] Matter of Clarke (Commr. of Labor) , 31 N.Y.S.3d 684 ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: May 19, 2016 520941
520942
________________________________
In the Matter of the Claim of
KARYN CLARKE,
Respondent.
SELECT MEDICAL CORPORATION,
INC., Also Known as SELECT
EMPLOYMENT SERVICES INC.,
Appellant.
COMMISSIONER OF LABOR,
Respondent.
(Claim No. 1.) MEMORANDUM AND ORDER
________________________________
In the Matter of the Claim of
HELENE M. WALSH,
Respondent.
SELECT MEDICAL CORPORATION,
INC., Also Known as SELECT
EMPLOYMENT SERVICES INC.,
Appellant.
COMMISSIONER OF LABOR,
Respondent.
(Claim No. 2.)
________________________________
Calendar Date: April 28, 2016
Before: McCarthy, J.P., Garry, Egan Jr., Devine and Aarons, JJ.
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__________
Clifton Budd & DeMaria, LLP, New York City (Daniel C.
Moreland of counsel), for appellant.
Michelle I. Rosien, Philmont, for Kayrn Clarke and Helene
M. Walsh, respondents.
__________
Devine, J.
Appeals (1) from four decisions of the Unemployment
Insurance Appeal Board, filed July 17, 2014, which ruled, among
other things, that Select Medical Corporation, Inc. was liable
for unemployment insurance contributions on remuneration paid to
claimants and others similarly situated, and (2) from four
decisions of said Board, filed November 19, 2014, which denied a
request by Select Medical Corporation, Inc. for reconsideration
and/or reopening.
The State Department of Education administers supplemental
educational services to eligible children that include speech and
occupational therapy (see 20 USC § 1400 et seq.; 20 USC § 6301 et
seq.; Education Law § 4400 et seq.; Matter of Wright [Mid Is.
Therapy Assoc. LLC–Commissioner of Labor], 134 AD3d 1216, 1217
[2015]). Metro Therapy, Inc., a subsidiary of Select Medical
Corporation, Inc. (hereinafter collectively referred to as the
agency), contracts with county health departments and school
districts to provide those services to children. The agency
accordingly maintains a database of certified service providers
consisting of, as relevant here, licensed occupational
therapists, including claimant Karyn Clarke, and occupational
therapy assistants, including claimant Helene M. Walsh. Upon
receiving a request from its governmental client, the agency
contacts potential providers in that area via email or direct
calls. The agency paid claimants directly pursuant to a fee
schedule that was subject to negotiation, and billed its clients
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using invoices prepared by claimants documenting the services
rendered. Claimants were not reimbursed for expenses and paid
for their own liability insurance, obtained their own licenses
and required certifications and did not receive employee
benefits. Claimants signed independent contractor agreements
with the agency that, among other things, permitted them to work
for other agencies but prohibited them from soliciting the
agency's clients while they worked for the agency and for a two-
year period thereafter.
Claimants applied for unemployment insurance benefits in
2010. A combined hearing was held at which Walsh and the vice-
president of Metro Therapy, Conrad Kupferman, testified. The
Unemployment Insurance Appeal Board determined, in four
decisions, that claimants and those similarly situated were
employees of the agency, and that the agency was responsible for
unemployment insurance contributions. The agency's subsequent
request for reopening and/or reconsideration was denied by the
Board in four decisions. The agency now appeals from all of the
Board's decisions.
While we are unpersuaded that the Board failed to explain
its departure from somewhat similar prior precedent (see Matter
of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516, 520
[1985]), that does not end the matter before us. "Whether an
employer-employee relationship exists is a factual determination
for the Board, and its decision will be upheld if supported by
substantial evidence" (Matter of John Lack Assoc., LLC
[Commissioner of Labor], 112 AD3d 1042, 1043 [2013] [citations
omitted]; see Matter of Empire Towing & Recovery Assn., Inc.
[Commissioner of Labor], 15 NY3d 433, 437 [2010]; Matter of
Salamanca Nursing Home [Roberts], 68 NY2d 901, 903 [1986]).
