not required to attend at all. The Tenth Circuit likewise rejected Fields’ claim of violation of the Equal Protection Clause, noting that Fields raised essentially the same arguments for his free exercise claim.

The judgment of the district court was affirmed on all counts.

Recent Colorado Cases Broaden Independent Contractor versus Employee Considerations

Mike-Schreiner_WEBBy Michael Schreiner

Two recent Colorado Supreme Court cases, Industrial Claims Appeals Office v. Softrock Geological Services, Inc., 2014 CO 30, No. 12SC501 (May 12, 2014) and its companion Western Logistics, Inc. v. Industrial Claims Office2014 CO 31, No. 12SC911 (May 12, 2014), clarify that the determination of whether an individual is an independent contractor or employee for purposes of unemployment tax liability is based on the “totality of the circumstances” and not the rigid application of the nine-factor test set forth in C.R.S. § 8-70-115(1)(c).

Under the Colorado Employment Security Act (CESA), employers are required to pay unemployment taxes on wages paid to employees but not on payments made to independent contractors. A division of the Industrial Claims Appeal Office (ICAO) routinely audits businesses to determine whether a business is classifying its employees appropriately and collecting and submitting the correct amount of tax. Under CESA, an employer can prove that an individual is an independent contractor by demonstrating that (1) the individual is free from the employer’s control and direction, and (2) the individual is “customarily engaged in an independent trade, occupation, profession or business related to the service performed.” C.R.S. § 8-70-115(1)(b).

Alternatively, under C.R.S. § 8-70-115(1)(c), an employer could submit a written document signed by both the employer and the individual that meets nine conditions. These conditions are that the employer will not do any of the following:

  1. Require the individual to work exclusively for the person for whom services are performed, except that the individual may choose to work exclusively for the said person for a finite period of time specified in the document;
  2. Establish a quality standard for the individual, except that the employer can provide plans and specifications regarding the work but cannot oversee the actual work or instruct the individual as to how the work will be performed;
  3. Pay a salary or hourly rate but rather a fixed or contract rate;
  4. Terminate the work during the contract period unless the individual violates the terms of the contract or fails to produce a result that meets the specifications of the contract;
  5. Provide more than minimal training for the individual;
  6. Provide tools or benefits to the individual, except that the materials and equipment may be supplied;
  7. Dictate the time of performance, except that a completion schedule and a range of mutually agreeable work hours may be established;
  8. Pay the individual personally, except for making checks payable to the trade or business name of the individual; and
  9. Combine the employer’s business operations in any way with the individual’s business, but instead maintains such operations as separate and distinct.

In Softrock, ICAO held that an individual was an employee because he provided services only to the employer during the period in question and therefore he did not have an independent trade or business. The Colorado Court of Appeals reversed, holding that ICAO incorrectly relied on a single factor. Instead, the court of appeals found that ICAO should have determined whether the individual was an employee by considering the nine factors set forth in C.R.S. § 8-70-115(1)(c).

The Colorado Supreme Court agreed with the court of appeals that the there is no single factor test and that the nine factors should be considered. However, the supreme court found that the nine factors required to be set forth in a document are not exclusive, but rather a fact-finder should also consider “the dynamics of the relationship between the employer and the putative employee and should not be limited to only considering nine factors.” According to the court, it would also be appropriate to consider such factors as “whether the putative employee maintained an independent business card, listing, address or telephone; had a financial investment such that there was a risk of suffering a loss on the project; used his or her own equipment on the project; set the price for performing the project; employed others to complete the project; and carried liability insurance.”

The court also held that the fact that the putative employee did not provide services to another does not conclusively establish that the individual is an employee. Rather, the determinative issue is “whether the putative employee chose to work for another in the field, regardless of, among other things, the intent of the parties, the number of weekly hours the putative employee actually worked for the employer, or whether the putative employee even sought other work in the field.”

The decision in Softrock means that the determination of whether an individual is an independent contractor or an employee for purposes of collecting unemployment compensation tax is no longer limited to the application of the nine factors set out in C.R.S. § 8-70-115(1)(c), or that the alternative single factor test factor test is dispositive. Instead, an employer can present additional information beyond the nine factors to establish the relationship. Further, the fact that an individual provides services only to one business does not conclusively establish that the individual is an employee. Rather, it is appropriate to determine the motivation of the individual and the circumstances surrounding the individual’s actions. In sum, a fact-finder will be required to look at the totality of the circumstances surrounding the relationship to determine whether a service provider is an employee or an independent contractor.

