Employment Status

The question of whether a worker is an employee under the Act is a jurisdictional fact, and the court on appeal must decide that issue based upon a de novo review of the record. Under this standard, the entire record is reviewed, evidence weighed and independent fact findings are made without deference to the fact findings or to the legal rulings made by the compensation court. Garrison v. Bechtel. Corp., 1995 OK 2, ¶8, 889 P.2d 273, 278.

Rules applicable to the secondary liability of general contractors are set out in 85 O.S. §314(3), formerly 85 O.S. §11(B)(2). For a discussion of this issue, click here.

1. The Employment Contract

Supreme Court Justice Yvonne Kauger succinctly and precisely stated the law of contracts which should be followed in making a trial court determination of whether or not the worker was an employee at the time of his injury.

An employer-employee relationship is created by contract, either express or implied, or by unequivocal acts of the parties recognizing the existence of the relationship . . . Every contract results from an offer and acceptance. An offer becomes a binding promise and results in a contract only when it is accepted. To constitute acceptance, there must be an expression of the intent to accept the offer, by word, sign, writing or act, communicated or delivered to the person making the offer or the offeror's agent. Generally, a contract is deemed to have been made where the final assent to the offer is given. The place where the contract is made is the controlling issue. To establish that an employment contract was entered into within Oklahoma, the employee must prove that an employment offer was made by the employer or its agent and that it was accepted by the employee in Oklahoma.

Garrison v. Bechtel Corp., 1995 OK 2, 889 P.2d 273

The term "employee" is defined in 85 O.S. § 312, [formerly 85 O.S. § 3(9)], in terms of who is not an employee. However, once the agreement is made to perform work, the relationship of the hiree to the employer can only be that of employee or independent contractor. Most of the reported cases therefore rely on Brown v. Burkett and Page v. Hardy for analysis of the facts in determining the type of relationship.

The contract can be express (one with the terms stated in words) or implied. In Macsuga v. Moreno, 2003 OK 24, 66 P.3d 409, the Court found an "implied" contract between and injured part-time helper/mechanic and the owner of a taxi service/garage. It held:

The existence and terms of an implied contract are manifested by conduct. 15 O.S. §133. "Implied contracts exist where the intention of the parties is not expressed, but the agreement creating the obligation is implied or presumed from their acts, where there are circumstances that show a mutual intent to contract." Jones v. University of Central Oklahoma, 1995 OK 138, 910 P.2d 987.

2. Place of Hiring

[A]ll the provisions of the Workers' Compensation Act . . . shall apply to employers and to employees, irrespective of where accident resulting in injury may occur, whether within or without the territorial limits of the State of Oklahoma, when the contract of employment was entered into within the State of Oklahoma . . . 85 O.S. §4

The Oklahoma Court of Civil Appeals overturned the trial court's denial of jurisdiction when the uncontradicted testimony of the worker established that when she called employer's safety officer from Oklahoma, he said "Of course, you have a job." The opinion stated:

¶13 A "contract is deemed to have been made where the final assent to the offer is given. The place where the contract is made is the controlling issue." [Garrison v. Bechtel] at 889 P.2d at 281(emphasis added)(footnotes omitted). "To establish that an employment contract was entered into within Oklahoma, the employee must prove that an employment offer was made by the employer or its agent and that it was accepted by the employee in Oklahoma." Id. (emphasis added.)

¶14 In General Electric Company v. Folsom, 1958 OK 279, 332 P.2d 950, Folsom, an Oklahoma resident, accepted through the mail an offer of employment in Indiana contingent upon Fulsom successfully passing the company's physical examination after arriving in Indiana, which he did. Folsom was later killed in an automobile accident in New Mexico. Folsom's widow filed a claim for death benefits in Oklahoma. The employer challenged Oklahoma's jurisdiction alleging the employment contract had been entered into in Indiana. The trial court awarded the widow the maximum death benefit. The supreme court sustained the award, holding that when an employee has accepted an offer while in Oklahoma, and the employer has instructed the employee to report for an initial out-of-state employment assignment with employment contingent upon completion of formalities at the out-of-state site, the effective date of employment relates back to, and is coincident with, his acceptance in Oklahoma of said company's offer. See also 2 A. Larson Workers' Compensation Law § 26.23 (1997)(Compensation protection does not need to wait for the completion of formalities once the claimant has achieved sufficient connection with the employment to bring him within the orbit of the risks of that employment).

¶15 In the matter before us, the authority of the Joplin safety officer to hire the claimant is not at issue, thus distinguishing Garrison v. Bechtel Corp., supra, and Skilstaf/Stafco, Inc. v. Burckhalter, 1996 OK CIV APP l49, 935 P.2d 403.

