PA Tow Truck Operator Was Employee, Not an Independent Contractor
In Berkebile Towing & Recovery v. Workers’ Comp. Appeal Bd. (Harr), 2021 Pa. Commw. LEXIS 427 (May 10, 2021), the Commonwealth Court of Pennsylvania affirmed a decision by the state’s Workers’ Compensation Board that, in turn, had affirmed a WCJ’s finding that a tow truck driver was an employee of the towing company under the state’s Workers’ Compensation Act, because the company had the right to exercise considerable control over its drivers. The court observed, inter alia, that the company set the rates and collection of payment for towing jobs, prominently displayed its name and phone number on trucks, owned the tow trucks—paying most of the expenses related to their use—and prohibited the drivers from towing vehicles for the company’s competitors.
Background
In March 2017, Harr, a tow truck operator, sustained fatal injuries when he became pinned between two vehicles. Harr’s fiancée, Migut, filed a death benefits claim on behalf of Harr’s two surviving minor dependent children. The tow truck company (“the company”) defended the claim, contending that Harr was an independent contractor and not an employee. The WCJ found the existence of an employer-employee relationship between the company and Harr and awarded death benefits. The company appealed to the Board, which affirmed.
Appellate Court’s Review of Evidence
The appellate court observed that Migut had testified that Harr did not own the trucks that he drove for the company and did not pay formal lease or rental payments for the trucks, and that Harr did not pay for the trucks’ registration, inspections, or insurance. The company provided Harr with a credit card to be used for gas purchases. Other evidence indicated the tow trucks had prominent signage with the company’s name and telephone number.
The company’s owner confirmed that he paid for the gas, insurance, registrations, and inspections. He contended that he took over the business in 1968 and had a verbal agreement with the various drivers to lease the trucks for a 10 percent lease fee. The company’s owner further testified that he told the drivers that “they’re responsible for anything that happens to themselves.” The owner also pointed to an “independent contractor agreement form,” in which Harr had affirmed that no employer-employee relationship existed between himself and the company.
The owner claimed that the tow trucks were affixed with 1×2 inch stickers stating that the vehicles were leased to drivers. There was some testimony, however, that the stickers were added after Harr’s fatal accident. The appellate court noted that the WCJ found the “leased to driver” stickers to be “utterly inconspicuous” and “dwarfed” by the signage on the trucks indicating that they were the company’s towing vehicles. The court also noted that other drivers testified that they were not free to use the trucks to tow vehicles for the company’s competitors.
The appellate court noted testimony that when he worked, Harr usually wore clothing that had the company’s name printed prominently. The drivers were paid in cash each Friday, receiving 40 percent of the relevant tow charges that they had generated. Migut testified that Harr was paid nothing unless he went out on tow assignments.
Control is the Key
The appellate court reviewed earlier Pennsylvania decisions, noting that the court had addressed the specific employment status of a tow truck driver in driver in Sarver Towing v. Workers’ Compensation Appeal Board (Bowser), 736 A.2d 61 (Pa. Cmwlth. 1999). In Sarver, the court acknowledged the longstanding tenet that control of the work and the manner in which the work was accomplished was the key factor in the analysis of an employment relationship.
The court acknowledged that Harr had signed the independent contractor agreement, noting, however, that the WCJ had given the agreement little weight, finding it was a mere pretext for the company to avoid the obligations of having employees. The appellate court agreed with the WCJ and the Board that under the facts as found by the WCJ, the company’s ownership and control over the availability and use of its trucks favored finding an employer-employee relationship with Harr. The court added that, as in Sarver, the level of control that Berkebile Towing could exercise by allowing or restricting the drivers’ use of the trucks was substantial and significant. Given the facts, law, standard of review, and policy at issue, the appellate court concluded that the company had not established on appeal that the WCJ erred in finding an employment relationship, nor did the Board err in affirming the WCJ’s decision.