Workers’
Compensation Board
OPINION
ENTERED: JANUARY 13, 2017
CLAIM NO. 201500924
LAKITEA GORDON PETITIONER
VS. APPEAL FROM HON. JOHN
B. COLEMAN,
ADMINISTRATIVE LAW JUDGE
WILD HORSE SALOON
UNINSURED EMPLOYERS' FUND
HON. JOHN B. COLEMAN,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
AFFIRMING
*
* * * * *
BEFORE: ALVEY, Chairman, STIVERS and RECHTER, Members.
ALVEY,
Chairman. Lakitea
Gordon (“Gordon”) seeks review of the opinion and order rendered August 3, 2016
by Hon. John B. Coleman, Administrative Law Judge (“ALJ”). The ALJ found she was an independent
contractor on April 7, 2015 when she was struck in the forehead by a shoe as
she was working as a dancer at an adult nightclub, and dismissed her claim
against the Wild Horse Saloon (“Wild Horse”).
Gordon also appeals from the August 30, 2016 order denying her petition
for reconsideration.
On appeal, Gordon
argues the evidence compels a finding that she was an employee rather than an
independent contractor at the time of her injury. We disagree and affirm. The ALJ performed the appropriate analysis in
applying the factors of Ratliff v. Redmon, 396 S.W.2d 320 (Ky. 1965), UEF
v. Garland, 805 S.W.2d 116 (Ky. App. 1991) and UEF v. Poynter, 829
S.W.2d 430 (Ky. App. 1992). The ALJ’s
decision is supported by substantial evidence, and a contrary result is not
compelled.
Gordon submitted a Form
101 on June 10, 2015, alleging injuries to her face and head on April 7, 2015
when she was struck in the head by a stiletto shoe as she walked into a
bathroom/dressing room during an altercation between other entertainers or
dancers. On the date of the incident,
Gordon was a dancer at Wild Horse.
Gordon filed the
ambulance transfer record dated April 8, 2015 in support of her claim. The record indicates Gordon was the victim of
assault/trauma, and sustained a three inch laceration to her forehead above the
nasal bridge. The record also indicates
Gordon has a history of seizures, and may have suffered a seizure of one minute
duration at the time of the incident.
Gordon is a resident of
Louisville, Kentucky. She testified by
deposition on August 26, 2015, and at the hearing held June 29, 2016. Gordon was born on October 12, 1988, and is a
high school graduate. She testified she
has taken some online college coursework, but did not indicate she had actually
completed any classes. Her employment
experience includes working as a hostess at the Galt House, as a server at
Frisch’s, and as a dancer at multiple nightclubs. She has not worked since the April 2015
incident. She testified she received SSI
benefits until the end of December 2014 due to a seizure disorder and
depression.
Gordon testified she
completed an application to dance at Wild Horse. She stated it was up to her as to when she
worked, but she believed she was required to dance on Friday and Saturday nights. She stated she was required to pay a “door
fee” to dance at the Wild Horse. This
fee varied based upon when she arrived to work.
This testimony was corroborated by Joe White (“White”), the club
owner. She was permitted to keep all of
the tips she earned, including those earned while dancing on the stage. She earned a percentage of any private dances
or drinks she sold. Gordon testified she
received her percentage in cash at the end of the night. She was required to tip various personnel at
the club, but the amount was up to her.
She testified she has never filed a tax return or paid taxes. She stated she has never been provided any
tax information. Gordon testified she
was not allowed to work at other clubs while dancing at the Wild Horse, but
could work other jobs. She additionally
testified she was not permitted to engage in solicitation or sexual acts with
bar patrons.
On the night of the
incident, other dancers were involved in an altercation on the back porch of
the bar. This continued into the
dressing room. As she was gathering her
clothing to leave, she was struck in the head by a shoe thrown by one of the
other dancers. She lost consciousness
and remembered coming to with blood pouring onto her face. When she awakened, police officers were
present. She was taken by ambulance to
the University of Louisville Hospital Emergency Room where she had x-rays,
injections, and stitches in her head.
