Matter of Production Processing Inc. (Commr. of Labor) ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: January 28, 2016 520723
______________________________________
In the Matter of PRODUCTION
PROCESSING INC.,
Appellant.
MEMORANDUM AND ORDER
COMMISSIONER OF LABOR,
Respondent.
(And Three Other Related Proceedings.)
______________________________________
Calendar Date: December 15, 2015
Before: Peters, P.J., Garry, Rose and Devine, JJ.
__________
Goldstein Jones, LLP, New York City (Richard W. Goldstein
of counsel), for appellant.
Eric T. Schneiderman, Attorney General, New York City
(Steven Koton of counsel), for respondent.
__________
Peters, P.J.
Appeals from four decisions of the Unemployment Insurance
Appeal Board, filed July 9, 2014, which ruled, among other
things, that certain unemployment insurance experience ratings
transferred to Production Processing Inc., Power Payroll Inc.,
FSI Processing Inc. and Film Payment Services Inc. pursuant to
Labor Law § 581.
Producers Payroll Inc., owned by Gregory Pickert, and FPS
Payroll Services Inc., owned by Robert Oberman, processed
payrolls for various companies in the entertainment industry.
Both companies, which operated out of the same address, ceased
operations in New York at the end of 2006. In the first quarter
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of 2007, Production Processing Inc. and Power Payroll Inc.
commenced operations in New York, owned by Pickert. At that
time, FSI Processing Inc. and Film Payment Services Inc. also
commenced operations in New York, owned by Oberman. All four of
these entities engaged in the same business as Producers Payroll
and FPS Payroll. The Unemployment Insurance Appeal Board
subsequently ruled that, pursuant to Labor Law § 581 (4) and (7),
the unemployment insurance experience rating of Producers Payroll
was transferred to Production Processing and Power Payroll and
the unemployment insurance experience rating of FPS Payroll was
transferred to FSI Processing and Film Payment. Production
Processing, Power Payroll, FSI Processing and Film Payment now
appeal.
Labor Law § 581 (7) (a) (1) states that "[i]f an employer
transfers its organization, trade or business, or a portion
thereof, to another employer and, at the time of the transfer,
there is at least a ten percent common ownership, management or
control of the two employers, then the unemployment experience
attributable to the transferred organization, trade or business
shall be transferred to the employer to whom such organization,
trade or business is so transferred," and "[f]or purposes of this
subdivision 'organization, trade or business' shall include the
employer's workforce." Here, Production Processing and Power
Payroll are solely owned by Pickert, who also owned Producers
Payroll; FSI Processing and Film Payment are solely owned by
Oberman, who also owned FPS Payroll. Further, the newly formed
entities all operate out of the same address as Producers Payroll
and FPS Payroll did. The record reflects that approximately 40%
of Producers Payroll employees worked for Production Processing
or Power Payroll in 2007. Similarly, approximately 50% of FPS
Payroll employees worked for FSI Processing or Film Payment in
2007. Pickert, who also serves as Secretary for FSI Processing
and FPS Payroll, testified that the new entities were created to
carry on the business due to liability issues that Production
Payroll and FPS Payroll had with the Internal Revenue Service.
He also testified that a number of clients of Producers Payroll
and FPS Payroll became clients of the new entities, although he
did not know the exact number. In light of the foregoing,
substantial evidence supports the Board's determination that a
transfer of business from Producers Payroll to Production
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Processing and Power Payroll and from FPS Payroll to FSI
Processing and Film Payment occurred pursuant to Labor Law § 581
(7) (see generally Matter of Hancock Lbr. LLC [Commissioner of
Labor], 56 AD3d 844, 845-846 [2008]; Matter of Felix Assoc., Inc.
[Commissioner of Labor], 53 AD3d 893, 894 [2008]; Matter of Up
State Fed. Credit Union [Sweeney], 246 AD2d 704, 704-705 [1998]).
The unemployment insurance experience ratings were therefore
properly transferred.
Garry, Rose and Devine, JJ., concur.
ORDERED that the decisions are affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court