Michael Densmore v. Barnes Industrial Group, Inc.

Issued by THE LABOR AND INDUSTRIAL RELATIONS COMMISSION

(Affirming Award and Decision of Administrative Law Judge with Supplemental Opinion)

**Injury No.:** 11-076364

**Claimant:** Michael Densmore

**Employer:** Barnes Industrial Group, Inc.

**Insurer:** N/A

This workers' compensation case is submitted to the Labor and Industrial Relations Commission (Commission) for review as provided by § 287.480 RSMo. Having reviewed the evidence, read the parties' briefs, and considered the whole record, we find that the award of the administrative law judge denying compensation is supported by competent and substantial evidence and was made in accordance with the Missouri Workers' Compensation Law. Pursuant to § 286.090 RSMo, we affirm the award and decision of the administrative law judge with this supplemental opinion.

On July 16, 2011, in the course of performing an installation job for one of employer's customers, the middle finger on claimant's left hand was crushed, resulting in this claim for permanent partial and temporary total disability benefits, disfigurement, and past medical expenses. The parties dispute whether claimant was working as an employee of employer at the time of his injury, or alternatively, as an independent contractor. The administrative law judge found claimant failed to meet his burden of proof, in part because claimant and James Amelung, employer's owner/president, had not yet "finalized" certain details of their work relationship before embarking on the July 2011 project. See Award, page 8. Claimant appeals.

Section 287.020.1 RSMo defines an "employee," in relevant part, as follows:

> The word "employee" as used in this chapter shall be construed to mean every person in the service of any employer, as defined in this chapter, under any contract of hire, express or implied, oral or written, or under any appointment or election, including executive officers of corporations.

In focusing on whether various terms of the parties' work relationship were finalized on July 16, 2011, it appears that the administrative law judge ultimately determined that claimant was not an "employee" for purposes of the foregoing definition, because the parties did not enter a "contract of hire." We agree that the record before us shows that claimant and Mr. Amelung remained, at the time of the injury, in negotiations concerning various aspects of claimant's prospective full-time work for employer as a supervisor overseeing its expansion into field service and fabrication work. However, we disagree that this circumstance requires us to conclude that there was not a qualifying "contract of hire" on July 16, 2011, between claimant and employer, for purposes of § 287.020.1. Accordingly, we discern a need to supplement the administrative law judge's analysis on this point.

Injury No.: 11-076364

Claimant: Michael Densmore

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We first recognize that the relevant language of § 287.020.1 is remarkably broad, in that it expressly encompasses "any" contract of hire. Our legal dictionary defines the words "contract" and "hire," in relevant part, as follows:

**Contract**, n. ... An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law <A binding contract>

**Hire**, vb. ... To engage the labor or services of another for wages or other payment.

*Black's Law Dictionary*, 389 and 847 (10th ed. 2014).

Especially when modified by the word "any," we find nothing within the foregoing definitions, or within the language of § 287.020.1 itself, to suggest or require a conclusion that there is no contract of hire where the parties contemplate further negotiation or adjustment of various details of a work relationship at a later date. In using such broad language, we believe the legislature recognized that the various terms of any agreement between parties to perform work for remuneration may—and probably will—evolve over time.

Here, the uncontested evidence compels a finding that the parties agreed, at minimum, that claimant would assist employer in performing the installation job on July 16, 2011, in exchange for consideration in the form of an hourly rate of $50 per hour. This is not a case such as *Leslie v. Sch. Servs. & Leasing*, 947 S.W.2d 97, 100 (Mo. App. 1997) or *Knupp v. Potashnick Truck Serv.*, 135 S.W.2d 1084 (Mo. App. 1940) where the worker was still engaged in the application process when injured, and thus no actual work agreement could be found. Instead, claimant and Mr. Amelung were parties to an agreement whereby claimant undertook an obligation to assist employer in accomplishing a specific service in exchange for employer's obligation to provide specific remuneration. In our view, this was a "contract of hire," regardless whether the parties had fully worked out the terms of claimant's future, anticipated role in employer's operation, including those ancillary matters such as whether employer would provide the cell phone claimant wanted, or give him various paid vacation days. We so conclude.

Having clarified the issue whether there was a qualifying contract of hire in this case, we nevertheless conclude that the parties' relationship was, ultimately, not subject to the Missouri Workers' Compensation Law. This is because we agree with the administrative law judge's conclusion that claimant's evidence fails to satisfy the so-called "right-to-control" test applied by the Missouri courts where there are questions whether a worker was an employee or an independent contractor:

The factors to determine if a "right to control" exist are: (1) the extent of control, (2) the actual exercise of control, (3) the duration of the employment, (4) the right of discharge, (5) the method of payment, (6) the degree to which the alleged employer furnished equipment, (7) the extent to which the work is the regular business of the alleged employer, and (8) the employment contract.