Alexander v. Transport Distribution Company, 1998 OK CIV APP 10, 954 P.2d 1247.

Truck driving and similar cases involve not only the determination of where final assent occurred but also whether the recruiting agent had hiring authority. In most cases the final assent will be given by the employee in Oklahoma, but the claimant must also prove that the out-of-state recruiter had authority to hire him. Proof could consist of the testimony of the claimant and the circumstances of the hiring or offer of employment. The credibility of the claimant is crucial, because the employer will generally make a sometimes self-serving denial of authority or assent or both. These fact finding decisions are usually within the sound discretion of the trial court, but the place of hiring determination is reviewed de novo on appeal.

Daleo, Inc. v. Edmonds, 1994 OK 122, 884 P.2d 544.
Garrison v. Bechtel Corp., 1995 OK 2, 889 P.2d 273 (the Supreme Court will decide independently based upon a de novo review of the record, without deference to the findings of fact or to the legal rulings made below, whether an employer-employee relationship existed in Oklahoma).
Driver Management, Inc. v. Miller, 1995 OK CIV APP 137, 908 P.2d 815 (truck driver called in Oklahoma was hired in Texas because evidence did not manifest the requisite final assent to a contract of employment until Claimant presented himself at employer's Texas facility and completed all required testing).

3. Independent Contractors

Whether a claimant seeking workers' compensation benefits is an employee or an independent contractor is a jurisdictional fact, which must be decided independently on appeal based upon a de novo review of the record. Duncan v. Powers Imports, 1994 OK 126, 884 P.2d 854.

Independent contractors and their employees are not employees of the general contractor that hired them; they are excluded from coverage under the policy of the general contractor.

The decisive legal test for determining whether a worker was acting as an employee or an independent contractor at the time of the accident is "whether the person for whom services are rendered has the right to control the details of the work or performance." Was claimant hired by the contractor "to work on a particular project according to his personal or unique methods, free from the owner's control and instruction, except as to the result or product?" Brown v. Burkett, 1988 OK 49, 755 P.2d 650.

Page v. Hardy, 1958 OK 283, 334 P.2d 782, is the leading Oklahoma Supreme Court case addressing the factors that distinguish employees from independent contractors. In making the determination of employment status, the trial court will consider these factors as a whole. No single factor is controlling.

Page v. Hardy Factors
1. the nature of the contract between the parties, whether written or oral;
2. the degree of control which, by the agreement, the employer may exercise on the details of the work or the independence enjoyed by the contractor or agent;
3. whether or not the one employed is engaged in a distinct occupation or business and whether he carries on such occupation or business for others;
4. the kind of occupation with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
5. the skill required in the particular occupation;
6. whether the employer or the workman supplies the instrumentalities, tools and the place of work for the person doing the work;
7. the length of time for which the person is employed;
8. the method of payment, whether by the time or by the job;
9. whether or not the work is part of the regular business of the employer;
10. whether or not the parties believe they are creating the relationship of master and servant; and
11. the right of either to terminate the relationship without liability.

Cases finding independent contractor status include:

3.1. Relative-Nature-of-Work Test

The essential item from the Page v. Hardy factors is number 3 according the Professor Larson; even more than the right to control the details of the work (factor 2). In his treatise he states:

The modern tendency is to find employment when the work being done is an integral part of the regular business of the employer, and when the worker, relative to the employer, does not furnish an independent business or professional service.
Larson, Workers' Compensation, Chapter 62.

3.2. Necessary and Integral Test

Effective August 26, 2011, this test has been legislatively addressed as follows:

In order for another employer on the same job as the injured or deceased worker to qualify as an intermediate or principal employer, the work performed by the immediate employer must be directly associated with the day to day activity carried on by such other employer's trade, industry, or business, or it must be the type of work that would customarily be done in such other employer's trade, industry, or business. 85 O.S. §314(1)

The employee of an uninsured independent contractor must prove that the work of his employer was necessary and integral to the business of the principal employer before he can establish secondary liability of the hirer pursuant to 85 O.S. §11B2. Bradley v. Clark, 1990 OK 73, 804 P.2d 425.

The Supreme Court has adopted a three-tier test to determine a principal employer's status:

In Bradley v. Clark, we applied the "necessary and integral" test for determining a hirer's status as a §11 employer and said that if the contract work is specialized, it is not, as a matter of law, a part of the hirer's trade or business. If it is determined that the contract work is non-specialized, then the inquiry shifts to a comparison of the hirer's trade or business and the contract work to see if the latter can be considered part of the hirer's trade or business. That is, we look to whether the principal hirer was engaged, at the time of the injury, in the trade or occupation of the hired contractor. If the task performed by the independent contractor is beyond the skill, training, expertise or capability of the hirer's employees, it must be regarded as beyond the scope of the hirer's regular maintenance activities.
Parsley v. Rickey, 1998 OK 47, 962 P.2d 1269.