She was referred to a plastic surgeon, but has had little follow-up
care. Gordon continues to have headaches
for which she uses Novocain patches and takes Tylenol or Excedrin. She currently receives food stamps, and has
been encouraged to reapply for SSI benefits.
White testified by
deposition on November 13, 2015, and at the hearing held on June 29, 2016. White owns rental property in Louisville and
operates Wild Horse. He testified when a
lady inquires about dancing at the nightclub, the rules regarding house fees as
well as prohibitions regarding solicitation, sexual contact and drugs are
explained. No formal application is
required; however, a dancer must provide information including her address and
proof of identity. The club rules are
included in the paperwork required to be completed.
Dancers must pay a
house fee which varies based upon the time they arrive at the nightclub. Dancers are permitted to keep all tips they
receive, and fifty percent of all drinks and private dances sold. Wild Horse does not withhold any taxes from
the money received by the dancers. He
stated after a dancer has performed for a period of time, a Form 1099 for
commissions will be issued. However,
most dancers do not work long enough to receive one.
Dancers work the hours
and days they want. There are no minimum
hours, and dancers are not required to work certain days. Dancers are not instructed how to dance, nor
are they required to dance in a certain manner.
Likewise, there is no requirement as to when dancers must arrive at the
nightclub. White stated dancers are
asked to not work at other nightclubs while dancing at the Wild Horse. He stated dancers make commissions and come
and go as they please. Wild Horse does
not provide clothing or props for the entertainer other than the stage and a
dressing room. Wild Horse maintains
workers’ compensation coverage on the bartender and the cook only, not on the
dancers. He stated dancers are not
employees, and are not intended to be.
White was not present
at the time Gordon was injured. She had
danced at White Horse approximately two weeks when the injury occurred.
A Benefit Review
Conference (“BRC”) was held on November 3, 2015. At that time, the ALJ ordered the claim
bifurcated for a determination of whether Gordon was an employee or an
independent contractor. Additional proof
time was granted to the parties. A
second BRC was held on June 8, 2016, and a hearing on the bifurcated issues was
scheduled. The hearing was held on June
29, 2016.
After summarizing in
detail the lay testimony, the ALJ determined Gordon was an independent
contractor, and dismissed the claim in the Opinion and Order rendered August 3,
2016. The ALJ specifically found as
follows:
In Ratliff v. Redmon, 396 S.W.2d 320 (Ky.
1965), the Supreme Court noted that in determining whether one acting for
another is a servant or an independent contractor the following matters of fact
among others, are considered: a) the extent of control, which by the agreement,
the master may exercise over the details of the work; b) whether or not
the employee is engaged in a distinct
occupation or business; c) the kind of occupation, with reference to whether,
in the locality, the work is usually done under the direction of the employer
or by a specialist without supervision; d) the skill required in the particular
occupation; e) whether the employee or the workman supplies the
instrumentalities, tools and the place of work for the person doing the work;
f) the length of time for which the person is employed; g) the method of
payment, whether by the time or by the job; h) whether or not the work is a
part of the regular business of the employer and i) whether or not the parties
believe they are creating the relationship of master and servant. In Uninsured
Employers' Fund v. Garland, 805 S.W.2d 116 (Ky. 1991), the Supreme Court
noted the four dominant factors of Redmon
to be: 1) the nature of the work as related to the business generally carried
on by the alleged employer; 2) the extent of control exercised by the alleged
employer; 3) the professional skill of the alleged employee; and 4) the true
intent of the parties. In distinguishing between an independent and an
employee, both the act and reality favor an existence of an employer/employee
relationship. Hushman Snack Foods Co., v.
Dillon, 591 S.W.2d 701 (Ky. App. 1979).
The
extent of control, which by agreement, the master may exercise over the details
of the work?
