CEVA Freight, LLC v. Employment Department

Under ORS 670.600(2), an entity is considered an independent contractor if it is (1) "free from direction and control over the means and manner of providing the services;" (2) "customarily engaged in an independently established business;" and (3) "responsible for obtaining other licenses or certificates necessary to provide the services."

CEVA Freight, LLC, a for-hire carrier, appealed an order of an ALJ assessing unpaid unemployment compensation taxes on payments made to "owner operator" truck drivers instead of exempting the taxes as services of independent contractors. CEVA leased trucks and drivers from "owner operators" but maintained some control over the drivers. In order to be considered a independent contractor, a person must be (1) "free from direction and control over the means and manner of providing the services;" (2) "customarily engaged in an independently established business;" and (3) "responsible for obtaining other licenses or certificates necessary to provide the services." The Court held that the owner operators obtained the necessary licenses on their own because the requirements to work for CEVA was to have a state driver license, not a federal license for interstate transportation. Although there was evidence that CEVA retained some control over the manner of services, the Court also held that CEVA did not retain sufficient control of the means and manner to deny the owner operators independent contractor status. BThe Court held that CEVA demonstrated all three requirements that the owner operators were independent contractors and exempt from employment. Reversed and remanded.