Opinion
C.A. PC 11-0542
01-12-2016
MICHAEL PIMENTEL v. R.I. DEPT. OF LABOR & TRAINING
For Plaintiff: Veronika M. Kot, Esq. For Defendant: Bernard P. Healy, Esq.
Providence County Superior Court
For Plaintiff: Veronika M. Kot, Esq.
For Defendant: Bernard P. Healy, Esq.
DECISION
VOGEL, J.
Plaintiff, Michael Pimentel (Pimentel), seeks judicial review of a decision of the Board of Review of the Department of Labor and Training (Board of Review or DLT). In the decision, the Board of Review rejected Pimentel's claim for wages and found that he did not meet the definition of an "employee" as set forth in G.L. 1956 §§ 28-14-1, et seq. The Court exercises jurisdiction pursuant to G.L. 1956 §§ 42-35-15, et seq. For the reasons set forth herein, this Court affirms the DLT's decision.
I
Facts and Travel
Pimentel claims that Cliff Dolan (Dolan) hired him on April 26, 2010 to perform residential rehabilitation work on three residential projects for Dolan's company, Small Job Pro. See Compl.; see also Tr. 3, Dec. 2, 2010 (Tr.). Pimentel asserts that he began working for Dolan immediately and remained Dolan's employee for nine weeks, averaging thirty-eight hours a week, at the rate of $15 per hour. See Compl. ¶ 4. On July 22, 2010, Pimentel filed a complaint with the DLT's Division of Labor Standards, alleging that Dolan failed to pay him wages from April 26, 2010 to June 21, 2010-totaling approximately $2, 582.50. See Compl. ¶¶ 4-6. On December 2, 2010, a DLT duly authorized representative and hearing officer conducted a hearing on Pimentel's claim against Dolan and his company, Small Job Pro. See Department of Labor and Training, Division of Labor Standards Claim No. LS 2010-265, January 10, 2011 decision (Decision).
The projects include the Sheffield Avenue, Pawtucket, Rhode Island project; the Scituate, Rhode Island project; and the Cooper Street, Pawtucket, Rhode Island project. See Tr. at 26, 28, 30.
During the hearing, Pimentel represented himself, testified, and presented documentary evidence. See Decision at 1; see also Tr. at 2. Pimentel testified as to the aforementioned start date, pay rate, and hours per week worked. Tr. at 4, 25-26. Pimentel also stated that Dolan provided him with the tools, supervision, and knowledge necessary to complete the projects. Tr. at 26-27, 30, 31, 32, 33. He testified that Dolan assisted him to set up in the morning and checked his progress at the end of each business day. Tr. at 27, 29, 32. Although Pimentel acknowledged that he was able to set his own schedule, he claimed that he did not work for other contractors during the nine weeks he worked for Dolan and was not registered as a contractor with the State of Rhode Island Contractors' Registration and Licensing Board. Tr. at 34-35, 46. During the hearing, Pimentel presented a personal log, prepared contemporaneously with his claimed employment, documenting the dates and times he worked, the locations where he worked, and the amount of money he claims Dolan owes to him. Tr. at 5-6. Pimentel contends that his relationship with Dolan's company was one of employer/employee. Tr. at 44, 46, 49. He seeks back wages in the amount of $2, 582.50. Tr. at 4.
