County of Spotsylvania v. Walker

COURT OF APPEALS OF VIRGINIA

Present: Judges Benton, Annunziata and Senior Judge Cole
Argued at Richmond, Virginia

COUNTY OF SPOTSYLVANIA AND
VIRGINIA MUNICIPAL GROUP SELF-INSURANCE
ASSOCIATION/VML INSURANCE PROGRAMS
OPINION BY
v. Record No. 1679-96-2 JUDGE ROSEMARIE ANNUNZIATA
JULY 15, 1997
BETTY C. WALKER

FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
William S. Sands, Jr. (Duncan and Hopkins,
P.C., on brief), for appellants.

No brief or argument for appellee.

The County of Spotsylvania (County) appeals the decision of

the commission awarding compensation benefits to Betty C. Walker

(claimant). There is no dispute that claimant suffered a

work-related injury by accident and was temporarily, totally

disabled. The issue in this case is whether claimant was an

"employee" within the meaning of the Act, or is otherwise

excluded from coverage. We find that claimant was not an

"employee" of the County and, therefore, reverse.

I.

The County's Department of Social Services (DSS) receives

allocations of federal and state funds for the purpose of

purchasing various services approved by the Virginia DSS. One

such service is the County's companion services program, designed

to assist low income elderly or disabled individuals with daily

living skills. The County's use of the allocated funds within
the program is defined by the policies and regulations of the

state DSS. Under state guidelines, funds may be used to provide

only certain needs. Specifically, the companion services program

is intended to address the client's "personal needs," not "heavy

duty housework." The state DSS establishes the maximum pay level

for companion services providers, and the County determines the

actual level of pay within those limits. Companion services

providers are paid by the County, which then obtains

reimbursement from the state.
In March 1992, the County approved claimant's application to

be a companion services provider. The general terms of the

relationship between the County and the service provider are

contained in an "Individual Vendor Agreement." This agreement

sets forth the services the individual provider offers to render

and the remuneration the County agrees to pay. The agreement is

not client-specific. Specifically, it provides:
This Agreement contains the terms under which
purchasing will take place, but it does not
mean that Social Services will purchase any
services. If Social Services wishes to
purchase services it will present the
Individual with a Purchase of Services Order
which then becomes a part of this Agreement.
The Individual shall provide services only
when and as authorized by a Purchase of
Services Order which has been accepted by the
Individual. Social Services may terminate
the Purchase of Services Order prematurely
for good cause by issuing a Purchase of
Services Order indicating termination.

The individual shall bill monthly on Vendor
Invoice forms supplied by Social Services.
The Individual shall bill Social Services and
receive payment only for services authorized

- 2 -
 by a Purchase of Services Order and only for
services actually provided.

* * * * * * *

The Individual states that the services
described in this Agreement are not available
from the Individual without charge. Any
additional fee paid by the client or the
client's family may only be with Social
Services' permission for services not
specified on the Purchase of Services Order
or in accordance with Social Services' fee
system as indicated on the Purchase of
Services Order.

The Individual shall not subcontract or
assign this Agreement to anyone else to
provide any of the services under this
Agreement without first obtaining written
approval from Social Services. The
Individual is responsible for the performance
of the subcontractor.
* * * * * * *

The Individual agrees to hold Social Services
harmless from any claims for damages for any
actions or inactions of the Individual or his
agents or employees.

The agreement further requires the provider to give the County

two weeks notice if the provider is unable to provide services as

agreed.

Claimant's Individual Vendor Agreement describes the

following services she offered to provide:

[p]rovide AM care (bath, dressing, ect.

[sic]), prepare meals, transport to and from

doctor[,] wash clothes, light house work.

Claimant was to be paid four dollars per hour and was limited to

a maximum of fifteen hours per week.

- 3 -
 County social workers administer the companion services

program. Typically, an individual seeking aid contacts a social

worker, who then meets with the prospective "client" to determine

that person's need and income eligibility for the program. Once

the County determines that the client qualifies, the social

worker pairs the client with a particular provider. Where the

client does not suggest a particular provider, the County seeks

to match the client with a provider from a list of approved

providers. The social worker contacts the prospective provider

to discuss the needs of the new client. The prospective provider

decides whether to accept the case. Providers may freely decline

an offered assignment. If the provider accepts a case, the

provider meets with the client, sometimes, but not necessarily,

in the presence of the social worker, to discuss the details of

the assignment. The client and the provider determine the

specific roles of the provider and the specific times when the

services will be provided. The client, not the social worker,

chooses the provider.
Once the client selects a provider, the provider and the

County complete a "Purchase Service Order," detailing the terms

of the assignment as agreed to by the provider and the client and

stating, inter alia, the services to be provided, to whom, and

when. The social worker has no day-to-day supervisory

responsibilities over the services provided. The social worker

visits the client quarterly, unless a problem arises demanding

- 4 -
more immediate attention. To be remunerated, the provider

completes a "Vendor Invoice," documenting, inter alia, the

services provided and hours spent.

