Court applies "economic reality" test to identify injured driver's employer
Imad Beydoun was hurt in a car accident while operating a semi-tractor trailer unit owned by Eddie Trucking and leased to Reserve Transportation. According to his logbook, Beydoun was driving for Roadlink National, Reserve's successor in interest at the time of the accident. Under Michigan no fault law, an individual's personal no fault coverage is usually required to pay his PIP benefits (medical expenses and three years of wages or domestic services). An exception exists, however, when the injury victim is operating a vehicle owned by his employer: in that case the employer's insurer is first-in-line to pay PIP benefits.
Beydoun's insurer, HomeOwners Insurance Company, argued that under the "economic reality" test, Beydoun was operating his employer's tractor-trailer, and therefore the employer's carrier, Ace American Insurance, should be responsible for Beydoun's PIP benefits. Even though Roadlink did not pay Beydoun directly and its lease classified him as an "independent contractor," the Court of Appeals unanimously upheld the trial court's conclusion that Beydoun was employed by Roadlink. It explained that the factors to be considered, (1) control over Beydoun's activities; (2) payment of wages; (3) right to hire or fire; and (4) "performance of duties as an integral part of the employer's business towards the accomplishment of a common goal," militated in favor of a finding that Roadlink was, in economic reality, Beydoun's employer.