SENT TO ALJS
Commonwealth of Kentucky
Workers’ Compensation Board
OPINION ENTERED: March 17, 2006
CLAIM NO. 05-00285
TERRY WADE HENRY PETITIONER
VS. APPEAL FROM HON. R. SCOTT BORDERS,
ADMINISTRATIVE LAW JUDGE
BOBBY HUBBARD D/B/A B & H LOGGING;
UNINSURED EMPLOYERS' FUND
and HON. R. SCOTT BORDERS,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
REVERSING AND REMANDING
* * * * * *
BEFORE: GARDNER, Chairman, STANLEY and YOUNG, Members.
STANLEY, Member. Terry Wade Henry ("Henry") seeks review from an opinion and order rendered September 21, 2005, by Hon. R. Scott Borders, Administrative Law Judge ("ALJ"), dismissing his claim against Bobby Hubbard d/b/a B & H Logging ("B & H") for an injury sustained November 19, 2004, based on lack of an employment relationship. The ALJ concluded that, "The parties clearly never had a meeting of the minds to such an extent that an implied contract for hire can be imputed herein" and, therefore, B & H has no liability for workers' compensation benefits. Henry also appeals from an order issued October 20, 2005, by the ALJ denying his petition for reconsideration.
On appeal, Henry raises four arguments: (1) the ALJ erred in determining there was no employer/employee relationship and his analysis and dismissal is not supported by substantial evidence; (2) the ALJ erred in determining there was no implied contract of employment between the parties which would invoke coverage under KRS 342.640; (3) the ALJ erred in reasoning that no employment relationship existed based, at least in part, on his finding that the petitioner was working on a "trial basis"; and (4) that it is against public policy to enable an employer to benefit from an employee's work but defer the liability for work-related injuries.
The relevant facts of the case sub judice as summarized by the ALJ are not in dispute. Moreover, after thoroughly reviewing the whole record, we find the ALJ's digest of the evidence to be complete and accurate for our purposes concerning the issues raised in this appeal. Not being able to improve upon that summary, we adopt it as our own as follows:
At the Benefit Review Conference, the parties stipulated Mr. Henry suffered an injury on November 19, 2004, and the Employer had due and timely notice; that he had not returned to work; his date of birth is October 13, 1975; he has a GED; and no specialized or vocational training.
At the Benefit Review Conference the case was bifurcated on whether or not Mr. Henry was an independent contractor vs. an employee and the remaining contested issues were whether or not there was coverage under the Act; existence of an employment relationship; independent contractor vs. employee; appropriate average weekly wage; entitlement to t.t.d. and medical benefits.
All other issues specifically regarding extent and duration of disability were preserved for further adjudication.
Due to the fact that his [sic] matter was bifurcated the medical proof submitted herein consists of Appalachian Regional Health Care, TN Professional Associates, as well as, Harlan and Bible Community physical therapy records, and records attached to the Form 101 from the TN Medical Center will not be summarized at this time.
The undersigned Administrative Law Judge deems that it is not necessary to review the medical proof in order to determine the threshold issues of whether or not an employer/employee relationship existed and whether or not Mr. Henry was an independent contractor vs. an employee.
The Plaintiff's deposition was taken by the deposition [sic] by the Defendant/Employer on June 14, 2005. Mr. Henry testified he was born on December 13, 1975, was 29 years of age at the time of his deposition and resided in Hulen, KY. He attended Bell County High School, but did not graduate and has achieved his GED.
After leaving high school he went to work for his uncle Zorro Miracle [l]ogging. He had worked for his uncle since he was 16 years of age. He started pulling cable and after a year he learned how to cut and has been cutting timber and running a bulldozer for the last ten years. He had not worked for his uncle for a few years and had been working for Maggard Mining in the coal mines. He worked there in 2001 running a scoop and cleaning beltlines and rock dust, working underground. He worked there for approximately 2 years and left the mining industry. Thereafter he was unemployed for 8-12 months. Prior to going to work with Mr. Hubbard, Mr. Henry testified he worked for a fellow out of TN, cutting trees, for 3-4 weeks.
Mr. Henry testified he found out about Mr. Hubbard by calling and [sic] individual named Mr. Jeff Howard, who is a local logger. He stated he was looking in the Bargain Banner and saw an ad wanting someone with 5 years dozer experience and timber cutting experience and also stated a drug test was required.
He called in response to the ad at 10:30 in the evening, and he and Mr. Hubbard decided to meet the following morning at McDonalds. He stated Mr. Hubbard advised him he wanted to see if he was capable of cutting timber and working for him.
The following morning when they met Mr. Henry did not believe they were cutting timber that day, he thought he was going for a drug test.
Mr. Henry stated the following morning they met at the McDonalds and he and Mr. Hubbard ate and he mentioned something about having trouble with a Mac truck. He asked Mr. Henry to ride up to the job with him and look things over, and on the way up they stopped at the garage to look at the truck. Mr. Henry still believed he was going to have a drug test. Thereafter they arrived at the job site, and Mr. Hubbard wanted him to cut a few trees to see how he could cut. Mr. Henry testified he believed they talked about pay being $10.00 an hour of [sic] $100.00 per day.
