The Illinois Appellate Court Ruled That An Employment Relationship Existed Between Trucker Driver And The Leasing Company Despite The Independent Contractor Status Given To The Driver In A Leasing Agr
The Appellate Court-1st District reversed the Commission’s holding that claimant-truck driver was not an employee of defendant’s leasing company, where a majority of the factors to be considered in making this determination, including the two most important ones-right to control the actions of the employee and the nature of the work performed by the employee in relation to the general business of the employer-indicated claimant was an employee. The fact defendant’s actions were often directed at ensuring compliance with federal regulations did not diminish the finding that it exercised control over claimant.
Claimant, an over-the-road truck driver, suffered several injuries when he fell while tightening the packing on a pumping mechanism in his truck. At the time of the injury, claimant was making a delivery for defendant, a company engaged in the business of delivering freight for various customers. Claimant and defendant had entered into an “Equipment Lease Agreement Between Independent Contractor and Carrier.” The lease referred to claimant as an independent contractor. Under the terms of the agreement, claimant leased his tractor to defendant, giving it “exclusive possession, control, and use for the limited purpose of complying with state and federal transportation law.” Claimant paid all the costs of operating the equipment including fuel, mileage, taxes and maintenance costs along with the costs of Workers’ Compensation insurance, unemployment insurance, Social Security and payroll tax deductions. Defendant provided insurance to claimant; however, the cost of such insurance was charged to claimant monthly at the actual cost for the policy in effect. Claimant testified that he owned his own semi-tractor, while defendant owned the trailers.
In a decision summarized at 7ILWCLB 1065, the Commission found claimant failed to provide an employment relationship between himself and defendant. The Circuit Court of Cook County confirmed the decision of the Commission.
The Appellate Court 1st-District reversed, finding that a majority of the factors to be considered in making this determination, including the two most important ones- right to control the actions of the employee and the nature of the work performed by the employee in relation to the general business of the employer-indicated claimant was an employee. The court found defendant exercised substantial control over claimant’s activities, for it required him to inspect his assigned tank trailer prior to starting a trip, it forbade him from carrying passengers and it instructed him regarding the type of fuel to buy, where to park and how to inspect and maintain equipment he needed, where he was going and what time to be there. Defendant required him to attend safety meetings, wear a uniform, shave and display a certain logo on his tractor. The court determined that this extensive list of circumstances where defendant would direct claimant’s behavior, coupled with claimant’s compliance, was strong evidence that defendant had the right to control claimant’s activities. Furthermore, the court explained that the fact defendant’s actions were often directed at ensuring compliance, with federal regulations did not diminish the finding that it exercised control over claimant.
As for the relative nature of claimant’s work in relation to the general nature of defendant’s business, the court noted that defendant’s business was hauling freight for various customers. Accordingly, defendant’s work was intimately related to defendant’s business.
Other factors favoring an employment relationship included defendant’s broad right to terminate the lease agreement immediately or with 30 days notice, defendant’s requirement that claimant wear a uniform and claimant’s long, continuous and exclusive relationship with defendant.
The court noted that only four factors pointed toward an independent contractor relationship; the lease the parties operated under referred to claimant as an independent contractor; defendant did no withhold income tax; claimant purchased occupational accident insurance on his own; and claimant received a set percentage of the gross revenue from each load he hauled. The court noted that the first three of these factors carried little weight.