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SCI, Inc. v. Director, Dep't of Workforce Servs.

Court of Appeals of Arkansas, Division III

September 17, 2014

SCI, INC., APPELLANT
v.
DIRECTOR, DEPARTMENT OF WORKFORCE SERVICES, APPELLEE

APPEAL FROM THE ARKANSAS BOARD OF REVIEW, No. 2013-BR0001-EC.

Catlett Law Firm, PLC, by: Christian C. Michaels, for appellant.

Phyllis A. Edwards, for appellee.

GLADWIN, C.J., and WOOD, J., agree.

OPINION

WAYMOND M. BROWN, Judge.

Appellant appeals from the Arkansas Board of Review's (Board) decision finding that it is a covered employer for unemployment insurance tax purposes. On appeal, appellant argues that (1) there was not substantial evidence to support the Board conclusion that the worker was not free from appellant's control and direction in connection with the services performed by the worker, and (2) the Board erred in finding that the relationship between appellant and the claimant constituted covered employment. We affirm.

Page 59

At some point in time, Sarah Miller filed a claim for unemployment benefits. In a letter dated April 12, 2012, the Department of Workforce Services (Department) advised appellant of the Department's determination that Miller, and any other similarly situated person, was appellant's employee for unemployment insurance purposes. Accordingly, the Department advised appellant that it was subject to unemployment taxes. Appellant responded in a letter dated April 30, 2012, disagreeing with the Department's determination and timely requesting a determination of coverage with respect to itself.

On November 15, 2012, the Agency Administrative Review Office conducted a telephone hearing on behalf of the Director of the Department. Testifying for appellant, Peter Fidopiastis, appellant's legal counsel, described appellant's services as " back-office support to logistics companies" in which it ensures that the " owner/operator, is paid appropriately, has access to certain benefits through [their] third-party vendor relationships," [1] and ensures that the " relationship between the independent contractor and the person they are providing delivery services to runs smoothly." He testified that Miller, an owner/operator, delivered for Corporate Transit of America (CTA), one of appellant's clients.

Speaking generally, Fidopiastis's testimony was that appellant did not arrange for deliveries, did not have facilities as most of its work was completed by telephone and/or computer, and did not have employees or locations in Arkansas. If an owner/operator didn't comply with a client's requests--whether for specific contractual requirements such as a background check or specific day-to-day requirements such as an identification badge or t-shirt--the owner/operator " just wouldn't be able to work" for that client. However, the owner/operator could still work for another of appellant's clients. There was a ten-day notice-of-termination-of-employment requirement contained in appellant's ninety-day revolving contract with its owner/operators, of which a violation by either party could result in a breach of contract lawsuit.

As to Miller specifically, Fidopiastis's testimony was that appellant had no communication with Miller on a daily or weekly basis, did not have exclusive use of Miller's delivery services, and did not set Miller's daily schedule. Appellant did not negotiate with Miller for the price of her services as Miller negotiated her own service prices with CTA. Miller would not be paid for her services unless she invoiced appellant's client. Appellant would only go after its client for payment of administrative fees, never Miller.

Though he asserted that appellant did not physically advertise in Arkansas, he did state that appellant had a relationship with courierboard.com, which advertised for it, and such advertising " probably would be shown in Arkansas." [2] He acknowledged that Miller was provided a badge with appellant's name on it. Finally, he asserted that appellant would be able to operate without couriers.

Testifying for the Department, Debbie Carter, DWS Program Operations Manager, testified that the Department stood by its April ...


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