Mr. Henry admitted that he told Mr. Hubbard if he could not satisfy him he would not owe him anything, meaning he wouldn't need to pay him. In fact, Mr. Henry stated, "Now, you know, I really need a job, but I will work for you for a couple of days. If you're not satisfied with my work, then I'll go home, you know what I'm saying, and we'll be done." He was then asked, "and, he wouldn't owe you anything?" To which Mr. enry responded, "Yeah, right".
Mr. Henry stated thereafter he felt Mr. Hubbard was satisfied with him, because he fired a boy and sent him home, and he didn't care for being in that situation.
Mr. Henry testified when he was cutting he was supplied saw, chaps, and a hat, by Mr. Kenny Farmer, who worked with Mr. Henry. Mr. Farmer was running a dozer at the time.
Mr. Henry stated he was told by Kenny Farmer where to go and cut trees. Mr. Henry testified he cut 30 Poplars that evening. One of the Poplars fell into a Sycamore tree. Apparently one of the branches was loose on the Sycamore tree.
Apparently, Mr. Hubbard left the job site soon thereafter, leaving Kenny Farmer in charge. Mr. Henry stated after they cut all the hardwood down on the steep bank they proceeded across the road and down another bank that wasn't as steep, it was all soft wood and pines, all the way to the road. Mr. Henry stated when he got hurt he was not actually cutting. Mr. Farmer was showing him something about a new cut called a hinge cut. Mr. Henry stated he could hinge cut but he thought it was too dangerous as he does another cut called switch knot. Mr. Henry stated thereafter he turned and was going toward the road and that was the last he remembered until waking up in the hospital.
Mr. Henry stated he never signed a contract with Mr. Hubbard and was never asked to. He testified Mr. Hubbard never told him he would be hired as a timber cutter on an independent contractor basis. He did not tell him he would have to pay his own Social Security taxes either. Mr. Henry did state that once he started cutting trees he had no further discussions with Mr. Hubbard.
He testified after the accident he asked Mr. Hubbard for money so he could pay for his medicine and he thought he had $100.00 coming; however, Mr. Hubbard never paid him. The church took up a collection and gave him $200.00 at one time. He also stated on one occasion he met Mr. Hubbard at a Dairy Queen and Mr. Hubbard gave him $200.00 to help him. He stated this money was out of Mr. Hubbard's own pocket not from the church. He also stated around Christmas he received approximately $500.00 from the church.
He did admit though that Mr. Hubbard did not say the $200.00 was for pay.
The deposition of Bobby Hubbard was taken on June 14, 2005 by the Plaintiff. Mr. Hubbard testified that he lives in Knox County and is originally from Bell County. He is a carpenter by trade and in fact is a licensed contractor in the Carolinas. He came to Kentucky hoping to retire, but wasn't able to do so. Thereafter he entered the logging business. They logged their own farm and then proceeded from there. He has been in Kentucky since 2000.
He organized B & H Logging in 2001. Mr. Hubbard is a master logger in the Kentucky program and is licensed in the state of Kentucky. He states he typically works based upon finding timber and he goes from there. At the time of his deposition he was under contract with Fountain Forest, who supplied those logs. Mr. Hubbard is a subcontractor under the guy that has the written contract with Fountain Forest.
Mr. Hubbard is the one primarily responsible for negotiating leases with land owners to harvest the timber. Mr. Hubbard testified that since he has been in the business he had 8-10 contracts and some projects are larger than others.
Mr. Hubbard testified on a normal job there would be a dozer operator, who operated a dozer and built roadways to get timber to be picked up with a skidder. He states the timber cutter provides the saw, chaps, and safety equipment; and Mr. Hubbard provides the gasoline and items such as chains and files. The cutter also makes his own repairs on his equipment. There is also a loader operator who is designated to run the arm, and cuts the timber according to what he feels it should be. He determines which ones would go where by the load he is loaded and then sends the truck driver on.
He is basically [an] over the [road] truck driver and shows them what to do, where to go, and tells him where to go and come back if he needs him to come back. A loader/operator physically operate [sic] the machinery that loads it on to [sic] the truck. Mr. Hubbard stated recently he had been running the skidder and paid himself a weekly salary. Mr. Hubbard leases the skidder and also leases dozers. He was in negotiations to buy his own dozer. He testified the truck is leased and he owns the log trailer.
He is also purchasing a skidder, dozer, and loader at the time. He testified he usually has 4 individuals working along side him. Mr. Hubbard also stated he does not normally use the same people, as turnover is pretty high. He stated if he could get a man to work a year to a year and a half is unusual. He felt the extreme turnover is mainly due to drugs and drinking. Mr. Hubbard testified he does not test for drugs, but it is one thing if he stays in business he is going to have to do.
