J. Cook Enterprises, Inc.

Read the official release (oshrc.gov)

Plain-English summary

OSHA cited J. Cook Enterprises after a residential framing worker fell 11.5 feet and died. The items alleged inadequate jobsite inspections, lack of residential fall protection, and failure to report the fatality within eight hours. The central issue was whether J. Cook Enterprises employed the framing crew or whether the workers were independent contractors. Applying common-law agency factors, the judge found insufficient proof that the company controlled the crew's work, hours, hiring, payment, tools, or other key aspects of the relationship. The homeowner paid the crew leader directly for this project, and the crew leader carried workers' compensation coverage for the framers. Because the Secretary did not prove the required employment relationship, all three citation items and the proposed $7,600 penalty were vacated.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.20(b)(2); 29 C.F.R. § 1926.501(b)(13); 29 C.F.R. § 1904.39(a)
• Outcome: Two serious items and one other-than-serious item vacated; no penalty assessed.
• Key point: The Secretary bears the burden of proving that the cited company employed the affected workers, and an uncertain informal business relationship did not meet that burden.

Full text (OSHRC public release)

                   UNITED STATES OF AMERICA
       OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

                     Complainant,
                                                            DOCKET NO.              13-0136
               v.

J. COOK ENTERPRISES, INC.
and its successors,

                     Respondent.

Appearances:

    Virginia Fritchey, Esq., Office of the Solicitor, U.S. Dept. of Labor, Dallas, Texas
             For Complainant

    Andrea Brock, Esq., Andrea Brock, P.A., Forrest City, Arkansas
            For Respondent

Before: Administrative Law Judge Brian A. Duncan

                                     DECISION AND ORDER

                                         Procedural History

    This matter is before the United States Occupational Safety and Health Review

Commission (“Commission”) pursuant to Section 10(c) of the Occupational Safety and Health

Act of 1970, 29 U.S.C. § 651 et seq. (“the Act”). On September 6, 2012, the Occupational

Safety and Health Administration (“OSHA”) inspected a worksite located at 6204 S. Caraway in

Jonesboro, Arkansas. (Tr. 31). As a result of that inspection, OSHA issued a Citation and

Notification of Penalty (“Citation”) to Respondent. The Citation alleges two serious, and one

other-than-serious, violations of the Act, with total proposed penalties of $7,600.00. Respondent

timely contested the Citation. A trial was conducted in Memphis, Tennessee on February 12,

2014. The parties each submitted post-trial briefs for consideration.
       Seven witnesses testified at trial: (1) David Brian, OSHA Compliance Safety and Health

Officer (“CSHO”); (2) Luis Valverde, an alleged employee of Respondent; (3) Alejandro

Valverde Zuniga, an alleged employee of Respondent; (4) David Inman, the general contractor

for the worksite; (5) Randy Pearson, insurance agent for Respondent; (6) Esther Witcher,

Respondent’s Certified Public Accountant; and (7) Joey Cook, owner of Respondent.

                                              Jurisdiction

     The parties stipulated that the Commission has jurisdiction over this proceeding pursuant

to Section 10(c) of the Act. (Tr. 16). The Court also finds that Respondent was an employer

engaged in a business and industry affecting interstate commerce within the meaning of Sections

3(3) and 3(5) of the Act, 29 U.S.C. § 652(5). Slingluff v. OSHRC, 425 F.3d 861 (10th Cir. 2005).

Respondent is a small residential and commercial construction company with at least two

employees. (Tr. 242–243).

                                              Background

     On August 25, 2012, Javier Valverde 1 died after falling 11.5 feet during the construction

of a home located at 6204 S. Caraway in Jonesboro, Arkansas (“worksite”). (Tr. 16). After

learning about Javier’s death, Complainant conducted an investigation of the fatality, and

charged Respondent with three separate violations of the Act. (Tr. 31). In response, Respondent

contends that Javier Valverde and his crew, which included Luis Valverde (Javier’s brother) and

Freddy Martinez, were not Respondent’s employees but were instead independent contractors.

The primary disputed issue in this case is whether Complainant has properly characterized

Respondent as the employer of Javier, Luis, and Freddy for the purposes of liability under the

Act.

1. For the purposes of clarity, due to common last names, the Court shall hereinafter refer to the carpenters/framers
   at the site as “Javier, Luis, and Freddy.”