In May 1995, the County arranged for claimant to provide

services to a client, Mrs. Pugh. Claimant could have declined to

provide services for Mrs. Pugh, and Mrs. Pugh could have declined

claimant as a provider. Mrs. Pugh was "disabled and required

assistance in daily living skills"; she was bedridden with

"severe dementia" and required "total care." The record,

however, contains neither a "Purchase Service Order" nor a

"Vendor Invoice" describing the specific services claimant

provided Mrs. Pugh. The social worker who had managed Mrs.

Pugh's case did not testify. In the course of lifting Mrs. Pugh

into bed following a bath, claimant injured her back.
II.

The Workers' Compensation Act covers employees but not

independent contractors.
No definite rule has been established to
ascertain whether the relationship with the
principal is that of employee or independent
contractor. It must be determined from the
facts of the particular case in the light of
well settled principles. While several tests
are applied to make the determination, the
final test is the right of control. The
history of the Act clearly shows that the
legislature did not have in mind as
beneficiaries any persons other than those
commonly understood as falling within a
contractual relationship of employer and
employee. The classification of a person as
an employee or an independent contractor is
governed, not by any express provision of the
Act, but by common law, and we must look to

- 5 -
 it in determining who is an employee.

Hamilton Trucking v. Springer, 10 Va. App. 710, 714, 396 S.E.2d

379, 381 (1990) (citations omitted). Determination of the

relationship involves a mixed question of law and fact which is

reviewable on appeal. Richmond Newspapers, Inc. v. Gill, 224 Va.

92, 95, 294 S.E.2d 840, 841 (1982). A person seeking benefits

under the Act bears the burden of proving he or she is an

"employee." Behrensen v. Whitaker, 10 Va. App. 364, 366, 392

S.E.2d 508, 509 (1990).
The power or right of control is the most significant factor

in determining the character of the relationship, and the most

significant inquiry is whether the power or right to control the

means and methods by which the result is to be accomplished has

been reserved. Gill, 224 Va. at 98, 294 S.E.2d at 843 (finding

paper carrier not employee of newspaper); Intermodal Services,

Inc. v. Smith, 234 Va. 596, 601-02, 364 S.E.2d 221, 224-25

(1988); Virginia Employment Commission v. A.I.M. Corp., 225 Va.

338, 347, 302 S.E.2d 534, 539-40 (1983); Craig v. Doyle, 179 Va.
526, 531, 19 S.E.2d 675, 677 (1942).
If under the contract the party for whom the
work is being done may prescribe not only
what the result shall be, but also direct the
means and methods by which the other shall do
the work, the former is an employer, and the
latter an employee. But if the former may
specify the result only, and the latter may
adopt such means and methods as he chooses to
accomplish that result, then the latter is
not an employee, but an independent
contractor. So the master test is the right
to control the work.

- 6 -
Gill, 224 Va. at 98, 294 S.E.2d at 843 (citations omitted). The

right to control results is not alone sufficient to establish an

employer-employee relationship. Id. Indeed, the right of

control over results does not distinguish an employee from an

independent contractor; by definition of the relationship, a

principal exercises certain control over results whether those

results are accomplished by employee or independent contractor.

The relevant and determinative distinction lies in the right to

control the means and methods chosen to accomplish the result.
The written contract between the parties and the evidence

concerning performance under that contract are factors which help

"to elucidate the manner and degree of control." Id. Indeed,

the "nature of the relationship the parties intended to create is

one of the factors to be considered." Id.

