The Issue The issue is whether GMC Truck Division of General Motors Corporation is receiving adequate representation in the community or territory where General Motors proposes to add an additional dealer.
Findings Of Fact The Relevant Community or Territory Coral Oldsmobile-GMC Truck, Inc. ("Coral") seeks to establish a GMC dealership in the vicinity of Coral Springs, Florida. The location chosen is within an area which GM has identified as the Fort Lauderdale multiple dealer area ("MDA"). The MDA is an area of primary responsibility ("APR") assigned by GM in its Dealer Sales and Service Agreements to more than a single GMC truck dealer. The three protesting dealers, Sheehan, located at Lighthouse Point, King in Fort Lauderdale and Scott in Hollywood, already have been assigned to sell GMC trucks in the Fort Lauderdale MDA. The Fort Lauderdale MDA comprises a large portion of the land area of Broward County, and its boundaries are defined U.S. Census Tracts. GMC truck dealers located in nearby APRs which touch the Fort Lauderdale MDA are known in the industry as "fringe dealers." No fringe dealer makes enough truck sales to consumers who register their vehicles in the Fort Lauderdale MDA so that any fringe dealer could be considered to fall within the community or territory at issue here. Information about the addresses where new car or truck owners register vehicles is available and can then be aggregated by census tracts or other geographic designations such as zip code areas. Nationally, from 62% to 85% of the sales made by each dealer within an MDA are made to persons who register the vehicles within the MDA boundary. General Motors has designated areas surrounding each dealer within an MDA as an "Area of Geographic Sales and Service Advantage" ("AGSSA"). The boundaries of each AGSSA is also defined by census tracts. For the Fort Lauderdale MDA, AGSSA 1 is located in the northeastern county, and has been assigned to Sheehan, in Lighthouse Point. AGSSA 2 is the central portion of the county, its dealer is King, in Fort Lauderdale. AGSSA 3 is in the southern portion of the county, its dealer, Scott, is in Hollywood. Each AGSSA is designed as the area in which its dealer has a convenience advantage over other dealers of the same line-make because of its proximity to consumers residing in that area. The proposed AGSSA to be created for the Coral dealership in the Fort Lauderdale MDA is designated as AGSSA 10 [why this is not designated AGSSA 4 is not clear, but it is also not significant]. Eighty four percent (84%) of customers registering new trucks in the area to comprise AGSSA 10 purchased their GMC trucks from dealers in the Fort Lauderdale MDA. King and Sheehan sell GMC trucks that are registered throughout the MDA. A significant number of consumers go outside the Sheehan AGSSA 1 and King AGSSA 2 to purchase GMC trucks from other MDA dealers. It is undisputed that AGSSAs 1, 2 and 10 should be included within the definition of the relevant community or territory. The dispute centers on whether AGSSA 3 is also part of the community or territory. Eighty-six percent (86%) of all GMC truck registrations in AGSSA 3 were attributable to sales by dealers in the Fort Lauderdale MDA, which includes sales by Scott. Of the registrations which were not generated by sales at Scott, 72% were from other Fort Lauderdale MDA dealers. Thirty-six percent (36%) of those registering GMC trucks in AGSSA 3 (the Scott AGSSA) purchased them from other Fort Lauderdale MDA dealers. AGSSA 3, therefore, does not perform like an isolated, unconnected market. Based on consumer behavior, the Fort Lauderdale MDA, including AGSSAs 1, 2, 3, and 10, perform as a large market shared by multiple dealers. The test commonly used for determining whether markets are so connected as to form an appropriate community or territory to use as a unit of analysis requires that there be cross-sell of at least 30% in both directions. In other words, at least 30% of a dealer's sales should be made to consumers outside of the dealer's AGSSA but inside the MDA, as well as at least 30% of the consumers inside the dealer's AGSSA should buy from the other dealers in the MDA. The Scott dealership, in the southern portion of Broward County, does not fit this classic definition. The Scott data for the most recent year show that for Scott, 33 sales were made to persons registering vehicles in other AGSSA's within the Fort Lauderdale MDA. Scott's nationwide retail sales were 241 units, so only 13.7% of Scott's sales were to persons residing in the Fort Lauderdale MDA, but outside of the Scott AGSSA. On the other hand, as pointed out in the prior Finding, 86% of all registrations in the Scott AGSSA were attributable to dealers in the Fort Lauderdale MDA (including sales made by Scott). Scott does not sell vehicles into the other AGSSAs of the MDA very well, but the customers in the Scott AGSSA are going to other MDA dealers to buy trucks more than they were going to dealers in any other area. On balance, this evidence demonstrates that it is appropriate to include the Scott AGSSA, AGSSA No. 3, in the Fort Lauderdale MDA, and that the Fort Lauderdale MDA defines the community or territory which should be the unit of analysis here. Standard of Evaluation The next question is whether the existing GM dealers are providing "adequate representation" in the relevant community or territory, i.e., the Fort Lauderdale MDA. Since 1988 GMC Truck sales performance in the Fort Lauderdale MDA as a whole and in AGSSA 10 have steadily declined. The most common measure for evaluating the performance of a dealer network is analysis of market penetration data. GMC Truck has a 7.41% market share nationally. National data includes markets where GM is inadequately represented, where it has no dealers at all, and markets where it is represented adequately. National data is, of course, only a starting point. There are variations in consumer preferences for different types of vehicles, and even a dealership network in an area which fails to match the 7.41% market penetration for the nation as a whole may be adequately representing GM in its area, if consumers there tend to prefer different types of vehicles, something which even the most efficient dealer cannot change. Conversely, the dealer or dealership network selling at the national average may be inadequately representing GM if it reaches no more than the national average market penetration in an area where the type of vehicle under consideration is quite popular with the area's consumers. Historically, GMC truck has had greater market penetration in the large pick-up truck, truck wagon and full size panel van segments of the market than in the small pick-up truck segment. In places where large pick-up trucks are popular (agricultural areas, for example, where trucks commonly are used on farms) market conditions are favorable to GM. Taking into account the different popularity of distinct segments of the truck market nationally and in the Fort Lauderdale MDA, GM expects the Fort Lauderdale MDA to achieve a market penetration of 6.45%, which is somewhat lower than the national average for market penetration. Applying the same analyses to AGSSA 10 (the proposed new dealership) shows an expected market penetration of about a 6.04%, or about 80% of the National average. (Anderson testimony, at 31.) These percentages are computed by identifying demand shown by actual consumer purchases in the Fort Lauderdale MDA and in AGSSA 10 for each segment of the product category (i.e., large pick-ups, small pick-ups, and mid-size vans, panel vans, etc.) and applying to those sales the national average GM achieves for each of those segments. This produces an expected number of registrations for the dealer according to the local popularity of each product segment. This standard of comparison is useful because it takes into account unique characteristics of the local market. In 1988 AGSSA 10 achieved 95.5% of its expected penetration. Performance declined to 76.6% of expected penetration by 1990. Analyzing AGSSA 10 based on age distribution of the area's population rather than on truck market segment popularity, shows that GMC truck projects a 7.59% market penetration in AGSSA 10 and in the Fort Lauderdale MDA, which is somewhat higher than the national average and the expected penetration described in Finding 13. When one takes into account income distributions in the area, GM projects a market penetration of 7.41% in the Fort Lauderdale MDA and 7.43% in AGSSA 10, which is quite close to the national average market penetration, and higher than AGSSA 10's projected market penetration based upon product segment popularity. See Finding 13, above. Expected penetration calculations for other markets in Florida show that 17 areas of Florida actually exceed their expected market penetration, which is evidence that the expected penetration calculation produces a reasonable expectation, and has not been manipulated by GM to become an extreme standard which dealers could not actually meet. Sheehan, in AGSSA 1 had sales equal to almost 150% of its expected penetration in 1990. It is significant that in census tracts within the Fort Lauderdale MDA that meet or exceed the expected penetration, based on product segment popularity, the average distance of the purchasing consumer from the nearest dealer is 3.4 miles. This confirms that convenience of dealer location affects consumers' purchasing decisions in an important way. Consumers in AGSSA 10 are, on average, now 8.7 miles from the nearest GMC Truck dealer. This increased distance is a very persuasive explanatory factor for the low sales in AGSSA 10 now, which fall below expected market penetration. The expert for the protesters, Dr. Mizerski, challenged GM's use of national averages to assess dealer performance in AGSSA 10 and the Fort Lauderdale MDA. Dr. Mizerski would have used as the standard for assessing the adequacy of representation of the GMC truck products by the protesting dealers market penetration in the State of Florida, on the theory that the State of Florida data more closely matches AGSSA 10 and the Fort Lauderdale MDA than national data does. This theory has some initial appeal, but it fails to take into account the question of whether Florida itself has a disproportionate share of inadequately represented markets. This could come from the substantial growth in Florida in recent years. Florida falls below the national average, and below 34 states in the ratio of GMC Truck dealers to all other dealers. More than half the Florida markets have penetration below that expected based on product segment popularity, which is an indication that Florida has a disproportionate share of inadequately represented markets. There is no proof that the number of sale points (i.e., dealerships) has increased in proportion as Florida's population has increased. (See Finding 30, below, as to Broward County). If market penetration for GMC truck products in Florida is lower than the national average not because of unique characteristics of the Florida market, but because of network inadequacies, it makes no sense to use that inadequate network as the standard for evaluating the adequacy of dealer performance. On balance, the expected penetration standard advocated by GM based on product segment