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Powers v. Keeneland Association, Inc.

Court of Appeals of Kentucky

March 31, 2017



          BRIEF FOR APPELLANT: Joseph L. Rosenbaum Lexington, Kentucky

          BRIEF FOR APPELLEE: Richard G. Griffith Lexington, Kentucky

          ORAL ARGUMENT FOR APPELLANT: Jason D. Thompson Lexington, Kentucky

          ORAL ARGUMENT FOR APPELLEE: Elizabeth S. Muyskens Lexington, Kentucky



          JONES, JUDGE

         JONES, JUDGE: The Appellant, Michael Powers ("Powers"), appeals from the November 17, 2015, summary judgment and order of the Fayette Circuit Court dismissing his claim of an alleged violation of Kentucky's Civil Rights Act, Kentucky Revised Statutes (KRS) Chapter 344 ("KCRA") against Appellee, Keeneland Association, Inc. ("Keeneland"). The trial court concluded that Powers was not an employee of Keeneland, but rather an independent contractor, and therefore, unable to invoke the protections KCRA. For the reasons set forth below, we affirm.

         I. Background

         Powers began working for Keeneland as a chaplain in October of 1999. As a chaplain, Powers's job duties included ministering to the backside workers, performing Sunday services during race meets, giving devotionals during race meets, presiding over funerals, and performing blessings, when requested to do so, during meals. Keeneland did not dictate how Powers was to conduct his ministry. Powers created his own schedule and was permitted to carry out his ministry as he deemed appropriate.

         Powers received a monthly salary from Keeneland and was given an annual raise every July.[1] Keeneland also reimbursed for all business-related expenses, paid various membership dues, and paid for his monthly cell phone bill. Keeneland also provided Powers with an office, office supplies, business cards, letterhead, and stationary. According to Powers, he was also provided a truck[2] and a golf cart by Keeneland. Keeneland also provided Powers two designated parking spaces, one for the truck and the other for the golf cart. Powers also received an employee discount in the gift shop and free admission to the track on race days.

         Keeneland indicated that Powers was an employee on various documents it submitted to the Kentucky Racing Commission.[3] Keeneland did not, however, offer Powers health insurance or pay any workers' compensation premiums on Powers's behalf. Moreover, Keeneland reported Powers's wages via a 1099 Form, as Powers was obligated to pay self-employment taxes on his own behalf. Powers did not participate in Keeneland's retirement plan. He also did not receive any sick leave or vacation time.

         Powers continued working for Keeneland for approximately fourteen years. He was eventually terminated in September 2013. Following his termination, in October 2014, Powers filed suit in Fayette Circuit Court alleging Keeneland engaged in disability discrimination in violation of KCRA when it terminated him.[4] After a period of discovery, on April 28, 2015, Powers filed a motion with the trial court for partial summary judgment on two issues: 1) a determination of whether he was an employee of Keeneland or an independent contractor; and 2) whether Keeneland discriminated against Powers due to his disability.

         In response to Powers's motion, Keeneland submitted an affidavit from Vince Gabbert, Keeneland's Chief Financial Officer. This was the first time Keeneland had relied on the testimony of Gabbert, as it had previously only designated Gerald "Jerry" Hale, Keeneland's Director of Human Resources, as its corporate representative. Powers filed a motion to strike Gabbert's affidavit since only Hale was ever identified as a corporate representative for Keeneland and Powers had not had the opportunity to depose Gabbert. Both parties briefed the motions and a hearing on the motions was held before the trial court on August 18, 2015.

         On September 9, 2015, the trial court overruled Powers's motion for partial summary judgment regarding his claim that Keeneland discriminated against him because he is a qualified individual with a disability finding that genuine issues of material fact existed regarding Powers's claim. Concerning whether Powers was an employee of Keeneland or an independent contractor, the trial court ordered that it was taking that issue under advisement. The trial court stated that "[a]fter additional discovery, including the completion of Powers's deposition, the parties may, but are not required to, submit supplemental briefs that discuss: (1) how Powers became chaplain for Keeneland; and (2) how Powers was paid while serving as chaplain, whether directly or through a third-party." Neither party filed a supplemental brief.

         Subsequently, by order rendered November 17, 2015, the trial court determined that Powers was not an employee of Keeneland, and therefore, could not bring a claim for employment discrimination based on the KCRA. In its findings, the trial court stated Powers had the discretion of how he would minister to the backside workers and was free to dictate his own schedule. Powers received no employee benefits and was free to travel on and off of Keeneland's property.

         The trial court also noted that Powers was originally paid through the Kentucky Race Track Chaplaincy, received a 1099, and paid self-employment taxes. This appeal followed.

         II. Analysis

         The KCRA makes it "an unlawful practice for an employer: (a) To fail or refuse to hire, or to discharge any individual, or otherwise to discriminate against an individual with respect to compensation, terms, conditions, or privileges of employment, because . . . the person is a qualified individual with a disability." KRS 344.040(1)(a). The KCRA's protection from job-related discrimination extends only to employees, not to independent contractors. See Steilberg v. C2 Facility Sols., LLC, 275 S.W.3d 732, 735 (Ky. App. 2008). Powers asserts that he was unlawfully terminated because of his disability, Parkinson's disease. Therefore, to prevail, Powers much first demonstrate that he is an employee, not an independent contractor. The KCRA defines an employee simply as "an individual employed by an employer." KRS 344.030(5).

         In Steilberg, we adopted the Sixth Circuit's use of the common-law agency test to determine whether an individual is an agent or an independent contractor under the KCRA. Id. (citing Simpson v. Ernst & Young, 100 F.3d 436 (6th Cir. 1996)). In Kentucky, our common-law agency law is based primarily on the Restatement (Second) of Agency § 220(2) (1958). See Kentucky Unemployment Ins. Comm'n v. ...

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