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Cooperative v. Department of Workforce Services

Court of Appeals of Utah

March 29, 2018

Fur Breeders Agricultural Cooperative, Petitioner,
v.
Department of Workforce Services, Respondent.

         Original Proceeding in this Court

          R. Scott Rawlings, Attorney for Petitioner.

          Nathan R. White, Attorney for Respondent.

          Judge Ryan M. Harris authored this Opinion, in which Judges Michele M. Christiansen and Jill M. Pohlman concurred.

          HARRIS, Judge.

         ¶1 Fur Breeders Agricultural Cooperative (FBAC) occasionally hires off-duty police officers to provide a security presence at its facilities, and pays those officers an hourly wage for their services. The Utah Department of Workforce Services (DWS) considers these officers to be employees of FBAC, and has charged FBAC with making unemployment insurance contributions related to its payments to the officers. FBAC disagrees with that determination, and maintains that the officers are not its employees, and that it should not be required to make unemployment insurance contributions related to its payments to the officers. A DWS hearing officer, an administrative law judge, and the DWS Board of Appeals (the Board) all determined that the officers were FBAC's employees. FBAC seeks judicial review of the Board's determination.

         ¶2 Upon review, we conclude that the Board's analysis was flawed, in that it improperly framed the relevant question. Instead of asking whether the off-duty officers were "independent" from FBAC, as the governing statute and regulation require, the Board engaged in an analysis geared toward ascertaining whether the officers were independent from anyone. In this opinion, we set aside the Board's order, provide instruction as to the proper framing of the question, and direct the Board to revisit the matter with the proper framework in mind.

         BACKGROUND

         ¶3 FBAC is a business that manufactures and distributes animal feed to farmers who raise animals for their fur. On occasion, animal rights activist groups have been known to attempt to damage or destroy property belonging to businesses like FBAC. In an effort to prevent such damage, FBAC sometimes hires off-duty police officers to provide security services and a "greater police presence" at its facilities. It finds these officers through the Unified Police Department of Greater Salt Lake (UPD), a police department that serves many Salt Lake County cities and communities.

         ¶4 UPD has a voluntary "secondary employment program" through which it allows and coordinates after-hours off-duty work opportunities for its officers. Any UPD officer who wishes to engage in police or security services for private entities during off-duty hours must use UPD's secondary employment program; UPD prohibits its officers from engaging in any such services outside the program. Any UPD officers who wish to engage in off-duty police work must sign up for the secondary employment program, and UPD then places those officers with an individual or entity who wishes to engage their services.

         ¶5 On occasion, FBAC contacts UPD and asks to retain the services of several off-duty officers. Upon receiving such requests, UPD provides FBAC with the names of available officers, and FBAC engages the officers directly and pays them an hourly wage. All payments are made directly from FBAC to the individual officers. The officers remain employees of UPD, and perform services for FBAC (and others) only in their off-duty hours. All of the officers who provided services to FBAC in their off-duty hours during the relevant time period also provided similar occasional off-duty services to other companies during the same time period.

         ¶6 FBAC provides no training to the officers. FBAC also does not provide the officers with any instructions as to how to perform their services, and does not require the officers to perform their services in any particular pace or sequence. In addition, FBAC does not furnish any equipment to the officers; all equipment used by the officers during their work for FBAC, including their uniforms, firearms, and police vehicles, was provided either by UPD or by the officers themselves.

         ¶7 In July 2016, a DWS hearing officer determined that the officers were "employees" of FBAC, such that payments made by FBAC to the officers were subject to unemployment insurance contributions. FBAC appealed the hearing officer's decision to an administrative law judge, who determined in October 2016 that the officers were FBAC's employees. FBAC then appealed to the Board, which in ...


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