Here, it does not
appear the club exercised a great deal of control over the details of the
plaintiff's work. The plaintiff worked
as a dancer for tips and then simply received a commission from the amount of
drinks sold at the club. It does not
appear there was any quota or any other requirements. While there were some club rules which were
designed to [sic] for the purposes of discouraging illegal activity or behavior
which could hurt the club's business, there was clearly no strict work schedule
or particular job duties required. This
factor seems to suggest an independent contractor relationship.
Whether
or not the employee is engaged in a distinct occupation or business?
The job as an adult
entertainer or dancer is a distinct type of business. The plaintiff performed activities to include
entertainment for which she was paid on the basis of tips by individuals rather
than to the club. She also worked in
sales on a strict commission basis. To
the undersigned, her dancing activities are more akin to any other type of
entertainment [sic] can be provided in a club or bar setting. For instance, musical entertainment or
comedians can work for tips on a nightly basis would not be held to be
employees. Instead, those individuals
have a unique skill and are simply selling that skill as part of their own
business. Additionally, since the only
income the plaintiff stated came from the club would be on a strictly
commission basis, both of these activities would weigh in favor of finding an
independent contractor relationship.
The
kind of occupation, with reference to whether, in the locality, the work is
usually done under the direction of the employer or by a specialist without supervision?
It is clear the
plaintiff’s dancing activities were performed with little supervision by the
defendant. The testimony did not
indicate the defendant provided any training or close supervision over the
plaintiff's nightly activities. Instead,
the plaintiff relied on her dancing and sales skills in order to be compensated
each night. This factor also weighs in
favor of an independent contractor relationship.
The
skill required in the particular occupation?
To the undersigned,
the type of activity performed by the plaintiff does require advanced
skills. Dancing for long hours in a way
to provide continuous entertainment could not be performed by just any
individual. Instead, certain individuals
hold themselves out as adult entertainers and use their skills as adult
entertainers to obtain pay through tips.
This factor also weighs in favor of an independent contractor
relationship.
Whether
the employee or the workman supplies the instrumentalities, tools and the place
of work for the person doing the work?
The evidence before
the ALJ does not indicate whether the plaintiff supplied her own clothing or
whether costumes were provided for the plaintiff to perform. However, it is clear the defendant provided
the stage and setting on which the plaintiff dance. However, it is also clear the plaintiff paid
a fee to utilize the stage on a nightly basis.
This could be characterized as a rental agreement. Therefore, this factor also weighs in favor
of an independent contractor relationship.
The
length of time for which the person is employed?
This factor also
weighs in favor of the finding of an independent contractor relationship. The plaintiff’s testimony was that she had
worked at several other clubs as an adult entertainer and had recently returned
for a second time to the Wild Horse Saloon.
Given the fact the plaintiff would go from different club to different
club, although not on a nightly basis, it appears that no long-term
relationship was contemplated by the parties.
The
method of payment, whether by the time or by the job?
Testimony of both
parties indicates that she was paid strictly through tips and commissions. In fact, she also paid a fee in order to
utilize the club on a nightly basis. The
plaintiff was not paid by the hour or even by the night. In fact, the plaintiff paid a fee each night
in order to apply for a trade. This is
an indication of an independent contractor relationship.
Whether
or not the work is a part of the regular business of the employer?
Both parties make
valid points in consideration of this factor.
The defendant, Wild Horse Saloon is, in essence, a bar. The income comes through the sale of
alcoholic beverages. This particular bar
utilizes female adult entertainers in order to attract customers to the
establishment. While Mr. White testified
that most customers come for the "ice cold beer" at the final
hearing, his description in his deposition testimony made it clear that
gentleman come to enjoy the erotic dancing while enjoying a drink as well. This business model does require the use of
this type of entertainment to be profitable.
While this factor may be argued either way, I believe it weighs slightly
in favor of an employment relationship.
Whether
or not the parties believe they are creating the relationship of master and
servant?