Cases applying the test include: Bradley v. Clark, 1990 OK 73, 804 P.2d 425 (company engaged to "kill" oil well by operator of well); Parsley v. Rickey, 1998 OK 47, 962 P.2d 1269 (builder of hog barns for property owner); Parret v. Unicco Service Company, 2005 OK 54, 127 P.3d 572 (replacing emergency lights at Dayton Tire plant); Hammock v. U.S., 2003 OK 77, 78 P.3d 93 (vendor for military PX); Powell v. Nortex Investigation Services, 1997 OK CIV APP 63, 947 P.2d 614 (plant security guard); Shackelford v. American Airlines, Inc., 2000 OK CIV APP 18, 998 P.2d 646 (injured while installing "blackout curtains" in a newly constructed parts inspection booth at an aircraft maintenance facility).

4. Illegal and Undocumented Workers

Illegal workers are not excluded from coverage. The injured illegal worker is entitled to medical treatment, temporary total and permanent total compensation. However, certain benefits may not be available, such as vocational rehabilitation, treatment by a specific physician due to his inability to stay in this country and protection from retaliatory discharge. Cherokee Industries, Inc. v. Alvarez, 2004 OK CIV APP 15, 84 P.3d 798; Lang v. Landeros, 1996 OK CIV APP 4, 918 P.2d 404. See also, Bartlett Collins v. Alvarado, COCA, Div IV, Case No. 105,106 (unpublished).

The Immigration Reform and Control Act of 1986 (IRCA), which imposes criminal penalties if a worker tenders fraudulent documents to an employer, is not a defense to the payment of benefits. Cherokee Industries, Inc. v. Alvarez, supra.

If an illegal worker was covered by a workers' compensation insurance policy, then pursuant to 85 O.S. §65.2, the employer is estopped from denying that the worker was in its employ at the time of the accident. Cherokee Industries, Inc. v. Alvarez, id.

For vocational rehabilitation versus job placement as it relates to illegal or undocumented workers, see, Sanchez v. Apex Industries, COCA, Div. 4, Case No. 103,639 (unpublished).

On November 1, 2007, most of the provisions of the Oklahoma Taxpayer and Citizen Protection Act of 2007 became effective. It appears that the Act will not have a significant impact on workers' compensation benefits or the handling of worker claims. For a thorough review of the law in this area, see Undocumented Aliens: Access to Oklahoma Courts and Recent Developments in Oklahoma Law, T. Douglas Stump, presented to the Oklahoma Judicial Conference on November 7, 2007.

Thomas R. Lee, Professor of Law, Brigham Young University; Dennis V. Lloyd, Chief Legal Counsel, Workers Compensation Fund (Utah), Workers’ Compensation and the Undocumented Worker is a scholarly discussion of the benefit issues that arise from claims by undocumented workers.

For thorough coverage of the issues surrounding benefits for undocumented or illegal workers, see Larson, Workers Compensation, 66.03.

5. Loaned Servant Doctrine

"The ‘loaned servant’ doctrine is, in brief, the rule that one who is the general servant of another may be loaned or hired by his master to another for some special service so as to become, as to that [859 P.2d 1111] service, the servant of such third person." Ishmael v. Henderson, 286 P.2d 265, 268 (Okla. 1955).

To determine whether a claimant in a compensation case is a loaned servant, the key is to ascertain whether the act which the claimant was performing when injured was part of the regular business of the temporary employer and subject to the latter's direction as to the details of the act. Tulsa Rig, Reel & Mfg. Co. v. Millsap, 619 P.2d 625, 628 (Okla. 1980). The right to discharge the employee or the obligation to pay his wages are merely indicia of the control and are not exclusively determinative of the question. Id.
Cherokee Lines, Inc. v. Bailey, 1993 OK 111, 859 P.2d 1106.

"When a general employer lends an employee to a special employer, the special employer becomes liable for workmen's compensation only if

(a) the employer has made a contract of hire, express or implied, with the special employer;

(b) the work being done is essentially that of the special employer; and

(c) the special employer has the right to control the details of the work.

When all three of the above conditions are satisfied in relation to both employers, both employers are liable for workmen's compensation."

Larson, The Law of Workmen's Compensation, § 48.00, cited in Tulsa Rig, Reel & Mfg. Co. v. Millsap, 1980 OK 165, 619 P.2d 625; and Van Zant v. Peoples Elec. Co-op., 1995 OK CIV APP 77, 900 P.2d 1008.

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License