Palmetto State Transportation Company (Palmetto) was an interstate motor carrier. Scott R. Wilkinson (Wilkinson) began his employment with Palmetto as a long-haul truck driver in January 1998. Palmetto and Wilkinson altered their relationship a year later and Wilkinson became an independent contractor. He purchased a tractor and entered into an Equipment Lease Contract with Palmetto. The contract stipulated an increased mileage rate and made Wilkinson solely responsible for all expenses associated with acquiring, financing, maintaining and insuring the tractor. He also assumed responsibility for "the means and methods of the performance of all transportation services" and agreed to carry Workers Compensation coverage for South Carolina's statutory limits. He accomplished this by purchasing an occupational accident policy from Zurich American Insurance Company that provided for a lump sum of $500,000 and monthly payments of $2,000 for 100 months in the event of his death.
Wilkinson died on May 16, 2002, in a motor vehicle accident while driving his tractor for Palmetto. The Zurich policy was paid to his wife, Lea Ann. She also filed a workers compensation claim, contending that her husband was Palmetto's employee. Palmetto's workers compensation carrier defended on the basis that he had been an independent contractor. The workers compensation commission, circuit court, and court of appeals found that Wilkinson was an employee and that his spouse was entitled to workers compensation benefits. The basis for their findings of compensability came from the employee/independent contractor test in previous case law. As a result, the matter was directed to the Supreme Court of South Carolina on appeal.
The determination of whether a workers compensation claimant is an employee or an independent contractor focuses on the issue of control, specifically whether the purported employer had the right to control the claimant in the performance of his work. The court must examine the factors of (1) direct evidence of the right or exercise of control, (2) furnishing of equipment, (3) method of payment, and (4) right to fire. The Supreme Court was persuaded that these factors presented a preponderance of evidence in favor of a finding that Wilkinson was an independent contractor. Its evaluation of the four factors was initially guided by the independent contractor agreement but, more importantly, by the parties' conduct, which mirrored the terms of the contract. The agreement, when viewed as a whole, led to a finding of an independent contractor agreement.
The Supreme Court reversed the court of appeals and found that Wilkinson was an independent contractor for the purposes of workers compensation and that his estate was not entitled to benefits. It overruled the previous case law that the presence of "any single factor is not merely indicative of, but, in practice, virtually proof of, the employment relation." It went back to case law that preceded this that emphasized that the common law factors–right or exercise of control, method of payment, furnishing of equipment, and right to fire–should be evaluated in an evenhanded manner in determining whether the questioned relationship is one of employment or independent contractor.
Supreme Court of South Carolina. Lea Ann Wilkinson (surviving spouse) for Scott R. Wilkinson (deceased), Claimant, Respondent, v. Palmetto State Transportation Company, Employer, and Canal Insurance Company, Carrier, Petitioners. No. 26646. Heard Jan. 22, 2009. Decided May 4, 2009. Rehearing Denied May 28, 2009. 382 S.C. 295, 676 S.E.2d 700