A retiree supplemented his income by delivering and transferring vehicles to and from automobile dealerships as the need arose. If a dealership did not have a vehicle a customer wanted, it would try to locate one at another dealership. The dealership would use drivers to retrieve the vehicle. Two drivers would go on each trip. If payment to a driver was more than $600, the dealership would provide the driver with a 1099 for income tax purposes.
The dealership did not have any rules that drivers had to follow. Drivers could stop when they wanted and could choose their route. Drivers were not required to deliver the vehicles by a set time.
The retiree's name was on a list of drivers willing to take trips. The retiree was called and asked to obtain a pickup truck from another state. He agreed and met with a manager of the dealership to obtain information about the truck, as well as insurance documents, documents to enable him to transfer title, a dealer tag for the truck and directions to the out-of-state dealership.
The retiree called a friend, who was also on the list of drivers, to accompany him on the trip. He picked up the truck, and while he was driving back to the dealership, the retiree was in a collision with another vehicle. He suffered serious injuries and sought workers' compensation benefits.
The trial court held that the retiree was entitled to benefits because he was an employee of the dealership. The dealership appealed.
Was the trial court correct in finding the retiree was an employee?
A. Yes. The dealership maintained control over the retiree by supplying him with a car and insurance.
B. Yes. The parties considered their relationship to be that of an employer and employee.
C. No. The dealership only controlled the retiree by directing him to what he was ultimately to accomplish--the transfer of a specific truck.
How the court ruled: C.
The Alabama Court of Civil Appeals held that the worker was an independent contractor and not an employee of the dealer, so he was not entitled to benefits. Susan Schein Chrysler Dodge, Inc. v. Rushing, No. 2091112 (Ala. Civ. App. 01/28/11).
In determining whether an employer-employee relationship exists, courts look to whether the purported employer has reserved the right to control the manner in which the worker performs his duties. Here, the retiree could have declined the transfer. The retiree chose his route and the individual to travel with him. He was free to make any stops along the way. Additionally, he never applied for a job with the dealership and did not complete income tax withholding forms, and there was no "employment" from which he could have been terminated. He also had no scheduled work hours, health insurance, vacations or holidays.
A is incorrect. The court said that the retiree's name was chosen from a list of possible drivers, and after the trip was complete, the parties had no further obligation to each other.
B is incorrect. The court said that the evidence showed that before the accident, neither party considered there to be an employer-employee relationship.
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March 3, 2011
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