Where, as here, "the details of the work performed are difficult
to control because of considerations such as professional
responsibilities, courts have applied the overall control test,
which requires that the employer exercise control over important
aspects of the services performed" (Matter of Wright [Mid Is.
Therapy Assoc. LLC–Commissioner of Labor], 134 AD3d at 1217
[internal quotation marks and citation omitted]; see Matter of
Empire State Towing & Recovery Assn., Inc. [Commissioner of
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Labor], 15 NY3d at 437-438; Matter of Mattei [Horizon Healthcare
Staffing Corp.—Commissioner of Labor], 265 AD2d 723, 723 [1999]).
With regard to Clarke, Kupferman testified that she
scheduled her own therapy sessions and was given no instruction
or direction on how to perform her work, that there was no
performance review by the agency other than occasional
observations on school visits and that the state did not require
review of her work. Clarke could accept or refuse a particular
assignment and was permitted to accept referrals from other
agencies. The reports that therapists prepared for each child
were required by the governmental client to document that the
child was receiving the required services and for future
planning, and the reports and daily invoices were only used by
the agency to pay the therapists and obtain reimbursement from
its clients for services rendered. Therefore, while the agency
may have exercised incidental control over Clarke and other
occupational therapists, such as requiring a noncompete clause,
substantial evidence does not support the finding that the agency
exercised overall control over any important aspect of the
services provided by Clarke (or other occupational therapists) so
as to establish an employer-employee relationship (see Matter of
Wright [Mid Is. Therapy Assoc. LLC–Commissioner of Labor], 134
AD3d at 1217-1218; Matter of Jean-Pierre [Queens Perioperative
Med. Assoc. PLLC–Commissioner of Labor], 119 AD3d 1206, 1207-1208
[2014]; cf. Matter of Harold [Leonard's Transp.–Commissioner of
Labor], 133 AD3d 1069, 1070-1071 [2015], lv dismissed 26 NY3d
1136 [2016]).
We reach a different conclusion with regard to Walsh, an
occupational therapy assistant, deferring to the Board's
determination to credit her testimony (see Matter of Sciortino
[Salina Free Lib.–Commissioner of Labor], 129 AD3d 1415, 1416
[2015]).1 Walsh required supervision in her role as an assistant
and reported to the service coordinators employed by the agency,
who were "constantly" in contact with her, telling her "what to
1
Walsh testified that her testimony and knowledge applied
only to her own work as an occupational therapy assistant and
that she could not testify regarding occupational therapists.
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do" in numerous respects and addressing problems with various
aspects of her work. They also made it clear that she could not
turn down assignments, repeatedly telling her that she was
required to take assignments if she wanted to continue working at
a particular school district. Substantial evidence therefore
supports the finding that the agency exercised sufficient overall
control over important aspects of the work of Walsh and those
similarly situated so as to establish an employer-employee
relationship (see Matter of Strauss [RMC Research Corp.–
Commissioner of Labor], 135 AD3d 1268, 1270 [2016]; Matter of
LaValley [West Firm, PLLC–Commissioner of Labor], 120 AD3d 1498,
1499 [2014]; Matter of Mackey [Prometric Inc.–Commissioner of
Labor], 120 AD3d 1493, 1495 [2014]).
As a final matter, the agency has not raised any arguments
in its briefs regarding the Board's denial of its application to
reopen or reconsider and, as such, has abandoned any claims in
that regard (see Matter of Perez v Licea, 74 AD3d 1672, 1674 n 1
[2010], lv denied 15 NY3d 711 [2010]).
McCarthy, J.P., Garry, Egan Jr. and Aarons, JJ., concur.
ORDERED that the two decisions filed July 17, 2014 with
respect to claimant Karyn Clarke are reversed, without costs, and
matter remitted to the Unemployment Insurance Appeal Board for
further proceedings not inconsistent with this Court's decision.
ORDERED that the two decisions filed July 17, 2014 with
respect to claimant Helene N. Walsh and the four decisions filed
November 19, 2004 are affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court