Dolan also testified at the hearing. See Decision at 1; see also Tr. at 2. In opposition to Pimentel's testimony, Dolan testified that Pimentel did, in fact, work for other contractors, as well as for Small Job Pro, during the subject time period. See Tr. at 18, 36. Dolan further stated that Pimentel operated his own contracting business and had business cards. See Tr. at 49. He denied knowing that Pimentel was not a registered contractor. See Tr. at 49-50. Dolan acknowledged that Pimentel performed construction work for Small Job Pro on various projects during the subject time frame, but contended that he did so as a subcontractor. See Tr. at 18, 49. Dolan testified that Pimentel made most of the decisions regarding the projects, and brought his own tools to the jobs. See Tr. at 36, 38, 39. Dolan stated that he only assisted Pimentel when he fell behind in his work and required Dolan's help to meet deadlines. See Tr. at 17, 37-40. Dolan described their relationship further by explaining that Dolan would get the jobs, receive bids for the work involved, and subcontract out the work. See Tr. at 42, 43. Dolan testified that, during the time frame in question, customers often paid Pimentel directly, as they would any independent subcontractor. See Tr. at 19-20, 23. Although Dolan acknowledged that he owes Pimentel money under their agreement for work he performed, he insists that Pimentel worked for the company as an "independent contractor, " not as an "employee." See Tr. at 20. As such, Dolan argues that Small Job Pro had no obligation to provide Workers' Compensation coverage for him, nor was Pimentel entitled to any other benefits available to employees. See Tr. at 18, 52.
On January 10, 2011, the Board of Review issued its decision, finding that Pimentel did not meet the strict definition of an "employee" under the applicable statute and was not entitled to wages from Dolan or Small Job Pro under § 28-14-1. See Decision. On January 31, 2011, Pimentel timely appealed that Decision to the Superior Court. See Compl.
In his Complaint, Pimentel asserts that the Decision violates §§ 28-14-1, et seq., which governs employees' payment of wages. See Compl. ¶¶ 9-11; see also §§ 28-14-1, et seq. On February 14, 2012, the DLT responded to the Complaint, asking the Court to uphold the administrative decision that Pimentel worked as an "independent contractor, " not as an "employee." See Answer. The DLT asserted an affirmative defense that Pimentel failed to join an indispensible party, Cliff Dolan, doing business as Small Job Pro. See Answer ¶ 2. Thereafter, Plaintiff filed a so-called Amended Complaint, adding Small Job Pro to the caption of the case.
Pimentel failed to seek leave of Court before filing the subsequent pleading. See R.I. Super. Ct. R. Civ. P. 15(a) (stating that "[a] party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served or . . . only by leave of court or by written consent of the adverse party"). Additionally, Pimentel never identifies Small Job Pro as a legal entity, only as Dolan's company. As such, the firm cannot be named as a party in a case caption. See Catucci v. Pacheco, 866 A.2d 509, 513 (R.I. 2005) (rejecting an amended pleading as there was "no suggestion that plaintiff sought leave of the Superior Court to amend his complaint to add [the parties] or that plaintiff received written consent of the adverse party to do so"). The Court therefore disregards the so-called Amended Complaint. However, the Court will consider the appeal on the merits based upon the allegations set forth in the original Complaint as Pimentel refers to his claim against Dolan in the body of the Complaint, and moreover, because the DLT failed to develop its affirmative defense in its brief. See Wilkinson v. State Crime Lab. Comm'n, 788 A.2d 1129, 1131 n.1 (R.I. 2002) ("stating an issue for appellate review, without a meaningful discussion thereof or legal briefing of the issues, does not assist the Court in focusing on the legal questions raised, and therefore constitutes a waiver of that issue").
II
Standard of Review
The Superior Court exercises jurisdiction over appeals from the DLT pursuant to § 42-35-15(g) of the Rhode Island Administrative Procedures Act, which provides as follows:
"The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
"(1) In violation of constitutional or statutory provisions;
"(2) In excess of the statutory authority of the agency;
"(3) Made upon unlawful procedure;
"(4) Affected by other error or law;
"(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
"(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion." Sec. 42-35-15(g).
As a general rule, "administrative agencies retain broad enforcement discretion" and, thus, considerable deference is accorded to an agency's decision. Arnold v. Lebel, 941 A.2d 813, 821 (R.I. 2007). Such deference is additionally given to an agency's interpretation of a statute, whose administration and enforcement has been entrusted to that agency. See In re Lallo, 768 A.2d 921, 926 (R.I. 2001) (stating that an agency's interpretation of its own statute or regulations should be accorded "weight and deference as long as that construction is not clearly erroneous or unauthorized") (internal citations omitted).