Mr. Hubbard testified they work by the day and they normally get 5 days in if weather permits. They typically work from 8:00 – 4:30, and he pays them cash at the end of the week. He does have a written agreement with his workers. He states the agreement requires them to show up on time, wear their safety equipment at all times. A copy of the standard contract was attached as an exhibit to the deposition.
The contract also included that the worker is to service and maintain the loader equipment, keep the loader equipment in good-working condition at all times, which was the typical agreement wherein the worker's [sic] would have to be responsible for their piece of equipment. The agreements were modified depending on what the person's job actually entails. Mr. Hubbard testified that he paid his workers in cash and does not withhold any state, federal, or Social Security taxes and he does not issue a 1099.
Mr. Hubbard admitted he had no signed agreement with Mr. Henry.
Mr. Hubbard agreed that Mr. Henry was injured on the job site, but denied that he was working for him that day. Mr. Hubbard testified the purpose for him being on the job site that day was due to a notice they put in the Cumberland Trader for timber cutters and dozer operators. He stated Mr. Henry called him at 8:30 or 9:00 that evening and wanted to apply for a job, and he told him he recognized his name, but he was way too young to be the person that he knew, and he knew Mr. Henry's father in high school.
At that time, he asked Mr. Henry what his qualifications were and he told him he cut timber for his uncle for 8-10 years, and he thought he said his age was 18 years of age. Mr. Hubbard stated that he felt that if Mr. Henry had cut timber that long he might be able to handle the job, and he told him he might possibly require him to take a drug test and that they did not have worker's comp and he would be working as a general contractor for himself. Mr. Hubbard did not want to discuss wages with him, even though Mr. Henry waned [sic] to discuss them, he stated he cannot hire a man not knowing what he is qualified to do. Therefore, they set up a meeting the following morning at 6:30 at McDonalds. He stated they met there and talked a few minutes, ate a biscuit, and he was with Eric Carnes, and a potential truck driver with him by the name of Benny Brown.
Mr. Henry had a gentleman by the name of Doyle with him who was his uncle by marriage. He stated they slightly discussed the job and where they were working and the nature of what he would be doing and he once again told him he did not have workers' compensation and they left. Eric, Benny, and he got in his truck and they went toward Arjay. They went to a residence, to a shop behind it, to where a gentleman was working on a truck for them. They stayed until 9:00 a.m. and the truck was still not working right, so they left and went to the job site in Redbird.
By that time, Mr. Hubbard and the other individuals had gotten there[.] [T]he other crew was already proceeding with what they do. He stated, at that time Mr. Henry was with Doyle, his uncle, ran the truck and they came up on the side about the time that Mr. Hubbard got there. They left the yard because they could not walk up the roadway the way the skid was coming in; and at that time, he had a gentleman by the name of Colby Brock running the skidder, and it was muddy, so they could not get up through there. They went back down to the blacktop and walked down the road and back up in the hollow where they were cutting and pulling.
Kenny Farmer was cutting the timber and he was also pulling, that is the reason they needed a timber cutter. Mr. Hubbard testified that he and Mr. Henry did not have an agreement, as to what he was going to do that day, except that Mr. Henry was going to perform the job to the best of his ability and show Mr. Hubbard what he could do because he would be under Kenny Farmer's direct supervision other than Mr. Hubbard's. He stated Mr. Henry asked if he could cut some trees and Mr. Hubbard asked if he was ready. Mr. Hubbard told him to use one of Kenny's saws, which is the only one they had. He reached down and got a hold of it, and he hollered at him to put a hard hat on, and cutter straps. He thereafter got a hard hat, cutter straps, and proceeded to cut some trees, being directed to them by Kenny Farmer. He stated he watched him for 15 minutes, and he asked Kenny what he thought about him, and he stated, "Well, he looks like he might be all right. I'll watch him." Mr. Hubbard stated, "watch him close, don't put him in no areas where he could possibly get hurt until we know exactly what he is capable of doing."
At that time, Mr. Hubbard left the job site. Mr. Hubbard believed it was around 4:00 p.m. that afternoon when Mr. Henry got hurt. He stated Mr. Henry was working that day on a trial basis, and there was no payment to be made. He stated Mr. Henry told him when he called prior to meeting him that he had a lot of problems with people saying they could do a job and then when they got there, they couldn't. Mr. Henry stated, "I'll work, I'll cut timber a day or two and if you don't like my work, you don't owe me a thing." Mr. Hubbard advised Mr. Henry he thought that was pretty manly of him as most people do not do that.
He testified Mr. Henry wanted to have an idea of what he would make, and Mr. Hubbard stated he wouldn't discuss that with him until he saw what his qualifications where [sic]. Mr. Hubbard did admit on that morning that he did fire 2 other individuals who had been working on a trial basis. Mr. Hubbard did admit that he gave a card to Mr. Henry stating that, B & H Logging, Bobby Hubbard, owner and also had license bonded and insurance. [sic] He stated they did have bonding but they did not have any insurance for bonding at that time.
Mr. Hubbard testified the other three workers at the site had been working for him for some period of time and he had written contracts with them. The other workers were also paid weekly as well. He stated the workers supplied their own saws.
