This appeal arises under the Texas Workers’ Compensation Act, TEX. REV. CIV. STAT. ANN. art. 8308-1.01 et seq. (Vernon Supp. 1993) (1989 Act). A contested case hearing was held in (city), Texas, on April 5, 1993, with (hearing officer) presiding as hearing officer. The hearing officer found that the claimant was not an employee of (CES), who carried workers’ compensation insurance with the respondent (carrier), at the time of his injury on June 11, 1992, while working at a location of . On a related issue as to whether the workers’ compensation insurance policy would cover claimant if he were an employee of CES, the hearing officer noted her opinion that it would, although a finding on the issue was moot given her holding on the employee status issue.
The appellant (claimant herein) appeals asserting that claimant was an employee of “the entity” created by an agreement between CES and (employer), and noting testimony from the branch manager of CES to the effect that their contracts were not employee leasing agreements, but co-employment agreements. There was no response filed by the carrier.
DECISION
Finding no reversible error in the record, and sufficient evidence to support the decision of the hearing officer, we affirm.
Claimant said that he had been in the logging business for 19 years, working for the year before his injury for (employer). Claimant indicated that on or about June 5, 1992, he filled out an application for employment with CES. This application was given to him, however, by the principals of (employer), (JG) and Mr. “Buddy” Edge (BE). Along with the application, claimant completed both an independent contractor agreement and an Internal Revenue Service W-9 form to supply his taxpayer number. Claimant stated he had never been to CES, nor talked with anyone from the company. On June 16, 1992, CES sent claimant a check for $0, which indicated that claimant had received a cash advance of his wages of $343.84. The check stub contains the words “B & J Trucking.” Claimant was actually paid money by (employer) for lumber he cut before his injury. Claimant stated that although his work was supervised (when necessary) by JG and BE rather than by CES personnel, he understood that he was a contract employee of CES, and was covered by workers’ compensation insurance. He agreed, however, that he probably stated at the benefit review conference that (employer) was his employer.
Claimant stated that on June 11, 1992, he was doing his usual work as a logger, when a limb fell out of a large pine tree and hit him on the head, injuring his head and neck. After his injury, (employer) sent him to the doctor, and advised him to have the doctor send the bill for medical services to the East Texas Insurance Agency. Claimant followed this directive, but his workers’ compensation claim was denied. (employer) paid claimant’s medical bills and continued to pay him $100 per week to help him with his living expenses.
Claimant stated that his work with (employer) was limited to felling and trimming trees, and did not extend to transporting the trees to the saw mill. He said that he was paid by the ton for the wood he cut, that he supplied his own saw and received separate money for that, from which fuel for the saw was paid.
Further information about claimant’s job was furnished by JG and BE. JG indicated that claimant essentially set his own hours, leaving anywhere from 11:00 to 1:00 each day, after he had cut wood. BE stated that claimant was a professional, did good work, and needed virtually no direction except to be told the location where wood was being cut by (employer). BE stated that (employer) did not withhold income taxes or Social Security from checks paid to claimant, and that claimant was “self-employed.” JR indicated that (employer) (prior to enrollment with CES) had a verbal agreement with the claimant that claimant’s status was that of an independent contractor.
Jimmy Crews (JC), of the East Texas Insurance Agency in Colmesneil, Texas, testified for claimant. He stated that in late 1991, he met with Byron (BL) and Wes Lansford (WL), in order to discuss the feasibility of enrolling some of his client businesses with CES, which he described as an employee leasing company. JC sought this meeting because the employment leasing company which previously had been doing business with his clients had decided that it did not wish to do business with loggers having fewer than 10 employees so he was attempting to locate a new employment service which would be willing to enroll his clients. At that meeting, JC said he was advised by BL and WL that client companies would be covered as soon as they had completed the enrollment contract with CES. JC said that shortly thereafter, CES supplied him with copies of the contract he was to use to enroll companies. JC further stated that the immediate coverage arrangement had been followed when other companies were enrolled, and that no company whom he had attempted to enroll with CES had been rejected by CES. He stated on being recalled that no contracts had ever been returned to him for incompleteness or any other reason.
