Matter of Pickton (Commr. of Labor) , 7 N.Y.S.3d 686 ( 2015 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: April 23, 2015 519219
________________________________
In the Matter of the Claim of
KERRY PICKTON,
Respondent.
PRIORITY ASSIST INC., MEMORANDUM AND ORDER
Appellant.
COMMISSIONER OF LABOR,
Respondent.
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Calendar Date: March 23, 2015
Before: McCarthy, J.P., Egan Jr., Devine and Clark, JJ.
__________
Jackson Lewis PC, Melville (Christopher M. Valentino of
counsel), for appellant.
Cynthia Feathers, Glens Falls, for Kerry Pickton,
respondent.
Eric T. Schneiderman, Attorney General, New York City
(Steven Koton of counsel), for Commissioner of Labor, respondent.
__________
Clark, J.
Appeals from two decisions of the Unemployment Insurance
Appeal Board, filed August 29, 2013, which ruled, among other
things, that Priority Assist Inc. was liable for additional
unemployment insurance contributions on remuneration paid to
claimant and others similarly situated.
Priority Assist Inc. is a corporation that sells
automobiles to service personnel on United States Navy vessels in
-2- 519219
international waters, who may pick the vehicles up after the end
of their deployment. Priority Assist is based in New York and
retained sales representatives like claimant to promote and sell
automobiles aboard the vessels (see Labor Law § 511 [3], [5]
[b]). After claimant stopped working for Priority Assist in
2009, he sought unemployment insurance benefits. The Department
of Labor determined that claimant was an employee of Priority
Assist and, as such, required it to make additional unemployment
insurance contributions based on remuneration paid to claimant
and others similarly situated from 2008 onward. The Unemployment
Insurance Appeal Board ultimately upheld that determination and
established the claim for benefits, and Priority Assist appeals.
Priority Assist initially asserts that claimant and others
similarly situated performed work in federal enclaves – i.e.,
lands purchased by the federal government, with state consent,
"for the Erection of Forts, Magazines, Arsenals, dock-Yards, and
other needful Buildings" – and that the Board accordingly lacked
jurisdiction to hold it liable for unemployment insurance
contributions (US Const, art I, § 8, cl 17). Even assuming that
United States Navy vessels that have never been part of a state
constitute federal enclaves, "exclusive jurisdiction over [such
an] area . . . remains with the United States, except as modified
by statute" (Howard v Commissioners of Sinking Fund of City of
Louisville, 344 US 624, 627 [1953] [emphasis added]). Inasmuch
as federal law provides that "[n]o person shall be relieved from
compliance with a [s]tate unemployment compensation law on the
ground that services were performed on land or premises owned,
held, or possessed by the United States," the Board retained
jurisdiction here (26 USC § 3305 [d]).
Turning to the merits, "the existence of an employment
relationship is a factual issue for the Board to decide and its
determination will be upheld if supported by substantial
evidence" (Matter of Automotive Serv. Sys., Inc. [Commissioner of
Labor], 56 AD3d 854, 855 [2008]; see Matter of Empire State
Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 NY3d
433, 437 [2010]). "An employer-employee relationship exists when
the evidence shows that the employer exercises control over the
results produced or the means used to achieve the results," with
the latter more important (Matter of Empire State Towing &
-3- 519219
Recovery Assn. [Commissioner of Labor], 15 NY3d at 437 [citation
omitted]; see Matter of Smith [College Network Inc.–Commissioner
of Labor], 109 AD3d 1058, 1059 [2013]).
There is substantial evidence in the record before us to
conclude that Priority Assist exercised sufficient control over
the work of claimant and others similarly situated to establish
an employer-employee relationship (see Matter of Interladi
[Cremosa Foods Co., LLC–Commissioner of Labor], 70 AD3d 1150,
1150-1151 [2010]; Matter of Greenspan [Adco Paper & Packaging
Co.–Commissioner of Labor], 31 AD3d 1092, 1093 [2006]).
Specifically, Priority Assist arranged passage on Navy vessels
for claimant, paid him a set draw against his commissions, and
reimbursed him for his travel expenses. Claimant was
additionally provided with promotional materials, business cards
and a laptop to assist him in making sales once on board.
Priority Assist further required claimant to attend training and
regular meetings, and instructed him in appropriate sales
techniques. The foregoing evidence supports the Board's
determination, and we reject Priority Assist's contention that it
contradicted either the Board's informal guidelines or its prior
decisions.
We are, however, persuaded that remittal is required due to
questions regarding the timeliness of the claim for benefits (see
Labor Law §§ 520, 527). "It is well settled that registering and
certifying for benefits in accordance with the Labor Law and the
applicable regulations is a necessary prerequisite to eligibility
for benefits" (Matter of Newman [Commissioner of Labor], 23 AD3d
816, 816 [2005] [citations omitted]; see Matter of Fleischer
[Commissioner of Labor], 45 AD3d 1094, 1095 [2007]; Matter of
Canellos [Commissioner of Labor], 21 AD3d 636, 636 [2005]). The
Department's records indicate that claimant filed for benefits in
December 2010 and, accordingly, that the base period used to
determine his eligibility for benefits encompassed none of the
time he was working for Priority Assist. The record also
indicates, however, that claimant filed a timely claim for
unemployment insurance benefits in North Carolina that was
transferred to New York for jurisdictional reasons, and
"compensation shall not be denied or reduced to an individual
solely because he files a claim in another [s]tate" (26 USC
-4- 519219
§ 3304 [a] [9] [A]). The Board failed to resolve this relevant
question and, accordingly, "its decision[s] must be reversed and
the matter remitted for further development of the record"
(Matter of Panek [City of Syracuse–Roberts], 111 AD2d 466, 466-
467 [1985]; see Matter of Montauk Improvement v Proccacino, 41
NY2d 913, 914 [1977]; Matter of Fleischer [Commissioner of
Labor], 45 AD3d at 1095).
McCarthy, J.P., Egan Jr. and Devine, JJ., concur.
ORDERED that the decisions are modified, without costs, by
reversing so much thereof as allowed claimant unemployment
insurance benefits; matter remitted to the Unemployment Insurance
Appeal Board for further proceedings not inconsistent with this
Court's decision; and, as so modified, affirmed.
ENTER:
Robert D. Mayberger
Clerk of the Court