Mr. Hubbard testified he did not have Mr. Henry sign a contract, because at times he did [not] know whether or not he would be capable of performing the job and he was simply working on a trial basis.
The deposition of Eric Carnes was taken by the Defendant on July 12, 2005. Mr. Carnes testified he resides in Corbin, KY, and was born on June 20, 1982. At the time of his deposition he was employed by American Timber in Williamsburg, running a loader, knuckle boom, loading logs, and sawing up on the yard. Mr. Carnes testified he had worked for Mr. Hubbard running a loader, performing contract labor, doing some of the same things that he now does for American Timber.
He testified he worked for Mr. Hubbard as an independent contractor and was paid by the day, weekly. If he didn't work, he didn't get paid. Mr. Carnes testified he was familiar with Mr. Henry, but did not know him prior to seeing him on the morning of the accident with Mr. Hubbard. He stated he believed it was November 19, 2004, when he was at McDonalds' that morning around 6:30 a.m. Mr. Carnes testified he arrived with Mr. Hubbard at McDonalds' and got out of the truck and he saw Terry Henry and his Uncle Doyle. Mr. Carnes ordered his breakfast and when he got back he heard Mr. Henry talking to Mr. Hubbard about his job experience and how he cut timber and Mr. Carnes thereafter sat down and ate.
Mr. Carnes believed that Mr. Hubbard wanted to talk to Mr. Henry about whether or not he was able to cut timber, and was a timber cutter. Mr. Carnes stated that Mr. Henry stated he would work a couple of days, like put him on a trial to see if he could do the job. Mr. Carnes was asked if there was anything said about being hired or money or pay for anything, to which Mr. Carnes stated no nothing of that sort. He stated he did not hear Mr. Hubbard offer Mr. Henry a job in any way nor did he hear him talk bout [sic] his pay or how he would be paid if he was hired. He also did not hear him state what the relationship between the two would be. They stayed for approximately 5 minuets [sic], ate, and left.
Mr. Carnes testified there were he, Mr. Hubbard, and another individual they were thinking of hiring for the truck driving job, as well as, Mr. Henry and his Uncle Doyle. He stated they left McDonalds around 7:00 a.m., and went to check on a truck that Mr. Hubbard had dropped off that he worked on. Mr. Carnes was riding with Mr. Hubbard and Mr. Henry was riding with his Uncle Doyle in a separate truck. They all headed toward the job site.
Mr. Carnes testified when he got to the job site, there were logs that needed to be cut up and they all waited around the truck; Terry, Bobby, and Doyle, and the other guy whose name he could not remember. Mr. Carnes got on the loader and proceeded to cut up the logs. The others stood there for 5 minutes watching him cut up logs. As he was getting done, the skidder pulled up, bringing another trip of logs for him to cut up.
He stated that after the skidder came in, it was rainy and soggy that day, so they decided to quit. He stated the skidder man came over and he cut up the logs, and he and the skidder man went back to where Mr. Henry, Mr. Hubbard, Kenny Farmer, and Doyle were. He testified when he got back here he saw Mr. Henry up on the bank cutting a tree, watched him cut 2-3 trees and noticed he was using Kenny Farmer's saw.
Thereafter, he and Mr. Hubbard left and went to Virginia to purchase tired [sic] for the truck. The following Monday is when he found out about Mr. Henry's accident.
Mr. Carnes stated he had been working for Mr. Hubbard for about a year and 2-3 months. His job is to saw up the wood and load the truck. Mr. Carnes is unaware of any other workers being hired on a trial basis.
He testified he really didn’t know anything about it.
The deposition of Mr. Kenny Farmer was taken on July 12, 2005, by the Defendant. Mr. Farmer testified he was born on August 23, 1969 and resides in Wallings, KY.
He works with Mr. Hubbard as a cutter and has done so for a year on [sic] a half. He operates as an independent contractor, furnishes his own materials, saws, and equipment. He is paid by the day, on days that he works. Mr. Hubbard does not withhold any taxes or Social Security and pays him in cash at the end of the week.
Mr. Farmer was familiar with Mr. Henry as they live in the same general vicinity. He had spoken with him prior to him seeking employment with Mr. Hubbard when he came to his house to see if anyone was hiring. He gave him Bobby’s phone number to call, and stated that same day, Mr. Henry asked him about insurance and stuff that Mr. Farmer told him, none of them were covered with nothing. There was no kind of insurance, nothing. He told Mr. Henry they operated as independent contractors and you had to provide all of that yourself, including your saws, and safety equipment.
Mr. Farmer was not present when Mr. Hubbard met with Mr. Henry on the morning of November 19th, at the McDonalds in Pineville. The first time he saw Mr. Henry that day was on the job site.
