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Court only gives "lip service" to economic reality test in deciding PIP priority

Dragen Perkovic was hurt in an accident returning from Utah while operating his semitractor in interstate trucking. The vehicle and trailer shared at least two separate insurance policies and Perkovic had a no fault policy on his non-commercial vehicle, yet in the end, Perkovic had to initiate his PIP benefits through the Assigned Claims Fund as the various insurers avoided taking responsibility.  Ultimately, Hudson Insurance Company was deemed responsible by the trial court, however, that decision was over-turned in the Court of Appeals. 

In the process of reversing the case, the Court was required to decide whether Perkovic was an independent contractor or an employee of the company for whom he delivered airbags manufactured in Utah, E.L. Hollingworth.  In a typical Christopher M. Murray opinion, the Court gave only superficial recognition to the "economic reality" test intended to help determine whether a purported "independent contractor" is really an employee.

The Court's opinion decided the issue in one paragraph, making sweeping declarations such as "with regard to factor three, the right to hire, fire and discipline, the Operating Agreement [imposed on Perkovic] provides that it is terminable by either party."  The Court did not mention whether Perkovic enjoyed the right to hire himself, or whether he was subject to discipline or retained the right to impose discipline.  Literally, the Court relied on the fact that Perkovic was obligated to perform repairs on the semi and could theoretically reject loads, and that he had the theoretical right to select "means and methods of transportation ...and routes", the fact that Hollingsworth did not withold taxes or pay workers compensation, and the fact that they had a "common goal," to rule that Perkovic was not an employee--despite the facts that he worked for only one company that set his schedule and imposed strict conditions on his operation.

Perhaps Perkovic was truly an "independent contractor," but this opinion certainly didn't justify that finding.  Using various cost-saving measures imposed by the employer and the theoretical "arms' length" terms of a contract imposed by the employer, combined with superficial analysis, to eliminate legal employment protections is just plain wrong.  In this case, it merely shifts the burden of insurance from the employer to the owner of the vehicle [Perkovic], however, in many cases, it denies basic employment rights to hard-working people who lack bargaining power.

Thompson O’Neil, P.C.
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