popularity is more persuasive than the "actual penetration" standard advocated by Dr. Mizerski. The penetration achieved in AGSSA 10 in 1990 was only 4.63%, which is well below the expected penetration of 6.04%, the national average of 7.41%, the Florida average of 5.8%, and the Florida MDA average of 5%. It began to fall below expected penetration in 1988 and performance has declined since then. Performance in the Fort Lauderdale MDA as a whole was also below expected penetration in 1989 and 1990. If lease registrations are included within the definition of the retail market, the figures are essentially the same. Consumer lease transactions are not distorting performance data. All Fort Lauderdale MDA dealers have not had trouble meeting expected penetration projections. The performance by Sheehan in AGSSA 1 is almost 150% of its expected penetration. Existing dealers have not been able to penetrate the market in AGSSA 10 adequately from their current locations. The most likely cause of the low penetration is the lack of a GMC Truck dealership in the geographic area. Market Characteristics The three existing dealers are located in what was the densely populated eastern or coastal half of Broward County in 1980. The Broward population has grown significantly from 1980 through 1990 in the western half of the Fort Lauderdale MDA, especially near the proposed location for the Coral dealership. The population in AGSSA 10 rose nearly 200,000 from 1970 to 1980, and rose 129,000 from 1980 to 1990. The 1990 population of 357,958 is about nine times the 1970 population, and twice the 1980 population. There have been similar increases in the number of households and an observable increase in household density in western Broward. This population growth in AGSSA 10 should continue into the future, reaching an estimated 530,554 within the next 10 years. This growth rate is five times greater than that of Broward County as a whole, which itself is growing at twice the national rate. Despite the significant increase in population in AGSSA 10 and in the western two thirds of AGSSA 3, there is no local GMC truck dealer to serve this growing population. The growth has not been limited to AGSSA 10. The entire Fort Lauderdale MDA had grown in terms of population, household and driving age population during the same period. Each AGSSA in the Fort Lauderdale MDA had population increases and increases in the number of households both in absolute numbers and on a percentage basis from 1970 to 1980. AGSSA 10 had the largest percentage increases (500% in population, 600% in households), although the entire Fort Lauderdale MDA grew very significantly. From 1980 to 1990 the population of AGSSA 10 grew 56.24% and households grew 66.66% and it became the second largest AGSSA in Fort Lauderdale MDA. The population of AGSSA 1 grew 10.92% and 19% in number of households during 1980-1990. AGSSA 3 increased 22.58% in population and 28.48% in households. AGSSA 2 population remained basically stable (decreasing by about 1.84%) and the number of households increased only moderately, 5.33%. The very significant growth in the Fort Lauderdale MDA and in AGSSA 10 has two implications. It has offered greater opportunities for sales of GMC trucks and also highlights the need for expansion of the dealer network so that dealers will be conveniently located to the new residents of the western areas of Broward County. AGSSA 10 currently holds strong prospects for additional sales due to its household incomes. Sales potential is better predicted by a household's income than by individual income. Areas of average household incomes below $15,000 generate few new vehicle sales, while household incomes of greater than $15,000 have significant potential for new vehicle sales. The average household income in AGSSA 10, and throughout the entire Fort Lauderdale MDA, are predominately of middle and upper income levels. Only one census tract in AGSSA 2 and one in AGSSA 3 have household income levels of below $15,000. The employment figures in the decade from 1980 to 1990 in Broward County are consistent with its population growth. The increases in employment and real income in Broward County have been significantly higher than those of the United States as a whole, and Broward's rate of unemployment has been lower. This economic strength is predicted to continue throughout the next decade. These facts indicate that the large growth in the Fort Lauderdale MDA and in AGSSA 10 is of a type likely to provide significant opportunities for sales of new GMC Trucks. As the population increased, light truck registrations have increased too. From 1982-1990, retail light truck registrations in the Fort Lauderdale MDA increased 112%, and in AGSSA 10 increased 213%. These increases in population, households, income and employment also point to an increased potential for traffic congestion in areas where current dealers are located, as individuals use the road networks to travel to and from work. Providing convenience to consumers by locating new dealerships in areas experiencing growth is important. See Findings 15 and 24. Areas which experience rapid development can outgrow the ability of the dealer network to provide adequate service to potential customers. The Fort Lauderdale MDA offers more sales opportunity per existing GMC truck dealer than all but three markets in Florida. Even with the proposed additional dealer, the opportunity per dealer would remain higher than that available in 39 other Florida markets. Merely to increase dealers in proportion to increases in the number of households, an additional dealer should have been added as long ago as in 1983, and another likely will be needed by 1995 in the Fort Lauderdale MDA. Based on GMC's experience over the years, the existing dealer network cannot continue to expand to fulfill the needs of Broward's increased population and especially the population of the Fort Lauderdale MDA. A dealer network designed to produce more than 225 expected GMC Truck registrations per dealer fails to achieve the minimum expected registrations 86% of the time. Thus, to have a reasonable chance of meeting expected market penetration, the network should not exceed a critical size of 225 expected GMC Truck registrations per dealership. This 225 registration goal is not a measure of total sales at a dealership. GMC Trucks are sold from dealerships which also sell other GM lines. The 225 registrations applies only to GMC Truck products. In the absence of the proposed new dealer in AGSSA 10, the GMC Truck network is configured to expect 365 registrations per dealer, which is much above critical optimum design capacity of 225. The Fort Lauderdale MDA simply has grown too large for a three dealer network. Appropriate planning by GM requires redesigning the network to allow for at least four and as many as five dealers. Perhaps the most telling facts are those showing selling success at distances. The existing dealers' market penetration is strongest close to their dealership locations, but declines as the distance from the dealerships increase. This makes intuitive sense. Sheehan has been able to meet or exceed the expected penetration within four miles of its dealership and has only moderate impact on GMC truck sales performance at distances near the proposed location for Coral in AGSSA 10. King does not penetrate the market significantly beyond four miles from its dealership, and has even less impact on GMC truck penetration at the proposed location, which is 10 miles away from King. Scott is not penetrating the market significantly at a distance, achieving only a 3/10 of one percent of its sales at a distance equal to that of the proposed new Coral dealership. Because there is no dealer in AGSSA 10, potential customers residing there are 8.7 miles from the nearest GMC truck dealer, on average. This is almost three times the average distance in AGSSA 1 (2.8 miles), twice the distance in AGSSA 2 (3.5 miles), and 2 and 1/2 miles farther than in AGSSA 3. If the proposed new dealership is established in AGSSA 10, convenience is improved to 4.1 miles on the average, which still is not as good as that provided in AGSSAs 1 and 2. Of course, the convenience GM offers to consumers residing in AGSSAs 1, 2 and 3 remains the same whether or not a new dealer is added in AGSSA 10. Other manufacturers of light trucks offer higher degrees of convenience to residents of AGSSA 10, which places GM at a competitive disadvantage. Performance of GMC truck in AGSSA 10 fell below minimum expected penetration in 1988 (see Finding 13). That year a light truck competitor, Dodge, established a dealership there. GMC truck performance has continued to decline in the area as other light truck manufacturers established representation in the area in 1989 (Id.). Based upon their distance from AGSSA 10 consumers, the existing Fort Lauderdale dealers are unable to overcome the convenience disadvantage they face in attracting consumers residing in AGSSA 10, and consequently have been unable to provide adequate inter-brand competition. This is partially the result of the design of Broward County roadways, which carry traffic better north-south than east-west. The problem is inherent in the current design of the GM sales network, and the solution is to add a GMC truck dealer in AGSSA 10 to improve convenience to consumers. Based on previous experience, this improvement in convenience should result in increased efficiency and additional sales. Impact on Existing Dealers GM computes a gross registration loss, which is the number of registrations which would raise each area within the MDA to the expected penetration level (see Finding 13). This is a conservative measure of possible additional sales because it is based upon the expected penetration, which is a minimum standard, not the maximum number of sales which might be achieved by effective dealers such as Sheehan. For 1990, the gross registration loss for GMC trucks in the Fort Lauderdale MDA was 295 units, which was mostly concentrated in AGSSA 10, and in the western 2/3 of AGSSA 3. If the proposed Coral dealership had been operating in 1990, and if it had performed at the average of the performance levels of the existing Sheehan, King and Scott dealerships, it would have produced a total of 313 registrations within a 20 miles radius of the dealership, which includes some areas beyond the boundary of the Fort Lauderdale MDA. This is 18 registrations more than the gross registration loss in the entire Fort Lauderdale MDA. Computed on the same basis, sales to the more relevant group of persons registering vehicles in the Fort Lauderdale MDA would have been 286 sales. This shows a new dealer in AGSSA 10 could theoretically make 286 sales without supplanting a single sale from existing dealers in the MDA. Moreover, in 1990 151 sales were made to persons who registered the vehicles within the Fort Lauderdale MDA from sales by dealers outside the Fort Lauderdale MDA. These sales represent additional potential sales to be captured by the three existing dealers.
Recommendation It is RECOMMENDED that the application to establish the GMC Truck dealership at Coral Oldsmobile be granted. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd day of October 1992. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October 1992.