When they arrived at the site, Mr. Farmer had just come out of the woods on the dozer and Mr. Henry was standing with Mr. Hubbard and 2 other gentleman [sic]. When he pulled up, Mr. Hubbard came up to the dozer to let him know that he brought Mr. Henry and to try him out as a cutter. He asked Mr. Hubbard if Mr. Henry knew about safety gear, chaps, and all that, to which he said yes. Mr. Farmer left and went back into the woods because they had another gentleman who was there cutting at the time, and they let him go. He stated at that time, Mr. Henry asked if he could go ahead and start cutting. He picked the saw up and he advised Mr. Henry he could not cut without a hard hat or chaps.
Mr. Henry was given a hard hat, chaps, and a saw to use. It was his equipment, not Mr. Hubbard's. He went up on the bank and the best he could remember Mr. Hubbard was still there when he cut the first one or two trees, and everybody watched him, he pulled a few pieces of timber out.
Mr. Hubbard left to go to Virginia to get some tires, and he came over to Mr. Farmer and asked him how he was going to work out, and he said, “Well I don’t’ [sic] know until we see him cut for a while”.
Mr. Hubbard told Mr. Farmer he was leaving, and that is the last time he saw him. He did advise him to observe Mr. Henry. He wanted Mr. Farmer to make sure everybody tries to keep everything going like they should and keep the job going like it’s supposed to, and make sure everyone keeps their hard hats and safety gear on.
Not much longer after they left, they ate dinner. Mr. Farmer was to watch Mr. Henry to see if he could perform the work and also was to advise him where to cut. Mr. Hubbard advised Mr. Farmer that Mr. Henry was not hired, that he was on a trial period. He stated that they talked a little bit about insurance and how Mr. Farmer took care of himself. He testified Mr. Henry asked him about pay, and he advised him that was between him and Bobby that he had nothing to do with that. Thereafter they finished dinner and went back to work.
Mr. Farmer sent Mr. Henry down to the hollow to cut some Poplars. Mr. Farmer took the dozer and took the trip back up to where the skidder was, and Mr. Henry had cut the Poplar and some other trees. He stated it fell down the hill and into the hollow and made a big mess. He did it the improper way. Apparently the trees that he cut where [sic] hanging into Sycamores. He came back tied into the Poplars he had cut into the Sycamores and drug them out, pulling them down. He went up the hollow and came back, and kept maybe one or two other trees since then they moved. He asked Mr. Henry if he wanted him to teach him how to do a hinge cut, which is the most effective cut. He said Mr. Henry had no idea how to hinge cut and he slip cut which is basically bore to one side of the tree, and walk all the way around it, and the tree falls where it wants. A hinge cut is where you cut a notch out, drive two edges on each side of it; you can pretty much drive a stake with it, and put the tree anywhere you want it to fall. He got off the dozer, put it in the clear, notched the Sycamore, and bulled it, and turned the saw off. He thought out of the corner of his eye he saw Mr. Henry go up the bank behind him. then he started the saw back up, finished boring out the tree, and turning it loose. He stated at that time Junior hollered at him, and when he turned around Mr. Henry was lying within ten feet of the tree and the creek, and that is when he realized he had been hit in the head with a big Sycamore limb.
He stated he was supposed to have been 30-35 feet behind him when he was cutting the tree, but instead he was 10-15 feet behind him. Mr. Farmer testified it was his understanding that Mr. Henry was not hired as an employee, he was simply on a trial basis.
Mr. Farmer stated that Mr. Henry had mentioned to him that he was on a trial run, and he would give Bobby a day or two days for nothing, to see if he didn’t like his work, and if he didn’t he didn’t owe him nothing.
Mr. Farmer had no more conversations with Mr. Henry after [the] accident.
Mr. Farmer testified that during the year he had worked with him. [sic] Mr. Hubbard he [sic] had approximately 15 people initially brought on for a trial basis and he had worked with all of them. He stated none of the folks that did a [sic] trial work ever stuck on the job. He testified he did not know if Mr. Hubbard had ever paid any of these people.
The deposition of Lester Fugate was taken by the Employer on July 12, 2005. Mr. Fugate testified he resides in Pineville, KY, and at the time of his deposition was unemployed. He used to work with Mr. Hubbard and worked with him for 4-5 months, last working for him in January 2005.
He was working with Mr. Hubbard in November 2004 and was familiar with Mr. Henry, having met him on the job site. He did not know him before.
On November 19, 2004, Mr. Fugate was working topping out trees that had been cut down. He had his own saw, but used Mr. Farmer’s most of the time, because it was a little lighter. Mr. Hubbard did not furnish any of the saws or equipment, but did furnish him safety equipment.
Mr. Fugate testified he first me Mr. Henry some time between 11-12 close to dinner time, on the day of the accident.
He stated Mr. Henry was there because he wanting [sic] a job to cut timber and the deal was he was just to come there and he said he would work to see if he liked his work, or whatever, and if he liked it he would be hired and if he didn’t he wouldn’t have to worry about it.
Mr. Fugate heard Mr. Henry tell Mr. Hubbard this. He stated on that day Mr. Henry went to work cutting trees, at the direction of Mr. Farmer. Mr. Fugate worked topping the trees that Mr. Henry would cut. He was around him most of the day. He was not actually right beside him all day, but in the general area. He did not hear any conversations between Mr. Farmer and Mr. Henry except that Mr. Henry hoped they liked his job, so that he would be hired.
