February 21, 2019

Archives for May 14, 2014

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.

6th Annual Sean May Memorial Run — Saturday, May 17, 2014

Sean May

Sean May

On Saturday, May 17, 2014, the Seventeenth Judicial District Access to Justice Committee and the Colorado Bar Association will present the 6th Annual Sean May Memorial Run at Barr Lake State Park, 13401 Piccadilly Road in Brighton. There will be three races on Saturday: a nine mile run, a 5K run, and a family fun run/walk.

The run is held each year in honor of Sean May, a deputy district attorney from the Seventeenth Judicial District who championed personal responsibility, including treating victims, the community, defendants, and the courts with dignity and respect. During his seven years of service in Adams County, May volunteered for the Child Victim Unit, where he pursued justice for children who had been physically and/or sexually abused. May died on August 27, 2008, when he was shot in his backyard when returning from work. At the time of his death, he was responsible for training and supervising new prosecutors.

Proceeds from the run will benefit Access to Justice programs and activities, as well as May’s family. Past proceeds have benefitted the Self-Help Resource Center at the Adams County Justice Center, which provides computers, information, and staff to help people with legal and procedural questions. Since its opening on January 5, 2011, the Self-Help Resource Center has aided hundreds of people, and it serves as a model of efficiency for other agencies.

Registration is available online, or participants can register on race day at Barr Lake State Park.

Tenth Circuit: Unpublished Opinions, 5/14/2014

On Wednesday, May 14, 2014, the Tenth Circuit Court of Appeals issued no published opinion and three unpublished opinions.

United States v. Hernandez

Wheeler v. Falk

Porter Bridge Loan Company, Inc. v. Northrop

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Bills Regarding Recall Elections, Foreclosure Cure Funds, Protecting Rape Victims, and More Signed

The 2014 Legislative Session ended last Wednesday, but Governor Hickenlooper continues to sign legislation that passed through both houses this term. To date, the governor has signed 190 bills and vetoed two. He is expected to sign several more bills in the coming days and weeks. Summaries of bills signed on Friday, May 9, 2014 and Monday, May 12, 2014 are provided here.