                                                    2
   

   CSHO Brian arrived at the worksite on September 6, 2012, twelve days after the

accident, to begin his investigation. (Tr. 31, 81). CSHO Brian contacted David Inman, the

general contractor for the worksite, discussed the purpose for his visit, and began examining the

worksite. (Tr. 31–32). During the course of his investigation, CSHO Brian took photos of the

worksite and conducted multiple witness interviews. (Tr. 34). Through his conversations with

Mr. Inman, CSHO Brian learned that Respondent was also involved in the construction project.

(Tr. 40–41). CSHO Brian ultimately concluded that Respondent was the framing crew’s

employer and issued the following three proposed violations of the Act.

                                   Citation 1, Item 1

   Complainant alleged a serious violation of the Act in Citation 1, Item 1 as follows:

   29 C.F.R. § 1926.20(b)(2): The employer did not initiate and maintain programs
   for frequent and regular inspection of the job site, material and equipment to be
   made by a competent person(s).

   On or about August 25, 2012, and at times prior thereto, at the jobsite located at
   6204 S Caraway in Jonesboro, Arkansas where employees were framing a single
   family residence. The employer did not ensure frequent inspections of the jobsite
   were conducted by a competent person. As a result an employee was not wearing
   fall protection and fell approximately 11 ½ feet to his death.

   The cited standard provides:

   Such programs shall provide for frequent and regular inspections of the job sites,
   materials, and equipment to be made by competent persons designated by the
   employers.

29 C.F.R. § 1926.20(b)(2).

                                   Citation 1, Item 2

   Complainant alleged a serious violation of the Act in Citation 1, Item 2 as follows:

   29 C.F.R. § 1926.501(b)(13):        Each employee(s) engaged in residential
   construction activities 6 feet (1.8 m) or more above lower levels were not
   protected by guardrail systems, safety net system, or personal fall arrest system,
   nor were employee(s) provided with an alternative fall protection measure under
   another provision of paragraph 1926.501(b)



                                            3

On or above August 25, 2012, at the job site located at 6204 S Caraway, in
Jonesboro, Arkansas. The employer did not ensure employees working 6 feet or
more above a lower level were protected from falling 11 ½ feet to the ground
below. As a result, an employee slipped and fell to his death.

   The cited standard provides:

   Each employee engaged in residential construction activities 6 feet (1.8 m) or
   more above lower levels shall be protected by guardrail systems, safety net
   system, or personal fall arrest system unless another provision in paragraph (b) of
   this section provides for an alternative fall protection measure. Exception: When
   the employer can demonstrate that it is infeasible or creates a greater hazard to use
   these systems, the employer shall develop and implement a fall protection plan
   which meets the requirements of paragraph (k) of 1926.502.

29 C.F.R. § 1926.501(b)(13).

                                    Citation 2, Item 1

   Complainant alleged an other-than-serious violation of the Act in Citation 2, Item 1 as

follows:

   29 C.F.R. § 1904.39(a): The employer did not orally report the death of an
   employee or the in-patient hospitalization of three or more employees because of
   a work-related incident:

   On or about August 25, 2012, at 6204 S Caraway in Jonesboro, Arkansas, the
   employer did not report to OSHA, a work-related death, within the 8 hour
   requirement.

   The cited standard provides:

   Within eight (8) hours after the death of any employee from a work-related
   incident or the in-patient hospitalization of three or more employees as a result of
   a work-related incident, you must orally report the fatality/multiple hospitalization
   by telephone or in person to the Area Office of the Occupational Safety and
   Health Administration (OSHA), U.S. Department of Labor, that is nearest to the
   site of the incident. You may also use the OSHA toll-free central telephone
   number, 1-800-321-OSHA (1-800-321-6742).

29 C.F.R. § 1904.39(a).

                                            4

Applicable Law

    To prove a violation of an OSHA standard, Complainant must prove, by a

preponderance of the evidence, that: (1) the cited standard applied to the facts; (2) the employer

failed to comply with the terms of the cited standard; (3) employees were exposed or had access

to the hazard covered by the standard, and (4) the employer had actual or constructive

knowledge of the violative condition (i.e., the employer knew, or with the exercise of

reasonable diligence could have known). Atlantic Battery Co., 16 BNA OSHC 2131 (No. 90-

1747, 1994).

