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Western Logistics, Inc. v. Industrial Claim Appeals office of State

Supreme Court of Colorado, En Banc

May 12, 2014

Western Logistics, Inc. d/b/a Diligent Delivery Systems, Petitioner:
v.
Industrial Claim Appeals Office of the State of Colorado; and Division of Employment and Training, Employer Services -- Integrity/Employer Audits, Respondents:

Certiorari to the Colorado Court of Appeals. Court of Appeals Case No. 11CA2461.

SYLLABUS

The supreme court holds that for the purpose of determining if an individual is an independent contractor under the Colorado Employment Security Act, whether an individual is " customarily engaged in an independent trade, occupation, profession, or business related to the service performed" is a question of fact that can only be resolved by applying a totality of the circumstances test, as laid out in Industrial Claim Appeals Office v. Softrock Geological Services, Inc., 2014 CO 30.

Attorneys for Petitioner: Sherman & Howard, LLC, Heather Fox Vickles, Matthew M. Morrison, Denver, Colorado.

Attorneys for Respondents: John W. Suthers, Attorney General, John A. Lizza, First Assistant Attorney General, Tricia A. Leakey, Assistant Attorney General, Alice Q. Hosley, Assistant Attorney General, Denver, Colorado.

Attorney for Amicus Curiae Colorado Motor Carriers Association: Wheeler Trigg O'Donnell, LLP, Mark T. Clouatre, Denver, Colorado.

OPINION

BOATRIGHT, JUSTICE.

[¶1] In this case, we consider when, under the Colorado Employment Security Act (" CESA" ), § § 8-70-101 to 8-82-105, C.R.S. (2013), an individual is an independent contractor

Page 551

as opposed to an employee. Under section 8-70-115(1)(b), C.R.S. (2013), an individual may be classified as an independent contractor if the employer can prove that the individual is " free from control and direction in the performance of the service, . . . and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed."

[¶2] Petitioner, Western Logistics, Inc., d/b/a Diligent Delivery Systems (" Diligent" ), challenges the court of appeals' decision affirming an Industrial Claim Appeals Office (" ICAO" ) panel's decision that certain individuals were employees rather than independent contractors under section 8-70-115. W. Logistics, Inc. v. Indus. Claim Appeals Office, 2012 COA 186. The court of appeals affirmed the ICAO panel's decision on the grounds that the individuals were not simultaneously providing services for others in the field. Id. at ¶ ¶ 14-19. The court of appeals also determined that the individuals were not free from Diligent's control and direction. Id. at ¶ ¶ 30-34.

[¶3] We disagree with the court of appeals. Whether an individual worked for another is not dispositive of whether the individual was engaged in an independent business. Indus. Claim Appeals Office v. Softrock Geological Servs., Inc., 2014 CO 30, ¶ 18. Rather, as we held in Softrock, determining whether an individual is an employee requires an expansive inquiry into the dynamics of the relationship between the putative employee and the employer. Id. at ¶ 2. Because we believe the independent trade or business issue and the control and direction issue may be related, we do not reach the control and direction issue. Thus, we reverse the judgment of the court of appeals and remand the case to that court with directions to vacate the portion of its decision that addresses the control and direction issue and to return the case to the ICAO for additional proceedings consistent with this opinion.

I. Facts and Proceedings Below

[¶4] Diligent is engaged in the auto-parts delivery business. The company handles all of the delivery logistics for its clients, meaning that it provides a delivery truck and driver for its clients' jobs. Diligent orchestrates the deliveries bye using a network of ...


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