Michael Schreiner is a senior litigator at Caplan and Earnest LLC. His practice focuses on employment matters, employment-related litigation, commercial litigation and public education. He previously worked in the Colorado’s attorney general’s office, Colorado State University and the University of Colorado. He may be reached at mschreiner@celaw.com.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Colorado Supreme Court: Determination Regarding Employee or Independent Contractor Status Must Be Made on Case-by-Case Basis

The Colorado Supreme Court issued its opinion in Industrial Claim Appeals Office v. Softrock Geological Services, Inc. on Monday, May 12, 2014.

Colorado Employment Security Act—Employment Law.

The Supreme Court held that there is no dispositive single factor or set of factors to determine whether an individual is an independent contractor under the Colorado Employment Security Act. The question of whether an individual is “customarily engaged in an independent trade, occupation, profession, or business related to the service performed” can be resolved only by applying a totality of the circumstances test that evaluates the dynamics of the relationship between the putative employee and the employer. Therefore, the Court agreed with the court of appeals that several factors must be analyzed to make the determination, but disagreed that there was a set of defining factors. The judgment was affirmed and the case was remanded with directions.

Summary and full case available here.

Colorado Supreme Court: Totality of the Circumstances Must Be Considered to Determine Employment Status

The Colorado Supreme Court issued its opinion in Western Logistics, Inc. v. Industrial Claim Appeals Office on Monday, May 12, 2014.

Colorado Employment Security Act—Employment Law.

The Supreme Court held that there is no dispositive single factor or set of factors to determine whether an individual is an independent contractor under the Colorado Employment Security Act. The question of whether an individual is “customarily engaged in an independent trade, occupation, profession, or business related to the service performed” can be resolved only by applying a totality of the circumstances test, as laid out in Industrial Claim Appeals Office v. Softrock Geological Services, Inc., 2014 CO 30. The judgment was reversed and the case was remanded with directions.

Summary and full case available here.

Colorado Court of Appeals: Multi-Factor Approach Applied to Determine Whether Workers were Employees or Independent Contractors

The Colorado Court of Appeals issued its opinion in Visible Voices, Inc. v. Industrial Claim Appeals Office on Thursday, May 8, 2014.

Unemployment Compensation Tax Liability—Definition of “Employment.”

Visible Voices, Inc. (Visible) provides “computer-assisted realtime translation” (CART) services under contracts with clients. It supplies clients with “CART providers, or captionists, who perform live word-for-word speech-to-text translation for the deaf and hearing impaired.” Visible entered into agreements with thirteen individuals (workers) to provide CART services to Visible’s clients as independent contractors.

The Division of Employment and Training (Division) issued a liability determination, concluding that the workers’ services for Visible amounted to covered employment and that Visible was required to pay unemployment compensation taxes on those services. On appeal, a hearing officer determined the workers were independent contractors. The Industrial Claim Appeals Office (Panel) upheld the hearing officer’s determination that the workers were free from Visible’s control and direction, but remanded for further findings as to whether the workers were customarily engaged in an independent trade or business providing CART-related services.

On remand, a different hearing officer affirmed the original determination. The (Panel) overturned this hearing officer’s decision as to eleven of the thirteen workers, finding that these workers were not customarily engaged in independent businesses related to the CART services and therefore were engaged in covered employment. Visible appealed.

CRS § 8-70-115(1)(b) defines covered employment for unemployment tax liability purposes. To establish that a worker is customarily engaged in an independent trade or business related to the services performed, a putative employer must show that the worker is engaged in a separate business venture, other than the provision of services for the putative employer.

The Court of Appeals concluded that a multi-factor approach to determining whether a worker is customarily engaged in an independent trade, occupation, profession or business, as enunciated in Softrock Geological Services, Inc. v. Industrial Claim Appeals Office, 2012 COA 97, ¶ 10 (cert. granted March 25, 2013), is the standard to be applied. In Softrock, the Panel focused almost exclusively on whether the workers performed CART services for others besides Visible.