   A violation is “serious” if there was a substantial probability that death or serious

physical harm could have resulted from the violative condition. 29 U.S.C. § 666(k).

Complainant need not show that there was a substantial probability that an accident would

actually occur; he need only show that if an accident occurred, serious physical harm could

result. Phelps Dodge Corp. v. OSHRC, 725 F.2d 1237, 1240 (9th Cir. 1984). If the possible

injury addressed by a regulation is death or serious physical harm, a violation of the regulation is

serious. Mosser Construction, 23 BNA OSHC 1044 (No. 08-0631, 2010); Dec-Tam Corp., 15

BNA OSHC 2072 (No. 88-0523, 1993).

                                        Discussion

    As an initial matter, the Court notes that Respondent’s post-trial brief did not address the

merits of the alleged violations; instead, Respondent focused the entirety of its brief on whether

it was properly characterized as the employer of Javier, Luis, and Freddy, the affected workers at

the worksite. For jurisdictional purposes only, the Court found above that Respondent is

generally an “employer” pursuant to Section 3(5) of the Act. However, the Court must further

                                             5

determine whether Respondent was the employer of the specific framing/carpenter employees

who were allegedly exposed to the hazards identified in the Citation items.

   “[T]he Secretary has the burden of proving that a cited respondent is the employer of the

affected workers at the site.” Allstate Painting & Contracting Co., 21 BNA OSHC 1033, 1035

(No. 97-1631, 2005). In order to determine whether Complainant has satisfied this burden, the

Commission applies the factors laid out by the Supreme Court in Nationwide Mut. Ins. Co. v.

Darden, 503 U.S. 318 (1992). See Sharon & Walter Constr. Co., 23 BNA OSHC 1286, 1289

(No. 00-1402, 2010) (applying Darden). The Supreme Court identified the following factors for

determining whether an employment relationship exists:

   In determining whether a hired party is an employee under the general common
   law of agency, we consider the hiring party’s right to control the manner and
   means by which the product is accomplished. Among the other factors relevant to
   this inquiry are the skill required; the source of the instrumentalities and tools; the
   location of the work; the duration of the relationship between the parties; whether
   the hiring party has the right to assign additional projects to the hired party; the
   extent of the hired party’s discretion over when and how long to work; the method
   of payment; the hired party’s role in hiring and paying assistants; whether the
   work is part of the regular business of the hiring party; whether the hiring party is
   in business; the provision of employee benefits; and the tax treatment of the hired
   party.

Id. at 323 (citing Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751 (1989)).

“While no single factor under Darden is determinative, the primary focus is whether the putative

employer controls the workers.” Allstate Painting & Contracting, 21 BNA OSHC 1033, 1035

(No. 97-1631, 2005) (citing Don Davis, 19 BNA OSHC 1477 (No. 96-1378, 2001)).

Respondent’s Right to Control Manner and Means by Which the Product is Accomplished

   The story of this case is based primarily on oral evidence, and is fraught with the typical

problems and uncertainties that arise when doing business with friends and acquaintances

without formal, written agreements. General Contractor David Inman agreed to build a small

home for a woman that worked with his wife and with whom he attended church. (Tr. 166). Mr.

                                             6

Inman orally offered the framing and carpentry work on the house to Joey Cook, Respondent’s

owner. (Tr. 166-168). To keep the homeowner’s costs as low as possible, Mr. Inman would

only pay $2.50 per-square-foot, which was apparently much lower than the $3.00-$4.50 per-

square-foot rate common in this area. (Tr. 167-168, 239, 262).

   Mr. Cook testified that he could not accept the job, because the price was too low. (Tr.

262–263). Instead, he agreed to pass along the job to Javier Valverde and his crew (with whom

he had on ongoing business relationship from other jobs). (Tr. 263-265). There was not a lot of

framing work available at the time, and Javier told Mr. Cook during a phone conversation that he

would take the job, even at the lower rate. (Tr. 263-265). Mr. Cook then arranged a meeting

between himself, Javier, and Mr. Inman, during which the blueprints for the house and details of

the job were discussed. (Tr. 263-265). Mr. Inman testified that, although no written agreements

were ever signed, he believed Mr. Cook to be the framing contractor, but that the work was

simply been further subcontracted to Javier – as that was the common practice in his industry.

(Tr. 170, 182-183).

