When does requiring satisfactory work make someone an employee? Jensen Tech v. Labor Commission Explained

In Jensen Tech Services v. Labor Commission, the Utah Court of Appeals clarified a crucial distinction in workers’ compensation law: the difference between controlling the quality of work and controlling the manner of performing work.

Background and Facts
Sergio Herrera, an IT technician, signed an agreement with Jensen Tech Services to perform work orders as an “independent contractor.” The agreement contained a noncompete clause and required Herrera to provide his own tools, though Jensen supplied cables and laptops. While working unsupervised on a twelve-foot ladder, Herrera fell and injured his ankle. When he sought workers’ compensation benefits, Jensen contested his employee status.

Key Legal Issues
The primary issue was whether the Labor Commission properly applied the right-to-control test to determine if Herrera was an employee or independent contractor. The Commission relied heavily on two factors: the agreement’s noncompete clause and Jensen’s right to approve the final work product.

Court’s Analysis and Holding
The court of appeals found the Commission’s analysis legally deficient. Most importantly, the court held that Jensen’s right to require satisfactory completion of work does not establish the right to control that characterizes an employment relationship. As the court explained, independent contractors are “subordinate to the employer only in effecting a result in accordance with the employer’s design.” The right to control focuses on the “manner or method” of performing work, not the quality of the final product.

The court also criticized the Commission for focusing almost exclusively on the noncompete clause while ignoring other contractual provisions, such as Herrera’s right to hire subcontractors.

Practice Implications
This decision reinforces that practitioners must comprehensively analyze all four Manning factors when determining worker classification: (1) agreements concerning right to control, (2) right to hire and fire, (3) method of payment, and (4) furnishing of equipment. Simply requiring satisfactory work or including noncompete provisions does not automatically create an employment relationship. The key inquiry remains whether the employer controls the manner and method of work performance, not just the final result.