Monday, February 6, 2012

So . . . . What’s an employer?


Marcum v. Agency of Human Services, 2012 VT 3 (mem.).

Workers’ compensation offers financial support for anyone injured in the course of her employment.  It is one of the great compromises between management and labor in the modern era.  Employers, by statute are obliged to cover the costs of injuries suffered by their employees at work, and workers are limited to the regulated compensations levels built into the system. 

The trade-offs are critical.  Employers agree to cover all work place injuries in exchange for limiting their exposure to potentially large judgments.  Employees, in exchange for the big personal injury payouts, do not have to prove that the employer was at fault or caused the injury.  For workers, this means that their case revolves around three issues: proving that the injury occurred in the course of employment, proving the extent of their injuries, and establishing that they were employees of the employer. 

On that last point, today’s case revolves and constitutes another entry in the on-going debate between what constitutes employment and when are you just an independent contractor with your compensation hanging out in the proverbial wind. 


Plaintiff worked as a nurse at Dartmouth-Hitchcock Medical Center and as a home-based-care provider for a boy with a congenital respiratory condition.  She began providing the home-nursing care in late 2006 at the patient’s mother’s request.  At the time she started working at the boy’s home, she was classified as a personal care attendant (PCA), which enabled Plaintiff to be paid under an Agency-administered program.  The legislature had also classified PCAs, coincidentally, as Agency employees for workers’ compensation and unemployment benefits, but not for other purposes. 

About three months later, the family became eligible for a Medicaid-administered family managed nursing initiative (FMNI) program, which the mother had applied for even before Plaintiff started working in the home.  It’s very important to note here the phrasal adjective family managed as this has a significant impact on the whether-or-not-an-employer analysis.  

So under the FMNI, Plaintiff made more money, but was no longer covered under the statutory extension to PCAs.  She signed an agreement in order to enroll in the FMNI program that specified she was “self-employed” and ineligible for any employee-type benefits.   

Plaintiff injured her arm in June 2007 while working in the home and in January 2008 filed a claim for Workers’ Compensation benefits.  The State moved for summary judgment, and the Commissioner granted the motion on the basis that Plaintiff was not a state employee at the time of her injury.  Plaintiff appealed, and the Commissioner certified two questions to the trial court: (1) was Plaintiff an “employee” when she was injured; and (2) if so, was her claim time-barred? 

The trial court granted the State’s motion for summary judgment on the grounds that Plaintiff wasn’t a state employee and didn’t reach the time-bar issue.

Plaintiff appealed.  The standard of review on an appeal from summary judgment is the same as the trial court employs.  (Ah, Dear Reader, I can picture you now—waiting with bated breath for me to explain this titillating and intriguing aspect of appellate review.)  Essentially, taking all the facts alleged by the nonmoving party as true, the SCOV asks whether the moving party is entitled to judgment as a matter of law. 

Although Vermont has a very broad statutory definition of “employer,” the SCOV concludes that the Agency is not Plaintiff’s employer in this case.  The so-called nature-of-the-business test asks whether the putative employer contracted for services that were in the “nature of the business” in an attempt to avoid employer liability.  For example, a contractor who hires subcontractors might very well qualify as a sub’s employer under this test.    

The SCOV notes “that the Agency’s sole function in this case was to administer a public welfare Medicaid program while nurse’s business was actual provision of nursing care in return for Medicaid payments.”   The Agency had no control of Plaintiff’s professional decision-making.  Essentially, the SCOV says, (paraphrasing) “simply writing a check in an administrative capacity doth not an employer make.” 

The trial court also analogized Plaintiff’s situation to a similar Nebraska case in which a patient/plaintiff sued the home care provider.  The Nebraska Court held that the home care provider was an independent contractor rather than an agency employee because the agency (paraphrasing) “wrote the checks” whereas the patient chose the provider, controlled the schedule, and so forth.  The SCOV agrees with the trial court’s approach and rules that Plaintiff in this case was not an employee.   

Plaintiff’s final argument was that under the so-called “right-to-control” test, the Agency exercised such control over her work that she was, for statutory purposes, an Agency employee.  The SCOV rejects this argument not once but twice.  First, the SCOV notes that the appropriate test is really the nature-of-the-business test as discussed above.  Then, the SCOV concludes that even under the right-to-control test, it was the patient’s parents and not the Agency who had the right to control Plaintiff’s work. 

So Plaintiff is out; proving that from a legal perspective good work may sometimes have to be its own reward.  And we still don’t get to find out whether the claim was time-barred.  

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