Ferguson v. New Hampshire Insurance Co. – SC Appeals Court Weighs Employee Status in Workers’ Comp Case

Most employers within South Carolina are required to carry workers’ compensation for their employees to cover expenses related to work injury or illnesses.
However, these claims sometimes hinge on whether:

  1. The employer was statutorily required to carry coverage
  2. The worker in question was in fact an “employee” per the understood legal definition

Although seemingly simple, these points are not always straightforward.

Take the recent case of Ferguson v. New Hampshire Insurance Company, recently weighed by the South Carolina Court of Appeals.

According to court records, these case involved an Internet marketing company that connects people looking for moving companies or rental moving vehicles with companies that supply those services. The suppliers contract with local moving companies to provide these services, with the Internet company keeping a 15 percent profit for making the connection.

One of the companies that contracted moving services through the Internet provider engaged in a telephone training session that offered advise on satisfying customers and outlining certain rules (i.e., no side agreements or direct contact with customer except through the marketing firm). The company didn’t have its own trucks or equipment, and instead used rentals. The owner typically did the jobs himself, but on occasion asked for help or, when he was overbooked, gave the overflow jobs to others.

Worker in question would later testify he worked on 10 to 15 of these moving jobs for contract company, and also occasionally worked with other moving companies.

One day, while on a job for this contract company, he injured his right hand while moving a washer/dryer unit. He later had to have surgery on his finger and indicated also his right shoulder had been injured.

He sought workers’ compensation benefits from the Internet marketer, its insurance company, the contract company and the South Carolina Uninsured Employers Fund. (Contract employer had fewer than three employees, and thus did not purchase workers’ compensation insurance coverage.)

The Internet marketer and its insurer filed a response denying coverage and requesting a hearing.

Commissioner hearing the case denied benefits and dismissed the claim after finding plaintiff failed to prove he was an employee of contract company or a statutory employee of the Internet marketer. An appellate panel affirmed, as did the appellate court.

In considering whether the Internet marketer was a statutory employer, the court considered whether the company was in fact a business and whether claimant’s work constitute part of the business trade or occupation. The latter element must be proven by showing the work was an important part of the business, it was necessary, essential and integral and had previously been performed by owner’s employees. Only one of these criteria must be met.

Defendant internet marketer contended it was not in the moving business, but rather in the marketing business, and claimant presented no evidence otherwise. The courts agreed, and thus ruled the marketer was not the mover’s statutory employer for workers’ compensation purposes.

The court also found claimant failed to prove he was an “employee” of the contract company, which would have entitled him to collection of benefits through the state’s uninsured employers fund.

We recognize some workers in these kinds of non-traditional employment arrangements may have more difficulty than others in securing compensation for work-related injuries. These cases will require a legal team with extensive experience. Call us today.

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
Ferguson v. New Hampshire Insurance Company, April 1, 2015, South Carolina Court of Appeals

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