                               Cite as 2014 Ark. App. 504



                ARKANSAS COURT OF APPEALS
                                     DIVISION III
                                     No. E-13-1226


                                            Opinion Delivered   September 24, 2014
 JANA O’DELL
 D/B/A PROFESSIONAL                   APPEAL FROM THE ARKANSAS
 TRANSCRIPTION                        BOARD OF REVIEW
                            APPELLANT [NO. 2013-BR-002-EC ]

 V.

 DIRECTOR, DEPARTMENT OF
 WORKFORCE SERVICES, AND
 EMPLOYER CONTRIBUTIONS
 UNIT
                  APPELLEES REVERSED AND REMANDED


                            RHONDA K. WOOD, Judge

      Jana O’Dell, d/b/a Professional Transcription, appeals the Arkansas Board of

Review’s decision holding that O’Dell is responsible for paying unemployment taxes on

the typists she hires because she failed to satisfy the three-prong test in Arkansas Code

Annotated section 11-10-210(e). O’Dell contends that the Board’s findings are not

supported by substantial evidence. We reverse the Board’s decision.

      The Arkansas Department of Workforce Services issued a Determination Letter of

Liability finding that Gina Polston and other similarly situated workers were employees of

O’Dell for employer tax-contribution purposes. O’Dell requested that the Department’s

director issue a “Determination of Coverage.” The director conducted a telephone

hearing and decided that Polston was an employee of O’Dell. O’Dell appealed that
                                 Cite as 2014 Ark. App. 504


decision to the Arkansas Board of Review, which affirmed. O’Dell filed a timely notice of

appeal.

          We consider the Board of Review’s findings of fact conclusive if they are

supported by substantial evidence and view the evidence in the light most favorable to the

Board’s findings. Baldor Elec. Co. v. Ark. Emp’t Sec. Dep’t, 71 Ark. App. 166, 27 S.W.3d

771 (2000). However, we conduct a de novo review when there are issues of statutory

construction. Ark. Comprehensive Health Ins. Pool v. Denton, 374 Ark. 162, 286 S.W.3d 698

(2008). Arkansas Code Annotated section 11-10-210(e) (Supp. 2005) provides that the

following three-prong test should be used to determine whether a worker is not an

employee for unemployment-benefit purposes:

                  (e) Services performed by an individual for wages shall be deemed to be
          employment subject to this chapter irrespective of whether the common-law
          relationship of master and servant exists, unless and until it is shown to the
          satisfaction of the Director that:

                       (1) Such individual has been and will continue to be free from
                control and direction in connection with the performance of such
                service,both under his contract for the performance of service and in fact;

                       (2) The service is performed either outside the usual course of the
                business for which the service is performed or is performed outside all the
                places of business of the enterprise for which the service is performed; and

                        (3) The individual is customarily engaged in an independently
                established trade, occupation, profession, or business of the same
                nature as that involved in the service performed.

There is a presumption of employee status, and to overcome that presumption, the party

seeking the exemption must establish that all three subsections are satisfied. Morris v.

Everett, 7 Ark. App. 243, 647 S.W.2d 476 (1983). Thus, to establish that Polston and other


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workers were independent contractors, O’Dell was required to prove the existence of all

three factors.

       The record showed that O’Dell provided medical-transcription services to

physicians for St. Vincent Hospital. The physicians provided tapes to O’Dell, who would

transcribe them. She also assigned tapes to other typists when she had more work than she

could complete alone. The typists picked up the tapes from O’Dell’s residence, transcribed

them, and returned their transcriptions on a thumb drive or floppy disk. O’Dell then

reviewed the transcripts, made necessary changes, printed them, and returned them to the

physicians.