The Court affirmed the portion of the Panel’s order determining that two of the thirteen workers were independent contractors and not in covered employment with Visible. However, the Court found that evidence in the record supported the hearing officer’s determination that the eleven workers in question were customarily engaged in independent businesses related to the services provided by Visible. Accordingly, the remainder of the order was set aside and remanded with instructions to reinstate the hearing officer’s determination that the remaining eleven workers were also not in covered employment with Visible.

Summary and full case available here.

Colorado Court of Appeals: Time Spent as Volunteer Firefighter Counts as Employment for Workers’ Comp Purposes

The Colorado Court of Appeals issued its opinion in City & County of Denver v. Industrial Claim Appeals Office on Thursday, May 8, 2014.

Firefighter—Cancer—Employment—Volunteer—Training—Workers’ Compensation—Home Rule Municipality.

Claimant is a first-grade firefighter for the Denver Fire Department. He was hired by Denver on October 1, 2004. Before taking his oath of office as a firefighter in February 2005, claimant completed a seventeen-week course at the Rocky Mountain Fire Academy as a probationary firefighter for Denver. Claimant also garnered four years’ experience as a volunteer firefighter and emergency medical technician for the Elbert Fire Protection District before entering the fire academy. On February 12, 2010, claimant was diagnosed with chronic myelogenous leukemia. He filed a claim for workers’ compensation benefits under CRS § 8-41-209 for his cancer treatments, invoking the statute’s presumption that certain cancers contracted by firefighters with five or more years of service are compensable occupational diseases. The administrative law judge (ALJ) found in favor of claimant and the Industrial Claim Appeals Office (Panel) agreed. The Court of Appeals affirmed.

On appeal, Denver contended that the ALJ and Panel misinterpreted CRS § 8-41-209(1) by including in the length of claimant’s “employment as a firefighter” both (a) the entire time claimant served as volunteer firefighter and (b) his time training at the fire academy. It argued that it did not “employ” claimant as a firefighter, within the meaning of § 8-41-209(1), until he took his oath of office as a firefighter in February 2005. However, the definition of “employee” set out in the Workers’ Compensation Act expressly includes “all members of volunteer fire departments.” By including volunteer firefighters in the definition of “employee,” the legislature made clear its intent that injuries sustained by volunteer firefighters in the course and scope of their volunteer work be compensable under the Act. Accordingly, the Panel did not err in finding that length of firefighting service under § 8-41-209 should begin to run from the date on which a volunteer firefighter fights his or her first actual or training fire, including time spent at the fire academy.

Denver also contended that its status as a home rule municipality gives it the right and authority to define “firefighter” and “probationary firefighter” as it sees fit. The scope of “employment as a firefighter” under the firefighter cancer presumption statute and workers’ compensation benefits are considered a matter of state-wide concern, which a home rule municipality may not supersede.

Summary and full case available here.

HB 14-1383: Increasing Required Number of Designated Healthcare Providers for Workers’ Compensation Treatment

On April 16, 2014, Rep. Angela Williams and Sen. Lois Tochtrop introduced HB 14-1383 - Concerning the Required Number of Physicians that Must be Provided to an Injured Employee for Selection of a Treating Physician in Workers’ Compensation CasesThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Current law requires an employer or workers’ compensation insurer to provide a list of at least two physicians or two corporate medical providers or one physician and one corporate medical provider to an injured employee from which to select a treating physician. The bill changes that number to four physicians and corporate medical providers.

Current law states that if there are fewer than four physicians or corporate medical providers within 30 miles of the employer’s place of business, the employer or insurer may instead designate one physician or one corporate medical provider. The bill adds an exemption for rural areas where there are more than three, but fewer than nine physicians or corporate medical providers within 30 miles of the employer’s place of business, the employer or insurer may instead designate two physicians or two corporate medical providers or a combination of the providers.

The bill was approved by the House on April 24. The Senate State Veterans and Military Affairs Committee approved the bill on April 28. On May 2 the bill was approved on 2nd Reading in the Senate.

Since this summary, the bill passed 3rd Reading in the Senate.