In the present case, the commission concluded that the

County exerted the "requisite control over the claimant's

activities" to render claimant an "employee." The commission's

decision was premised on the following findings with respect to

the Independent Vendor Agreement: (1) the agreement granted the

County the right to terminate claimant's services; (2) the

agreement required claimant to give two weeks notice before

ceasing to provide services; (3) the agreement established the

services authorized to be provided; (4) the agreement set an

hourly wage; (5) the agreement required claimant to obtain County

approval before subcontracting the agreement; and (6) the

- 7 -
parties' use of the term "vendor" in the agreement was not

relevant "since this terminology is designed clearly to establish

that the [providers] are not employees and to distinguish them

from other county employees." The commission's decision was

further premised on the following findings: (1) the County

"determined the types of services to be provided" in placing

limitations on "heavy housework" and the number of hours to be

worked per week; and (2) the County "exercised oversight and

control over the provision of services." 1 We conclude that the

commission's findings are insufficient, as a matter of law, to

support a finding that claimant was an "employee" of the County.

None of the commission's findings evidences the right of control

by the County over the means and methods by which claimant

performed the services she contracted to provide.

There is no evidence that the County directed or controlled

how services were to be performed. No evidence shows that the

County could direct, for example, how providers were to

accomplish particular tasks, a particular order or manner of

accomplishing tasks, or the tools or instruments, if any, used to

accomplish a task. To the contrary, the evidence shows that the

County had no day-to-day supervisory responsibility and, unless

problems arose, the social worker visited the client only four

times per year.
1
The commission further found that claimant was not
exempt from the Act as a "domestic servant." See Code
§ 65.2-101(2)(f).

- 8 -
 While claimant was paid by the hour, she controlled the

actual number of hours she worked. She could freely accept or

decline an offer from the County to provide services to a

particular client, and the client could likewise decline to

employ the provider. The maximum number of hours which providers

could work and the specific rate of remuneration were functions

of the County's fiscal constraints, not a reservation of control

over the means and methods claimant could employ in providing

services.
The County did not retain an absolute right to discharge

claimant. Claimant could be discharged only for "good cause."

Contrary to the commission's finding, such a limitation is "more

characteristic of" an independent contractor relationship, and

while our ultimate conclusion is not premised on this factor

alone, it is a factor to be considered. Gill, 224 Va. at 100,

294 S.E.2d at 844.

We also note that, contrary to the commission's finding, the

parties' characterization of claimant's relationship to the

County as "vendor" is evidence of their intent to treat claimant

as an independent contractor. While the parties'

characterization of the relationship is not conclusive of the

issue, the "nature of the relationship the parties intended to

create is one of the factors to be considered." Id. at 98, 294

S.E.2d at 843.

To the extent the County had the right to control the

- 9 -
provision of services, it could control only the parameters of

the service relationship, viz., the ends to be achieved. The

relationship between claimant and the County was defined

primarily by an agreement, the Individual Vendor Agreement, which

set forth the general services claimant offered to provide and

the rate at which the County agreed to compensate her. No term

of that agreement authorized claimant to perform any work on

behalf of the County. Rather, claimant's work was to be

authorized by subsequent agreement, which would provide the terms

of service and remuneration for a specific client. Contrary to

the commission's finding, however, the County did not establish

or control the services to be provided for a specific client or

how the services were to be performed. Rather, the client's

needs and the provider's ability or willingness to provide for

those needs in the manner required by the specific client

dictated the specific services to be provided.
The limitations the County placed on the type of services it

would subsidize and the maximum number of hours per week it would

compensate the provider merely set the bounds of the tripartite

relationship. The County's role in that relationship was to

administer the provision of services in compliance with state DSS

guidelines; it facilitated the pairing of providers with clients

who met the criteria specified by the state guidelines for

participation in the program, and it provided funds to subsidize

services provided to its low-income citizens. The County's role

- 10 -
did not relate to or affect the means and methods by which the

services falling within those parameters were to be provided.

Cf. Gill, 224 Va. at 101, 294 S.E.2d at 845 (placing no

significance in fact that newspaper had right to control route

carrier was required to follow: "The geographical description of

the `area of primary responsibility' was merely a definition of

the job territory . . . not a limitation upon the manner in which

Gill served his customers.").
The requirements that claimant give two weeks notice before

ceasing to provide services and obtain County approval before

subcontracting the agreement relate, if at all, to the County's

right to control the result sought to be accomplished, the

provision of services, rather than the methods and means of their

provision. Indeed, the provision in the agreement regarding

subcontracting services further provides that once services are

subcontracted, the provider is responsible for the performance of

the subcontractor. In any event, even considering those factors

as indicative of an employer-employee relationship, they alone

are not conclusive.