Findings Of Fact Terrell Oil Company (TOC) was incorporated in 1986 with Grady Terrell, Jr., as president; Richard W. Gilliam and J. Anthony Belcher as board director members. As of the time of this application, Grady Terrell owned 60 percent of the stock of the company, Belcher owned 20 percent, Gilliam owned 19 percent, and Anna Alverez, company secretary, owned 1 percent. The company was started with a $6000 loan made by Grady Terrell, Jr., which sum was borrowed from C & S National Bank (Exhibit 16). Grady Terrell, Jr., is a black male and, therefore, designated as a member of a minority and/or disadvantaged class by statute. Neither Belcher nor Gilliam invested capital in TOC, but received their stock in the company for services in kind. The By-Laws of TOC provide that all times at least 51 percent of the stock in TOC shall be owned by "minority individuals" as that term is defined in state and federal statutes applicable to minority business enterprises or disadvantaged business enterprises. Several lines of credit obtained by TOC from C & S Bank were guaranteed by Grady Terrell, Jr. (Exhibits 9-12). No loans to TOC were guaranteed by anyone else. Anthony Belcher resigned from the Board of Directors of Belcher Oil Company in 1982 and thereafter served as a consultant for approximately two years. He has not been affiliated with Belcher Oil Company since that time (Exhibit 15). Grady Terrell, Jr., executed the lease for the property occupied by TOC for an office (Exhibit 6). Grady Terrell, Jr., approves all major purchases, all invoices for payment, and other bills for payment except routine monthly bills for utilities, vehicle payments, etc., at TOC. In connection with the line of credit with C & S Bank, TOC assigns most of its receivables to the bank for collection. TOC is involved with bidding on and supplying various agencies of government (federal, state and local) with petroleum supplies. To make these deliveries, TOC owns two small tank vehicles of 1500 and 2500 gallon capacities, respectively. (The record is unclear whether the 2500 gallon tank vehicle replaced the 1500 gallon truck.) When necessary to deliver larger quantities than can be hauled in TOC's trucks, a commercial carrier is utilized. In all cases, however, TOC takes ownership of the oil at the loading site. TOC entered into a lockbox agreement with Belcher Oil Company in which Belcher extended TOC a line of credit to purchase petroleum products from Belcher. An arrangement was made with the bank to establish a special account into which the customer would remit payment for product delivered and the bank would credit Belcher's account for the invoice price. This lockbox arrangement with Belcher has been inactive for several years. At one time, TOC purchased nearly all of its products from Belcher, but that is no longer true. Richard W. Gilliam is the executive vice-president of Terrell. He receives no salary from TOC, but is reimbursed for out-of-pocket expenses. He has the authority to accept bids for the purchase of fuel from dealers and to execute contracts with purchasers. Gilliam has operated other businesses in the past and has considerably more experience in business matters than does Grady Terrell, Jr. However, no evidence was presented upon which a finding can be made that Gilliam is the person actually running TOC, and Grady Terrell, Jr., is but a figurehead. It is a fact that Grady Terrell, Jr., is legally in charge of, and has the authority to, fully direct the operations of TOC. In addition to the tank truck(s), TOC has leased a service station where three 3000 gallon tanks are located in which TOC can store inventory if desired. Grady Terrell, Jr., also executed this lease. TOC has been certified as a DBE by several governmental agencies, including the Defense Logistics Agency who contracts with TOC to deliver petroleum products to ships in Miami; and certification has been denied by more than two agencies to which applications were made. No evidence was presented that TOC failed to submit all information requested by DOT.
Recommendation It is recommended that Terrell Oil Company, Inc., be certified as a Disadvantaged Business Enterprise. DONE and ENTERED this 17th day of May, 1990, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 1990. COPIES FURNISHED: John L. Chamblee, Jr., Esquire 202 Cardy Street Tampa, FL 33601 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, FL 32399-0458 Ben G. Watts Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Attn: Eleanor F. Turner, MS 58 Robert Scanlan Interim General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458
The Issue The issues to be resolved in this proceeding concern whether the Respondent, P.A.T. Auto Transport, Inc., committed the violations alleged in the relevant Stop-Work Order and the Fourth Amended Order of Penalty Assessment, and, if so, what, if any, penalty is warranted.
Findings Of Fact The Petitioner is an agency of the State of Florida, charged with the responsibility of enforcing the Workers' Compensation coverage requirements embodied in Section 440.107, Florida Statutes (2008), whereby Florida employers must secure the payment of workers' compensation insurance coverage and benefits for their employees. See § 440.107(3), Fla. Stat. The Respondent, P.A.T., is a corporation conducting a trucking business, headquartered in Pensacola, Florida. The Respondent's services include transporting motor vehicles using a fleet of some 61 highway tractors and associated auto transport trailers. Michelle Newcomer is an investigator employed by the Petitioner. Her duties include conducting inspections and investigations of businesses who may be workers' compensation employers, to determine if they are required to have workers' compensation coverage under Florida law, and the extent and compliance of that coverage. Ms. Newcomer conducted an inspection of the Respondent at 6732 Rambler Drive in Pensacola, Florida, on March 18, 2009. She determined that two companies, or businesses, operated at that address, the Respondent and MNT Enterprises (MNT). MNT had a workers' compensation policy covering its employees and was statutorily compliant. Ms. Newcomer also investigated the Respondent and learned that the principal stockholder, George Hedges, was exempt from coverage. She inquired about the status of the truck drivers working for the company and was told by Tracie Hedges that they were independent contractors. She was unable to witness any violations occurring at that time and concluded the investigation. Later, in April 2009, she received information that led her to believe that the Respondent's truck drivers were employees and not independent contractors. She had an opportunity to see a pay stub for a truck driver who had worked for the company who had been injured and had a workers' compensation issue. She noticed that the pay stub reflected that Federal Income Tax withholding had been deducted, along with various other deductions, such as Social Security and Medicare. She felt this might be indicative of an employee relationship, rather than the drivers being independent contractors. She returned to the Respondent's address later that month and issued a written Request for Production of Business Records to the Respondent and to an associated company called TK131. She issued a Stop-Work Order for the Respondent due to its purported failure to comply with workers' compensation coverage requirements for employees. The Respondent did provide the required business records. She reviewed the records provided to her and was able to ascertain that the Respondent employed more than four employees. Additionally, she learned that, although the Respondent, through a leasing arrangement for its office employees, had workers' compensation coverage for them, the 59 drivers and corporate officers did not appear to be covered by workers' compensation insurance. Thereafter, the Stop-Work Order was amended to include the purported failure to secure payment of workers' compensation coverage as required by Chapter 440, Florida Statutes. That resulted in a Stop-Work Order and Penalty Assessment. The Department also issued a Stop-Work Order and Penalty Assessment to DTS, LLC, which included the predecessor company, Darts Transport. The Stop-Work Order and Penalty Assessment issued to DTS was later revoked, however. The Department takes the position that the Respondent, P.A.T., paid its drivers through the entity known as "DTS", or directly with P.A.T. checks during the audit period, and that the number of drivers paid for their services was more than four employees and closer to 59 drivers for the 61 tractor-trailers owned by the Respondent. The Department does concede that a small number of the drivers were clearly owner-operators and no longer contends that they were employees. The Department thus contends that at no time pertinent hereto did the Respondent have a workers' compensation policy or an employee leasing arrangement in place by which workers' compensation coverage was provided for the drivers. The original Order of Penalty Assessment covered the period April 22, 2006, through April 22, 2009. The 4th Amended Order of Penalty Assessments for those dates, which is at issue in this case, also included a $108,000 fine for the Respondent's working in violation of a Stop-Work Order. The total fine assessed and sought by the Petitioner is $1,564,707.91. The Department maintains that the drivers working for the company are employees and therefore should have been covered with workers' compensation insurance, but the Respondent disputes that claim, asserting that the drivers are independent contractors and therefore do not need to be covered by workers' compensation insurance. The Petitioner maintains that office workers employed by the Respondent were required to be covered by workers' compensation insurance as well. The Respondent maintains that these were covered through coverage obtained from an employee leasing company, through an employee leasing program. The Department also maintains that three employees, as corporate officers, were not properly qualified to be exempt. The Respondent maintains that the required Exemption Request forms were properly delivered to the Department and therefore it complied with the law in obtaining exemptions from workers' compensation coverage. Finally, the Department maintains that certain named individuals were employees of the Respondent and should have been covered by workers' compensation coverage or insurance, but the Respondent maintains that these employees, who essentially performed incidental, non-recurring tasks for the Respondent, were not employees and did not have to be covered by such insurance. Moreover, the Respondent claims that it has a contingent liability insurance policy in place which served as a policy of workers' compensation insurance and for this reason it is compliant also. The parties agree that Florida Administrative Code Rule 69L-6.035 defines "payroll" as the basis for calculating a penalty. Payroll can include any of ten variations of payments from or through an employer to or on behalf of an employee. These include the payment of traditional wages and also bonuses, un-repaid loans to employees, expense reimbursements that are not documented on the employer's business records, payments binding an employer to a third party on behalf of an employee for services rendered by the employee, among others. Investigator Newcomer relied on Florida Administrative Code Rule 69L-6.035(1)(a) to define payroll for the office workers and truck drivers paid directly from the Respondent's account. The drivers were paid from the P.A.T. account from July 16, 2008, through April 22, 2009. Investigator Newcomer opined that the drivers' payroll prior to July 16, 2008, could not be included on the Penalty Worksheet based upon Rule 69L- 6.035(1)(a), but rather was based on Rule 69L-6.035(1)(i). Ms. Newcomer did not rely on Rule 69L.6.035(1)(b),(d),(e),(f),(h), or (j) to define P.A.T.'s payroll. The Department included payments to various child support enforcement agencies, made on behalf of drivers, on the Penalty Worksheet, by authority of Florida Administrative Code Rule 69L-6.035(1)(c), defined as payments made to a third party on behalf of the employer for services rendered to the employer by the employee. The Department also included as payroll on the Penalty Worksheet loans made to drivers, maintaining that these have not been repaid and should be deemed as part of payroll under Rule 69L-6.035(1)(g). There is no proof that this is the case, however, because neither Ms. Newcomer nor Ms. Hedges offered any evidence to establish that there is proof that some or all of the loans remained unpaid. The Petitioner, through the testimony of Investigator Newcomer, takes the position that payments made by P.A.T. to Darts Transports or DTS,LLC are properly included on the Penalty Worksheet by authority of Florida Administrative Code Rule 69L.