   When Mr. Inman came to the worksite during the first few days to check on the framing

progress, Javier, Luis, and Freddy were there, as well as (at least during the first four days) Zach

Cook (Joey Cook’s son). (Tr. 103, 172). According to Luis and Mr. Inman, Zack participated in

some of the framing work on the home, kept track of materials, and discussed changes to the

blueprints with both Mr. Inman and Luis. (Tr. 103, 174). After those first few days, Zack left the

worksite and moved on to work on another project. (Tr. 103, 108).

   Although Zack Cook’s presence during the first few days of work was the only evidence

of Respondent’s physical presence during work at the jobsite, neither party called Zack Cook as

a witness at trial. As a result, there were more questions raised by the testimony concerning

                                             7

Zack Cook, than there were answers given during the trial. Even Luis, whose credibility is

somewhat called into question due to his pending litigation against Respondent on behalf of his

brother’s estate, referred to Zack Cook as “the boss” at one point, then corrected himself and said

“the boss’ son” at a later point. (Tr. 92, 125-126). Mr. Inman testified he was under the

impression that Zack was acting as an “overseer”, but also saw him “cutting some lumber,

helping stand a wall, measuring, [and] carrying some lumber.” (Tr. 173). Mr. Inman also

discussed the details of framing the home, and some changes to the framing plans, with both

Zack and Luis. 2 (Id.).

    It is unclear what Zack Cook’s actual position and role was at this worksite; how long he

was there each day; who asked him to go to the worksite in the first place; what he was doing

while he was there; whether he was directing work or being directed; whether he was just there

to earn some money since there was no other work at the time; whether he was to be paid while

on site; how he was to be paid while he was there; or by whom he was to be paid. Complainant

argues in its post-trial brief that it was Respondent’s responsibility to call Zack Cook to testify at

trial, and that Respondent’s failure to do so should weigh against them. The Court disagrees.

Complainant bears the burden of proof in this case. The Court will not speculate on what Zack

Cook would have testified to had he been called as a witness. See Don Davis d/b/a Davis

Ditching and Davis Ditching, Inc., 19 BNA OSHC 1477 (No. 96-1378, 2001) (citing Timothy

Victory, 18 BNA OSHC 1023, 1027 (No. 93-3359, 1997)).

    The only other evidence of Respondent having a representative at this jobsite was on the

day before the accident. Joey Cook visited the site and asked Javier if his crew would be done

by the following Sunday, because there was another project Joey Cook needed him to work on.

2. It is also worth noting that Mr. Inman testified that he had trouble communicating with the Spanish-speaking
   workers, which could explain why he included Zack Cook in jobsite discussions. (Tr. 174).

                                                 8
   

   (Tr. 110). Yet, even considering the limited information concerning Zack Cook’s presence at

this site on certain days, and Joey Cook’s visit the day before the accident, there is simply not

enough information in the record for the Court to conclude that Respondent asserted control over

the manner and means of the framing work being performed by Javier, Luis, and Freddy at this

jobsite. Therefore, analysis of this Darden factor weighs against finding an employer/employee

relationship between Respondent and Javier, Luis, or Freddy.

                                              Skill Required

     Javier, Luis, and Freddy were all experienced carpenters/framers—and according to

Luis— had been framing for 14 years. (Tr. 85). He further testified that he did not need

instruction on how to frame a house; rather, he only needed directions about what needed to be

framed and then carried out those instructions based on his experience and expertise. (Tr. 127).

CSHO Brian also testified that the affected workers were skilled framers, and Complainant has

conceded as much in his brief. See Compl’t Br. at 6. Therefore, analysis of this Darden factor

weighs against finding an employer/employee relationship between Respondent and Javier, Luis,

or Freddy. See Southern Scrap Materials Co., Inc., 23 BNA OSHC 1596 (No. 94-3393, 2011)

(noting level of skill and amount of experience of workers).

                                Source of Instrumentalities and Tools

     The framing materials and supplies were provided directly by the homeowner. (Tr. 76).

However, Respondent provided most of the tools that were used by the framing crew at the

worksite. (Tr. 89, 248). Joey Cook testified that Javier and his crew had some of their own tools,

but they were old and worn out, so he allowed them to borrow tools and equipment on this and

other jobs prior to this one. 3 (Tr. 248). On this particular job, Respondent allowed Javier and his

3. Joey Cook testified that he did this for other subcontractors that he worked with as well. (Tr. 248). In some
   instances, he allowed subcontractors to ultimately purchase the tools that they had been borrowing. (Tr. 249).

