Victory in Court of Appeals For Small Business Owner

Ogborn Mihm, LLP partner Thomas Neville obtained a victory for their client, Visible Voices, Inc., over the Division of Unemployment Insurance in a recent Colorado Court of Appeals decision, Visible Voices, Inc. v. Industrial Claim Appeals Office of the State of Colorado and Division of Unemployment Insurance, 2014 COA 63.  The Division of Unemployment Insurance commenced an audit of a small business, Visible Voices, Inc., that provides instant speech-to-text translation known in the court reporting industry as Computer Assisted Realtime Translation (“CART”).  The Division determined that Visible Voices owed back unemployment insurance taxes on 13 workers it determined were “employees” of Visible Voices.  Visible Voices appealed the determination, citing facts that showed the workers were independent contractors who undertook performance of engagements on a limited basis when the Visible Voices owner was unable to perform the services requested of her clients due to a scheduling conflict.

Court of Appeals

The case was heard by two different hearing officers, and twice by the ICAO before going up on appeal to the Court of Appeals.  In the Court of Appeals decision, it sided with Visible Voices, holding that the ICAO inappropriately relied on a single-factor test to determine whether the pool of workers Visible Voices occasionally gave work to were independent contractors.  Notably, the Court of Appeals cited with approval to Softrock Geological Services, Inc. v. Industrial Claim Appeals Office, 2012 COA 97, for the proposition that a single-factor test is inappropriate to determine whether a worker is customarily engaged in an independent trade or business related to the services performed.

This Court of Appeals decision was bolstered a few days later by the Colorado Supreme Court’s twin decisions in Industrial Claim Appeals Office v. Softrock Geological Services, Inc., 2014 CO 30, and Western Logistics, Inc. v. Industrial Claim Appeals Office, 2014 CO 31, which also rejected a single-factor test for purposes of determining whether an individual is an independent contractor under the Colorado Employment Security Act.