- 6.035(1)(i). Those payments were made prior to July 16, 2008, before P.A.T. began making payments directly to drivers. The Rule provision in question, concerns payments made to an alleged non-compliant employer who has contracted with the customer, if the contract includes payment for labor and materials. If it is impossible to segregate the cost of materials from the employee payroll in such a contract, then under this Rule provision, 80 percent of the total contract price shall be presumed to be the employer's payroll, with regard to that customer and contract. The unrefuted evidence, however, establishes that the drivers in this situation were paid a flat 25 percent commission of the hauling fee charged by P.A.T., after deduction of the cost of fuel for the trucks. P.A.T.'s customers paid the fuel surcharge to P.A.T. There is no evidence that P.A.T. provided customers with any materials. Its business operation involves solely and simply the transportation of customer-owned vehicles. The Department also maintains that corporate officers Bradley Hedges and Gregory A. Hedges, as well as Teri Kimberly Forret, corporate officers of P.A.T., are non-exempt employees. It contends that under Rule 69L-6.035(2) their compensation constitutes "payroll," under the default formula in that Rule provision, for defining payroll to a corporate officer, if the ten factors under sub-section(1) of that Rule do not address the means of compensation received by those corporate officers. The quintessential question in this case, however, concerns whether the drivers are independent contractors or employees. If they are independent contractors, then there is no obligation on the part of the Respondent to ensure payment of workers' compensation benefits for them. This would mean that the Respondent cannot be adjudicated non-compliant by the Petitioner Department and payments to the drivers would not constitute payroll and would be stricken from the Penalty Worksheet calculation. Independent contractor status is defined in Section 440.02(15)(d)1.a.(I)-(VI) and b.(I)-(VII), Florida Statutes (2008). Under the former statutory provision, four of the six criteria must be met for independent contractor status to be established. Under the latter provision, any of the seven conditions named in that provision may be satisfied and independent contractor status thus established. With regard to the criteria in Section 440.02(15)(d)1.a.(I)-(VI), the preponderant weight of the evidence shows that some of the truck drivers are independent contractors with federal employer identification numbers and some are sole proprietors who are therefore not required to obtain a federal employer identification number under pertinent state or federal regulations. § 440.02(15)(d)1.a.(II), Fla. Stat. The evidence also shows, for purposes of Subsection(15)(d)1a.(V) of this statutory provision, that the drivers are permitted to work or perform work for other entities or companies needing their services, in addition to the Respondent, at the election of the driver. There is no showing that an employment application must be completed to perform such tasks for other unrelated entities. The drivers must use the unrelated company's truck for work assigned to them by such other companies or entities. They are not permitted to use P.A.T. trucks for non-P.A.T. transportation work (driving) they have agreed to perform. Moreover, all the drivers are compensated for completion of a task or set of tasks according to a flat 25 percent commission of the hauling charge imposed by P.A.T. There is no evidence that clearly shows a contractual agreement which expressly states that an employment relationship exists between the drivers and P.A.T. Even if the status and operations of the drivers referenced above does not meet four of the criteria listed in sub-subparagraph a. Subsection 440.02(d)1., they may still be presumed to be independent contractors and not employees, based upon a full consideration of the nature of their individual situation with regard to satisfying any of the conditions or criteria referenced in Section 440.02(15)(d)1.b.(I)-(VII). With regard to the first criteria under that provision, the drivers perform the services of driving for a specific amount of money in the form of a 25 percent commission. They control a substantial amount of the means of performing the services or work. The driver is asked to deliver vehicles from point A to point B for that commission. He gets paid that commission whether it takes one day or six days to accomplish the task. The driver determines the route to be driven. The driver, within the limits of the Department of Transportation rules, determines when to begin driving and when to pull over to sleep. The driver is free to decline to accept a hauling job. There is no detrimental action taken against a driver for declining to accept a given hauling job, unless it happens too frequently for satisfactory conduct of P.A.T.'s operations. The driver must provide the incidental tools and equipment, such as binding chains and maintenance tools to operate the truck and securely transport the load of vehicles he is required to transport. The driver is responsible for maintaining current driver's license qualifications and DOT physical examination requirements. The driver is responsible for paying for any necessary badges authorizing entry at maritime ports, a frequent occurrence in the transportation of foreign-manufactured vehicles. The Respondent, P.A.T., either owns or leases the trucks used by the drivers and pays for the insurance policies for the trucks. P.A.T. also pays for routine maintenance of the truck. If the driver causes damage of any sort to the truck, the driver must bear the financial responsibility for repair of the damage. The driver must also bear responsibility for any damage to the vehicles being transported on the trucks. It can thus be seen that both the Respondent and the drivers control a substantial portion, respectively, of the means of performing the services or work. Clearly, the unrefuted evidence shows that the drivers receive compensation for the work or services performed (driving services, incidental loading and unloading and protection responsibilities, with regard to the vehicular cargo), for a commission or per job basis and not on any other basis. Therefore criterion number IV, cited last above, is clearly met. Concerning criterion (II) under the last-referenced provision cited above, the drivers incur expenses for costs of their commercial driver's license, repair costs for any vehicle damage to the truck or to the vehicles which are being transported by the truck; any DOT fines incurred by the drivers; any badge expenses, as port entry and exit fees, must be borne by the drivers; lodging and meal expenses on the road during a haul must be borne by the drivers, without reimbursement. Concerning criterion (III), the driver is responsible for the satisfactory completion of the work or services that he or she agrees to perform, in the operational sense, in that the driver will not be paid if the delivery of the vehicles ordered to be transported is not satisfactorily accomplished. The privity of contract, however, for a given hauling job runs between the customer and P.A.T., the Respondent, who the customer actually contracts with to have the vehicles transported. The drivers, for purposes of criteria (V), (VI), (VII), of the last-referenced statutory provision, as established by the unrefuted testimony of Ms. Hedges, stand to realize a profit, or suffer a loss, in connection with performing the transportation driving services. They have continuing or recurring business liabilities or obligations aside from the expense of owning or leasing the truck, insuring the truck, or the fuel expense which they do not bear. They do, however, have recurring or continuing business liabilities or obligations which have a direct effect on whether they realize any net gain from a commission on a given hauling job. The success or failure of their business, even as sole proprietors, depends on the relationship of their receipts, under their 25 percent commission arrangement, and their expenditures for each hauling job for which they earn that commission. Drivers often complain of losing money due to vehicle repair bills, fines, towing charges, etc. Additionally, as referenced above, although when transporting loads for P.A.T., the drivers must use P.A.T. owned or leased trucks, the drivers are free, under their arrangement, to engage in hauling for other companies or customers, if they are not currently engaged in the middle of a hauling job for P.A.T. They may do so for other companies using other trucks, so long as they do not engage in such transportation services for other entities with P.A.T.'s truck. This factual arrangement tends to also militate in favor of the drivers not being employees. Many of the drivers have the standard federal tax withholdings deducted from their commission payments, as well as, in some cases, court-ordered child support payments. While this might be deemed to militate in favor of an employer/employee relationship, the unrefuted testimony of Ms. Hedges establishes that this is a service that drivers have come to P.A.T.'s management and requested, because in view of their many hours and days spent on the road, and for other reasons, involving their business management abilities, it is an assistance to them to have the tax liabilities simply withheld from their commission payments. This helps to avoid personal difficulties involving arrearages to the Internal Revenue Service. Status of Non-Driver P.A.T. Workers and Corporate Officers Persuasive testimony offered by Tracie Hedges, established that Regina Davis, Robin Hand, Stanley Warren, William Bertelsen, Cecil Hannah, Chipley Atkinson, Kristene Viverios, Katherine Flores, Laura Dunn, Amber Taylor, Amy Murphy, and Ms. Hedges herself, are office workers of P.A.T. They are covered by a policy of workers' compensation insurance through AES Leasing, a worker leasing company. Apparently the Petitioner no longer disputes this. Ms. Hedges reviewed, in her testimony, the final Penalty Worksheet concerning the status of various named persons who the Petitioner contends were employees, not covered by workers' compensation coverage. Ms. Hedges established with persuasive testimony that Arthur Nicolas was not a P.A.T. employee, but did some improvements on the office building (i.e. in the nature of carpentry). Alex Sibbach and Witt Davis did not ever work as employees for P.A.T. They may have performed some yard work or sold some equipment to P.A.T., but were never employees. She also established that Richard Burrson and Robert Marra were dump truck drivers for a company by the name of MNT Enterprises and had never been P.A.T. employees. Bradley and Gregory A. Hedges and Kimberly Forret are officers of P.A.T., or were at times pertinent to this case. The Petitioner contends that they had not established an exemption from the requirement of being covered under a policy of workers' compensation insurance. This is because of the Petitioner's contention that no corporate officer exemption had been filed or made effective. Bradley Hedges and Gregory A. Hedges are children of owners Greg and Tracie Hedges. Kimberly Forret is Tracie Hedges' sister. Ms. Forret is an office worker at P.A.T. and both Bradley and Gregory A. Hedges work at P.A.T. on a part-time basis while attending school. Ms. Hedges completed exemption forms for all three of them and delivered them to Investigator Newcomer's office on Burgess Road in Pensacola, Florida. Investigator Newcomer took the position that the exemptions for these people had not been established or filed based on her examination of agency computer records. The computer program or site failed to establish to her that the three individuals in question had established exemptions. Exemption status is triggered by compliance with Section 440.05, Florida Statutes (2008).1/ Tracie Hedges established with persuasive testimony that the exemption applications for the named three officers had been hand-delivered to the Burgess Road office of the Department of Financial Services. Janice Evers is a staff worker at that office. She testified that her research could neither confirm nor deny that the exemption applications were delivered to her office, but acknowledges their receipt by the Department. It must be concluded that the applications were delivered to the office on Burgess Road but were never forwarded to the Tallahassee office by Ms. Newcomer's or Ms.' Evers staff. Investigator Newcomer's business address is 610 East Burgess Road in Pensacola, the location where Ms. Hedges testified that the exemption applications were delivered. When the Department made a Discovery Request for Production of the Business Records of the Respondent, it required that those records be produced at that same business address in Pensacola, Florida. It is thus "an office of the Department" for purposes of Section 440.05(c), Florida Statutes (2008). Ms. Hedges established that the exemption applications were delivered during the 2005 calendar year although she was unable to provide an exact date of delivery. Ms. Evers acknowledges that fact in her testimony. The Stop-Work Order at issue in this case by statute can only date back as early as April 22, 2006. Even if the applications were delivered on December 31, 2005, the three officers in question would be exempt from workers' compensation coverage requirements prior to April 22, 2006, when the time period, or audit period, related to the Stop-Work Order began. It is determined that at least by January 30, 2006, exemptions had been established, by delivery at least 30 days prior thereto, for Bradley Hedges, Gregory Hedges, and Terri Kimberly Forret. It is found that the exemptions were shown by persuasive evidence to have been delivered during the 2005 calendar year. Inasmuch as they were "received" by the Department in 2005, then they would have become effective, by operation of law, on or before January 30, 2006, well before the effective date of the Penalty Assessment of April 22, 2006.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Financial Services, Division of Workers' Compensation, dismissing the Stop-Work Order and Fourth Amended Order of Penalty Assessment, in its entirety. DONE AND ENTERED this 29th day of January, 2010, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of January, 2010.