When considering questions of law, however, the Court is not bound by the determination of the agency, but instead may be "freely reviewed to determine the relevant law and its applicability to the facts presented in the record." State Dep't of Envtl. Mgmt. v. State Labor Relations Bd., 799 A.2d 274, 277 (R.I. 2002). Therefore, "questions of law-including statutory interpretation-are reviewed de novo." Iselin v. Ret. Bd. of Employees' Ret. Sys. of Rhode Island, 943 A.2d 1045, 1049 (R.I. 2008).
Conversely, when considering questions of fact, the Court "may not substitute its judgment for that of the agency and must affirm the decision of the agency unless its findings are clearly erroneous." Guarino v. Dep't of Soc. Welfare, 410 A.2d 425 (R.I. 1980) (citing § 42-35-15(g)(5)). Further, the Court cannot "weigh the evidence [or] pass upon the credibility of witnesses [or] substitute its findings of fact for those made at the administrative level." E. Grossman & Sons, Inc. v. Rocha, 118 R.I. 276, 284-85, 373 A.2d 496, 501 (1977). Rather, § 42-35-15(g) limits the Court to an examination of the record in order to ascertain whether the agency's decision is supported by legally competent and substantial evidence. See Ctr. for Behavioral Health, Rhode Island, Inc., v. Barros, 710 A.2d 680, 684 (R.I. 1998); Kirby v. Planning Bd. of Review of Town of Middletown, 634 A.2d 285, 290 (R.I. 1993). Legally competent evidence is such "relevant evidence that a reasonable mind might accept as adequate to support a conclusion [and] means an amount more than a scintilla but less than a preponderance." Town of Burrillville v. R.I. State Labor Relations Bd., 921 A.2d 113, 118 (R.I. 2007).
III
Analysis
A
Plaintiff's claim was brought under General Laws 1956 §§ 28-14-1, et seq., the Act governing the payment of wages. That Act merely states that an "[e]mployee means any person [] permitted to work by an employer, except [] independent contractors or subcontractors, " but fails to define what constitutes an "independent contractor." Sec. 28-14-1(2).
On appeal, Pimentel alleges that the Decision is affected by error of law because the DLT incorrectly relied on the statutory definition of "independent contractor" as found in Chapters 42-44 of Title 28, the so-called Employment Security Act. Pimentel faults the Board of Review for determining his status as an "independent contractor" by applying the factors set forth under the Employment Security Act. Under that Act, the test for making that determination "shall be the same as those factors used by the Internal Revenue Service (IRS) in its code and regulations." Sec. 28-42-7.
The Court rejects Pimentel's contention that the DLT applied the wrong criteria when deciding whether he was an "independent contractor" or an "employee." His argument fails because the DLT's determination as to Pimentel's status follows not only the IRS test, but also well-established Rhode Island case law, as well as Restatement (Second) of Agency § 220.
The IRS test for determining employment status for tax purposes focuses on the employer's control over the manner in which the work is performed. See Gen. Inv. Corp. v. United States, 823 F.2d 337, 341-42 (9th Cir. 1987). In determining whether a taxpayer is an "independent contractor" or an "employee, " the Tax Court applies common law principles to the specific facts and circumstances of the case. See id. The Court also seeks guidance from the Restatement. See Robinson v. C.I.R., 101 T.C.M. (CCH) 1473 (T.C. 2011) aff'd, 487 F.App'x 751 (3d Cir. 2012).
