Elms v. Renewal by Anderson
439 Md. 381, 96 A.3d 175, 2014 WL 3565632 (2014)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The determination of whether an individual is a common law employee for workers' compensation purposes must be made before applying the statutory employer analysis. The statutory employer provision is an expansion of coverage for employees of subcontractors, not a replacement for the primary common law test based on the right to control.
Facts:
- Richard A. Elms owned and operated Elms Construction, an unincorporated home improvement business, as a sole proprietor.
- In 2006, Elms Construction began installing windows and doors for Renewal by Andersen.
- Renewal provided Elms with an “Installation Job Expectations” manual that included a code of conduct and standards for workmanship, performance, and appearance.
- Renewal required Elms and his workers to wear shirts bearing Renewal's logo and to place Renewal signs in customers' yards.
- Renewal trained Elms's employees on its specific installation methods, spot-checked their work, required corrections, and used customer report cards to provide feedback.
- Renewal scheduled all installations, providing Elms a monthly calendar with customer details and time frames for each job, over which Elms had no input.
- While Elms used his own truck and tools, he obtained all supplies and materials from Renewal’s warehouse and occasionally used Renewal's larger equipment.
- On August 6, 2008, Elms fell from a ladder and injured his right foot while installing a window at a home for a Renewal customer.
Procedural Posture:
- Richard A. Elms filed a workers’ compensation claim with the Workers’ Compensation Commission.
- The Commission found that Elms was an independent contractor and denied his claim for benefits from Renewal.
- Elms filed a petition for judicial review in the Circuit Court for Carroll County (a trial court).
- The Circuit Court reversed the Commission’s decision, concluding that Elms was a common law employee of Renewal.
- Renewal appealed the Circuit Court's judgment to the Court of Special Appeals (an intermediate appellate court).
- The Court of Special Appeals vacated the Circuit Court's judgment, holding that a statutory employer analysis under § 9-508 must precede the common law analysis, and remanded the case to the Commission.
- Elms petitioned for a writ of certiorari, which was granted by the Court of Appeals of Maryland (the state's highest court).
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the statutory employer provision of the Maryland Workers’ Compensation Act (§ 9-508) abrogate the common law employment test, requiring a court to first determine a worker's status as a subcontractor before determining if they are a common law employee of the principal contractor?
Opinions:
Majority - Greene, J.
No. The statutory employer provision does not abrogate the common law employment test; rather, the common law analysis must be performed first. The court reasoned that § 9-508, the statutory employer provision, is a remedial measure intended to expand liability to principal contractors when an employee of a subcontractor is injured and cannot recover from their direct employer. It creates an alternative basis for coverage and does not replace or precede the primary common law analysis. If a worker is found to be a common law employee of the principal contractor, the analysis ends there, and the statutory employer provision is inapplicable. Applying the common law test to the undisputed facts, the court found that Renewal exercised significant control over Elms through its detailed training, instructions, required uniforms and signage, work inspections, and absolute control over scheduling. This level of control established that Elms was a common law employee of Renewal, making him eligible for workers' compensation benefits under Renewal's policy.
Analysis:
This decision clarifies the analytical hierarchy in Maryland workers' compensation cases involving contractors and subcontractors. It establishes that the common law 'right to control' test is the threshold inquiry for determining employee status, reinforcing its primacy over statutory definitions. The ruling prevents companies from using subcontracting agreements as a shield against workers' compensation liability when they, in fact, exert the control of an employer over the worker. This holding ensures that the remedial purpose of the Workers' Compensation Act is served by focusing on the substance of the working relationship rather than its form.