The Issue The issues are whether Petitioner is eligible for agency- sponsored employment services or whether he is capable of returning to suitable, gainful employment via an offer of employment from his former employer.
Findings Of Fact Petitioner began working for Ploof Truck Lines (Ploof) as a trainee over-the-road truck driver in August of 1995. Prior to his employment with Ploof, Petitioner worked in the aerospace industry. He had work experience in computer operations, computer software programs, and assembly of electronic accessories. Upon his employment with Ploof, Petitioner began a four- week training program, earning gross wages in the amount of $300 per week for the weeks ending August 24, 1995, August 31, 1995, September 7, 1995, and September 14, 1995. Upon completion of the training program, Petitioner worked as a single-seat truck driver, earning the following amounts: (a) $107.99, for the week ending September 21, 1995; (b) $160.25, for the week ending September 28, 1995; (c) $388.92, for the week ending October 5, 1995; (d) $601.49, for the week ending October 12, 1995; (e) $489.43, for the week ending October 19, 1995; (f) $571.53, for the week ending October 26, 1995; (g) $507.35, for the week ending November 2, 1995; (h) $594.19, for the week ending November 9, 1995; and (i) $526.43, for the week ending November 16, 1995. A trained truck driver's earnings depend on his or her productivity. The average salary of an experienced single-seat truck driver falls in the range of $400 to $600 per week. A novice single-seat truck driver earns an average salary in the range of $300 to $600 per week. Petitioner was a novice single- seat truck driver when he was injured. One of the duties that a truck driver has is to assess the safety of a tractor and trailer before accepting a hauling assignment. In other words, the truck driver must determine whether the tractor and trailer meet legal road requirements. In this case, there is no persuasive evidence that Petitioner's wages were lower than average at any time because Ploof did not have a "road ready" tractor/trailer available. To the contrary, Petitioner rejected all available trucks during the first week after his completion of the trainee program because the trucks were not clean. At Ploof, trainee truck drivers earn a salary of $300 per week for four weeks. Trained truck drivers are paid according to the number of miles they drive, 29 cents per mile loaded and 19 cents empty. If a truck driver is detained on the road because he or she has no work order or because of mechanical problems, the truck driver is paid a flat fee of $25 after 24 hours. The driver manager is responsible for assigning work to the truck drivers. A truck driver located at the terminal does not accrue mileage or a salary if the driver manager does not assign him or her a load to pickup or deliver. In that case, Ploof allows the truck driver to work in the warehouse or around the yard for an hourly wage. Petitioner presented no persuasive evidence that his wages as a truck driver were lower than average at any time because the driver manager was unable to or refused to assign him a load to pickup or deliver. Additionally, Petitioner did not present any credible evidence that his wages were ever lower than average because he was detained at a truck stop with no hauling assignment or a mechanical breakdown. On November 20, 1995, Petitioner fell, fracturing his left ankle, while employed as an over-the-road single-seat truck driver with Ploof. After Petitioner's injury, Ploof and its workers' compensation carrier calculated Petitioner's average weekly wage (AWW) as $395.97 per week, based on Petitioner's gross wages for thirteen weeks beginning on August 24, 1995, and ending on November 16, 1995. This figure does not include Petitioner's final gross wages as a truck driver for the period ending November 20, 1995, in the amount of $655.83. 1/ Respondent does not compute AWW. Instead, Respondent uses the AWW as computed by the employer and its carrier when determining an injured employee's average weekly earnings. In this case, Respondent based its decisions about suitable gainful employment for Petitioner using the $395.97 figure. If Respondent had included Petitioner's gross wages in the amount of $655.83 for the period ending November 20, 1995, Petitioner's average weekly earnings would have been closer to $423.34. Petitioner received immediate medical treatment at South Georgia Medical Center after his accident on November 20, 1995. Upon his return to Jacksonville, Florida, Dr. Harold Lynn Norman became Petitioner's treating physician. On February 5, 1996, Dr. Norman released Petitioner to return to part-time work (four hours a day) at light duty. Petitioner subsequently returned to work for Ploof. Petitioner worked in the safety/personnel department because his work restrictions precluded him from driving a truck. His job duties included calling applicants for truck driver positions and performing background checks on applicants. This job was within Petitioner's physical restrictions. He earned $7.50 per hour, which was close to the AWW as determined by the employer/carrier. On April 1, 1996, Dr. Norman increased Petitioner's work hours from four hours a day at light duty to eight hours a day at light duty. Petitioner continued to work for Ploof in accordance with his doctor's instructions. His job duties and salary remained the same. Ploof eventually changed Petitioner's job after he returned to work full-time at light duty. The new job involved operating the log scan machine. Initially, Ploof increased Petitioner's salary to $8.00 per hour. Ploof ultimately raised Petitioner's salary to $8.50 per hour. On or about May 6, 1996, Dr. Robert Yant became Petitioner's treating physician. On November 14, 1996, Dr. Yant placed Petitioner at maximum medical improvement (MMI). On that date, Dr. Yant gave Petitioner a zero percent permanent impairment rating with no permanent work restrictions. After this release to work, Ploof offered Petitioner a job in the safety department earning $8.50 an hour. Petitioner refused this job because he thought it was not "conducive" for him to return to work at Ploof at that wage and because he was not interested in returning to work with Ploof. His refusal was not related to his work restrictions. Petitioner's medical condition worsened after he refused the November 1996 job offer from Ploof. He eventually required additional ankle surgery by Dr. Yant. That surgery was performed on December 5, 1997. On or about June 29, 1998, Petitioner made an appointment to attend an orientation for Respondent's re- employment services program. On July 16, 1998, he attended the orientation, which is the first stage in the re-employment services program. That same day, Respondent signed a Request for Screening (Form DWC-23). Petitioner's signature on the form indicated his belief that he was eligible for screening by Respondent for re-employment services/benefits. The second stage in Respondent's re-employment services program is the screening phase. During this period, the Form DWC-23 is sent to the employer and/or its carrier. The employer's signature on the form indicates that there is no employment available for the injured employee with the employer of injury. The carrier's signature on the form indicates the carrier's agreement that the injured employee is entitled to screening for re-employment services or benefits. If the employer and/or carrier do not sign the form, Respondent takes the position that suitable employment is available with the employer. In this case, neither Ploof nor its carrier signed the Form DWC-23. Nevertheless, Respondent proceeded with the screening process to determine whether Petitioner was entitled to re-employment services or benefits. The program at issue is a return-to-work program, not a re-training or tuition assistance program. Respondent accomplishes the return-to-work program in one of three ways. First, Respondent attempts to place an injured worker directly in a job with a new employer when the worker has transferable skills, which permit return of the worker to the workplace in suitable, gainful employment. Second, Respondent contracts with an employer that will provide an injured worker with on-the-job training for specific tasks with Respondent reimbursing a portion of the worker's wages during the training period. Third, Respondent provides an injured worker with formal education and training under the following circumstances: (a) if the worker does not have transferable skills; or (b) if the labor market does not support the worker's transferable skills; and (c) if the worker is not able to perform his or her pre-injury work. If Respondent approves an injured worker for participation in a formal training and education program, the insurance carrier is obligated to pay temporary total rehabilitation payments (a workers' compensation benefit) to the injured employee. This payment covers living expenses during the re-training program, for a maximum of 52 weeks. Dr. Yant placed Petitioner at MMI for the second and final time on July 27, 1998. At that time, Dr. Yant gave Petitioner a seven percent permanent impairment rating. Petitioner's permanent work restrictions were one hour on, one hour off, and no stair or ladder climbing. On or about September 25, 1998, Respondent sent Dr. Yant an occupational description and job analysis report of a tractor/trailer truck driver. Respondent requested Dr. Yant to review the documents and determine whether this type of work would be appropriate for Petitioner based on his physical restrictions. Dr. Yant completed the physician's review on October 5, 1998. Dr. Yant added additional restrictions such as no lifting greater than twenty pounds and no repeated movement. Dr. Yant felt that repeated left foot clutch and assisting in any aspect of loading or unloading a truck would cause severe disability and pain. According to Dr. Yant, Petitioner is unable to return to work as a truck driver. By letter dated November 18, 1998, Ploof offered Petitioner another job as a driver recruiter. The duties of the job included telephone solicitation of qualified candidates from the Ploof office or Petitioner's home, direct contact with driver candidates at truck stops within a 50-mile radius of Jacksonville, and the option of recruiting drivers outside the Jacksonville area. The driver recruiter job paid $400 a week with future raises based on performance. This salary is consistent with the salaries of other Ploof employees performing the driver recruiter job. On December 8, 1998, Dr. Yant advised Petitioner that he should reject Ploof's offer of employment as a driver recruiter because the duties of the job required walking to and from areas of destination, climbing up and down stairs, and potential for out-of-town, overnight occasional travel. The next day, Petitioner rejected the job as driver recruiter because it was not within his job restrictions. He also believed it did not pay enough. On December 22, 1998, Respondent's staff performed a job analysis of Ploof's November 18, 1998, offer of employment as a driver recruiter. The job analysis included a site visit, task analysis, and interview with the owner of Ploof. By letter dated December 31, 1998, Respondent contacted Dr. Yant to determine whether the driver recruiter job was within Petitioner's work restrictions. In January 1998, Dr. Yant replied that the job was not appropriate for Petitioner because it involved ambulating on hard surfaces in parking lots. Dr. Yant was of the opinion that Petitioner should only perform sedentary type work. By letter dated January 28, 1999, Ploof offered Petitioner a modified driver recruiter job. Pursuant to the modifications, Petitioner would not