Independent contractor vs an employee; Economic reality test; McKissic v Bodine; Adanalic v Harco Nat’l Ins Co; MCL 500.3114(3)’s applicability

The court concluded in this consolidated appeal that the economic-reality test factors indicated that plaintiff-Knight was an employee of his grandmother’s company. Thus. it affirmed the Wayne County trial court’s denial of summary disposition and reversed the Washtenaw County trial court’s grant of summary disposition. Defendants-GEICO and State Farm argued “that the Washtenaw County trial court erred in finding that Knight was an independent contractor, granting” defendant-Auto Owners’ summary disposition motion, and dismissing it as a party. In contrast, Auto Owners, as appellant in the Wayne County case, argued “that the Wayne County trial court erred in finding that Knight was an employee, denying Auto Owners’ motion for summary disposition, and dismissing GEICO and State Farm as parties.” The court found that most “importantly, the second McKissic factor and the fourth Adanalic factor indicate that Knight is an employee: Knight was performing work that was an integral part of the business when he was injured.” Auto Owners argued that he “was not integral because he performed other job duties, such as lawn and fish care, and because [the company] did not replace him after his accident.” Auto Owners focused on the wrong circumstance here. “‘The question is not whether the particular worker is integral to the business but instead whether the type of work is integral to the business.’” The court noted that “Knight was returning from a meet where he sold [the company’s] products, which was integral to [its] business as a merchant. Although Knight performed some work that might not be integral, significant weight should be given to the evidence that he was performing integral work when the accident occurred. Therefore, this factor, in combination with the other factors, supports a finding that Knight was an employee.” Because the factors indicated that he was an employee, the court affirmed the Wayne County trial court and reversed the Washtenaw’s County trial court. The court noted that the “Washtenaw County trial court displayed apprehension to elevate what it saw as an informal family relationship to an employee relationship. But, the trial court cannot forgo an analysis under the economic-reality test when deciding whether a worker is an employee or independent contractor simply because there are familial ties between the worker and the employer.” The court found that “Knight was an employee of [the company] at the time of the accident for purposes of MCL 500.3114(3).” Affirmed in part, reversed in part, and remanded.