While there was an
application completed by the plaintiff, I am convinced the application was for
the purposes of ensuring the dancers understood the requirements or rules to be
utilized to perform at that particular establishment. I am also convinced that application was
utilized to ensure the dancers were of the appropriate age to perform or work
at the facility. I do not believe the application
was intended to create a master and servant relationship. Testimony indicates the plaintiff could
choose the night she wanted to work although it is clear the defendant did
encourage an individual to work especially on the busier nights such as of
Friday and Saturday. After considering
the testimony of both parties, I believe the intended relationship was that the
club would be available for the plaintiff to utilize her skills to make her
money through tips and commissions. The
club would also benefit by having the plaintiff's entertainment as a draw to
the business. In other words, this is
more of a symbiotic relationship wherein both parties benefit equally from the
arrangement. I did not believe it is
indicative of a master and servant relationship on a long-term basis. This factor weighs in favor of an independent
contractor relationship rather than an employment relationship.
After considering
all the factors noted above, including the four dominant factors, while being
under the understanding that the act and reality favor an existence of the
employer/ employee relationship, I must note that I find the great majority of
the evidence and the law favors the finding of an independent contractor
relationship in this particular instance.
The plaintiff is a professional entertainer and salesperson who was not
paid by the defendant. Instead, the
plaintiff paid a fee in order to be able to utilize her entertainment and sales
skills and the defendant's facility. The
plaintiff's pay came through tips from customers and commissions from sales
only and not through an hourly wage. The
plaintiff chose the night she wanted to work and did not have a regular set
schedule. While the plaintiff perceived
she was unable to come and go as she pleased, the explanation offered by the
club owner gives sufficient reasons for the rules placed upon the
entertainment. As such, I find no
employment relationship to be in existence at the relevant time and the
plaintiff’s claim for income and medical benefits must be dismissed.
Gordon filed a petition
for reconsideration arguing the ALJ’s analysis was too narrow, and he erred in
finding she was an independent contractor.
In an order issued August 30, 2016, the ALJ denied the petition as
merely a re-argument of the merits of the claim and not an attempt to correct
an error.
On appeal, Gordon
argues the ALJ erred in finding she was an independent contractor as
established in the test set forth in Ratliff v. Redmon, supra; UEF
v. Garland, supra; and UEF v. Poynter, supra, and the
evidence compels a contrary result.
As the claimant in a workers’
compensation proceeding, Gordon had the burden of proving each of the essential
elements of her cause of action, including the existence of an
employee-employer relationship. Snawder
v. Stice, 576 S.W.2d 276 (Ky. App. 1979).
Since she was unsuccessful in her burden, the question on appeal is
whether the evidence compels a different result. Wolf Creek Collieries v. Crum, 673
S.W.2d 735 (Ky. App. 1984). Compelling
evidence is defined as evidence so overwhelming no reasonable person could
reach the same conclusion as the ALJ. REO
Mechanical v. Barnes, 691 S.W.2d 224 (Ky. App. 1985). The function of the Board in reviewing the
ALJ’s decision is limited to determining whether the ALJ’s findings are so
unreasonable under the evidence they must be reversed as a matter of law. Ira A. Watson Department Store v. Hamilton,
34 S.W.3d 48 (Ky. 2000).
As fact-finder, the ALJ
has the sole authority to determine the weight, credibility and substance of
the evidence. Square D Company v.
Tipton, 862 S.W.2d 308 (Ky. 1993).
Similarly, the ALJ has the discretion to determine all reasonable
inferences to be drawn from the evidence.
Miller v. East Kentucky Beverage/Pepsico, Inc., 951 S.W.2d 329
(Ky. 1997); Jackson v. General Refractories Co., 581 S.W.2d 10 (Ky. 1979). The ALJ may reject any testimony and believe
or disbelieve various parts of the evidence, regardless of whether it comes
from the same witness or the same adversary party’s total proof. Magic
Coal Co. v. Fox, 19 S.W.3d 88 (Ky. 2000). Although a party may note evidence supporting
a different outcome than reached by an ALJ, such proof is not an adequate basis
to reverse on appeal. McCloud v.
