Missouri Independent Contractor v. Employee

Missouri defines an employee as “[e]very person in the service, of an employer, as defined in this chapter under any contract of hire, express or implied, oral or written, or under any appointment election, including executive officers of corporations.” MO. Stat. §287.020(1). Additionally, Missouri has an owner/operator exemption, which states, “[t]he word ‘employee’ shall not include an individual who is the owner, as defined in section 301.010, an operator of a motor vehicle which is leased or contracted with a driver to a for-hire motor carrier operating within a commercial zone…, or operating under a certificate issued by the Missouri department of transportation or by the United States Department of Transportation, or any of its subagencies.” MO. Stat. §287.020 (1). Missouri case law has defined an independent contractor as “[o]ne who exercising an independent employment, contracts to do a piece of work according to his own methods, without being subject to the control of his employer, except as to the result of his work.” White v. Dallas & Mavis Forwarding Co., Inc., 857 S.W.2d 278, 280 (Mo. Ct. App. 1993) (Citing Miller v. Hirshbach Motor Lines, Inc., 714 S.W.2d 652, 656 (Mo.App.1986). 

The Court in White v. Dallas & Mavis Forwarding Co., Inc., made their decision prior to the enactment of the owner-operator exemption of §287.020.1. In White, Claimant was found to be an independent contractor by the Administrative Law Judge (“ALJ”), and that decision was affirmed by the Labor and Industrial Commission. Claimant appealed that decision, which was ultimately reversed and remanded by the Missouri Court of Appeals for the Western District. Claimant signed a contract with Dallas & Mavis Forwarding Co., Inc., (D & M) which was titled “Independent Contractor Lease” and prepared by D & M. Under this agreement, Claimant leased his tractor and trailer to D & M, and he was designated as an independent contractor. Upon its review of the initial appeal, the Commission affirmed the award of the ALJ due to finding the parties had the freedom to contract to allocate workers’ compensation liability and the agreement between D & M and Claimant described Claimant as an independent contractor and was, thus, controlling. The Court of Appeals found the contractual designation important in its analysis, however, found it to not be conclusive when there was evidence overcoming such a designation. White, 857 S.W.2d at 281 (citing Miller). 

Following its review of the evidence set out before it, the Court of Appeals found there was significant evidence to show D & M controlled the service provided by Claimant so that the designation of Claimant as an independent contractor was overcome. The Court of Appeals found seven factors enabling it to overcome the independent contractor designation. The factors being: (1) Claimant was told when and where to pick up a load; (2) although Claimant was not directly told what route to take, D & M effectively controlled the choice of route by allowing compensation based only on the most direct route mileage; (3) Claimant was required to call in every day to report his whereabouts and any irregularities in the trip; (4) Claimant was required to call D & M for instructions following any delivery and when he had an empty trailer to determine where and when to pick up another load; (5) when Claimant indicated he wanted to decline a load which would not take him home, Claimant was told if he did not do so he would be terminated; (6) at the conclusion of each trip, Claimant was required to turn in copies of his log, which gave a history of his trip; and (7) Claimant was not free to lease additional deliveries with other companies without the approval of D & M, except in rare cases, Claimant had been refused permission to lease such deliveries. The Court of Appeals held, “[t]hese factors point to control by D & M of [Claimant’s] service in contrast to an independent contractor who performs a piece of work according to his own method without being subject to the control of the employer.” White, 857 S.W.2d at 281.

According to the White ruling, the main factor in determining an independent contractor-employee relationship before the owner operator exemption, was the ability of the employer to control the employee’s service and job. 

In Booth v. Trailiner Corporation, 21 S. W. 3d. 869 (Mo. App. 2000), the Missouri Court of Appeals addressed the independent contractor/employee issue following the implementation of the “owner/operator exemption.” The Commission, and the initial ALJ, held Claimant was an employee of Trailiner Corporation despite a clear “owner/operator” agreement between Claimant and Trailiner. On appeal, the Court of Appeals agreed with Trailiner that the Commission holding Claimant as an employee, rather than exempt from the provisions of the Workers’ Compensation Act by §287.021, was erroneous because of facts found by the Commission did not support the award and there was not significant competent evidence to warrant making such an award. The Booth Court concluded all of the evidence before the Commission established there was a lease, or contract, between Claimant, as an owner and operator, and Trailiner concerning Claimant’s tractor; the lease or contract concerning the tractor was with the driver; Claimant was operating his tractor at the time of the accident; and Trailiner was a commercial contract motor vehicle carrier operating under a certificate issued by the ICC, since Claimant’s tractor was being used under Trailiner’s ICC numbers. This evidence was undisputed and brought the relationship between Claimant and Trailiner within the letter of the owner-operator exemption of §287.020.1 and, thus, established Claimant was not an employee under the statutes and exempt from workers’ compensation coverage. 

If you have any questions about these cases, the “owner/operator exemption and/or how they may affect matters you are reviewing, please do not hesitate to reach out to our talented attorneys. Sodoro Law Group is a full-service law firm answering to the legal needs of clients in Iowa, Kansas, Missouri, Nebraska, and South Dakota. 

For more information, or to contact the team at Sodoro Law Group, go to sodorolaw.com or email Kelsey Sievers at ksievers@sodorolaw.com.