Memorandum: Employee or Independent Contractor?

Discussion

The following is a review of the likelihood of the success of Mr. Sanducci’s claim that he was an employee of Red Hawk Cab Company. While the existence of an agreement between the parties is generally insufficient to disclaim an employee/employer relationship, the crux of the argument as to whether or not a taxicab driver is an employee or an independent contractor for purposes of worker’s compensation coverage hinges on the level of control exercised by the taxicab company over the employee. La Grande v. B & L Serv., Inc., 432 So. 2d 1364, 1367 (Fla. 1st DCA 1983); Bowdoin v. Anchor Cab, 643 So. 2d 42 (Fla. 1st DCA 1994). A court reviewing the facts of Mr. Sanducci’s case would need to take employment law into consideration and conclude whether he was generally autonomous in the operation of his taxicab, and not controlled by the taxicab company. If so, a court would conclude that Mr. Sanducci was an independent contractor and not an employee of Red Hawk Cab Company. In the alternative, if a court reviewing Mr. Sanducci’s case found that Red Hawk, and not Mr. Sanducci, ultimately controlled the operation of the taxicab business, the court would find that he was an employee of the taxicab company.

1. Mr. Sanducci was an independent contractor for Red Hawk Cab Company.

Mr. Sanducci’s signed a Vehicle Service Contract with language specifically stating that he is not an employee of Red Hawk Cab Company. While, the existence of the contract alone does not automatically determine an independent contractor relationship, nor eliminate an employee/employer one, the courts have held that such an agreement is an indication of Mr. Sanducci’s level of consent to Red Hawk control over him as an employer. In La Grande, the court held that such an agreement represented a worker’s “refusal to submit to pervasive control,” while it also represented the company’s acknowledgment that it lacked control over the worker. La Grande v. B & L Serv., Inc., 432 So. 2d 1364, 1367 (Fla. 1st DCA 1983). Instead, the court (in reliance on the language in the contract) looked to the level of control exercised by the taxicab company over the driver as a determining factor in whether there was sufficient finding to indicate an employee/employer relationship and “pierce the independent contractor status contemplated by parties” Id.

In executing this contract, Mr. Sanducci acknowledged that he was an independent contractor, bolstering Red Hawk’s argument that he is not an employee of Red Hawk.

Further, the fact that Red Hawk established certain guidelines for Mr. Sanducci and other drivers to follow, absent local or county ordinance, does not alone establish an employee/employer relationship between him and Red Hawk. The courts have held that enforcement of governmental regulations do not constitute control over an individual, as they would apply to both employees and independent contractors alike. Requirements that drivers keep logs, or adhere to dress codes, in accordance with the local ordinance would not establish an employment relationship. La Grande v. B & L Serv., Inc., 432 So. 2d 1364, 1367 (Fla. 1st DCA 1983). However, based upon research here, Mr. Sanducci is not subject to any city or county ordinances and is only required to possess a valid, commercial driver’s license.

Lastly, Mr. Sanducci was generally in control of his own business operations and taxicab and, thus, the courts may conclude that Red Hawk did not exercise sufficient control over Mr. Sanducci to create an employee/employer relationship. The courts have held that for purposes of workers’ compensation, the determination of an individual’s status as an employee or independent contractor is based on the degree of control the employer exercises over the individual. La Grande v. B & L Serv., Inc., 432 So. 2d 1364, 1367 (Fla. 1st DCA 1983); Bowdoin v. Anchor Cab, 643 So. 2d 42 (Fla. 1st DCA 1994). This control is demonstrated through various actions of the taxicab company.

The first indicator of the level of control over a taxicab driver would be in evaluating who controls the driver’s daily activities. In La Grande, the courts held that the plaintiff was an independent contractor. Here, much like Sanducci, although the dispatch service was made available to the plaintiff, he was not required to use it. In fact, he was “free to perform all or part of his taxicab services independently of Owner's dispatching systems or concession agreements” much like Mr. Sanducci reports to be. Id. While the majority of Mr. Sanducci’s fares come from the Red Hawk dispatcher, he is not required to use the service, nor even take the calls. On the contrary, he may accept calls from any other dispatcher and is not required to accept any from Red Hawk. Mr. Sanducci may also pick up any additional passengers that he likes and is free to work as many, or as little, hours as he prefers. Red Hawk drivers establish their own driving schedules.