have to travel to truck stops. Instead, he could work from the terminal office and assist with verification of applicants' employment background. The modified work position was within Petitioner's work restrictions. The modified driver recruiter job was the same type of work performed by Petitioner upon his return to work in 1996. Ploof's January 28, 1999, letter also offered Petitioner a job working as a log auditor in the log department at the terminal office. Petitioner had the necessary job experience and skills to perform duties of a log auditor. The physical requirements of the log auditor job were within Petitioner's work restrictions. Petitioner rejected Ploof's driver recruiter and log auditor job offers out-of-hand because he did not believe they paid enough and because he had no intention of ever working for Ploof again. Both positions pay $400 per week, which is at or close to Petitioner's AWW as determined by the employer/carrier. The jobs are currently available to Petitioner. On or about February 5, 1999, Respondent's staff performed a transferable skills analysis (TSA). The purpose of the TSA was to determine whether Petitioner had skills that would transfer to occupations in general, and if so, which of those occupations Petitioner could perform within his physical limitations. The analysis revealed 19 occupations which Petitioner could perform using his transferable skills. Of the 19 occupations, the following six occupations are appropriate for Petitioner considering his physical restrictions: (a) computer operator; (b) computer peripheral equipment operator; (c) routing clerk; (d) switchbox assembler I; (e) assembler, electrical accessories I; and (f) laborer, stores (shipping and receiving). Based on wage estimates in the Jacksonville labor market, the median salaries for these six positions range between $7.90 and $10.55 per hour. For example, the median weekly wage for a computer operator in the Jacksonville area is $422. This figure exceeds Petitioner's AWW as determined by Ploof and its carrier and is more in line with Petitioner's average weekly earnings corrected to include his wages for the period ending November 20, 1995. The Jacksonville labor market consistently has jobs available in the six occupations identified in the February 5, 1999, TSA. They would permit Petitioner to return to suitable gainful employment via direct placement rather than through training and education. 2/ Petitioner is capable of returning to work at suitable, gainful employment with Ploof. He also has transferable skills which would permit him to compete for other jobs providing suitable gainful employment within his physical limitations in the Jacksonville area.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is
Findings Of Fact Curtis Ketchup is black and worked for Standard Container Company at its Tampa, Florida, warehouse from 1968 until his employment was terminated on April 8, 1981. Ketchup was employed as warehouseman and truck driver whose primary duties consisted of loading and unloading trucks and delivering products to Respondent's customers in the area served by the Tampa warehouse. At all times here relevant Ruby Jellico was the manager of Respondent's Tampa operation. She ran both the office and warehouse and supervised two warehousemen and one clerk/secretary. In 1980 business had slowed down in the Tampa Operation and Jellico's function was changed to have her call on customers more than before to solicit additional business. During her absence V. J. Marria, whose title was sales assistant/secretary, took most of the telephone orders and prepared the necessary papers to accomplish the delivery of the product. With a total of only four employees at the Tampa operation, all of these employees sometimes took orders and dealt with customers. Petitioner was the second highest in seniority and pay with the company in Tampa. Although Petitioner contends he was warehouse manager until April 1, 1981, at which time he was demoted, the evidence is clear that Petitioner was never designated warehouse manager; that neither his authority nor his pay was cut on or about April 1, 1951; and whether or not he was, in fact, acting as warehouse manager is irrelevant since no evidence of discrimination in this regard was presented. Petitioner served part-time as a Holiness Pentecostal minister and had discussed with his fellow employees and Jellico his desire to give up his job with Respondent and devote his full time to the ministry. He inquired of Jellico if he could withdraw the funds he had accrued in the company's profit- sharing plan and was told the only way these funds could be withdrawn was by a plan member leaving the company either by dying, retiring, or resigning. Respondent has an employee profit-sharing plan to which employees become members after working with the company for a specified period of time. Contributions to this plan are made by the company and the funds are invested by the manager of the plan. The plan is intended to provide additional benefits to an employee after he retires from the company or to his survivors if he dies before retirement. Petitioner's decision to leave the company if he could withdraw his funds from the profit-sharing plan was communicated to Jellico, who relayed the information that Petitioner wanted to retire and withdraw his funds from the profit-sharing plan to Harry Peyton, the company treasurer, at the home office in Fairfield, New Jersey. Peyton told Jellico that he would have an advance on the funds due Petitioner sent to the Tampa office and that it was necessary for Petitioner to submit his resignation in writing and to agree to endorse back to the company the check he would later receive when the exact amount due him was disbursed at the end of the calendar year. As a further result of these conversations between Jellico and Petitioner, Ken Sessions was employed on April 7, 1981, as Petitioner's replacement. On April 9, 1981, Petitioner talked to Peyton by telephone and Peyton told Petitioner that it was necessary for him to terminate his employment with the company in order to withdraw his funds from the company profit-sharing plan. When the advance on Petitioner's share in the company's profit-sharing plan was received in Tampa on April 14, 1981, Jellico called Petitioner and told him he could come in and pick up the check for $4,834.33. Upon his arrival in the office, Petitioner gave Jellico his resignation letter (Exhibit 7) dated April 8, 1981, the last day worked by Petitioner. Petitioner also signed Exhibit 8 in which he acknowledged discussing the termination of his employment with Respondent as soon as a replacement could be found for him and agreed to repay the amount of the advance at the end of 1981 when the exact amount due him under the profit-sharing plan was determined. In early 1982 an additional check in the amount of some $800 was forwarded to Petitioner to close out all funds due him. Petitioner contends that on April 8, 1981, while lifting a pallet from a shelf above his head he felt a sharp pain in his neck. The following morning, April 9, Petitioner's wife called Jellico to tell her Petitioner had net slept well the night before, was tense, and did not feel well. Jellico suggested he see a doctor. On April 9, 1981, Petitioner went to St. Joseph's Hospital, Tampa, where he was seen by a Dr. Mooney. Notations taken and treatment rendered on this visit are contained in Exhibit 6. Although Petitioner testified he believes he told Dr. Mooney about the pain he experienced while lifting the pallet on April 8, 1981, no mention is made of this in Exhibit (Nor did Petitioner tell any of Respondent's employees of this pain experienced on April The first notice received by Respondent of this alleged incident was a call from a State Worker's Compensation official some months later inquiring why no accident report had been filed. In addition to filing a claim for Worker's Compensation for the injury allegedly occurred on April 8, 1981, petitioner filed suit in the Circuit Court of Hillsborough County against Respondent alleging discrimination. This latter action was dismissed before going to trial and Petitioner was also unsuccessful in his Worker's Compensation claim.
The Issue The issue in this case is whether the Hayes & Hayes Trucking triple axle dump truck being driven by Norman Williams on June 20, 1990, on U.S. 92 between 56th Street and Orient Road in Tampa, Florida, was being operated with its air axle up, resulting in its being over the maximum weight for its tandem rear axles, as well as for its steering axle, under Section 316.535, Florida Statutes (1989).
Findings Of Fact On June 20, 1990, Norman Williams was operating a dump truck owned by Hayes & Hayes Trucking on 56th Street in Tampa, Hillsborough County, Florida. The truck was equipped with a steering axle, tandem rear axles and a middle "mini-axle" that can be lowered to carry heavy loads. When required to carry heavy loads, the "mini-axle" can be raised only during turning but must be lowered upon completion of the turn. When Williams got to U.S. 92, he raised the "mini-axle" and made a right turn onto U.S. 92, headed east. He did not lower the "mini-axle" after the turn. While headed west on U.S. 92, about a hundred yards east of 56th Street, Rebecca Stalnaker, a DOT Motor Carrier Compliance Officer, observed the dump truck Williams was driving traveling east on U.S. 92 with its air axle up. She made a U-turn to check the load. After making her U-turn, Stalnaker followed the truck, which was traveling in the left lane of the eastbound traffic on U.S. 92, for approximately a mile. Three or four times, Stalnaker changed to the right lane to verify that the truck's air axle still was up. After following for about a mile, Stalnaker put on her blue light to get the driver of the truck to pull over and stop. For the first time, Williams saw Stalnaker in his side view mirror and, as he began to pull into the right lane, put his truck's air axle down. Williams pulled the truck off the right side of the road. When Stalnaker confronted Williams and accused him of driving with the air axle up, Williams replied that he thought it was permissible to drive with the air axle up in town when driving in traffic in streets having traffic signalization. Stalnaker required Williams to put the air axle back up and drive his truck to a weigh station. The scale showed that the front, steering axle of the truck was supporting 19,980 pounds and the rear, tandem axles of the truck were supporting 47,400 pounds. After weighing the truck, Stalnaker issued a citation and $181.50 fine to Hayes & Hayes Trucking. The company paid the fine and required Williams to reimburse the company. The company never challenged the fine, and there is no evidence in the record that the company authorized Williams to challenge it on the company's behalf. Williams requested that the Commercial Motor Vehicle Review Board drop the fine. The Review Board and the Department acquiesced in Williams' standing, but the Review Board declined to drop the fine.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation enter a final order upholding the $181.50 fine it assessed against Hayes & Hayes Trucking in this case. RECOMMENDED this 2nd day of October, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of October, 1991.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of Hayward Trucking, Inc. for certification as a minority business enterprise be GRANTED. DONE and ENTERED this 11th day of June, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 1982.
The Issue Pursuant to section 760.10(7), Florida Statutes (2015), the issue is whether Respondent has unlawfully discriminated against Petitioner in employment for opposing unlawful employment discrimination.