Mr. Fugate remembered Mr. Henry counting Poplars that fell into a Sycamore tree, and stated that is what got him hurt. He stated this Poplar fell into the Sycamore tree instead of up the hill like they were supposed to. Thereafter they went down to cut the Sycamore and when they did one of the limbs fell off of the top of it and as he described it, “Swapped him right across the top of the head.” He testified he heard Mr. Farmer telling Mr. Henry how to cut the tree so it would go to where he wanted it. He said when the limb fell Mr. Henry was standing right there beside Mr. Farmer. He stated instead of going away from the tree he just stood there. Mr. Fugate was on the bank watching about 35-40 feet away, which [is] where Mr. Henry should have been. Mr. Fugate actually saw Mr. Henry get hurt. He stated after that, all he tried to do was help the boy. Mr. Fugate hasn’t spoke [sic] nor has he seen Mr. Henry.
On cross-examination, Mr. Fugate admitted that the time period he worked for Mr. Hubbard he was never hired on a trial basis, without pay, just to show his skills. He was not aware of the other individuals that did this either. Mr. Fugate reiterated on cross-examination that Mr. Henry told Mr. Hubbard he would work for free and if he didn’t like his work, he didn’t have to worry about it.
Mr. Fugate testified that when he worked for Mr. Hubbard he signed a contract and worked as an independent contractor for him.
The Final Hearing was held on this matter on July 26, 2005. Mr. Henry and Mr. Hubbard both testified at the Final Hearing.
Mr. Henry testified first, and reiterated his side of the story of what occurred when they met at McDonald’s and how he simply thought he was going for a drug test and not to work. He testified how they arrived on the job site and was advised he was going to have to cut some trees. He stated that he and Mr. Hubbard discussed wages at McDonalds’. He stated he was to earn $10.00 per hour or $100.00 per day whichever way he wanted it. He stated while he was cutting trees Mr. Hubbard left the job site. He testified he continued working that day, as Mr. Hubbard had fired the other boy and sent him home; and in fact gave him his chaps and saw. Mr. Henry reiterated he felt uncomfortable with this situation, and stated he didn’t bring any of his own equipment or safety gear. He stated he had cut timber in the past for 10 years, starting when he was 15, and actually had been in the woods since he was 12. He also had worked underground in the mines.
Mr. Henry testified that during the course of his time at the job site, he went out and cut a big line of Oaks, about 4 of them, and afterward was told, “You’re hired.” He stated Mr. Hubbard then left the job and left Kenny Farmer in charge and told him to, “Go up yonder and cut them Poplars.” Mr. Kenny [sic] reiterated that when he cut the trees apparently one fell into one of the Sycamores. He stated one fell on him and he did not know what happened after that.
Mr. Henry was asked if at any time he and Mr. Hubbard discussed whether or not he was going to be an employee or independent contractor. Mr. Hubbard told him, he was an employee. He stated he was never given any sort of employment contract or agreement in writing. Mr. Henry stated he is drawing Social Security disability as is his young children.
On cross-examination, Mr. Henry admitted they did not speak about pay on the telephone the night before the meeting, but he believes something was said at McDonalds’. He denied ever being told he was an independent contractor, and he did admit he told Mr. Hubbard he would cut for him for a week, or a day or a [sic] two, and told him if he didn’t like his cut, he didn’t owe him anything. Mr. Henry admitted if Mr. Hubbard didn’t like his work, he did not expect to be paid because that is what he was told. Mr. Henry also stated Mr. Hubbard stayed at the job site and watched him cut trees for about 3 hours.
He stated that after cutting trees, he told him he was hired and the [sic] he should be paid $10.00 per hour or $100.00 per day. Mr. Henry admitted that after the accident upon leaving the hospital he received money from the church and received some money that had been collected by the other workere’s [sic] at the job site.
He denied he had ever been paid the $100.00 per day for the work he performed for Mr. Hubbard.
Mr. Hubbard testified likewise at the hearing. He testified at the time he was operating under the name of B & H Logging and had been in the timber business since 2003. He reiterated that Mr. Henry called him the night before answering an ad in the Cumberland Trader for a dozer operator/timber cutter and that a drug test was required on hiring.
He asked Mr. Henry his experience, and in fact, he told Mr. Hubbard on the phone that he would cut a day or two and if Mr. Hubbard did not like the way he cut timber if he didn’t cut enough timber he wouldn’t’ [sic] owe him anything.
Mr. Hubbard stated he told Mr. Henry that night on the telephone he was responsible for his own taxes, and that he would be an independent contractor and that Mr. Hubbard did not have workers’ comp insurance[.] Mr. Henry asked him about money and Mr. Hubbard responded that he would not talk to him about money until he saw his ability to cut timber. Mr. Hubbard denied ever paying anyone by the hour, since he has been in the lumbar [sic] business and has never withheld taxes or Social Security on any of his workers.