                                                     9
   

   crew to take the tools home with them so that they could drive directly from their homes to the

worksite, rather than having to stop by Respondent’s home to collect them each day. (Tr. 104).

Joey Cook testified that the practice of allowing subcontractors to borrow tools is common in his

business practice and the industry in general. (Tr. 249).

   Providing tools to workers is typically an indication that an employment relationship

exists. See Loomis Cabinet v. Occupational Safety and Health Review Comm’n, 20 F.3d 938,

942 (9th Cir. 1994) (holding Commission’s findings of employment relationship supported by

substantial evidence, including provision of tools). The Court finds that this Darden factor does

tend to support the finding of an employment relationship, though, in light of Joey Cook’s

undisputed testimony regarding his and the industry’s practice, perhaps not as strongly as

Complainant argues.

                                   Location of the Work

   The worksite in this case was a home construction site located in Jonesboro, Arkansas,

which was controlled by Mr. Inman and the homeowner. (Tr. 31). The location of this worksite

does not, in and of itself, weigh heavily in terms of a possible employment relationship, because

it was not Respondent’s place of business. However, it is worth noting that on past projects in

which Respondent worked with Javier and his crew, the framers would frequently report to Joey

Cook’s home each morning and then be transported as a group to a jobsite location. (Tr. 90,

253–254, 269–270). On this particular job, the framers did not report to Mr. Cook’s house each

morning, nor were they transported there as a group each day. (Tr. 104). Javier, Luis, and

Freddy traveled directly to the jobsite at issue in this case each day in their own personal vehicle.

(Tr. 104). This fact is consistent with Joey Cook’s testimony describing this job as a unique

project, which he passed along to Javier and his crew so they could have some work. Therefore,

                                             10

analysis of this Darden factor weighs against finding an employer/employee relationship

between Respondent and Javier, Luis, or Freddy on this job.

                               Duration of the Relationship

   According to Luis, he and Javier had worked exclusively for Respondent on various jobs

for the year-and-a-half period prior to the accident. (Tr. 86–87). An exclusive relationship of this

duration can give rise to a reasonable inference that an employment relationship exists.

However, it is common in the construction industry to frequently use the same subcontractors

with whom a positive business relationship has been established. (Tr. 167, 219). While Javier

and his framing crew worked only with Respondent for the previous year-and-a-half, it is

important to note that Respondent had also worked with approximately 15 other subcontractors

on various projects during that same period. (Tr. 237). The ongoing business relationship

between Respondent, Javier, Luis, and Freddy for a significant period of time weighs in favor of

an employment relationship.

                    Respondent’s Right to Assign Additional Projects

   There was very little testimony regarding any purported right Respondent had to assign

additional projects to Javier and his crew. After Javier died, Luis and Freddy never went back to

the worksite and never received any further communications from Respondent regarding the job

– which was only 90-percent complete. (Tr. 86, 138-139).

   Complainant argues that Respondent could, and did, assign additional projects to Javier

and his crew. Complainant points to Joey Cook’s visit to the jobsite the day before the accident

to tell Javier that he needed them on another job the following Monday. (Tr. 110). This

undeveloped testimony is problematic for a couple of reasons: (1) there was no evidence to

suggest whether Respondent and Javier had previously agreed on the upcoming project, thus

                                            11

calling into question whether the project was something that was assigned, or merely offered as

an additional opportunity for work; and (2) there is no evidence to suggest that Respondent had

any control over the work being performed at this site, and whether this visit was intended for

Joey Cook to determine whether Javier’s crew could be available to work on the other project, or

whether Respondent needed to find another subcontractor.

    The lack of convincing evidence with respect to this factor leads the Court to conclude

that Complainant failed to prove that Respondent had the right to assign additional projects to

Javier and his crew, as opposed to offering them the opportunity for new jobs as subcontractors.

           Extent of Hired Party’s Discretion of When and How Long to Work

    Complainant’s evidence on this particular factor was also unclear.        Luis Valverde’s

testimony often overlapped between work on this particular site, and work on other past jobs

obtained through the crew’s relationship with Respondent. Complainant elicited testimony about

numerous past jobs to establish historical evidence of an employer/employee relationship. The

record, however, indicates that this particular project, due in large part to the low pay offered by

the general contractor, was handled differently than other past projects. It was difficult in some

instances, especially during Luis’s testimony, to determine whether he was testifying about

events on this jobsite or past jobsites.

