Hanson v. Transportation General, Inc.
1998 Conn. LEXIS 269, 716 A.2d 857, 245 Conn. 613 (1998)
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Rule of Law:
In Connecticut, the determination of whether a worker is an employee or an independent contractor for workers' compensation purposes is governed exclusively by the 'right to control' test. This test focuses on whether the putative employer has the right to control the means and methods used by the worker in the performance of their job.
Facts:
- Allen Hanson entered into a written 'owner-operator' agreement with Transportation General, Inc., doing business as Metro Taxi Service (Metro).
- Under the agreement, Hanson operated a taxicab to which Metro held legal title, but Hanson maintained beneficial ownership.
- Hanson paid Metro weekly 'stand dues' of approximately $425 for the right to operate under Metro's certificate, and he kept all fares he earned.
- The agreement allowed Hanson to set his own hours of operation, hire a second driver, and use the vehicle for personal use.
- Hanson was responsible for all operating expenses, including repairs, maintenance, insurance, fines, and taxes.
- Metro did not pay Hanson a salary, provide any employment benefits, or collect payroll or social security taxes from him.
- Either party could terminate the agreement with 48 hours' notice, at which point legal title of the taxicab would transfer to Hanson.
- On April 16, 1990, Allen Hanson was murdered while operating the Metro taxicab.
Procedural Posture:
- Janet Hanson, the decedent's surviving spouse, filed a claim for survivor benefits with the workers’ compensation commissioner.
- The commissioner dismissed the claim, finding that the decedent was an independent contractor, not an employee.
- Hanson (appellant) appealed the dismissal to the compensation review board, which affirmed the commissioner's decision.
- Hanson (appellant) then appealed to the Appellate Court of Connecticut, which affirmed the review board's decision.
- The Supreme Court of Connecticut granted Hanson's (appellant's) petition for certification to appeal from the judgment of the Appellate Court.
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Issue:
Is a taxicab owner-operator who contracts with a taxi company an 'employee' of that company eligible for workers' compensation benefits when the agreement grants the operator significant autonomy over the means and methods of their work?
Opinions:
Majority - Peters, J.
No, a taxicab owner-operator is an independent contractor, not an employee, when the taxi company does not retain the right to control the means and methods of the operator's work. The court reaffirmed that the 'right to control' test is the sole standard for determining employee status under the Workers' Compensation Act. The court declined to adopt the 'relative nature of the work' test, citing principles of stare decisis and legislative acquiescence in the long-standing judicial precedent. Applying the 'right to control' test, the court found the evidence supported the commissioner's finding that the decedent was an independent contractor because he set his own hours, kept his own fares, paid all his own expenses, and could hire other drivers. Metro's requirement that drivers comply with state regulations did not, by itself, establish sufficient control to create an employer-employee relationship.
Dissenting - Berdon, J.
Yes, the decedent should have been considered an employee under a proper application of the 'right to control' test. The majority applied the test too narrowly by failing to consider all relevant factors from the Restatement (Second) of Agency § 220, particularly that the decedent's work was an integral part of Metro's regular business. Driving a taxi is the very essence of Metro's business, which the company effectively contracted out to avoid its social and legal obligations. Furthermore, the commissioner failed to include the undisputed fact that the decedent was killed while responding to a call from Metro's dispatcher, placing him directly under Metro's control and direction at the time of his death. The remedial purpose of the Workers' Compensation Act requires a more liberal interpretation to protect workers like the decedent.
Analysis:
This decision solidifies the traditional 'right to control' test as the exclusive standard for determining employee status in Connecticut workers' compensation cases, rejecting more modern, economically-focused tests like the 'relative nature of the work' test. By emphasizing stare decisis and legislative acquiescence, the court signaled its deference to the legislature on policy matters concerning the scope of workers' compensation coverage. The ruling makes it more challenging for individuals in arrangements common to the gig economy, such as owner-operators, to be classified as employees, as it prioritizes the formal terms of the contractual relationship and direct control over the economic realities of the worker's integration into the business.