This is in direct contrast to Bowdoin, where the courts held that the taxicab driver was an employee, rather than an independent contractor. The driver, in this case, was prohibited from taking calls from other taxicab companies. He could, however, refuse to pick up fares without fear of reprisal. As Mr. Sanducci was free to use whichever dispatch service he preferred, and was unrestricted in this activity, in distinguishing itself from Bowdoin the court may hold that he was not an employee of the taxicab company.

However, the most important indicator of the level of control over a taxicab driver would be in evaluating who controls the driver’s cab fares and who makes the ultimate decision as to the rates charged to passengers. Mr. Sanducci was free to set the fares for passengers in his taxicab. In evaluating taxicab fares, the two cases of La Grande and Bowdoin again establish the parameters for an employee/employer relationship. In following La Grande, the courts may hold that this discretion over fares firmly established Mr. Sanducci as an independent contractor. In examining what constitutes an employee/employer relationship, the La Grande court followed Collins v. Federated Mutual Implement & Hardware Insurance Co., 247 So.2d 461, 463 (Fla. 4th DCA 1971), in holding that this relationship requires “control over the person, as well as the performance of the work to the extent of prescribing the manner in which the work shall be executed and to the method and details by which the desired result is to be accomplished.” Here the court distinguishes an employee from an independent contractor and effectively distinguishes Mr. Sanducci from being an employee.

2. Mr. Sanducci was an employee of Red Hawk Cab Company.

As noted above, in order to establish an employee/employer relationship between a taxicab driver and taxicab company, one must meet a burden of proof as to the level of control exercised by the taxicab company over the driver. La Grande v. B & L Serv., Inc., 432 So. 2d 1364, 1367 (Fla. 1st DCA 1983); Bowdoin v. Anchor Cab, 643 So. 2d 42 (Fla. 1st DCA 1994). In reviewing the facts of this case, it is possible to argue that Mr. Sanducci was, in fact, subject to Red Hawk control.

In the absence of city or county ordinances, the courts have held that the question becomes what constitutes control over the individual driver. Bowdoin v. Anchor Cab, 643 So. 2d 42 (Fla. 1st DCA 1994). Mr. Sanducci was required to attend an orientation workshop at Red Hawk, where he received a handbook containing the company’s guidelines for behavior. Pursuant to the language of the handbook, he was restricted from certain conduct while operating his leased vehicle, including the use of profanity and playing certain kinds of music in his cab while on duty. Further, as part of his agreement with Red Hawk, Mr. Sanducci was required to regularly attend certain professional development training seminars; this attendance was mandatory - otherwise Mr. Sanducci would be "let go" or fired from the company.

In Bowdoin, the court’s evaluation of the employee/employer relationship was essentially reduced to the question of “who has the right to direct what shall be done, and how and when it shall be done.” In adhering to Red Hawk’s guidelines, Mr. Sanducci no longer had the ability to choose what kind of language he could use, nor what kind of music he could listen to while operating his taxicab. Further, as he was directed to attend certain training/education classes, he was also no longer free to accept fares at his complete leisure, as was originally contended. As such, a court may look to La Grande, where the court’s finding held that the independent contractor was “free to perform all or part of his taxicab services independently of Owner's [control]”, and conclude that these guidelines and education requirements effectively exert some level of control over Mr. Sanducci. Under this scenario, a court may hold that he was an employee of Red Hawk.

Notably, the La Grande court also followed Collins v. Federated Mutual Implement & Hardware Insurance Co., 247 So.2d 461, 463 (Fla. 4th DCA 1971). This court held that the “relationship of employer and employee requires control and direction by the employer over the actual conduct of the employee.” Id. In requiring that Mr. Sanducci adhere to guidelines prohibiting certain types of behavior, this would appear to meet the burden of Collins, and further, establish Mr. Sanducci as an employee.