Friday, May 9, 2014

  • HB 14-1327 – Concerning Measures to Expand the Deployment of Communication Networks and, in Connection Therewith, Enacting the “Broadband Deployment Act” and Making an Appropriation, by Reps. Angela Williams & Carole Murray and Sens. Mark Scheffel & Lois Tochtrop. The bill, highly praised by the governor, sets statewide policy regarding deployment of broadband technology.
  • SB 14-158 – Concerning the Harmonization of Statutory Recall Election Provisions with the Recall Provisions in the State Constitution to Reflect the Manner in which Contemporary Elections are Conducted, and, in Connection Therewith, Aligning Circular Regulation and Petition Requirements with Initiative and Referendum Circulator and Petition Requirements, by Sens. Pat Steadman & Matt Jones and Rep. Dickey Lee Hullinghorst. The bill eliminates certain conflicts between the state and federal constitutions regarding recall elections and makes changes to the procedure for recall elections.
  • SB 14-160 – Concerning Removing Limitations on a Transitional Living Program for a Person with a Brain Injury, by Sen. Linda Newell and Rep. Dianne Primavera. Currently, Medicaid waiver recipients with traumatic brain injury can receive transitional living services for 6 to 12 months. The bill removes the time limit for the services.
  • SB 14-161 – Concerning the Modernization of Provisions of the “Uniform Election Code of 1992” that Ensure Voter Access for Eligible Electors and, in Connection Therewith, Reducing the Deadline by which a Voter Registration Application Must be Submitted via Certain Methods, Altering Procedures Pertaining to National Change-of-Address Searches, Allowing Emergency Ballots to be Obtained for Nonmedical Reasons, Amending Provisions Relating to Military and Overseas Voters, Increasing the Penalty for Providing False Residential Information, Making the Aiding or Abetting the Provision of False Residential Information a New Felony Offense, and Making and Reducing Appropriations, by Sens. Jessie Ulibarri & Mike Johnston and Rep. Dickey Lee Hullinghorst. The bill makes several changes to the state’s Uniform Election Code of 1992.
  • SB 14-165 – Concerning the Percentage at Which to Rate the Student Academic Growth Standard for the Purpose of Licensed Personnel Performance Evaluations in the 2014-15 Academic Year, by Sens. Mike Johnston & Andy Kerr and Reps. Carole Murray & Cherylin Peniston. The bill allows a local school board to determine what percentage, if any, of a teacher’s performance evaluation must be based on student academic growth.
  • HB 14-1034 – Concerning the Creation of a Wine Packaging Permit to Allow Certain Alcohol Beverage Licensees to Package Wine Produced by Another Manufacturer, and, in Connection Therewith, Making an Appropriation, by Rep. Angela Williams and Sen. Cheri Jahn. The bill allows licensed wineries to package wine produced by other wineries.
  • HB 14-1061 – Concerning Sentences Imposing Monetary Payments in Criminal Actions and, in Connection Therewith, Eliminating Prison Sentences for Persons who are Unable to Pay Criminal Monetary Penalties, by Rep. Joseph Salazar and Sen. Lucia Guzman. The bill changes procedures for criminal defendants who fail to pay monetary fines.
  • HB 14-1095 – Concerning the Colorado Bureau of Investigation’s Authority to Investigate Computer Crime, and, in Connection Therewith, Making an Appropriation, by Reps. Daniel Kagan & Bob Gardner and Sen. Linda Newell. The bill authorizes the CBI to investigate cyber crime.
  • HB 14-1101 – Concerning a Partial Business Personal Property Tax Exemption for Community Solar Gardens, by Rep. Max Tyler and Sen. Gail Schwartz. Beginning in 2015, the bill exempts electricity generated by a community solar garden from property tax.
  • HB 14-1130 – Concerning the Disposition of Moneys Charged to Borrowers for Costs to be Paid in Connection with Foreclosure, by Rep. Beth McCann and Sen. Jessie Ulibarri. The bill establishes procedures for handling cure statements in foreclosure and directs that overpayments of funds paid to cure a debt in foreclosure must be returned to the borrower.
  • HB 14-1162 – Concerning Protection of the Victim of a Sexual Assault in Cases where a Child was Conceived as a Result of the Sexual Assault, and, in Connection Therewith, Making Legislative Changes in Response to the Study by and the Report of the Recommendations from the Task Force on Children Conceived Through Rape, by Rep. Lois Landgraf and Sen. Morgan Carroll. The bill adds several protections for victims of sexual assault who conceive children as a result of the assault, including allowing termination of the aggressor’s parent-child relationship even when no conviction occurred and requires victims and children to be referred to by their initials in termination proceedings.
