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Potter v. Hawaii Newspaper Agency2/19/1999
ontractor."
The DLIR has observed that:
"Work[ers'] compensation laws are highly remedial in character. Their paramount purpose is to provide compensation for an employee for all work-connected injuries, regardless of questions of negligence and proximate cause. Courts should therefore give them a liberal construction in order to accomplish their beneficent purposes." "Evanson v. University of Hawaii, 52 Haw. 595, 600, 483 P.2d 187, 191 (1971) (citations omitted). Consequently, the DLIR contends that "the term `employee[,]' as used in the workers' compensation context, should be liberally construed to achieve the beneficent intent of workers' compensation statutes." Although, Locations does not dispute this contention, and although we recognize the beneficent purposes and the remedial nature of Hawai i's workers' compensation laws, " he rule of liberal construction cannot be strained to the point of extending it to employments not within its scope or intent." Florida Indus. Comm'n v. Schoenberg, 117 So.2d 538, 541 (Fla. Dist. Ct. App. 1960). Simply stated, there can be no workers' compensation coverage absent an employer and employee relationship. See Harter v. County of Hawaii, 63 Haw. 374, 378 n.3, 628 P.2d 629, 632 n.3 (1981) (the relationship between employer and employee must be entered into in a deliberate manner with the informed consent of both parties)." Id. at 211, 900 P.2d at 787 (emphases added).
Nevertheless, the Hawaii appellate courts have traditionally been reluctant to allow an employer to achieve inequitable results by resorting in form to an independent contractor agreement in order to mask the reality of an employer-employee relationship and, thereby, deprive workers of statutory protections to which they are lawfully entitled. See Homes Construction Co., Inc. v. Agsalud, 2 Haw. App. 421, 633 P.2d 564 (1981) (holding that home improvement company's sales persons, who were paid on commission, were employees, so as to make employer liable for payment of employment security taxation); In re Appeal of Century Metalcraft Corp., 41 Haw. 508 (1957) (holding that salesmen, designated as "distributors" by manufacturer/retailer of aluminum cookware, were employees for purposes of employment security taxation); Bailey's Bakery v. Borthwick, 38 Haw. 16 (1948) (holding that bakery's denomination of its drivers as "independent contractors," where drivers owned their own trucks, which could be financed by bakery, and "purchased" bread from bakery at "wholesale" prices and resold it to retailers, retaining a "profit," did not exempt bakery from requirement to pay unemployment insurance taxes). Similarly, we are aware that "contracts for hire" are often contracts of adhesion, entered into by parties who do not possess equal bargaining power. See Brown v. KFC National Management Co., 82 Hawaii 226, 246-47, 921 P.2d 146, 166-67 (1996) (noting, under Hawaii law, that: (1) a contract of adhesion -- i.e., a contract offered by the stronger of the contracting parties on a "take it or leave it" basis -- is unenforceable if (a) the contract is the result of coercive bargaining strength, and (b) the contract unfairly limits the obligations and liabilities of, or provides otherwise unfair advantages to, the stronger party; and (2) an arbitration agreement in an employment application is usually not regarded as unenforceable because the second condition is generally lacking). The "Newspaper Dealers' Agreement" is such a contract of adhesion.
It is apparent from the record that the "Newspaper Dealers' Agreement" was offered to prospective newspaper carriers on a take-it-or-leave-it basis. The disparity of bargaining power was made more acute by the paucity of employment opportunit
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