*/
January 13, 2017 201500924

Commonwealth of Kentucky 

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