The following morning they met and eventually went on to the job site. Mr. Hubbard did say that when he gave Mr. Henry his card the next morning, he specifically advised him that he did not have worker’s comp insurance. He stated thereafter they got to the job site and in regard to the individual he terminated, Mr. Hubbard testified he had decided to terminate him the day before, as he was not a good worker and had no way of getting a hold of him until he saw him at the job site the following day. He stated Mr. Henry coming to the job site had nothing [to] do with him terminating the worker.
Mr. Hubbard reiterated he advised Mr. Farmer that he was going to try Mr. Henry out to see if he could cut timber, and he supplied [him] with a pair of chaps, hard hat, and saw. He stated the material belonged to Kenny Farmer, not him. He stated he stayed to watch Mr.. Henry cut 3-4 trees and he left to go to Virginia for tires. Mr. Hubbard stated he never told Mr. Henry before he left that he was hired, and in fact he never even told him he was happy with his work.
Mr. Hubbard admitted that he took $500.00 to Mr. Henry while he was in the hospital in Knoxville that had been given to him by the church.
In regard to the $200.00 that he gave him, the money was taken up in donations from the guys on the job site to help Mr. Henry out. He stated he gave this money to his Aunt and Uncle and not to Mr. Henry himself. He did however give him $200.00 at the Dairy Queen for money collected by the co-workers, once again. Mr. Hubbard denied ever giving Mr. Henry any money because he didn’t want another law suit [sic] or that he couldn’t afford another law suit [sic], and in fact he stated he never even mentioned it. Mr. Hubbard reiterated he never hired Mr. Henry as an independent contractor; nor as an employee.
Mr. Hubbard stated all of his workers were independent contractors. He testified all of the individuals on the job site except Mr. Henry had signed an independent contracting agreement.
Mr. Hubbard testified he had other potential employees or independent contractors work on a trial period. He stated within the last year he has done this with approximately 10 individuals. He stated they normally work one day and by the end of the day you can tell if they can adequately perform the job.
By opinion rendered September 21, 2005, the ALJ dismissed Henry's claim in its entirety. He explained his rationale as follows:
The first issue for determination herein is whether or not there is an employment relationship between Mr. Henry and Mr. Hubbard, d/b/a B & H Logging.
KRS 342.640(1) states in pertinent part, "every person including a minor, whether lawfully or unlawfully employed, in the service of an employer under any contract of hire or apprenticeship, express or implied, and all helpers and assistants of employees, whether paid by the Employer, or employee, if employed with the knowledge, actual or constructive, as the Employer." [sic]
In this instance, the true crux of the matter is whether or not Mr. Henry and Mr. Hubbard entered into a contract for hire either expressed or implied. The evidence is clear that there is not an expressed contract for hire entered into as neither of the parties entered into a written agreement regarding Mr. Henry's employment.
It is further undisputed that either the night before the incident on November 18, 2004, and/or the morning of the incident on November 29, 2004, Mr. Henry told Mr. Hubbard that he could try him out for a couple of days cutting wood, and if Mr. Hubbard didn't like his work he didn't owe him a thing. Mr. Henry admitted this both in his deposition testimony and at the Final Hearing held herein.
Where the testimony differs is that Mr. Henry testified that after Mr. Hubbard watched him cut a few trees he told him he was hired. Mr. Hubbard denies ever telling Mr. Henry that he was hired.
In fact, Mr. Hubbard testified that when he saw Mr. Henry in the hospital after the incident, Mr. Henry asked him about his day's pay; to which Mr. Hubbard responded, he was not going to get any as he had not hired him.
Therefore, the issue now becomes one of credibility in regard to Mr. Henry's testimony vs. Mr. Hubbard's. After having the opportunity to observe both of the individuals testifying at the Final Hearing, the Administrative Law Judge must state that he finds Mr. Henry's testimony less than credible, and in fact, finds it to be self serving. Mr. Henry cannot even produce one witness that can cooberate [sic] his statement that Mr. Hubbard agreed to hire him on 11/19/04. In fact, Mr. Farmer testified that Mr. Henry was specifically on a trial basis and was not hired on November 19, 2004. His testimony was cooberated [sic] by the testimony of Mr. Eric Carnes, who heard Mr. Hubbard state that he, would let Mr. Henry go out into the woods and show him how well he could cut wood.
The requirement in a workers' compensation claim is that the Plaintiff must be an employee for hire, as the essence of compensation protection is a restoration of a part of wages which are assumed to have existed. Kentucky Farm and Power Equipment Dealer's Association vs. Fulkerson Brothers, 631 SW 2d 633 (Ky. 1982).
Further, [i]n workers' compensation, the concept of an employee is narrower than the common law concept of "servant". In the master/servant relationship, the same implies that service to be performed is under contract for hire, either expressed or implied. Workers' compensation decisions uniformly exclude from the definition employees, workers who neither receive nor expect to receive any kind of pay for their services. . Kentucky Farm and Power Equipment Dealer's Association vs. Fulkerson Brothers, Supra.