JC stated that on June 4, 1992, (employer) Company completed an enrollment contract, at the home of one of the principals, and that he submitted the contract to CES before claimant was injured on June 11, 1992. Although JC could not specifically recall, he stated that it was his practice to make sure that the representatives of client companies such as B & J would sign both places where signature was required. JC stated that although he had no independent recollection of whether page 5 of the enrollment contract with CES (the signature page) was included in the contract which he forwarded to CES on behalf of (employer), he was certain that if page 5 had been included in the blank form contract which was provided to him by CES for completion by client companies, he would have sent it along with the rest of the contract documents.
JC’s method of operation was to receive money from client companies and then write a larger check from his business’ own account to CES. Memos that accompanied checks in evidence that were written to CES in June 1992 indicate that one of the companies was “B & J Trucking.” Typically, the money from the client company would cover workers’ compensation, salary and a four percent administrative fee, according to JC. JC said that, in order to avoid any delay in claimant’s paycheck relating to child support obligations of claimant, it was agreed that (employer) would, for a few weeks, advance money against claimant’s pay, although all paperwork would be processed through CES. For these periods, the money sent by (employer), and paid over to CES, consisted of the workers’ compensation premium plus a four percent administrative service charge. JC stated that CES never advised him that the contract was either rejected or accepted, and further stated that the money which he collected from (employer), and forwarded to CES on behalf of (employer), had never been refunded to him, or to (employer) so far as he was aware.
JC noted that he was paid a commission by CES. He was terminated July 31, 1992. A July 31, 1992, letter in evidence from CES styled as a memo to “All Clients” from BL, regarding “Agent Cancellation,” informs that JC is no longer “an agent or representative of CES.” JC stated that he did not act as an agent for carrier relating to the sale of workers’ compensation insurance for any of the client companies. He stated that he requested, and received by facsimile transmission, proof from CES that it carried workers’ compensation insurance.
(RC), an independent insurance agent doing business in (city) and (city), Texas, testified for claimant. RC testified that in late 1991, he met with BL, WL, and JC in Colmesneil. RC stated that he had attended this meeting because JC had informed him about CES, and RC was interested in learning more about the company. At that meeting, either BL or WL stated that a client company employee would be covered by CES as soon as that employee went to work for a client company, and that coverage began when the enrollment paperwork was commenced. RC stated that he never enrolled any of his insurance clients with CES. RC stated that it was his understanding that he or JC would operate as agents of CES when signing up businesses for CES.
JG and BE, partners in (employer), testified for claimant. They testified that on June 4, 1992, the CES contract included two places for them to sign, and was signed in both places, and thereafter given to JC for forwarding to CES. They further testified that they made their payments to the East Texas Insurance Agency and these payments included the amount they had been informed was for purchase of workers’ compensation insurance. JG stated that (employer) had been a nonsubscriber to workers’ compensation for three years, and that the primary reason for contracting with CES was to avoid the large down payment of workers’ compensation premium that would be required of their company through the assigned risk pool. BE testified that the overall annual premium would not be less, but that the method of payment, paying over time as opposed to paying up front, would change. They testified that the amount of money paid through East Texas Insurance Agency was a percentage based upon their workers’ compensation classifications for logging workers. They stated that neither CES nor the East Texas Insurance Agency had ever refunded the money which (employer) paid pursuant to their agreement.
BL, the branch manager of CES in June of 1992, was called as a witness by claimant. He stated that he was present at the 1991 meeting in Colmesneil, Texas, and further stated that JC was not advised that companies would be covered immediately upon completing an enrollment application, but that companies were not covered until such time as the contract was accepted by CES. He stated that only he and WL had authority to accept contracts. BL stated that his company was not an employee leasing company because it did not “buy and lease” employees.
BL stated that when the CES contract/enrollment application submitted by JC on behalf of (employer) was received by CES, it was missing the first signature page (page 5), and stated that JC often submitted incomplete paperwork which was returned to JC for completion. BL was unable to state exactly when the B & J contract was received. He stated that it had been retrieved from CES’s files after this dispute arose, and it was noted then that page 5 was missing. BL agreed that such contracts would be reviewed before filing. BL stated that CES never accepted the contract, because CES learned that (employer) had experienced an on-the-job accident (claimant’s injury), and therefore CES rejected the contract. BL strongly denied that the contract had been accepted, and that he, or anyone else with CES, had misplaced the page containing signatures on behalf of (employer) and CES. BL conceded that CES had processed a payment received on behalf of (employer), and that it had issued a “zero” check to claimant, attributing this to bookkeeper error. BL stated that CES personnel were instructed to refund B & J’s money but was unable to state whether this refund had ever occurred. BL stated that CES did not often process payrolls without having received a contract, although there were some rare exceptions to this policy (which did not involve (employer)). Although the witness stated that JC was an agent of CES, he gave no specific testimony regarding the extent of the authority which CES had expressly given JC. Moreover, there was no evidence as to whether limitations on JC’s authority were communicated to the client companies prior to the letter indicating that JC had been terminated from CES.