  • HB 14-1181 – Concerning the Sunset Review of the Nurse-Physician Advisory Task Force for Colorado Health Care and, in Connection Therewith, Continuing the Task Force Through September 1, 2020, by Rep. Sue Schafer and Sen. John Kefalas. The bill repeals the sunset of the Nurse Physician Advisory Task Force, which evaluates the medication prescribing authority of nurse practitioners.
  • HB 14-1266 – Concerning the Penalties for Certain Value-Based Offenses, and, In Connection Therewith, Reducing an Appropriation, by Reps. Beth McCann & Bob Gardner and Sens. Linda Newell & Steve King. The bill makes adjustments to the penalties of certain value-based crimes, such as criminal mischief, fraud by check, and others.
  • HB 14-1284 – Concerning Registration with the Department of Revenue of Distinguished License Plates Issued to Members of the Colorado General Assembly, by Reps. Max Tyler & Don Coram and Sens. Nancy Todd & Larry Crowder. The bill proscribes procedures for the Department of Revenue to use when issuing legislative license plates.
  • HB 14-1290 – Concerning an Addition to the Definition of “Other Outlet” to Enable the Operation of a Remotely Located Telepharmacy Outlet, by Rep. KC Becker and Sen. Ellen Roberts. The bill allows telepharmacy practices for patients who communicate remotely with pharmacy outlets and specifies rules related to telepharmacy practices.
  • HB 14-1291 – Concerning Authorizing a Charter School to Employ a School Security Officer by Contract to Carry a Concealed Handgun if the Person has a Valid Conceal Carry Permit, by Reps. Mike McLachlan & Stephen Humphrey and Sens. Scott Renfroe & Lois Tochtrop. The bill allows charter schools to employ armed security officers.
  • HB 14-1295 – Concerning Residential Mortgage Foreclosures, and, in Connection Therewith, Requiring a Single Point of Contact and Prohibiting Dual Tracking, by Rep. Beth McCann and Sen. Jessie Ulibarri. The bill, which generally applies to servicers of mortgage loans, amends residential foreclosure statutes.
  • HB 14-1307 – Concerning the Recategorization of Mineral County for the Purpose of Statutory Provisions Fixing the Salaries of County Officers, by Rep. Edward Vigil and Sen. Larry Crowder. The bill reclassifies Mineral County for the purpose of establishing salaries for certain officials.
  • HB 14-1312 – Concerning Efforts to Reduce the Number of Foreclosures in Colorado, and, In Connection Therewith, Continuing the Foreclosure Deferment Program, by Rep. Angela Williams and Sen. Jessie Ulibarri. The bill extends the Foreclosure Deferment Program until September 1, 2015.
  • HB 14-1319 – Concerning the Creation of an Outcomes-Based Funding Model for Higher Education, and, in Connection Therewith, Making and Reducing Appropriations, by Reps. Mark Ferrandino & Chris Holbert and Sens. Kent Lambert & Nancy Todd. The bill creates a new mechanism for allocating state funds to institutions of higher education.
  • HB 14-1329 – Concerning the Exemption of Certain Internet-Protocol-Enabled Services from Oversight by the Public Utilities Commission, and, in Connection Therewith, Making an Appropriation, by Reps. Angela Williams & Carole Murray and Sens. Andy Kerr & Mark Scheffel. The bill deregulates certain telecommunications products, including voice-over-internet-protocol, most long distance services, certain operator services, and more.
  • HB 14-1330 – Concerning an Update of Telecommunications Terminology for Intrastate Telecommuncations Services, by Rep. Angela Williams and Sen. Lois Tochtrop. The bill amends statutory terms used in telecommunications regulation.
  • HB 14-1331 – Concerning the Regulation of Basic Local Exchange Service as it Affects Effective Competition, and, in Connection Therewith, Making an Appropriation, by Reps. Angela Williams & Carole Murray and Sens. Jeanne Nicholson & Andy Kerr. The bill modifies the statutory framework for regulation of local phone service.
  • HB 14-1345 – Concerning Authority for the Department of Higher Education to Transfer Moneys Allocated to the Governing Board of an Institution of Higher Education Between the Governing Board’s Spending Authority for College Opportunity Stipends as a Result of Increases or Decreases in Student Enrollment at the Institution of Higher Education, by the Joint Budget Committee. The bill allows the Department of Higher Education to make certain limited monetary transfers.
  • HB 14-1354 – Concerning the Ability of a County Clerk and Recorder to Seek Judicial Review of Final Action by the Secretary of State Relating to Elections, by Reps. John Buckner & Bob Gardner and Sens. Irene Aguilar & Larry Crowder. The bill allows a county clerk and recorder to seek judicial review in district court of certain Secretary of State actions related to elections.