Beth-Elkhorn Corp., 514 S.W.2d 46 (Ky. 1974). The Board, as an appellate tribunal, may not
usurp the ALJ’s role as fact-finder by superimposing its own appraisals as to
the weight and credibility to be afforded the evidence or by noting reasonable inferences which otherwise could have been drawn from the
evidence. Whittaker v. Rowland,
998 S.W.2d 479 (Ky. 1999). So long as
the ALJ’s ruling is supported by substantial evidence, it may not be disturbed
on appeal. Special Fund v. Francis,
708 S.W.2d 641 (Ky. 1986).
In Ratliff v. Redmon, 396 S.W.2d at 324-325, the Court of Appeals provided nine factors to be considered when deciding whether a worker is an
employee or an independent contractor.
These factors were enumerated by the ALJ in his decision. The ALJ provided an analysis of each of the
nine factors in finding Gordon was an independent contractor.
In Chambers v. Wooten's IGA Foodliner, 436 S.W.2d 265, 266 (Ky.
1969), the Court of Appeals "refined" the nine-factor test by
identifying four factors that are most "predominant" stating as
follows:
[T]he nature of the work as
related to the business generally carried on by the alleged employer, the
extent of control exercised by the alleged employer, the professional skill of
the alleged employee, and the true intentions of the parties.
A proper legal analysis
involves consideration of "at least"
the four factors set forth in Chambers, and "proper legal
conclusions may not be drawn from consideration of one or two of these
factors." UEF v. Garland, 805
S.W.2d at 119. There, the Supreme Court stated:
A reviewing court must give
great deference to the conclusions of the fact-finder on factual questions if
supported by substantial evidence and the opposite result is not compelled.
When considering questions of law, or mixed questions of law and fact, the
reviewing court has greater latitude to determine whether the findings below
were sustained by evidence of probative value.
. . . .
The proper legal analysis
consists of several tests from Ratliff and requires consideration of at
least four predominant factors: (1) the nature of
the work as related to the business generally carried on by the alleged
employer; (2) the extent of control exercised by the alleged employer; (3) the
professional skill of the alleged employee; and (4) the true intent of the
parties.
Id. at 117, 118-119; See also UEF
v. Poynter, 829 S.W.2d 430 at 431.
Regarding the factors
set forth above, the ALJ determined three of the four supported a finding
Gordon was an independent contractor. The ALJ exercised the discretion afforded
to him in reaching these determinations.
Gordon requests this Board to reweigh the evidence and direct a finding
in her favor, which we are not permitted to do. The ALJ identified the appropriate factors
set forth in Ratliff v. Redmon, supra, and the four dominant
factors set forth in UEF v. Garland, supra. The ALJ addressed each factor, and determined
Gordon was an independent contractor. Because
the ALJ applied the appropriate tests, exercised his discretion in reaching his
determination based upon substantial evidence of record, and a contrary result
is not compelled, the ALJ’s decision will not be disturbed.
Accordingly, the August
3, 2016 Opinion and Order, and the August 30, 2016 order denying Gordon’s
petition for reconsideration rendered by Hon. John B. Coleman, Administrative
Law Judge, are hereby AFFIRMED.
ALL CONCUR.
COUNSEL
FOR PETITIONER:
HON PHILLIPE W RICH
1001 TREVILIAN WAY
LOUISVILLE, KY 40213
COUNSEL
FOR RESPONDENT:
HON JAMES K MURPHY
200 SOUTH FIFTH ST, STE 400
LOUISVILLE, KY 40202
RESPONDENT:
HON C D BATSON
UNINSURED EMPLOYERS’ FUND
1024 CAPITAL CENTER DR, STE 200
FRANKFORT, KY 40601
ADMINISTRATIVE
LAW JUDGE:
HON JOHN B COLEMAN
PREVENTION PARK
657 CHAMBERLIN AVENUE
FRANKFORT, KY 40601