Injury No.: 11-076364

Claimant: Michael Densmore

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Harp v. Malone Freight Lines, Inc., 16 S.W.3d 667, 671 (Mo. App. 2000).

It was claimant's burden to satisfy the foregoing test: "[a] claimant establishes an employer/employee relationship if the claimant worked in the service of the alleged employer and the employer controlled these services." Leslie v. Sch. Servs. & Leasing, 947 S.W.2d 97, 99 (Mo. App. 1997) (emphasis added). We find that claimant failed to meet that burden.

Apart from claimant's conclusory assertion that Mr. Amelung "controlled the job," see Transcript, page 35, the record before us is bereft of the kind of necessary evidentiary detail as to the means and manner of the parties' performance of the installation job on July 16, 2011, to support affirmative factual findings with regard to factors 1, 2, 4, and to a certain extent, 6 above. Further, it is not even clear from claimant's testimony whether his global assertion of "control" referenced the July 2011 job at issue in this claim, or a previous job claimant worked for employer in Springfield, Missouri, in early 2011, at which job claimant concedes he worked as an independent contractor.

Because claimant failed to prove that employer had the right to control his services, we conclude claimant was working as an independent contractor, rather than as an "employee" for purposes of § 287.020.1, on July 16, 2011. For this reason, we conclude that employer is not liable to claimant for workers' compensation benefits pursuant to § 287.120 RSMo, because the parties' work relationship was not subject to the Missouri Workers' Compensation Law.

All other issues are moot.

**Decision**

We affirm and adopt the award of the administrative law judge as supplemented herein.

The award and decision of Administrative Law Judge Lorne J. Baker, issued April 26, 2017, is attached and incorporated herein to the extent not inconsistent with this supplemental decision.

Given at Jefferson City, State of Missouri, this 22nd day of August 2018.

**LABOR AND INDUSTRIAL RELATIONS COMMISSION**

John J. Larsen, Jr., Chairman

Reid K. Forrester, Member

**DISSENTING OPINION FILED**

Curtis E. Chick, Jr., Member

Attest:

Secretary

Injury No.: 11-076364

Claimant: Michael Densmore

After a careful review of this matter through the lens of strict construction, I am convinced that the Commission majority errs in denying this claim based on their finding that the employment relationship was not covered by the Missouri Workers' Compensation Law. For the benefit of the reader, I will first summarize the relevant, and essentially uncontested, facts involved in this case.¹

As of early 2011, Barnes Industrial Group (hereinafter "employer") was in the business of selling equipment and automation in the concrete industry. At that time, employer's president, James Amelung, was considering expanding employer's business to include a field service division, which would involve welding and fabrication. Mr. Amelung had previously met employee while employee was working for a concrete company that had done business with employer. Because Mr. Amelung did not have personal experience in welding or fabrication, and because he had been impressed with employee's skills in this area, he reached out to employee sometime in April 2011, and the two began discussing Mr. Amelung's desire to hire employee to help accomplish the expansion of employer's operations into field service work.

Mr. Amelung told employee he wanted him to be the welder and fabricator for employer, and thereafter work as a supervisor in the event employer hired more workers in its field service division. Employee was to earn an hourly wage of $30.00 per hour, with employer furnishing most of the tools, and providing the facility out of which employee would work. Employer was to procure business, while permitting employee, as a supervisor, some discretion in scheduling the work. At some point during their discussions, Mr. Amelung flew employee to Omaha where the products employer sold were manufactured. Employer also requested that employee sign a non-compete agreement preventing employee from doing any work for rival companies; employee signed that agreement on July 6, 2011.

At some point in early July 2011, Mr. Amelung received a query from a customer in Columbia, Missouri, whether he knew anyone that could install a bin inside of an aggregate container that the customer had purchased from employer. Mr. Amelung replied that, yes, employer had someone who could do that work. Mr. Amelung accepted the job, handled all communications with the customer, arranged for payment of the work, and scheduled the work. Employer furnished straps, chains, and some other items, but because employer had not yet acquired all of the necessary tools and equipment to complete the installation job, Mr. Amelung arranged for employee to bring his own, and agreed to pay employee an increased rate of $50.00 per hour to account for this. At that time, employee was working full-time for another employer as a

1 I acknowledge that the administrative law judge deemed the testimony of Mr. Amelung to be generally more persuasive than the testimony from employee; the judge did not, however, identify any specific conflict in the testimony that he resolved in favor of Mr. Amelung. Apart from the fact that these non-attorney witnesses obviously disagree as to the legal issue whether their employment relationship was covered under the Missouri Workers' Compensation Law, I do not perceive any material conflict in the evidence that is determinative of the issues herein.

Injury No.: 11-076364

Claimant: Michael Densmore

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mechanic. He gave that employer a two-week notice, on his assumption he was going to work for Mr. Amelung on a full-time basis as of July 16, 2011.

On that date, Mr. Amelung didn't have workers' compensation insurance, because his insurance agent had previously told him he didn't need it unless he