Alabama Court of Appeals Reverses Trial Court Finding of Employment Relationship
Susan Schein Chrysler Dodge, Inc. v. Rushing:
On April 15, 2011, the Alabama Court of Civil Appeals released an opinion wherein it reversed a trial court’s finding of an employer/employee relationship. At trial, the evidence revealed that the plaintiff was a retiree who supplemented his income by transferring vehicles to and from Birmingham area automobile dealerships. When a dealership needed a transfer, they would contact an individual who had a list of several retirees willing to make the trip for a flat fee. Taxes were not withheld from the payment and if the flat fee was over $600, then the driver was provided with a form 1099 for tax purposes. A car was provided to the driver to drive to the location but the contracted driver chose the individual that would accompany him. The trial court determined that an employment relationship existed because the dealership provided the vehicle and suggested the route. Further, the dealership instructed the driver on inspecting the vehicle prior to driving it back. In reversing the trial court, the Court of Appeals noted that the dealership’s control over the driver extended no further than directing what he was to ultimately accomplish. In support of its decision, the Court noted that the driver could choose an alternate route, was free to make any stops he desired, had no scheduled hours, no benefits, no holidays, and the driver recognized that he was not an employee in his own tax returns.
My Two Cents:
In Alabama, the courts focus on an employer’s reserved right of control when determining whether or not an employment relationship exists. Such control does not actually have to be exerted. There is no bright line test and each case is decided upon a laundry list of factors. In the above case, it seems pretty clear from the facts that both the driver and the dealership had a pre-accident understanding that their relation was that of independent contractor. The employer might have had an easier time proving its case at trial, if the independent contractor status of the driver had been reduced to writing.