In sum, there is no evidence to support a finding that the

County had the right to control the means and methods by which

claimant provided services. The County's right to control

extended only to the parameters of the tripartite relationship

and was, at most, oriented to effecting, generally, the provision

of services to its low-income citizens. Contrary to the

- 11 -
dissent's position, we decline to infer a right to control means

and methods from a right to control results. Such an inference

would collapse the common law distinction between employees and

independent contractors.

- 12 -
 Accordingly, the commission's decision must be reversed. 2

Reversed.

2
The County also contends that claimant is precluded
from compensation under Code § 65.2-101(2)(f), which excludes
"domestic servants." Finding that the commission's decision must
be reversed on other grounds, we need not address this issue. We
note, however, that the relevant inquiry under Code
§ 65.2-101(2)(f) is the employment relationship between the
alleged "domestic servant" and the party for whom that person
provides domestic service. The cases the County cites bear this
out. Here, however, the issue is the employment relationship
between claimant and the County; claimant does not suggest Mrs.
Pugh was her employer. Accordingly, the body of law which
excludes domestic servants from the protections of workers'
compensation legislation is inapposite to this case.

- 13 -
Benton, J., dissenting.

"The [Workers' Compensation] Act protects 'employees,' as

defined in the Act." Intermodal Services, Inc. v. Smith, 234 Va.

596, 600, 364 S.E.2d 221, 223 (1988). As pertinent to this case,

"[e]very person . . . in the service of another under any

contract of hire . . . , written or implied" is an employee under

the Act. Code § 65.2-101.
As a general rule, a person is an employee
if [the person] works for wages or a salary
and the [individual or entity] who hires [the
person] reserves the power to fire [the
person] and the power to exercise control
over the work to be performed. The power of
control is the most significant indicium of
the employment relationship; other factors
merely help to elucidate the manner and
degree of control.

Richmond Newspapers, Inc. v. Gill, 224 Va. 92, 98, 294 S.E.2d

840, 843 (1982). The record unambiguously discloses that Walker

was paid an hourly wage to "provide services only when and as

authorized." However, the majority finds that the facts did not

prove the requisite level of "control by the County over the

means and methods by which [Walker] performed the services she

contracted to provide." I disagree.

"'[T]he ultimate question is not whether the employer

actually exercises control over the doing of the work, but

whether [the employer] has the right to control.'" Hann v.

Times-Dispatch Publ'g Co., 166 Va. 102, 106, 184 S.E. 183, 184-85

(1936) (citation omitted). The facts of each case are important

in determining the issue of control. See id. at 106, 184 S.E. at

- 14 -
184. Furthermore, when the record contains credible evidence

that supports the commission's factual findings, those findings

are "conclusive and binding as to all questions of fact." Code

§ 65.2-706; see James v. Capitol Steel Constr. Co., 8 Va. App.

512, 515, 382 S.E.2d 487, 488 (1989).

The evidence proved that Walker was a "companion aide." The

Director of Social Services testified that the County's

Department of Social Services defined the scope of Walker's

services and that the case worker, who was assigned to Pugh (the

"client"), gave Walker her instructions. The director testified

that the social worker initially would meet with the client to

assess the client's needs. The social worker would then

interview the companion aide to explain the authorization,

discuss "all aspects . . . with the [companion aide]," and sign

the forms. Typically, the case worker would introduce the

companion aide to the client. Unless the companion aide was

requested by the client, the social worker would choose which

companion aide would be offered a particular assignment. Thus,

the social worker had significant control over Walker's

assignments and the number of hours she worked. Accord Sparlin

Chiropractic Clinic, P.C. v. TOPS Personnel Servs., Inc., 387

S.E.2d 411, 412-13 (Ga. Ct. App. 1989) (holding that a person was

an employee of a temporary placement agency because the agency

paid him and "controlled his assignments").

The majority concedes that the County controlled the number

- 15 -
of hours Walker worked but dismisses that fact in its discussion

of the elements of control on the ground that the reason for the

limits was the County's "fiscal constraints." Regardless of what

the County's motivation was, however, the fact remains that the

County controlled Walker's hours. Indeed, every employer suffers

from "fiscal constraints."

The evidence also proved that after the case worker assessed

the client's needs, the case worker would discuss with the

companion aide the services to be performed. In the agreement

between Walker and the County, Walker was required to "provide

services only when and as authorized." Moreover, the County's

representative was required to monitor the progress and give

direction "if there [were] difficulties or problems." The County

also had the power to discharge Walker for unsatisfactory

services. Thus, the instructions to the companion aide were

obligatory terms and conditions of employment.
"'One of the means of ascertaining whether or not this right

to control exists is the determination of whether or not, if

instructions were given, they would have to be obeyed.'" Hann,

166 Va. at 107, 184 S.E. at 185 (citation omitted). The evidence

establishes that the agreement gave the County the power and the

right to discharge Walker if she disobeyed the County's

instructions. Thus, the County retained the "right to control."