Rhode Island Supreme Court precedent makes clear that "it is impossible to determine the relationship of employer and employee [versus an independent contractor] by any hard and fast rule." Sormanti v. Marsor Jewelry Co., Inc., 83 R.I. 438, 441, 118 A.2d 339, 341 (1955); see also Di Orio v. R. L. Platter, Inc., 100 R.I. 117, 121-22, 211 A.2d 642, 644 (1965) (stating that "[o]rdinarily no single phase of the evidence is determinative of the question and all features thereof must be considered together [as] the answer to such question depends in each case upon its particular facts taken as a whole"). Nonetheless, Rhode Island law acknowledges that, "although there is no definite answer, 'the test [as to] whether a person is [an employee or] an independent contractor is based on the employer's right or power to exercise control over the method and means of performing the work.'" Absi v. State Dep't of Admin., 785 A.2d 554, 556 (R.I. 2001); see O'Connor v. Narragansett Elec. Co., 54 R.I. 317, 172 A. 889, 890 (1934) ("The final test [of whether a person is an independent contractor] is not the actual exercise of the power of control, but the right of the employer to exercise power of control."). In addition, our Supreme Court has found certain factors to be of particular importance in determining whether one party actually has the authority to control the work of another, including, "the provisions of the employment contract between the parties, if any; the method of payment; the option as to time in doing the work; and the giving of instructions by the employer." Henry v. Mondillo, 49 R.I. 261, 142 A. 230, 232 (1928).
Furthermore, Rhode Island courts, like the Tax Court, may look to the Restatement for guidance in determining a person's status as an "independent contractor" or "employee." See Schock v. United States, 56 F.Supp.2d 185, 193 (D.R.I. 1999), aff'd, 254 F.3d 1 (1st Cir. 2001) (noting that "[t]he Rhode Island Supreme Court would look to the Restatement" for guidance). Section 220 (Second) of the Restatement provides guidelines in order to determine whether an individual is an employee or an independent contractor and states 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 one employed 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 employer 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;
"(i) whether or not the parties believe they are creating the relation of master and servant; and
"(j) whether the principal is or is not in business." Restatement (Second) of Agency § 220 (1958).
Here, the DLT relied on appropriate factors, including those set forth in both the Restatement and the IRS code, in reaching its conclusion that Pimentel was an "independent contractor." See Schock, 56 F.Supp.2d at 193. The Court finds that the DLT properly examined the parties' relationship-specifically "the degree of control and . . . independence" between them-to determine whether Pimentel was an "employee" or an "independent contractor." Decision at 4; see Sormanti, 83 R.I. at 441, 118 A.2d at 340 (noting that "[t]he final test is the right of the employer to exercise power of control" over the supposed employee). In examining whether such a relationship exists, the DLT outlined certain factors-from the Restatement, IRS code, and Rhode Island law-that it considered, including, "[t]he parties' intent to establish an employee relationship . . . [t]he type of service . . . whether the individual has been and will continue to be free from control or direction . . . whether the services are either outside of the usual course of the business for which that service is performed . . . and whether the individual is customarily engaged in an independently established trade, occupation, profession or business." Decision at 4-5; see Restatement (noting that "[i]n 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 one employed is engaged in a distinct occupation or business; (c) the kind of occupation; . . . [and] (i) whether or not the parties believe they are creating the relation of master and servant"); Henry, 49 R.I. at 261, 142 A.2d at 232. Thus, the DLT's reliance on these factors in connection with the evidence before it was not affected by other error or law.
B
Pimentel additionally contends that in light of the Restatement's guidelines, the Decision is clearly erroneous because the record proves Dolan had control over Pimentel and his work. See Compl. ¶¶ 7, 11. For instance, in his brief, Pimentel contends that the record demonstrates that Dolan told him what work to perform on each project, gave him instructions on how to perform the work, frequently checked in on his progress, and often visited the jobsites. In addition, Pimentel claims that the record shows Dolan chose which jobsite he would work at each week, set his hourly wage, and provided him with the necessary tools and materials. Pimentel further contends that working for Dolan prevented him from working for other contractors during this time. Consequently, Pimentel argues that the record demonstrates he was Dolan's "employee" within the meaning of § 28-14-1(2), and thus, Dolan is liable for "the violations of [Pimentel's] rights under the payment of wages requirement of §§ 24-14-1, et seq." See Compl. ¶ 11.
