Thursday, May 19, 2011

Are Bicycle Messengers Employees or Independent Contractors?

This is a question that comes up from time to time in my practice. If a client ever comes in with a case that occurred while they were working as a messenger we will often initiate a Worker’s Compensation claim regardless of whether or not they are classified as employees or independent contractors. As it turns out, the classification deemed by the employer is not dispositive by a long shot.

Messengers are often under the mistaken impression that they are “independent contractors” because their employer says they are an independent contract. Often, the employer has the messenger sign documents indicating their knowledge of their status as an “independent contractor.” When it comes to the question of who is an employee, the Illinois Industrial Commission has the last word.

Let us consider the example of the case my firm handled, Rangel v. Standard Courier, 10 IWCC 0023. In that case a bicycle messenger when he was hit by a car on the way to a drop. Mr. Rangel made a claim under the Illinois Workers’ Compensation Act, which was fought tooth and nail by Standard Courier. Standard Courier maintained all along that Mr. Rangel was an “independent contractor,” not an employee.

Mr. Rangel was hired by Standard Courier as a bicycle messenger. When he showed up for his first day of work, Mr. Rangel filled out a “NICA Independent Contractor Profile Form.” At the bottom of that form, just above Mr. Rangel’s signature, appeared the language, “I understand that I am completing this information in order to contract me services as a self-employed Independent Contractor and not as an employee of any company.”

Mr. Rangel also executed a document labeled, “Independent Contractor Agreement” a document that suggested that Mr. Rangel wished to specify his/her relationship to Standard Courier as an Independent Contractor, and not as an employee. Language from that document reads in relevant part, “In pursuing the work described in this Contract, the Contractor understands and agrees that he/she shall be and remain an Independent Contractor in fact and law.”

Further documents executed by Mr. Rangel indicated that Standard Courier was not to exercise direct control over “Contractor,” nor would the control the method or means by which the contractor performed his/her services. Further, Contractor was free to accept or reject any delivery orders. Mr. Rangel was paid through a trust operated by NICA. Mr. Rangel was responsible for paying his own income taxes. Mr. Rangel was required to maintain “bicycle insurance.”

Finally, it was expressly agreed in the documents signed by Mr. Rangel that he was an independent contractor, and he would not be covered by Standard Courier’s Workers’ Compensation insurance. Mr. Rangel agreed, by signing the documents, not to hold himself out as Standard Courier’s employee and to only represent himself as an independent contractor. The documents further indicated that Mr. Rangel would not be deemed or construed to be an employee of Standard Courier for purposes of Illinois Law.

Despite all those documents indicating to the contrary, Mr. Rangel was deemed by the Illinois Industrial Commission to be an employee, and if the Illinois Industrial Commission says someone is an employee that person is an employee.

The Industrial Commission based its finding on an analysis performed under the Illinois Supreme Court case Roberson v. Industrial Commission. Under Roberson, the determination of “employee” or “independent contractor” status is a fact specific inquiry taking into account the, “totality of the circumstances.” Roberson v. Industrial Commission, 225 Ill.2d 159, at 174 (2007). Factors considered by the Roberson Court are:

  • Whether the employer may control the manner in which the person performs the work,
  • Whether the employer dictates the person’s schedule,
  • Whether the employer pays the person hourly,
  • Whether the employer withholds income and social security taxes,
  • Whether the employer may discharge the person at will,
  • Whether the employer supplies the person with materials and equipment.

In Mr. Rangel’s case, the Industrial Commission considered these factors. They found that Standard Courier exerted control over Mr. Rangel’s work by prohibiting him from subcontracting work out. Standard Courier also exercised control over Mr. Rangel’s schedule by requiring Mr. Rangel to stick within an agreed schedule or be discharged. Standard Courier required Rangel to lease a radio, an essential piece of equipment as a messenger. Standard Courier also issued Mr. Rangel a badge with Standard Courier’s logo.

When Mr. Rangel came into our office we immediately recognized the potential for a Workers’ Compensation claim, and accordingly Robert Smoler was brought on board to help with the Workers’ Compensation aspects of Mr. Rangel’s claim. He is an invaluable member of the team who brings to the table years of experience dealing with the Industrial Commission.

In Mr. Rangel’s case we were successful in securing an award for Mr. Rangel. In so doing, we set a template by which future Worker’s Compensation Claims may be pursued against employers who are trying to avoid paying payroll taxes and Workers’ Compensation insurance on their employees. In doing so, employers enrich themselves while putting their employees at great risk.