    For example, Luis testified that Zack Cook decided when Javier’s crew could leave at the

end of each day. (Tr. 92). But he went on to say that when Zack was not there, Paul (a third

party painting subcontractor) would decide when Javier’s crew would leave each day. (Tr. 90-

92). However, Zach worked with Respondent and Javier’s crew on this project (on certain days)

and regularly on other past jobs. (Tr. 92, 152, 269-270). It was unclear whether Paul worked at

this particular project. Luis also testified that Paul drove Javier’s crew to the worksite, and

                                            12

described ongoing payments from Joey Cook by check, but in that same line of testimony,

acknowledged that Javier payed Luis’s wages out of lump sum project checks received from

Joey Cook, and that he, Javier, and Freddy drove themselves to this jobsite in their own vehicle.

(Tr. 90, 93-95, 104, 152). Luis’s testimony, at several points, was simply unclear. Ultimately,

the Court finds that Complainant failed to establish that Respondent controlled when or how long

Javier and his crew worked at this site.

                                          Method of Payment

    There are two things to consider with respect to this particular factor: (1) the payment

history between Respondent and Javier’s crew on past projects; and (2) the payment for this

particular project. The parties dispute how Respondent historically paid Javier and his crew on

past projects. Luis testified that sometimes they were paid by the hour and sometimes they were

paid by the project. (Tr. 94–95). In either case, Luis said that they were paid consistently on a

bi-weekly basis. 4 (Tr. 140). Joey Cook, on the other hand, testified that he only paid Javier lump

sum amounts by the project. (Tr. 238, 245). Javier, in turn, paid Luis and the other framers. (Tr.

95). The financial records introduced in evidence supports Respondent’s version of events. (Ex.

R-8).

    The checks were not issued to Javier in any discernible temporal pattern. There were

some days on which Javier was issued three different checks, each with a different amount and a

memo reference to the project for which payment was being made. (Ex. R-8). Although some

checks were issued two weeks apart, there were occasions when as little as two days, and

4. Luis claimed that Zack kept a log of the hours worked by each framer. (Tr. 94). Without the log itself, which was
   not introduced in evidence, it is unclear whether that was in fact true; whether Luis was once again overlapping in
   his testimony between this particular project and other past projects; and is also inconsistent with the financial
   records introduced in the records which indicated lump sum payments to Javier per project.

                                                   13
   

   sometimes up to three months, would pass between checks. 5 (Id.). To the extent that Luis

perhaps received payment every two weeks suggests more about the employment relationship

between Javier and Luis than it does about the relationship between Respondent and Javier or his

crew.

     Second, with respect to this particular job, Javier and his crew were not paid at all by

Respondent. (Ex. R-6). Instead, payment for their framing work was issued directly by the

homeowner through a check made out to Javier Valverde. (Tr. 186-187; Ex. R-6). Respondent

did not receive any payment for this particular project, nor was there any evidence that Zack

Cook was paid for the time he spent working at the jobsite. (Tr. 187-188). The evidence relating

to this factor weighs against a purported employment relationship between Respondent and

Javier, Luis, or Freddy, and also tends to support Joey Cook’s testimony that this particular job

was handled differently than previous projects.

                        Hired Party’s Role in Hiring and Paying Assistants

     Complainant contends that Respondent played a significant role in Javier’s decisions to

hire and pay assistants. While Joey Cook may have had some input on the number of workers

that would be necessary to complete particular jobs within the timeframe agreed upon, the

responsibility to recruit and pay individual workers fell to Javier. (Tr. 137, 241, 245). He

specifically decided who to hire on particular jobs, which often ended up being his own relatives

and friends. (Tr. 136–137; 241–242). Joey Cook testified that, on past jobs, 6 he paid Javier the

same amount regardless of how many framers Javier decided to have on his crew. (Tr. 241-242).

     There was also no indication in the record that Respondent had any authority to fire the

5. It is also important to note that Joey Cook testified that Javier and his crew were often paid in full for jobs where
   their portion of the work was complete, yet work continued to be performed by Respondent’s other subcontractors.
   (Tr. 258–259; Ex. R-8).
   6
   Again, Respondent did not pay Javier or his crew for this job. Javier and his crew were paid by the homeowner.

