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South Carolina
Judicial Department
4256 - Shuler v. Tri-County Electric Co-op, Inc.
Shuler v. Tri-County Electric Co-op

In The Court of Appeals

Frederick D. Shuler, Appellant,


Tri-County Electric Co-op, Inc., Employer, and Federated Rural Electric Insurance Corp., Carrier, Respondents.

Appeal From Richland County
James W. Johnson, Jr., Circuit Court Judge

Opinion No. 4256
Heard April 10, 2007 � Filed June 18, 2007


Kevin Hayne Sitnik and John Gressette Felder, Jr., both of Columbia, for Appellant.�

W. Hugh McAngus, Weston Adams, III, and Mary Margaret Hyatt, all of Columbia, for Respondents.

Samuel F. Painter, of Columbia, for Amicus Curiae.

STILWELL, J.:� Frederick D. Shuler filed this action alleging entitlement to workers� compensation benefits.� Shuler appeals the circuit court�s ruling he was not an employee of Tri-County Electric Co-op, Inc. (the Co-op) and therefore not entitled to coverage.� We affirm.


The Co-op is a rural electric cooperative.[1]� Shuler served on the Co-op�s Board of Trustees.� Shuler requested authorization from the Co-op to attend the annual convention of the National Rural Electric Cooperative Association in Dallas.� Although Shuler�s attendance was not mandatory, and he was not a voting delegate at the meeting, the Co-op approved his request.� Shuler was injured in an automobile accident while driving to Dallas and filed a workers� compensation claim.� The Co-op denied the claim, contending Shuler was not an employee.�

As a board member, Shuler received compensation from the Co-op, including reimbursed expenses and a per diem allowance for attendance at meetings.� This compensation was designated on Shuler�s IRS 1099 form issued by the Co-op as �Nonemployee compensation.�� Shuler also received benefits from enrollment in the Co-op�s retirement and health insurance plans. �

The single commissioner found Shuler was not the Co-op�s employee and was therefore ineligible for workers� compensation benefits.� The full commission reversed the commissioner.� The circuit court reversed the full commission, reinstating the single commissioner�s decision.�


The existence of an employer-employee relationship is a factual question that determines the jurisdiction of the Workers� Compensation Commission.� Nelson v. Yellow Cab Co., 349 S.C. 589, 594, 564 S.E.2d 110, 112 (2002).� When an issue involves jurisdiction, the appellate court can take its own view of the preponderance of the evidence.�� Dawkins v. Jordan, 341 S.C. 434, 439, 534 S.E.2d 700, 703 (2000).� �In determining jurisdictional questions, doubts of jurisdiction will be resolved in favor of inclusion of employees within workers� compensation coverage rather than exclusion.�� Wilson v. Georgetown County, 316 S.C. 92, 94, 447 S.E.2d 841, 842 (1994).


Shuler argues he is an employee of the Co-op and therefore entitled to workers� compensation benefits.� We disagree.�

To decide the issue of employment in this case, we are required to review:� 1) the Workers� Compensation Act, 2) the Electric Cooperative Act, and 3) the Co-op�s by-laws. �We shall do so seriatim.

In interpreting the Workers� Compensation Act, we are required to construe the statutes liberally in favor of coverage.� Peay v. U.S. Silica Co., 313 S.C. 91, 94, 437 S.E.2d 64, 65 (1993).� The primary section of the Workers� Compensation Act involved in this case is section 42-1-130.� Section 42-1-130 defines an employee as a �person engaged in an employment under any appointment [or] contract of hire, . . . expressed or implied, oral or written . . . .�� S.C. Code Ann. � 42-1-130 (Supp. 2006).

In construing the Workers� Compensation Act to define an employee, our court has held that coverage depends on the existence of an employment relationship.� Edens v. Bellini, 359 S.C. 433, 439, 597 S.E.2d 863, 866 (Ct. App. 2004).� The �contract of employment� is the jurisdictional factor used to determine if an employment relationship exists.� Alewine v. Tobin Quarries, Inc., 206 S.C. 103, 109, 33 S.E.2d 81, 83 (1945).� Although no formality is required, the contract is established if the parties recognize each other as employer and employee.� Id.� Furthermore, an employee�s right to demand payment for his services from the employer is essential to the establishment of an employment relationship.� Kirksey v. Assurance Tire Co., 311 S.C. 255, 257, 428 S.E.2d 721, 723 (Ct. App. 1993), aff�d, 314 S.C. 43, 443 S.E.2d 803 (1994).� For example, in Doe v. Greenville Hosp. Sys., 323 S.C. 33, 39-40, 448 S.E.2d 564, 567-68 (Ct. App. 1994), this court held an unpaid volunteer candy striper was not the employee of a hospital.� Likewise, in McCreery v. Covenant Presbyterian, this court found an unpaid church volunteer not an employee of the church for workers� compensation purposes.� 299 S.C. 218, 383 S.E.2d 264 (1989), rev�d on other grounds, 303 S.C. 271, 400 S.E.2d 130 (1990).� See also Kirksey, 311 S.C. at 257, 428 S.E.2d at 723 (finding unpaid daughter of store owner not an employee).� See generally 3 Larson�s Workers� Compensation Law � 65.01 (2006).