       The Board found that O’Dell failed to prove the first prong: namely, that Polston

and other typists were not free from her control. We disagree with the Board’s broad

interpretation of the statute. The sole evidence of control before the Board was that

O’Dell gave instructions to her typists regarding the format, font, and margins, and she

required them to return the completed work within 24−36 hours. Once the work was

returned, O’Dell would review it and make any revisions before forwarding the product

to St. Vincent. If any of the typists failed to adequately complete the work, O’Dell

retained termination rights and did not pay them. The Board’s broad interpretation results

in it becoming next to impossible for anyone to be free from control. The legislature

surely intended for independent contractors to exist in Arkansas or the statutory test would

not exist. Providing an independent contractor with basic guidelines and retaining the

right to discontinue using them in the future does not equate to control sufficient to create

an employer-employee relationship under the statute.

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       Even had we agreed with the Board’s statutory interpretation, this was also not

substantial evidence of control under Ark. Code Ann. § 11-10-210(e)(1). 1 While we give

great deference to the Board’s findings of facts, the facts must equate to substantial

evidence that reasonable minds might accept as adequate to support a conclusion. We

simply do not agree there was evidence substantial enough for the Board to find that

O’Dell had failed to meet the burden of proving that the typists she hired were free from

her control and direction.

       The Board additionally found that O’Dell failed to meet the second prong of the

three-part test by not proving that the typists’ services were “performed outside all the

places of business of the enterprise for which the service is performed.” 2 Ark. Code Ann. §

11-10-210(e)(2). Here, the Board incorrectly applied a supreme court case addressing this

issue: Mamo Transportation, Inc. v. Williams, 375 Ark. 97, 289 S.W.3d 79 (2008).

       In Mamo, our supreme court stated “we hold that ‘place of business’ is the place

where the enterprise is performed. An enterprise’s place of business must be decided on a

case by case basis.” Id. at 103, 289 S.W.3d at 85. More specifically, the court compared

the facts in Mamo with the facts in Home Care Professionals of Arkansas, Inc. v. Williams, 95

Ark. App. 194, 235 S.W.3d 536 (2006). In Home Care, the enterprise contracted home-
       1
         While we do not weigh the evidence in these cases, it is useful to note that the
Board also had the following uncontroverted evidence: (1) O’Dell did not control who
actually performed the typing (the typists often used others to complete the work); (2) the
typists could, and some did, work for other entities; (3) O’Dell did not train, supervise, or
provide equipment; and (4) O’Dell did not control the hours worked or the typists’
wardrobe.
       2
       It is clear that O’Dell is in the business of transcription services and her typists
performed said services; therefore, our focus is on the second subsection of the second
prong.
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healthcare professionals to provide care in client’s homes. In Mamo, the enterprise

contracted trucks to provide transportation across the United States and Canada.

       In both Home Care and Mamo, the enterprise in question necessarily entailed

providing a service that could be done only at a place of business outside the enterprise’s

actual physical office. Transportation takes place on the open road, and home healthcare

takes place in the clients’ homes. Thus, in both those cases, the employer failed the second

prong because the services were performed within the places of business of the enterprise:

that is, on the road and in the home.

       The present case involves a business venture different from those in Mamo and

Home Care. O’Dell’s enterprise was to provide transcription services. She could and did

provide this service within her business office, her home. However, the key difference is

that the typists she contracted with did not provide the service at her place of business but

at their places of business or where they chose to complete the work. The service here did

not dictate alternative places of businesses as necessary to fulfill the purpose of the

enterprise. As a result, the Board of Review incorrectly applied Mamo and thus erred in

finding that she failed to prove the second prong.

       In sum, to overcome the presumption of employment, the party seeking the

exception must prove the existence of all three subsections of Ark. Code Ann. § 11-10-

210(e). The Board of Review failed to address the third prong after erroneously ruling

that O’Dell had failed to meet the first and second prongs. We therefore reverse and

remand for the Board to consider whether she met the third prong.

       Reversed and remanded.

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GLADWIN, C.J., and BROWN, J., agree.

R. David Lewis, for appellant.

Phyllis A. Edwards, for appellees.




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