704

Opinion of the Court.

The Government points out that the regulations were construed by the Commissioner of Internal Revenue to cover the circumstances here presented. This is shown by his additional tax assessments. Other instances of such administrative determinations are called to our attention.9

So far as the regulations refer to the effect of contracts, we think their statement of the law cannot be challenged successfully. Contracts, however "skilfully devised," Lucas v. Earl, 281 U. S. 111, 115, should not be permitted to shift tax liability as definitely fixed by the statutes.10

tion of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is an independent contractor, not an employee.

"If the relationship of employer and employee exists, the designation or description of the relationship by the parties as anything other than that of employer and employee is immaterial. Thus, if two individuals in fact stand in the relation of employer and employee to each other, it is of no consequence that the employee is designated as a partner, coadventurer, agent, or independent contractor.

"The measurement, method, or designation of compensation is also immaterial, if the relationship of employer and employee in fact exists. "Individuals performing services as independent contractors are not employees. Generally, physicians, lawyers, dentists, veterinarians, contractors, subcontractors, public stenographers, auctioneers, and others who follow an independent trade, business, or profession, in which they offer their services to the public, are independent contractors and not employees." 26 C. F. R. § 400.205. See also Treasury Regulations 91, 26 C. F. R. § 401.3. (Emphasis added.)

9 The citation of these cases does not imply approval or disapproval of the results. The cases do show the construction of the regulation by the agency. United States v. Mutual Trucking Co., 141 F. 2d 655; Jones v. Goodson, 121 F. 2d 176; Magruder v. Yellow Cab Co., 141 F. 2d 324; Texas Co. v. Higgins, 118 F. 2d 636; American Oil Co. v. Fly, 135 F.2d 491; Glenn v. Standard Oil Co., 148 F. 2d 51.

See also note 2.

10 Gregory v. Helvering, 293 U. S. 465; Griffiths v. Commissioner, 308 U. S. 355; Higgins v. Smith, 308 U. S. 473; Helvering v. Clifford, 309 U.S. 331.

755552 0-48- 49

Opinion of the Court.

331 U.S.

Probably it is quite impossible to extract from the statute a rule of thumb to define the limits of the employeremployee relationship. The Social Security Agency and the courts will find that degrees of control, opportunities for profit or loss, investment in facilities, permanency of relation and skill required in the claimed independent operation are important for decision. No one is controlling nor is the list complete. These unloaders and truckers and their assistants are from one standpoint an integral part of the businesses of retailing coal or transporting freight. Their energy, care and judgment may conserve their equipment or increase their earnings but Greyvan and Silk are the directors of their businesses. On the other hand, the truckmen hire their own assistants, own their trucks, pay their own expenses, with minor exceptions, and depend upon their own initiative, judgment and energy for a large part of their success.

Both lower courts in both cases have determined that these workers are independent contractors. These inferences were drawn by the courts from facts concerning which there is no real dispute. The excerpts from the opinions below show the reasons for their conclusions."1

Giving full consideration to the concurrence of the two lower courts in a contrary result, we cannot agree that the

11 United States v. Silk, 155 F. 2d 356, 358-9: “But even while they work for appellee they are not subject to his control as to the method or manner in which they are to do their work. The undisputed evidence is that the only supervision or control ever exercised or that could be exercised over the haulers was to give them the sales ticket if they were willing to take it, and let them deliver the coal. They were free to choose any route in going to or returning. They were not required even to take the coal for delivery.

"We think that the relationship between appellee and the unloaders is not materially different from that between him and the haulers. In response to a question on cross examination, appellee did testify that the unloaders did what his superintendent at the coal yard told them to do, but when considered in the light of all his testimony, all that

704

Opinion of the Court.

12

unloaders in the Silk case were independent contractors." They provided only picks and shovels. They had no opportunity to gain or lose except from the work of their

this answer meant was that they unloaded the car assigned to them into the designated bin. . . .

"The undisputed facts fail to establish such reasonable measure of direction and control over the method and means of performing the services performed by these workers as is necessary to establish a legal relationship of employer and employee between appellee and the workers in question."

Greyvan Lines v. Harrison, 156 F. 2d 412, 414-16. After stating the trial court's finding that the truckmen were not employees, the appellate court noted:

"Appellant contends that in determining these facts the court failed to give effect to important provisions of the contracts which it asserts clearly show the reservation of the right of control over the truckmen and their helpers as to the methods and means of their operations which, it is agreed, furnish the test for determining the relationship here in question. . . .'

It then discussed the manual and concluded:

"While it is true that many provisions of the manual, if strictly enforced, would go far to establish an employer-employee relationship between the Company and its truckmen, we agree with appellee that there was evidence to justify the court's disregarding of it. It was not prepared until April, 1940, although the tax period involved was from November, 1937, through March, 1942, and there was no evidence to show any change or tightening of controls after its adoption and distribution; one driver testified that he was never instructed to follow the rules therein provided; an officer of the Company testified that it had been prepared by a group of three men no longer in their employ, and that it had been impractical and was not adhered to."