Findings Of Fact Petitioner is black and originally from Trinidad. He appears to be at least 50 years of age. Petitioner failed to prove that he is a Seventh-Day Adventist, but this omission is immaterial for the reasons set forth below. At all material times, Respondent has employed Petitioner as a Heavy Equipment Operator. Several years ago, after, on three occasions, Respondent declined to promote Petitioner to Pipefitter Supervisor. Petitioner complained to Respondent and later to the Florida Department of Environmental Regulation that Respondent had hired for this position three persons who lacked a Water Distribution Level III license and instead improperly used Petitioner's license to satisfy a requirement of the agency for the employment of a person holding such a license. It may be inferred that Respondent did not welcome these complaints, regardless of their merits. Petitioner's proof as to his attempts to secure a position as a Pipefitter Supervisor is sketchy, but, regardless of any evidentiary shortcomings, it appears that, at the time, he opposed Respondent's actions, not as actions of unlawful employment discrimination, but as a violation of an agency rule and improper use of Petitioner's license. The sole potentially retaliatory act identified by Petitioner occurred, several years later, when, in April 2015, Respondent refused to sustain Petitioner's appeal of a reprimand that he received for causing $25 worth of damage to a third party's mailbox while operating heavy equipment within the scope of his duties as a Heavy Equipment Operator. However, the evidence fails to prove that the refusal to sustain the appeal was retaliatory. Petitioner did not deny that his operation of heavy equipment damaged the mailbox. Although $25 is a modest amount of damage, heavy equipment is inherently dangerous and its negligent operation may require punishment, even when the damage is slight, in order to deter future negligence that might result in more serious damage or loss of life. Petitioner unpersuasively links the denied appeal of the ensuing reprimand to his job-related complaints several years earlier. Even if Petitioner had established that these complaints constituted opposition to unlawful employment discrimination, which he did not, Petitioner cannot link the evidently reasonable punishment of a reprimand for negligent operation of heavy equipment, years later, to Respondent's decisions not to promote him to Pipefitter Supervisor. As it is, Petitioner proved only that he is a member of several protected classes; several years ago, he complained that Respondent hired unqualified persons as Pipefitter Supervisors and used Petitioner's license to satisfy a state agency's rule; several years later, while operating heavy equipment for Respondent, Petitioner damaged a mailbox; and, as a consequence, Respondent reprimanded Petitioner and denied his appeal of the reprimand.
Recommendation It is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief filed on September 16, 2016. DONE AND ENTERED this 25th day of July, 2017, in Tallahassee, Leon County, Florida. S Robert E. Meale Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of July, 2017. COPIES FURNISHED: Tammy S. Barton, Agency Clerk Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399 (eServed) William X. Candela, Esquire Dade County Attorney's Office 111 Northwest 1st Street, Suite 2810 Miami, Florida 33128 (eServed) Selwyn Don Titus Apartment 601 14030 Biscayne Boulevard Miami, Florida 33181 (eServed) Cheyanne Costilla, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399 (eServed)
The Issue The issue to be resolved in this proceeding concerns whether the Petitioner was subjected to an act of employment discrimination by termination from employment because of his race.
Findings Of Fact The Petitioner, Jeffrey Moore, timely filed a charge of discrimination and, after a finding by the Commission of No Cause, filed a Petition for Relief. In the Petition the Petitioner alleges that he was discriminated against by termination from his employment position with the Respondent, based upon his race (black). The Respondent is a construction enterprise engaged in highway and bridge construction projects. It is an employer with more than 15 employees for purposes of Chapter 760, Florida Statutes. The Petitioner worked for Respondent approximately 35 weeks and was terminated on October 3, 2003. The Petitioner had been hired by the Respondent to drive and operate a fuel/maintenance truck and a "low-boy" equipment transporter truck at the project site in or near Pensacola, Florida. Operation of the fuel maintenance truck required its operator to fuel and lubricate all the equipment used by the Respondent on its project site. After the Petitioner assumed his duties of driving and operating the fuel maintenance truck, and servicing the heavy equipment and the low-boy truck, transporting heavy equipment to and around the project site, the job grew in size and complexity. As the project work area got larger, more and more heavy equipment was added to the compliment of equipment and machinery used in performing the construction contract in question. The Respondent's management recognized that Mr. Moore, through no fault of his own, was unable to meet the demand for both the fuel and maintenance truck operations and the low-boy truck operations by himself. Therefore, it determined that a second full-time job had effectively evolved, due to the growth in size and complexity of the construction project. Mr. Moore was therefore given the option as to whether he would prefer to continue to operate the fuel and maintenance truck, with associated heavy equipment lubrication and servicing, or operate the low-boy equipment transporter truck. He decided that he would prefer to continue to operate the fuel and maintenance truck, servicing the equipment. In response to that decision another driver was hired to handle the responsibilities of operating the low-boy truck, transporting heavy equipment. The driver who was hired for operation of the low-boy truck was a white male. The hiring of the white low-boy truck driver, while it replaced some of Mr. Moore's duties did not constitute a reduction of his hours, pay, and was in no way intended and in fact was not an adverse employment action. Rather, it was a recognition by management that the duties he had been performing were so extensive as to require the hiring of a second employee to perform some of them. The Petitioner contends that the hiring of the white low-boy truck driver was an act of discrimination. That testimony by the Petitioner is not supported by the persuasive evidence however. The taking of some of the duties from the Petitioner's responsibility and assigning them to the newly hired truck driver was not an adverse employment action and the fact that the newly hired driver happened be white was shown to be coincidental and not an act of discrimination. Archer Western, in fact, had exceeded the minority participation goals set forth by the United States Department of Labor by a factor of three. Evidence adduced by the Respondent clearly shows that since before the Petitioner was hired, and after he was terminated the Respondent has had minority employees in all sorts of jobs, including supervisory positions in substantial numbers. In fact, the "EEO Report" in evidence as Respondent's Exhibit Two shows that out of 155 employees 75 were minority employees. In performing his job with the fuel/maintenance truck operation, the Petitioner was largely unsupervised. He had no direct supervision. This was because the fueling and lubrication operation for which he was responsible required that the equipment he was servicing be idle. Thus this was best accomplished by his performing servicing of equipment after normal working hours and on weekends. He earned overtime for some of this work. Mr. Moore kept his own time record which he turned into the office, without direct supervision of it. During the course of his duties with the fuel/maintenance truck operation, his supervisors noted that the volume of lubrication grease that should have been used in lubricating the machinery seemed to be lower than normal. Moreover, Mr. Hall, the equipment superintendent and the Petitioner's supervisor, on a number of occasions shortly prior to the decision to terminate the Petitioner found that equipment operators would inform him that their equipment was out of fuel early in the work day when it should have been filled with fuel the night before. Knowing that the work assigned to Mr. Moore was not being accomplished in an appropriate manner gave his supervisors cause for concern as to whether he was performing his job or performing it adequately. The work was simply not getting done or timely done. Mr. Moore, however, was reporting considerably more working hours than project managers had anticipated was necessary to complete the equipment servicing tasks. The fueling and lubrication of equipment was becoming more and more behind while Mr. Moore's hours continued to run well in excess of management's reasonable hourly estimate for his job. Thus the Petitioner's supervisors became convinced that he was reporting more hours than he worked. In response to the inconsistency in the performance of his job with the number of hours of work he reported, management determined to change him to a different job or position, rather than to terminate him, to see if the situation regarding hours would improve. He was therefore offered a change of position involving driving a water truck. Unlike the fuel/maintenance truck, which is used a considerable amount of the time during after-hours equipment servicing while equipment lies idle (or on weekends), a water truck, because of its purpose in a construction operation, works closely with the daily construction operation and crew. The hours of its driver will be substantially co-extensive with those of the entire construction crew during these daytime operations. Mr. Moore accepted the change in position but was resentful of the change primarily because it constituted a reduction in his weekly work hours. In point of fact, the evidence of record indicates that Mr. Moore, while he was operating the fuel maintenance truck, reported more hours worked, including overtime, than any other employee. In his new position driving the water truck, Mr. Moore's attitude declined and he became verbally abusive with co-workers and, to some extent, supervisors. He had a verbal altercation with more than one supervisor and became belligerent and abusive with a female co-worker, using foul language and gestures. Ultimately, his negative attitude and performance on the job, coupled with his false reporting of working hours resulted in a decision that he be terminated. He was terminated from his employment on October 3, 2003. The Respondent's witnesses maintained that this decision had nothing to do with the Petitioner's race. Given the fact that approximately 50 percent of the employees and supervisors employed by the Respondent are members of minority groups, this testimony is deemed credible and it is determined that the termination of the Petitioner was not due to racial aminus.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED: That a final order be entered by the Florida Commission on Human Relations dismissing the Petition for Relief in its entirety. DONE AND ENTERED this 8th day of December, 2005, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of December, 2005. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Jeffrey Moore 10923 County Road Munday, Texas 76371 Jack Slattery Archer Western Construction 4501 Northeast 21st Lane Fort Lauderdale, Florida 33308
The Issue The issues are whether Respondent was substantially justified in issuing an initial Stop Work Order and Order of Penalty Assessment against Petitioner for failing to comply with a Business Records Request, followed by an Amended Stop-Work Order and an Amended Order of Penalty Assessment to Petitioner for alleged noncompliance with workers’ compensation coverage requirements, and if so, is an award of attorneys’ fees and costs appropriate.
