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A driver was hired by a South Carolina expedited delivery company to drive a delivery van. A transportation logistics company contracted with the delivery company for a delivery of parts from South Carolina to Wisconsin. The driver made the delivery in Wisconsin. While driving back to South Carolina, he was killed in an automobile accident. The driver's dependents filed a workers' compensation claim.

The logistics company's general manager said that its drivers only made deliveries within 100 miles. The logistics company subcontracted longer trips to companies such as the delivery company. The logistics company paid the delivery company a set fee per mile one way. It used the delivery company's services two to three times per month. It claimed that once a delivery was made its agreement with the delivery company ceased. The general manager said that such deliveries were an important and necessary part of the logistics company's business.

A workers' compensation commissioner found the logistics company was the driver's statutory employer. The logistics company appealed to the Workers' Compensation Commission. The commission found the logistics company was the driver's statutory employer during his trip to Wisconsin, but not on the return trip to South Carolina. The uninsured employers' fund appealed.

Was the commission correct in finding the driver was not a statutory employee?

A. Yes. The logistics company had a lack of control over the driver at the time of his accident.

B. No. The delivery the driver made was an important and necessary part of the logistics company's business.

C. Yes. Any employment relationship ended when the driver completed the delivery in Wisconsin.

How the court ruled: B. The South Carolina Court of Appeals held that the driver was a statutory employee of the logistics company. Collins v. Seko Charlotte, No. 5022 (S.C. Ct. App. 08/15/12).

The court explained that once the commission determined that the driver was an employee of the logistics company's subcontractor, it should have looked to whether the driver's activities were part of the logistics company's trade, business, or occupation. This requirement is met if the activity is an important part of the business or trade, is a necessary, essential, and integral part of the business, or was previously performed by the employee of the business.

The logistics company's general manager admitted that deliveries like the one the driver made were an important and necessary part of the company's business. Therefore, the driver was a statutory employee of the logistics company during his entire trip.

A is incorrect. The court explained that in finding the logistics company had a lack of control over the driver on his return trip, the commission improperly used the employee/independent contractor test to determine whether the driver was a statutory employee.

C is incorrect. The court said that the driver was a statutory employee of the logistics company during his entire trip.

Editor's note: This feature is not intended as instructional material or to replace legal advice.

October 11, 2012

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