                                                     14
   

   workers that Javier chose to bring with him to this, or other, worksites. For example, after the

accident on this site, Luis and Freddy did not do any further work through Respondent. (Tr. 86,

121, 139, 144, 247, 274). They were not fired, nor did they quit; they simply ended their

working relationship with Respondent. It is also worth noting that neither Luis nor Freddy made

claims for unemployment benefits at the conclusion of their working relationship with

Respondent. (Tr. 274). Therefore, analysis of this Darden factor also weighs against finding an

employer/employee relationship between Respondent and Javier, Luis, or Freddy on this job.

               Whether Work is Part of the Regular Business of Respondent

     Respondent is in the business of residential and commercial construction. (Tr. 217–218).

Depending on the job, Joey Cook testified that he works as a general contractor or subcontractor.

(Id.). When he works as a general contractor, Mr. Cook stated that he generally subcontracts out

most of the work. (Tr. 218). Even when he acts as subcontractor, he testified that he often further

contracts the work out to other subcontractors. (Tr. 219). This includes carpentry/framing work.

(Id.).

     Citing to an ALJ decision, Complainant contends that “when a party is hiring workers to

perform work that is part of its regular business, the implication is that the persons hired are

employees rather than independent contractors.” Daniel Crowe Roof Repair, 23 BNA OSHC

2001 (No. 10-2090, 2011) (citation omitted). While that might be true in some cases, both Mr.

Inman and Mr. Cook testified that it is a typical practice in the industry for subcontractors to

further contract work out to other subcontractors. Further, it is important to note that Cook

testified that he has worked with multiple framing contractors over the last couple of years. (Tr.

219). The work on this project is typical of the kind of work Respondent subcontracts on a

                                            15

regular basis. However, that fact does little to prove or disprove the existence of an employment

relationship in this particular case.

                      Provision of Employee Benefits and Tax Treatment

    The parties agree that Respondent did not provide any employee benefits to the affected

workers, nor did it deduct any taxes from the checks issued to Javier. (Tr. 242-243). As noted by

Complainant, the Commission has found that the absence of federal income tax documentation is

not dispositive as to a worker’s status as employee or independent contractor. See Sharon &

Walter Constr., Inc., 23 BNA OSHC 1286 (00-1402, 2010) (“[F]ailure to withhold federal

income and social security taxes was imply an attempt to hide [the worker’s] true status, not a

bona fide reflection of an authentic independent contractor relationship . . . .”). The

Commission’s conclusion in that case must also be viewed in light of the numerous other factors

that clearly support a finding of an employment relationship. See id. (worker’s hours were

specifically set, specific jobs assigned each morning, etc.). In this case, Respondent’s financial

records support Joey Cook’s testimony that Javier and his crewmembers were independent

contractors, and Complainant produced no records which could contradict that fact.

    Also, Javier purchased his own worker’s compensation policy to cover the individual

framers he used on this and other projects. (Tr. 205-206, 214; Ex. R-4). Although not definitive,

this is certainly persuasive evidence to suggest that Javier was the employer of the framers on

this project, rather than Respondent. 7 Analysis of the evidence relevant to this Darden factor

weighs against finding an employer/employee relationship between Respondent and Javier, Luis,

or Freddy.

7
Complainant argues only that Respondent was Javier’s and his crews’ employer. No argument of alternative
liability under a multi-employer, controlling employer theory was asserted.

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Conclusion

    As noted above, it is Complainant’s burden to establish that an employment relationship

existed between Respondent and Javier Valverde, Luis Valverde, and Freddy Martinez. A lack

of any documentation memorializing the business relationships on this particular project, as well

as the failure to elicit trial testimony from a key witness created a record full of unanswered

questions. Considering the totality of the circumstances discussed above, the Court finds that

Complainant failed to meet its burden. Accordingly, the Citation items proposed in this case will

be VACATED.

                                          Order

    Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED

that Citation 1, Items 1 and 2; and Citation 2, Item 1 are hereby VACATED.

   SO ORDERED.




                                  /s/   Brian A. Duncan

Date: July 22, 2014 Judge Brian A. Duncan
Denver, Colorado U.S. Occupational Safety and Health Review Commission

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