Matter of Berger (Commr. of Labor) ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: October 6, 2016 521913
________________________________
In the Matter of the Claim of
JACOB BERGER,
Respondent.
GAIL & RICE, INC., MEMORANDUM AND ORDER
Appellant.
COMMISSIONER OF LABOR,
Respondent.
________________________________
Calendar Date: September 16, 2016
Before: Peters, P.J., McCarthy, Garry, Clark and Aarons, JJ.
__________
Clark Hill PLC, Detroit, Michigan (Andrew C. Richner of
counsel), for appellant.
Salvatore C. Adamo, Albany, for Jacob Berger, respondent.
Eric T. Schneiderman, Attorney General, New York City (Mary
Hughes of counsel), for Commissioner of Labor, respondent.
__________
Peters, P.J.
Appeals from two decisions of the Unemployment Insurance
Appeal Board, filed December 23, 2014, which ruled, among other
things, that Gail & Rice, Inc. was liable for unemployment
insurance contributions on remuneration paid to claimant and
others similarly situated.
Gail and Rice, Inc. (hereinafter G & R) is an entertainment
and communication business located in Michigan that primarily
secures brand ambassadors for its clients, mostly automotive
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companies, to market and promote client products in live
settings. Claimant, an actor with experience as a brand
ambassador, was hired to work a one-day promotional event for a
client of G & R, a food company, in New York City on New Year's
Eve in 2013. After claimant applied for unemployment insurance
benefits, G & R objected, claiming that he was an independent
contractor and not an employee. A hearing was held and the
Unemployment Insurance Appeal Board ultimately determined that
claimant was an employee of G & R and assessed additional
unemployment insurance contributions based upon remuneration paid
to claimant and others similarly situated in the fourth quarter
of 2013. G & R now appeals.
We have reviewed the record and conclude that the Board's
determination that claimant was an employee of G & R is not
supported by substantial evidence (see Matter of Lee [Encore
Nationwide Inc.–Commissioner of Labor], 127 AD3d 1399, 1399
[2015]). In determining whether an employer-employee
relationship existed, the dispositive inquiry is whether "the
[purported] employer exercise[d] control over the results
produced or the means used to achieve the results," although
"control over the means is the more important factor to be
considered" (Matter of Empire State Towing & Recovery Assn., Inc.
[Commissioner of Labor], 15 NY3d 433, 437 [2010] [internal
quotation marks and citation omitted]; see Matter of Ritch
[Island Tutoring Ctr., Inc.–Commissioner of Labor], 139 AD3d
1151, 1152 [2016]). Here, the uncontroverted testimony of G &
R's account executive established that G & R did not train or
instruct claimant on his duties for this event, was not present
on the event day and lacked any authority to and did not
supervise claimant or the means by which he performed these
duties for the client. G & R advertised the position on a
Facebook page for brand ambassadors, using information about the
event position provided by the client, and it received via email
resumes and accompanying photographs from applicants, which it
reviewed and submitted to the client, which selected its brand
ambassadors. Claimant was free to decline the position and was
permitted to and had worked for other brand promoters; after the
client selected claimant and other individuals for this event, G
& R provided them with written show information and guidelines
supplied by the client, which outlined the details and
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expectations for the event.
G & R also sent claimant a welcome letter agreement – that
the parties signed – designating him as an independent contractor
and that required, among other provisions, that any substitutes
be approved; it also set forth the client's expectations and
rules.1 G & R paid claimant $25 per hour plus a per diem, which
was based upon the client's advertising budget, and he received
no fringe benefits; G & R paid claimant by check provided that
its client paid for his services, and he was issued an IRS 1099
form. Prior to the event day, the client held a conference call
with claimant and the other brand ambassadors, during which it
instructed them about the new brand that it was promoting and the
goals of the event, its expectations and their duties at the
event. On the day of the event, the client provided all of the
equipment and supplies, as well as the wardrobe bearing its logo
for the event, including a tuxedo, identification badge, hat and
shoes; the client also reviewed its expectations with the brand
ambassadors, provided them with "talking points" to promote its
product and instructed them how to perform their job, and its
managers thereafter supervised their performance during the event
(see Matter of Lee [Encore Nationwide Inc.–Commissioner of
Labor], 127 AD3d at 1399-1400). We disagree with the Board's
conclusion, on these facts, that the client was acting as the
agent of G & R (see id. at 1400; compare Matter of Victor [Aubrey
Organics, Inc.–Commissioner of Labor], 116 AD3d 1327, 1328
[2014]). Given the evidence that G & R exercised little, if any,
control over the means used or the results produced by the brand
ambassadors, we reverse the Board's decisions (see Matter of Lee
[Encore Nationwide, Inc.–Commissioner of Labor], 127 AD3d at
1400). In light of our decision, we need not reach G & R's
remaining contentions.
1
While the agreement provided that Michigan law governed,
the issue here is not one of contract interpretation but, rather,
a determination as to claimant's entitlement to unemployment
insurance benefits in New York and G & R's obligation for
unemployment insurance contributions on remuneration paid in New
York to claimant and others similarly situated, which is governed
by the laws of New York.
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McCarthy, Garry, Clark and Aarons, JJ., concur.
ORDERED that the decisions are reversed, without costs, and
matter remitted to the Unemployment Insurance Appeal Board for
further proceedings not inconsistent with this Court's decision.
ENTER:
Robert D. Mayberger
Clerk of the Court