In its response brief, the DLT asserts that the record demonstrates that Dolan carried his burden in proving that he did not have the authority to control Pimentel, and thus, Pimentel was not an "employee, " but instead, an "independent contractor." The DLT contends that Dolan satisfied this burden by testifying that Pimentel set his own hours, provided some of his own tools, worked for other contractors, received some payment directly from the homeowners, owned his own contracting business, and did not regularly work under Dolan's instructions. The DLT found that, as a result, Dolan neither had the authority to exercise control over Pimentel nor even tried to exercise such control. Therefore, the DLT claims its finding that Pimentel was not an "employee" of Dolan, but instead an "independent contractor, " is not clearly erroneous.
The DLT noted that it was Dolan's burden to establish that Pimentel was an "independent contractor, " and found that Dolan met that burden. See Decision at 4, 5.
In deciding issues of fact, the Court may not weigh the evidence of the administrative record, pass upon the credibility of witnesses, or substitute its findings of fact for those made by the DLT. See E. Grossman & Sons, Inc., 118 R.I. at 284-85, 373 A.2d at 501. Rather, the Court's review is limited "to an examination of the certified record" in order to ascertain whether the Decision is supported by substantial evidence. See Ctr. for Behavioral Health, Rhode Island, Inc., 710 A.2d at 684.
The Board of Review accepted Dolan's version of events as credible, and favorably noted "his demeanor and forthright answers." Decision at 5-6. This Court must defer to the Board's findings of fact and determinations as to the credibility of the witnesses. E. Grossman & Sons, Inc., 118 R.I. at 285, 373 A.2d at 501. So long as the Court determines that the Decision is supported by adequate and legally competent evidence, the Court must affirm the administrative decision. See Ctr. for Behavioral Health, Rhode Island, Inc., 710 A.2d at 684. Applying that standard, the Court finds that the DLT's determination that Pimentel was an "independent contractor" is supported by adequate and legally competent evidence.
Dolan testified that Pimentel was "paid as an independent contractor" and "worked for [] other people just like me as an, a subcontractor." Tr. at 18, 20. He further testified that Pimentel was often paid directly from the homeowners. See Tr. at 19-20, 23, 38; see also Restatement (stating that "[i]n determining whether one [] is [] an independent contractor, the following [] are considered: (g) the method of payment"); Di Orio, 100 R.I. at 122, 211 A.2d at 642 (considering the method of payment as a factor in determining whether the petitioner was an independent contractor or an employee).
The evidence that the DLT found to be credible further demonstrates that Dolan would "general out . . . the jobs, " and give Pimentel general instructions and supervision, consistent with a general contractor and subcontractor relationship. Tr. at 35; see Restatement (noting that the type of occupation that one is engaged in must be considered in determining whether that individual is an employee or an independent contractor). The record also reveals that, for the most part, Dolan left Pimentel alone to perform his work unsupervised. See Tr. at 38, 39, 49; see also Restatement (stating that "the extent of control which, by the agreement, the master may exercise over the details of the work" helps determine whether an individual is an independent contractor); Lowe v. Surpas Res. Corp., 253 F.Supp.2d 1209, 1232 (D. Kan. 2003) (noting that "[a]n independent contractor is defined as one who, in exercising an independent employment, contracts to do certain work according to his own methods, without being subject to the control of his employer, except as to the results or product of his work"). Finally, the DLT accepted Dolan's testimony that he never intended to employ Pimentel, and Pimentel never viewed himself as an employee. See Tr. at 18; see also Restatement (stating that "whether or not the parties believe they are creating the relation of master and servant" is an important factor to consider in determining whether an individual is an employee or an independent contractor). Based on this evidence-that the DLT accepted as true-the Court finds that the Decision ruling that Pimentel was not an "employee" is supported by adequate and legally competent evidence. Accordingly, the Decision is not clearly erroneous in light of the probative and substantial evidence on the record. See § 42-35-15(g).
IV
Conclusion
After review of the entire record, this Court finds that the Decision was neither affected by other error or law nor clearly erroneous. See § 42-35-15(g)(4). Pimentel's substantial rights were not prejudiced. Accordingly, the Court affirms the Decision. As a result, Pimentel's request for attorney's fees is denied. See Compl. ¶ 3; see also § 42-92-3.
Counsel shall submit the appropriate judgment for entry.