In this instance, the Plaintiff bears the burden of proof and risk of non-persuaded [sic] in each and every element of their claim. Snawder v. Stice, 576 S.W.2d 276 (Ky.App. 1979).
After careful consideration, the Administrative Law Judge is simply not persuades [sic] that the Plaintiff has met the burden of proving that an employment relationship existed on November 19, 2004, the date he was injured. In fact, Mr. Henry admitted that he agreed to work for Mr. Hubbard without pay on a trial basis to allow Mr. Hubbard to determine whether or not he had the experience to be a valued timber cutter. The parties clearly never had a meeting of the minds to such an extent that an implied contract for hire can be imputed herein.
Therefore, the Administrative Law Judge is simply not persuaded that the Plaintiff has met his burden of proving that a contract for hire was entered into between he and Mr. Hubbard and/or B & H Logging on November 19, 2004, nor has he met his burden of proving that he expected to receive pay for the work performed on the date in question.
Therefore, having found that an employer/employee relationship did not exist, the Plaintiff's claim for workers' compensation benefits arising out of an incident that occurred on November 19, 2004, must be and the same is hereby dismissed.
Due to the foregoing findings, the remaining issues herein are deemed moot.
It is from the above language that Henry now appeals.
Opposite to the complexity of this appeal as presented by the parties, is its resolution, which is relatively straightforward. The question with which we are presented is whether Henry during his “try-out period” with B & H qualified as an employee for purposes of the Act? The answer to that question as a matter of law is an unequivocal “yes.”
Both the ALJ below and the parties before this Board have apparently overlooked KRS 342.640(4), which expressly provides as follows:
The following shall constitute employees subject to the provisions of this chapter, except as exempted under KRS 342.650:
(4) Every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury;
According to Professor Larson, “since workers' compensation law is primarily interested in the question when the risks of the employment begin to operate, it is appropriate, quite apart from the strict contract situation, to hold that an injury during a try-out period is covered, when that injury flows directly from employment activities or conditions.” See Larson’s Workers’ Compensation Law, §26.02 [6]. For purposes of the Act, KRS 342.640(4) reflects the codification of this rule in Kentucky. KRS 342.640(4) does not specifically necessitate a contract of hire. See Com., Dept. of Educ., Div. Of Surplus Properties v. Smith, 759 S.W.2d 56, 58 (Ky. 1988). For coverage to occur all that is required is that an employee for hire be performing services on behalf of an employer for hire at the moment of the injury. Id.
In this instance, it is undisputed that B & H is a logging company in the business of harvesting timber for profit. At the time of his accident, Henry was harvesting timber at a job site B & H controlled, pursuant to the instructions of the company’s owner. Moreover, Henry does not fall within any of the exceptions set out in KRS 342.650. In assessing employment relationship, none of the other facts of this case matter. At the moment Henry experienced a harmful change to the human organism he was “performing service in the course of the trade, business, profession, or occupation” of B & H.
In accordance with KRS 342.640(4), therefore, Henry was an employee of the respondent at the time of his accident. For that reason, Henry is entitled to an award of medical benefits pursuant to KRS 342.020 and temporary total disability benefits in line with KRS 342.140(1)(f) and KRS 342.730(1)(a). He is also potentially entitled to receive an award of permanent disability benefits depending on the remaining lay and medical evidence, and how that issue is decided on remand by the ALJ as the finder of fact.
Accordingly, the opinion and order rendered September 21, 2005, by Hon. R. Scott Borders, Administrative Law Judge, is hereby REVERSED, and this case is REMANDED for entry of a decision on the merits consistent with this opinion.
GARDNER, Chairman, CONCURS.
YOUNG, Member, CONCURS IN PART, DISSENTS IN PART, AND FILES SEPARATE OPINION.
YOUNG, Member. I concur in the majority opinion, with one exception: To the extent that the majority opinion may be read to authorize an award, on remand, of medical benefits after the claimant’s maximum medical improvement date absent a permanent impairment rating, I dissent. KRS 342.020(1) only authorizes medical benefits “at the time of injury and thereafter during disability.” I continue to believe that pertinent statutory provisions should be applied as written, for the reasons I have previously expressed in Gentiva Health Services v. White, Claim No. 02-90873 (December 10, 2004); Vogt v. Dahlem Realty, Claim No. 02-77500 (March 28, 2004); United Parcel Service v. Montgomery, Claim No. 01-89184 (April 1, 2005); and Kentucky River District Health Department v. Combs, Claim No. 03-79326 (April 29, 2005).
COUNSEL FOR PETITIONER:
HON R SCOTT WILDER
308 HIGHLAND PARK
RICHMOND KY 40475
COUNSEL FOR RESPONDENTS:
HON GLENN L GREENE JR
PO DRAWER 999
HARLAN KY 40831
UNINSURED EMPLOYERS' FUND
1024 CAPITAL CENTER DR STE 200
FRANKFORT KY 40601
ADMINISTRATIVE LAW JUDGE:
HON R SCOTT BORDERS
8120 DREAM ST
FLORENCE KY 41042
