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01/31/92 ROSEXPRESS v. DISTRICT COLUMBIA DEPARTMENT

January 31, 1992

ROSEXPRESS, INC., PETITIONER
v.
DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, RESPONDENT



Petition for Review of a Decision of the District of Columbia Department of Employment Services.

Before Terry and Wagner, Associate Judges, and Newman, Senior Judge.

The opinion of the court was delivered by: Terry

TERRY, Associate Judge: Petitioner RosExpress, a business which delivers roses and other flowers, seeks review of a decision by the Department of Employment Services awarding unemployment benefits to a former RosExpress delivery driver, Peter Joynes. RosExpress asserts three errors by the Department. It maintains, first, that the Department erred in failing to determine whether Joynes was an employee or an independent contractor; second, that Joynes' behavior constituted misconduct and that the Department should have so found; and third, that the Department failed to determine whether Joynes had another job at the time he was seeking unemployment benefits. We agree with the first argument, and as to the second, we hold that the Department's decision is not supported by substantial evidence. Accordingly, without reaching the third claim of error, we reverse.

I

Peter Joynes drove a delivery truck for RosExpress for approximately three months in 1989. Joynes had signed an employment contract with RosExpress in which he agreed to call the company a half-hour before a delivery was due if he knew he would be unable to deliver the flowers on time. Adherence to this provision by company drivers enabled RosExpress to inform its customers in advance of any delay and to make alternate arrangements for delivery. The contract expressly provided for termination of employment upon the third violation of this policy. RosExpress consistently enforced this provision with its drivers.

Joynes missed his first deadline on September 27, 1989, when flowers which should have been delivered at 5:00 p.m. were actually delivered at 5:31. Joynes did not call the company until after the 5:00 o'clock deadline had passed. He received a warning on that occasion. On November 17 Joynes missed a 3:00 p.m. deadline and, once again, did not call until 3:30 to report what had happened. He was warned on November 20 that he would be fired if he missed another deadline without calling in advance. when he missed a third deadline on November 22, he was fired.

Joynes then filed a claim for unemployment compensation. Initially, a claims examiner ruled that he was ineligible for benefits because he had been discharged for "violation of company policy," i.e., misconduct. Joynes appealed from this decision, and an evidentiary hearing was held, at which both Joynes and a company representative testified. Joynes admitted in his testimony that he "was aware of the rules." The hearing examiner, however, reversed the claims examiner and ruled that Joynes was eligible to receive unemployment compensation. The hearing examiner found that Joynes had not been discharged for misconduct as defined in the applicable statute and regulations. *fn1 While acknowledging that Joynes had violated the employer's rules, the examiner found that the violations were due to circumstances beyond Joynes' control, such as traffic congestion or inability to find a parking place, so that his conduct could not be characterized as willful disregard of company policy. RosExpress appealed to the Office of Appeals and Review, which affirmed the decision of the hearing examiner. RosExpress now seeks relief from this court.

II

RosExpress claims that Joynes was ineligible for unemployment benefits because he was an independent contractor, not an employee. The relevant portion of the statute defines "employment" as any service performed by "any individual who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee . . . ." D.C. Code § 46-101 (2)(A)(i)(II) (1990). When the relationship of a worker to a company is that of an independent contractor rather than that of an employee as defined by the common law, that worker is not entitled to benefits under the District of Columbia Unemployment Compensation Act. See, e.g., Spackman v. District of Columbia Department of Employment Services, 590 A.2d 515 (D.C. 1991).

At the hearing below, the representative of RosExpress, Lowell Press, *fn2 raised the issue of whether Joynes should be classified as an employee or an independent contractor. After testifying to the events leading up to Joynes' discharge, Mr. Press asked the examiner whether "this is . . . the right time to enter the thing about the independent contractor." The examiner replied, "I already made a determination that you're okay." Mr. Press then said, "That's all I have for now," and the examiner turned the questioning to other matters. The issue of Joynes' status as an employee or an independent contractor did not come up again. Because this critical issue was left unresolved, the decision of the Department cannot stand. *fn3

In reviewing any agency decision, this court must determine three things: "(1) whether the agency has made a finding of fact on each material contested issue of fact; (2) whether substantial evidence of record supports each finding; and (3) whether Conclusions legally sufficient to support the decision flow rationally from the findings." Levy v. District of Columbia Board of Zoning Adjustment, 570 A.2d 739, 746 (D.C. 1990) (citations omitted); see Perkins v. District of Columbia Department of Employment Services, 482 A.2d 401, 402 (D.C. 1984); D.C. Code § 1-1509 (e) (1987). A meaningful review requires the agency in its decision to "state findings of fact on each material, contested factual issue . . . ." Perkins, supra, 482 A.2d at 402; accord, Smithsonian Institution v. District of Columbia Department of Employment Services, 514 A.2d 1191, 1194 (D.C. 1986).

The record in this case contains no finding on the status of Joynes as either an employee or an independent contractor. *fn4 Since his eligibility for benefits depends on his being the former rather than the latter, and since this issue was expressly raised below, it should have been resolved at the hearing. ordinarily, we would remand the case to the Department for further proceedings, since we cannot make the necessary finding ourselves. "If the agency fails to make a finding on a material, contested issue of fact, this court cannot fill the gap by making its own determination from the record, but must remand the case for findings on that issue." Colton v. District of Columbia District Unemployment Services, 484 A.2d 550, 552 (D.C. 1984) (citation omitted); accord, Smithsonian Institution, supra, 514 A.2d at 1194-1195. In this case, however, there is another, more fundamental flaw in the Department's decision.

III

The hearing examiner found that Joynes' failure to comply with the company rules was not willful, and therefore did not constitute misconduct. RosExpress contends that this finding was not supported by substantial evidence. See Washington Post Co. v. District Unemployment Compensation Board, 377 ...


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