Id.

The majority states that the County did not control the

- 16 -
services Walker performed because the services were dictated by

the client's needs. The fact that an individual client's needs

determined what services were required does not negate the

inescapable conclusion that the content of the instructions given

to Walker by the social worker governed the means and methods of

performance.

The commission made the following findings, all of which are

supported by credible evidence in the record:
We find that the County Department of
Social Services exerted the requisite control
over [Walker's] activities. When [Walker]
applied for and was accepted as an approved
companion aide, the parties signed a contract
granting the County the right to terminate
her services, requiring two weeks notice
before ceasing to provide services,
establishing the services authorized, and
setting an hourly wage. The County's social
worker determined the types of services to be
provided for the client. For example,
[Walker] was not authorized to do heavy
housework, nor was she allowed to work for
the client more than fifteen hours per week.
She could not find a substitute herself, but
had to contact the social worker if she was
unavailable. In this case, when [the
client's] regular aide was going on vacation,
the social worker called [Walker] and
assigned her to provide services to the
client for two weeks. Although the record
suggests that [Walker] could have declined
this particular assignment, this is the only
element of control retained by [Walker], far
outweighed by the other indicia of control
retained by the County.
[Walker] was not paid for the results of
her work as an independent contractor, but
was assigned to perform particular tasks for
a particular length of time, for which she
was paid on an hourly basis. Although there
was not daily supervision, the social worker
exercised oversight and control over the

- 17 -
 provision of services, visiting whenever
there were problems and at least once every
three months. We do not find it relevant
that the County constructed forms which refer
to the companion aides as "vendors" and their
time cards as "vendor invoices," since this
terminology is designed clearly to establish
that the companion aides are not employees
and to distinguish them from other County
employees who receive higher pay and benefits
from a separate payroll. We further find
that the provision of companion care services
is a regular part of the business of the
County, which provides a wide range of
services to its residents, including
home-based care of the indigent disabled.

The evidence and the reasonable inferences to be drawn from

the evidence proved that the County had the right to instruct

Walker as to the work that was to be done and the manner in which

that work would be performed. The County also had the power to

give direction if Walker and the client experienced difficulties

or problems. "Where reasonable inferences may be drawn from the

evidence in support of the commission's factual findings, they

will not be disturbed by this Court on appeal." Hawks v. Henrico

County Sch. Bd., 7 Va. App. 398, 404, 374 S.E.2d 695, 698 (1988).

Notwithstanding the requirement of "good cause" for

termination, that factor was not an impediment to the

commission's finding that Walker was not an independent

contractor. The Supreme Court clearly stated that "limitations

upon . . . rights of termination may not be inconsistent with the

existence of an employer-employee relationship." Gill, 224 Va.

at 100, 294 S.E.2d at 844. Indeed, the evidence proved and the

commission found that Walker "was assigned to perform particular

- 18 -
tasks for a particular length of time for which she was paid on

an hourly basis." The commission also found that the County

specified the "types of services" Walker would provide for the

client. The evidence further proved, and the commission found,

that if Walker was unavailable, she "could not find a substitute

herself"; she had to contact the County so that the County could

make alternative arrangements. In view of the evidence

establishing other substantial indicia of the County's right to

control, the commission's findings are supported by credible

evidence.
Although the majority states that the County "could control

only the parameters of the relationship," no evidence in this

record proved that the County could not, for example, specify in

detail each service Walker was to provide and schedule the time

of day and sequence in which each service was to be performed.

Indeed, the evidence undisputedly proved that the County had the

power and the right to control because Walker could "provide

services only when and as authorized." Thus, the evidence proved

the County clearly retained the right to specify the services.

In addition, the County's right to intervene if a conflict

developed between the client and Walker, when viewed together

with the right to authorize Walker's services, manifestly proved

that the County retained the right to control the details of

Walker's work, not just "the ends to be achieved."

Based on the evidence in this record, the reasonable

- 19 -
inferences that flow from the evidence, and the commission's

findings, I would hold that Walker was an employee, not an

independent contractor. Thus, I would affirm the commission's

award.

I therefore dissent.

- 20 -