May 12, 2014

  • HB 14-1008 – Concerning the Authorization of the Colorado Water Resources and Power Development Authority to Make Loans to Private Entities for Purposes of Forest Health Projects, by Rep. Millie Hamner and Sen. Gail Schwartz. The bill, recommended by the Wildlife Matters Review Committee, allows the Colorado Water Resources and Power Development Authority to make loans to private entities for forest health projects.
  • HB 14-1010 – Concerning Corrections to Statutory Provisions Relating to the Prescribed Burning Program Administered by the Division of Fire Prevention and Control in the Department of Public Safety, by Rep. Millie Hamner and Sen. George Rivera. The bill changes naming of “prescribed burn managers” to “certified burners” and removes certified burners from the list of people who can be in supervisory roles at prescribed burns.
  • SB 14-164 – Concerning Aerial Firefighting Efforts Through the Division of Fire Prevention and Control in the Department of Public Safety, and, in Connection Therewith, Implementing Recommendations Made by the Division Regarding the Colorado Firefighting Air Corps, by Sens. Morgan Carroll & Steve King and Reps. Bob Gardner & Mike McLachlan. The bill directs the Division of Fire Prevention and Control to maximize its aerial firefighting capacity.

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

Kimbra Killin Appointed to Phillips County Court

On Tuesday, May 13, 2014, Governor Hickenlooper announced the appointment of Kimbra Killin to the Phillips County Court bench in the Thirteenth Judicial District. The appointment is effective May 30, 2014, upon the retirement of Hon. David O. Colver.

Ms. Killin currently is a partner at Colver, Killin & Sprague, LLP in Holyoke, where she practices in the areas of real estate, title work, agricultural issues, probate, estate planning, and entity formation. Prior to working at Colver, Killin & Sprague, she worked as a special county attorney for the Phillips and Sedgwick county departments of human services. She received her undergraduate degree from Regis University and her J.D. from the University of Denver Sturm College of Law.

Tenth Circuit: No Personal Jurisdiction When Only Plaintiff Had Contacts in Forum State

The Tenth Circuit Court of Appeals issued its opinion in Rockwood Select Asset Fund XI (6)-1, LLC v. Devine, Millimet & Branch on Tuesday, May 6, 2014.

Rockwood, a Utah company, was asked to loan money and required the borrower to obtain an opinion letter from its New Hampshire law firm, Devine, Millimet & Branch. The letter was picked up by someone and forwarded to Rockwood in Utah. Rockwood determined that the letter contained falsehoods and sued Devine in Utah federal court, but the suit was dismissed for lack of personal jurisdiction. Rockwood appealed the dismissal to the Tenth Circuit.

The Tenth Circuit evaluated Rockwood’s claim of specific personal jurisdiction to determine whether Utah law would allow service on Devine and, if so, whether service would deprive Devine of due process. Because Utah law allows service on Devine under its long-arm statute, the Tenth Circuit focused its attention on whether service of process would have deprived Devine of due process. Rockwood did not meet its burden of a prima facie showing that Devine’s connections with Utah were sufficient to establish personal jurisdiction. The dismissal of the district court was affirmed.

Tenth Circuit: Untimely Filed Petition Not Reviewable Due to Lack of Jurisdiction

The Tenth Circuit Court of Appeals issued its opinion in State of Utah v. Environmental Protection Agency on Tuesday, May 6, 2014.

Under the federal Clean Air Act, states are required to adopt programs that will reduce visibility-affecting air pollution emissions. The State of Utah submitted such a plan to the Environmental Protection Agency, but the agency partially rejected the state’s plan. The state and one of the affected companies, PacifiCorp, filed petitions for review. The parties all agreed that the Tenth Circuit had jurisdiction, but the Tenth Circuit disagreed.

The Clean Air Act requires an aggrieved party to file a petition to review within 60 days of the date on which the EPA’s action appears on the Federal Register. The agency’s rejection of the Utah plan appeared in the Federal Register on December 14, 2012, and Utah and PacifiCorp waited until March 21 and 22, 2013, to file petitions for review. The parties submitted four arguments to advance their cause that the petition was timely: (1) The 60-day deadline does not apply to grounds arising after the 60th day; (2) the EPA changed the promulgation date when it identified the deadline as March 23, 2013; (3) Filing after the 60th day is allowed under the “reopener doctrine”; and (4) denial of jurisdiction would be inequitable. The Tenth Circuit rejected each argument in turn.

As to the first argument, the Tenth Circuit noted that the exception does not apply because the “grounds” for the petitions lie in the EPA action published on December 14, 2012. For the second point, the EPA had neglected to include a statement regarding the parties’ 60-day deadline in its original rejection, so it stated on January 22, 2013, that aggrieved parties would have until March 25, 2013, to file a petition for review. The parties relied on this statement in error; the plain language of the EPA regulations required the EPA to explicitly change the promulgation date in the Federal Register, which it did not do. The Tenth Circuit declined to adopt the “reopener doctrine” and noted that the doctrine was inapplicable anyway. As to the fourth argument, the Tenth Circuit agreed that an inequity was created by the jurisdictional bar, but did not expand its jurisdiction to include hardships despite the inequity.

The petitions were dismissed for lack of jurisdiction.

Tenth Circuit: Unpublished Opinions, 5/14/2014

On Tuesday, May 13, 2014, the Tenth Circuit Court of Appeals issued three published opinions and six unpublished opinions.

Mata-Soto v. United States

Leo v. Garmin International, Inc.

United States v. Ceballos

Stouffer v. Trammell

United States v. Yankey

Bame v. Iron County

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.