After a discussion of the helper problem, this statement appears: "... the Company cannot be held liable for employment taxes on the wages of persons over whom it exerts no control, and of whose employment it has no knowledge. And this element of control of the truckmen over their own helpers goes far to prevent the employer-employee relationship from arising between them and the Company. While many factors in this case indicate such control as to give rise to that relationship, we think the most vital one is missing because of the complete control of the truckmen as to how many, if any, and what helpers they make use of in their operations. . . ."

12 Cf. Grace v. Magruder, 148 F.2d 679.

Opinion of the Court.

331 U.S.

hands and these simple tools. That the unloaders did not work regularly is not significant. They did work in the course of the employer's trade or business. This brings them under the coverage of the Act.13 They are of the group that the Social Security Act was intended to aid. Silk was in a position to exercise all necessary supervision over their simple tasks. Unloaders have often been held to be employees in tort cases.'"

14

There are cases, too, where driver-owners of trucks or wagons have been held employees 15 in accident suits at

13 I. R. C., chap. 9, subchap. A, § 1426 (b), as amended, 53 Stat. 1384:

"The term 'employment' means any service performed employee for the person employing him

except

by an

"(3) Casual labor not in the course of the employer's trade or business;

14 Swift & Co. v. Alston, 48 Ga. App. 649, 173 S. E. 741; Holmes v. Tennessee Coal, I. & R. Co., 49 La. Ann. 1465, 22 So. 403; Muncie Foundry Co. v. Thompson, 70 Ind. App. 157, 123 N. E. 196; Chicago, R. I. & P. R. Co. v. Bennett, 36 Okla. 358, 128 P. 705; Murray's Case, 130 Me. 181, 154 A. 352; Decatur R. Co. v. Industrial Board, 276 Ill. 472, 114 N. E. 915; Benjamin v. Fertilizer Co., 169 Miss. 162, 152 So. 839.

15 Western Express Co. v. Smeltzer, 88 F. 2d 94; Industrial Commission v. Bonfils, 78 Colo. 306, 241 P. 735; Coppes Bros. & Zook v. Pontius, 76 Ind. App. 298, 131 N. E. 845; Burruss v. B. M. C. Logging Co., 38 N. M. 254, 31 P. 2d 263; Bradley v. Republic Creosoting Co., 281 Mich. 177, 274 N. W. 754; Rouse v. Town of Bird Island, 169 Minn. 367, 211 N. W. 327; Industrial Commission v. Hammond, 77 Colo. 414, 236 P. 1006; Kirk v. Lime Co. & Insurance Co., 137 Me. 73, 15 A. 2d 184; Showers v. Lund, 123 Neb. 56, 242 N. W. 258; Burt v. Davis-Wood Lumber Co., 157 La. 111, 102 So. 87; Dunn v. Reeves Coal Yards Co., Inc., 150 Minn. 282, 184 N. W. 1027; Waters v. Pioneer Fuel Co., 52 Minn. 474, 55 N. W. 52; Warner v. Hardwood Lumber Co., 231 Mich. 328, 204 N. W. 107; Frost v. Blue Ridge Timber Corp., 158 Tenn. 18, 11 S. W. 2d 860; Lee v. Mark H. Brown Lumber Co., 15 La. App. 294, 131 So. 697.

See particularly Singer Manufacturing Co. v. Rahn, 132 U. S. 518.

704

Opinion of RUTLEDGE, J.

tort or under workmen's compensation laws. But we agree with the decisions below in Silk and Greyvan that where the arrangements leave the driver-owners so much responsibility for investment and management as here, they must be held to be independent contractors.1 These driver-owners are small businessmen. They own their own trucks. They hire their own helpers. In one instance they haul for a single business, in the other for any customer. The distinction, though important, is not controlling. It is the total situation, including the risk undertaken, the control exercised, the opportunity for profit from sound management, that marks these driverowners as independent contractors.

No. 312, United States v. Silk, is affirmed in part and reversed in part.

No. 673, Harrison v. Greyvan Lines, Inc., is affirmed.

MR. JUSTICE BLACK, MR. JUSTICE DOUGLAS and MR. JUSTICE MURPHY are of the view that the applicable principles of law, stated by the Court and with which they agree, require reversal of both judgments in their entirety.

MR. JUSTICE RUTLEDGE.

I join in the Court's opinion and in the result insofar as the principles stated are applied to the unloaders in the Silk case. But I think a different disposition should be made in application of those principles to the truckers in that case and in the Greyvan case.

So far as the truckers are concerned, both are borderline cases.1 That would be true, I think, even if the so

16 Compare United States v. Mutual Trucking Co., 141 F. 2d 655; Glenn v. Standard Oil Co., 148 F. 2d 51.

1 The opinion of the Circuit Court of Appeals in the Greyvan case stated, after referring to United States v. Mutual Trucking Co., 141 F. 2d 655: "It is true that the facts there do not present as close a question as in the case at bar." And see note 3.