BL said he did not receive claimant’s application paperwork until June 30, 1992. He said this was also when he became aware that claimant was injured.
The contract in question refers to CES and (employer) as “co-employers” of persons working for B & J. It delegates to B & J, referred to as the “Special Employer,” responsibility for the hiring, supervision and control of employees. CES reserves to itself duties with respect to payroll related taxes and benefits, and some authority to terminate employees in accordance with any written employment agreement. Evaluation of employee performance is left to the Special Employer. The Agreement expressly states
that it cannot be construed as creating a joint enterprise or partnership, and that CES and B & J remain separate companies. It states that it is valid and enforceable only after “signed” by authorized agents for both companies.
Leaving aside the issue of missing page 5, the one signature page that is part of Schedule A of the contract has been signed by JG and BE, but not by anyone for CES. Moreover, Schedule A, which is the schedule setting forth the employees covered by the agreement, and the rate of pay, is incomplete where specific “fill-in-the-blank” information is called for.
There is evidence on both sides of the issue of whether CES and (employer) had a contract. Like the hearing officer, we need not decide one way or the other because even if there were a contract, the document in question does not reserve or confer right of control in CES over claimant. To the extent any control is delegated in the document between CES and (employer) over employees covered by the contract, it would seem to be delegated to B & J, not CES. There was no evidence to support, and the contract document expressly refutes, the claimant’s argument on appeal that a separate employing “entity” such as a joint venture was created by the agreement. We have stated several times before that the mere recital or claim by a party to be the “employer,” or the gratuitous provision of workers’ compensation insurance, does not conclusively resolve the issue of who is the “employer” for purposes of workers’ compensation. See Texas Workers’ Compensation Commission Appeal No. 92116, decided May 14, 1992; also Appeal No. 93053, decided March 1, 1993. See also Archem Co. v. Austin Industrial, Inc., 804 S.W.2d 268 (Tex. App.- Houston [1st Dist] 1991, no writ). We do not regard, under the facts here, the recitation that CES is a “co-employer” to be materially different than previous cases where leasing companies have claimed to be the “joint” employer or sole employer of loaned employees. See Texas Workers’ Compensation Commission Appeal No. 92188, decided June 29, 1992.
The evidence suggests another basis upon which the hearing officer could have found that claimant was not an employee of CES: that he operated as an independent contractor. Claimant appears to have been free to set his hours, and his methods of working. Except for the site of wood cutting, he appears to have required virtually no supervision. He supplied his own tools, was not paid by the hour, but by the amount of wood cut, and was responsible for payment of his taxes and withholding. Testimony indicated that claimant had been perceived as “self-employed” and a professional who needed little, if any, supervision by principals of (employer) before the CES transaction came about. In addition, claimant signed an independent contractor agreement as part of the paperwork submitted to CES; principals of (employer) stated that there was a verbal understanding before this that he was an independent contractor.
The decision of the hearing officer is sufficiently supported by the record and is affirmed.
Susan M. Kelley – Appeals Judge
CONCUR:
Lynda H. Nesenholtz – Appeals Judge
CONCURRING OPINION:
I concur with the opinion in this case. However, I want to emphasize that although not established by the evidence in this case, Article 8308-3.05(e) provides a method for a general contractor and a subcontractor (including a subcontractor operating as an independent contractor) to enter into a written agreement wherein the general contractor provides workers’ compensation coverage. This may have been the intent of the claimant and (employer) in the attempted arrangement between CES and (employer). However, the record does not show compliance with Article 8308-3.05(e) and (f) even if a binding co-employer or joint employer relationship or entity had been established by CES and (employer). I do not read this opinion to rule out the possible establishment of such a binding relationship.
Stark O. Sanders, Jr. – Chief Appeals Judge