To correctly determine the relationship of the parties in this case, we must next turn our attention to the language of the Electric Cooperative Act and the by-laws adopted by the individual co-op pursuant to the provisions of that act.� The Electric Cooperative Act governs rural electric cooperatives in South Carolina.� See S.C. Code Ann. ��33-49-10 to -1450 (2006 & Supp. 2006).� Section 33-49-630 of the Electric Cooperative Act, entitled �Compensation or employment of trustee,� provides:

The bylaws may make provision for the compensation of trustees; provided, however, that compensation shall not be paid except for actual attendance upon activities authorized by the board. �The bylaws may also provide for the travel, expenses and other benefits of trustees, as set by the board. �A trustee, except in emergencies, shall not be employed by the cooperative in any other capacity involving compensation.

S.C. Code Ann. � 33-49-630 (2006) (emphasis in original).�

While we are required to construe the Workers� Compensation Act liberally in favor of coverage, the same is not true in the interpretation and construction of either the Electric Cooperative Act or the by-laws adopted pursuant thereto.� With regard to these enactments, we apply more general rules of construction. �The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature.� S.C. Dep�t of Transp. v. First Carolina Corp., 369 S.C. 150, 153-54, 631 S.E.2d 533, 535 (2006).� The court should give words their plain and ordinary meaning, without resort to subtle or forced construction to limit or expand the statute�s operation.� Sloan v. S.C. Bd. of Physical Therapy Exam�rs, 370 S.C. 452, 469, 636 S.E.2d 598, 607 (2006).�

The plain language of section 33-49-630 allows a rural electric cooperative to provide for the compensation of trustees and limits this compensation �for actual attendance upon activities authorized by the board.�� S.C. Code Ann. �33-49-630 (2006).� However, this section does not mandate the compensation or employment of a trustee, nor does it create in the trustee a right to demand payment.� See, e.g., Nallan v. Motion Picture Studio Mechs. Union, 360 N.E.2d 353, 353 (N.Y. 1976) (emphasizing, in the context of whether a board member of a labor union was an employee of the union, that the board member�s stipend did not constitute a salary or compensation under workers� compensation laws).� We also find instructive the language of the Electric Cooperative Act itself, which prohibits a trustee from being employed by the cooperative in any other capacity involving compensation except in emergency situations.� We are able to discern no right to demand a wage arising pursuant to section 33-49-630 sufficient to satisfy the test for the creation of an employment relationship as required in court decisions.� Nor do we discern from the Electric Cooperative Act any intent by the legislature to create an employment relationship for purposes of workers� compensation benefits.

Finally, we look to the by-laws of the individual co-op to determine if they provide a basis for concluding that an employment relationship existed between the Co-op and Shuler.� The by-laws are an integral component establishing Shuler�s relationship as a board member of Tri-County Electric Co-op.� The by-laws should be construed in the same manner a contract is construed because they form the basis for the relationship between the parties, as does a typical contract.� �The primary purpose of all rules of contract construction is to determine the intent of the parties.�� Goldston v. State Farm Mut. Auto. Ins. Co., 358 S.C. 157, 170, 594 S.E.2d 511, 518 (Ct. App. 2004).� In determining the parties� intentions, the court must read the contract as a whole.� S. Atl. Fin. Servs., Inc. v. Middleton, 356 S.C. 444, 447, 590 S.E.2d 27, 29 (2003).� When the language of a contract is clear, explicit, and unambiguous, the language of the contract alone determines the contract�s force and effect, and the court must construe it according to its plain, ordinary, and popular meaning.� Moser v. Gosnell, 334 S.C. 425, 430, 513 S.E.2d 123, 125 (Ct. App. 1999).�

Article IV, Section 9 of the by-laws provides, in pertinent part:

Board members shall not receive any salary for their services as such, except that the board may authorize a fixed sum for each day or portion thereof spent on Cooperative business . . . . �If authorized by the board, board members may also be reimbursed for expenses actually and necessarily incurred in carrying out such cooperative business or granted a reasonable per diem allowance . . . .

Other provisions of the by-laws provide that trustees are elected by the Co-op members and serve for a fixed term of three years.� The by-laws provide that trustees must be members, but employees do not have to be members.� They also prohibit any employee from being a trustee while being simultaneously employed by the Co-op or having been employed in the preceding five years.� �No person shall be eligible to become or remain a board member . . . who . . . is employed by the Cooperative or was employed by the Cooperative at any time during the preceding five (5) years.��

Although the by-laws permit compensation on a per diem basis, provide for trustees to be reimbursed for actual expenses incurred, and allow other benefits, when read as a whole the by-laws do not create an employment relationship.� Rather, these benefits and compensation constitute gratuitous payments, allowed in the board�s discretion, and are not compensation for services rendered.�

For the foregoing reasons, we hold Shuler is not the Co-op�s employee, and he is not entitled to coverage under the workers� compensation act.� Accordingly, the circuit court�s decision is


HEARN, C.J., and GOOLSBY, J., concur.

[1]  The parties stipulated many of the facts before the single commissioner. �

[2]  Shuler contends the circuit court erred in several other aspects of its analysis.� However, based on our conclusion that Shuler is not the Co-op�s employee, we need not address these issues.� See Rule 220(c), SCACR (�The appellate court may affirm any ruling, order, decision or judgment upon any ground(s) appearing in the Record on Appeal.�).