Findings Of Fact Respondent is the state agency charged with enforcing the requirements of Section 440.107, Florida Statutes, requiring that employers in Florida secure the payment of workers’ compensation insurance coverage for their employees. Petitioner is a Florida corporation that conducts business in Florida, with headquarters in Pensacola, Florida. Petitioner’s business involves the transportation of vehicles, utilizing a fleet of approximately 61 tractor-trailers and accompanying auto transport trailers. Michelle Newcomer is a compliance investigator for Respondent. Her duties focus on conducting inspections/investigations of Florida businesses to ensure compliance with Florida’s workers’ compensation coverage requirements. She also issues Stop Work Orders (SWOs) and Orders of Penalty Assessment (OPAs) when Respondent believes a business is non-compliant with Florida’s workers’ compensation law. Ms. Newcomer and her supervisors are familiar with the definition of "independent contractor" set forth in Sections 440.02(15)(d)1a and 440.02(15)(d)1b, Florida Statutes. However, they never tested Petitioner’s claim that its truck drivers were independent contractors and not employees against the criteria in that definition. On March 16, 2009, Ms. Newcomer received information from an anonymous source that Petitioner was not in compliance with the workers’ compensation laws in Florida. The anonymous source asserted that Petitioner’s drivers were being misclassified as independent contractors. Ms. Newcomer performed a search of Respondent’s database. She learned that Tracie Hedges and George Hedges, as corporate officers, were exempt from having workers’ compensation insurance. She found that Petitioner had no workers’ compensation coverage for any employees. On March 18, 2009, Ms. Newcomer visited Petitioner’s office. Upon arrival, she met Ms. Hedges. During the meeting, Ms. Newcomer inquired about the company, its operations, and its truck drivers. Ms. Hedges told Ms. Newcomer that Petitioner had about 50 to 60 truck drivers who were independent contractors. Seeing only one other employee, Ms. Newcomer left and terminated her investigation. On April 8, 2009, Ms. Newcomer received a referral from Respondent’s Employee Assistance Office. The referral indicated that one of Petitioner’s former drivers, Mike Borders, had suffered an injury while working for Petitioner, but was not receiving workers’ compensation benefits. The referral included a copy of one of Mr. Borders’ pay stubs. Upon reviewing Mr. Borders’ pay stub, Ms. Newcomer noticed that federal income tax withholding was deducted along with various deductions for Social Security and Medicare. The federal payroll deductions were identical to those any employer would deduct from an employee’s wages. Ms. Newcomer performed another search of Respondent’s database, finding that Petitioner had workers’ compensation insurance through Allstates Employer Services, effective March 17, 2009. Ms. Newcomer then contacted Allstates Employer Services and requested a copy of Petitioner’s employee roster. When she received the roster, Mr. Borders’ name was not on the roster. Ms. Newcomer next interviewed Mr. Borders, inquiring about Mr. Borders’ relationship with Petitioner. She wanted to know the following: (a) whether he drove Petitioner’s vehicle; (b) whether he signed any employment contracts; and (b) whether he considered himself Petitioner’s employee. Mr. Borders responded as follows: (a) he considered himself an employee of Petitioner; (b) he had signed an employment application; (c) he drove Petitioner’s truck; and (d) he took orders from Petitioner as to when and where to pick up the cars that needed to be transported. After speaking with Mr. Borders, Ms. Newcomer conducted further review via various state databases. She researched the database maintained by the Florida Department of State, Division of Corporations, to determine the relationship of Petitioner to Transport TK 131, LLC, another company listed on Mr. Borders’ pay stub. This search revealed 21 limited- liability companies using the Transport TK name. Ms. Newcomer learned that Transport TK 131’s managing member was Gary Hedge. Ms. Newcomer believed that Mr. Hedge also was a principal of Petitioner. Ms. Newcomer also reviewed the database maintained by the Florida Department of Revenue to determine who was paying the unemployment compensation tax for Petitioner’s drivers. She learned that Transport TK 131, LLC, listed two to three employees for purposes of unemployment withholdings. The same was true for all of the other Transport TK companies. Ms. Newcomer believed her investigation presented numerous inconsistencies with statements made by Ms. Hedge. Ms. Newcomer presented her findings to her supervisors. They gave her approval to investigate Petitioner. Ms. Newcomer prepared a Business Records Request Form 1 (BRR#1) for Petitioner and Transport TK 131, LLC. Both BRRs requested the companies to provide payroll information for employees and any forms of workers’ compensation coverage for its employees for the period January 21, 2009, through April 21, 2009. The BRRs also made the following request: Record Category #12--For each independent contractor who performs any service with regard to the completion of a contractual obligation of the employer listed above, at any time during the period specified above: all contracts for work, licenses, invoices, ledgers, payments made pursuant to that contract, and any other documents that support the status of an independent contractor under section 440.02(15)(d), F.S. The request for records did not give the companies the option of creating and providing affidavits or other documents to support the status of independent contractors if no written contracts for work existed. The BRRs were sent to Petitioner and Transport TK 131, LLC, by certified mail on April 22, 2009. Petitioner failed to provide all of the requested records within the required five-day time period. Accordingly, Respondent issued a SWO and an OPA to Petitioner. Ms. Newcomer posted the SWO and OPA at the worksite on May 5, 2009. While Ms. Newcomer was at Petitioner’s headquarters, Ms. Hedges provided her with some records, including Petitioner’s QuickBooks registry, showing all checks written for a three-month period. Ms. Hedges also answered Ms. Newcomer’s questions about the records, including questions about DTS, LLC, a company described by Ms. Hedges as a payroll account. Ms. Hedges explained that before August 2008, Petitioner paid DTS, LLC, for work performed by “employees” of the Transport TK companies. DTS, LLC, would then pay the truck drivers. However, when DTS, LLC, ran out of checks in August 2008, Petitioner began paying the Transport TK employees directly. The documentation and information provided by Ms. Hedges, resulted in the SWO being revoked for Transport TK 131, LLC. The revocation was based on a showing that Transport TK 131, LLC, and other Transport TK companies did not have bank accounts. The SWO against Petitioner, for failing to produce sufficient records, remained in place, pending further review. Ms. Newcomer continued to have discussions with Ms. Hedges relative to Petitioner’s business. Ms. Newcomer discussed the case again with one of her supervisors. She explained that Petitioner was paying individuals that were reported as employees of the Transport TK companies. She also stated that Petitioner pays its corporate officers, Bradley Hedges, Gregory Hedges and Teri Forret, who did not have workers’ compensation exemptions and were not covered by Allstates Employer Services workers’ compensation coverage. Ms. Newcomer and her supervisor decided to amend the SWO to add the charge of failure to provide workers’ compensation coverage for employees. On May 6, 2009, Respondent sent the SWO, the Amended Stop Work Order (ASWO,) and a Business Records Request Form 2 (BBR#2) to Petitioner by certified mail. Petitioner received the documents the next day. Ms. Newcomer had a meeting with Ms. Hedges on May 8, 2009. During the meeting, Ms. Hedges explained that DTS, LLC, is just a bank account, used to pay the employees of the Transport TK companies. Ms. Hedges also stated that Petitioner has full control of its customer contracts and directs the drivers where to go for work. On May 11, 2009, Ms. Newcomer received Petitioner’s Quickbook report for the period of the BBR#2 records request. On May 13, 2009, Ms. Newcomer staffed the case with Respondent’s legal counsel. On May 14, 2009, Ms. Newcomer received some contracts between Petitioner and truck drivers who owned and operated their own trucks. Respondent calculated Petitioner’s penalty using the Quickbooks report, in conjunction with W-2 documents provided for tax years 2007 and 2008. As of May 18, 2009, Petitioner’s penalty was $1,496,680.40. Ms. Newcomer requested and received approval to issue an Amended Order of Penalty Assessment (AOPA) for that amount. The AOPA was served on Petitioner by hand delivery on May 19, 2009. Ms. Newcomer did not include Petitioner’s office staff/dispatchers, including Ms. Hedges, in calculating Petitioner’s penalty. Ms. Newcomer was able to confirm that those individuals had workers’ compensation coverage through the employee leasing company. Ms. Newcomer did not include the owner/operator truck drivers in calculating Petitioner’s penalty. Ms. Newcomer had copies of contracts indicating that they were independent contractors. Ms. Newcomer did include the 50 to 60 truck drivers who drove Petitioner’s trucks in calculating the penalty. Ms. Newcomer knew that Petitioner was paying those individuals by check and that their pay-stubs showed various deductions, including withholdings for federal income taxes, Social Security, Medicare, and even deduction options for various forms of Individual Retirement Accounts, both standard and “Roth” versions. For some of the drivers, Petitioner deducted child support payments. If Ms. Newcomer had asked more questions or talked to more drivers, she would have learned that Petitioner made the deductions from the checks of drivers who drove Petitioner’s trucks at their request and in exchange for a smaller commission. Petitioner did not make the deductions as an employer. Ms. Newcomer also learned that all individuals driving Petitioner’s trucks signed employment applications. Apparently, Ms. Newcomer did not believe Ms. Hedges when she explained that the employment applications were used as forms to comply with the Federal Motor Vehicle Carrier Safety Act for drivers of trucks with Petitioner’s name. Ms. Newcomer never attempted to find out whether the drivers of Petitioner’s trucks were independent contractors pursuant to oral contracts. She did not ask Ms. Hedges questions that track the definition of “independent contractor” status in Sections 440.02(15)(d)1a and 440.02(15)(d)1b, Florida Statutes. In other words, Ms. Newcomer did not try to ascertain whether and/or to what extent Petitioner or the truck drivers controlled or directed the manner in which the work was done. Ms. Hedges told Ms. Newcomer that Petitioner’s corporate officers had filed for workers’ compensation exempt status by delivering exemption application forms to one of Respondent’s offices in 2005. Ms. Hedges did not have a receipt showing delivery of the forms. Ms. Newcomer could not find the names of two of these officers in the state’s database of corporate officers electing exempt status. Therefore, Ms. Newcomer included the two corporate officers in the penalty calculation. Apparently, Ms. Newcomer never considered that Ms. Hedges was telling the truth about the exemption forms and that, pursuant to statute, the exemptions became effective 30 days after Ms. Hedges delivered them to Respondent even though Respondent never processed them. Ms. Newcomer also did not go back to Mr. Borders to question him about his claim of being Petitioner’s employee as opposed to an independent contractor, using the definition of independent contractor set forth in Sections 440.02(15)(d)1a and 440.02(15)(d)1b, Florida Statutes. Additionally, Ms. Newcomer did not attempt to interview any other individuals that drove Petitioner’s vehicles to determine whether they considered themselves employees or independent contractors. On or about June 5, 2009, Petitioner requested an administrative hearing to challenge the ASWO and AOPA. The hearing was held on November 3, 2009. On January 29, 2010, Administrative Law Judge P. Michael Ruff issued a Recommended Order, finding that Petitioner was compliant with Florida’s workers’ compensation coverage and recommending that a final order be entered dismissing the ASWO and AOPA. On April 28, 2010, Respondent entered a Final Order adopting Judge Ruff’s legal and factual findings. The parties stipulate as follows: (a) Petitioner is the prevailing party in the underlying case; (b) Petitioner was a small business at the time the ASWO and AOPA were served; and (c) The reasonableness of the amount of attorney’s fees and costs claimed by Petitioner, namely $50,000, is not in dispute.
