Unemployment Compensation Commission v. Mathews

I am unable to concur. It is held that the musicians who acted as leaders or contractors pursuant to a union rule requiring that some member of the orchestra should act in that capacity, were employers of the other musicians (never more than three, sometimes only one) who, with the leader, played in defendant's "Palace Gardens," described in the above opinion. An unhappy result that would seem to follow is that the leaders or contractors will not be entitled to benefits under the act. I think we should hold that all the members of the orchestra performed for defendant service that was "employment" subject to the act.

The pertinent provisions of the act are quoted in the above opinion. It is conceded that defendant was an employer as defined by section 2(h), and that the musicians performed service for wages. Section 2(i) (1). Section 2(i) (5) provides:

"Services performed by an individual for wages shall be deemed to be employment subject to this Act unless and until it is shown to the satisfaction of the Commission that —

"(A) such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and

"(B) such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

"(C) such individual is customarily engaged in an independently established trade, occupation, profession or business."

Similar provisions are found in the unemployment compensation laws of many of the states, and have been considered by the courts in Washington Recorder Pub. Co. v. Ernst, 199 Wash. 176,91 P.2d 718, 124 A.L.R. 667; Wisconsin Bridge Iron Co. v. Ramsay, 233 Wis. 467, 290 N.W. 199; Hill Hotel Co. v. Kinney (Neb.) 295 N.W. 397; Industrial Comm. v. Northwestern Mut. L. Ins. Co., 103 Colo. 550, 88 P.2d 560; Globe Grain Milling Co. v. Ind. Comm., 98 Utah 36, 91 P.2d 512, 97 P.2d 582; Singer Sewing Mach. Co. v. Comp. Comm. (Ore.) 103 P.2d 708; Unemployment Comp. Comm. v. Jefferson, 215 N.C. 479,2 S.E.2d 584; Young v. Bureau of Unemp. Comp. (Ga.App.) 10 S.E. 412; Schomp v. Fuller Brush Co., 124 N.J.L. 487, 12 A.2d 702; McKinley v. R.L. Payne Son Lbr. Co. (Ark.) 143 S.W.2d 38, and (under the Illinois law) In re Mid America Co., 31 F. Supp. 601.

The cited Washington and Nebraska cases hold, as stated in Washington Recorder Publishing Co. v. Ernst, supra, and quoted with approval in Hill Hotel Co. v. Kinney, supra, that: "In drafting the statute the legislators attempted to codify the common law. They intended that the common law test of employment relationship should likewise be the test under the Unemployment Compensation Act." Perhaps Wisconsin Bridge Iron Co. v. Ramsay, supra, a case difficult to summarize, supports this view.

The other cases cited above, in construing acts containing provisions like sections 2(i) (1) and 2(i) (5) of our act, hold, in effect, that the statute itself contains a complete definition of "employment" as used in the act, and that an employer of individuals who perform service for wages must make the required contributions unless it is shown that the conditions set forth in subsections (A) (B) and (C) existed. The burden of proof is on the employer who resists payment, and the issue is not whether the employed individuals were independent contractors under general law, or whether the common law relation of master and servant existed, but whether the service performed was "employment" as defined by the statutes.

This disagreement in the cases construing similar statutes in other jurisdictions is noted in the majority opinion without deciding which view is supported by the better reasons. It is held that the evidence was sufficient to support a finding not only that the leaders or contractors were independent contractors under general law, but also that all the conditions set forth in subdivisions (A) (B) and (C), supra, existed.

I do not care to express a doubt that the evidence was sufficient to support a finding that the orchestra leaders or contractors were "independent contractors" under the general law of master and servant, but I do not think it was sufficient to support a finding of the existence of all the conditions stated in subsections (A) (B) and (C). In my opinion, therefore, it becomes necessary to decide definitely whether we follow the Washington and Nebraska cases, holding that the test of employment under the act is that of general law, or the other cases holding that the test is that stated in the statute. I think we should follow the cases last referred to, for reasons stated therein which I shall not repeat.

On the question of the sufficiency of the evidence to show the existence of the conditions stated in subsections (A) (B) and (C), I shall refer only to the evidence relevant under subsection (B), for it is there that I think there was a clear failure of proof. This subsection states two alternative conditions, and one or the other must be shown in order to exclude the employment from the act. We agree that the second alternative condition was not shown. It therefore was incumbent on defendant to show that the service performed by the musicians was "outside the usual course of the business for which such service was performed."

The facts showing the nature of defendant's business and of the musicians' service are stated in the majority opinion. The only omitted fact that seems material is that musicians had been employed by defendant to perform service of this kind for at least three years preceding the trial. The service was performed regularly and for the obvious purpose of attracting and entertaining customers. I do not think there is a sufficient reason for holding that the service was outside of the usual course of the business.

No case exactly in point on this question has been found, unless it be Rossini v. Tone, 7 Conn. Super. Ct. 13, a decision by a Connecticut superior court under the unemployment compensation law of that state, wherein it is said that: "The service rendered by the musicians was as much a part of [the restaurant] business as that rendered by the waiter or the dishwasher." Several other cases considering the status of musicians performing service in restaurants have been mentioned. In some of these cases it was held that the musicians were employees of the restaurant owner; in others, that they were employees of an independent contractor; and it seems of some significance that it does not appear in any case that it was contended that the service was not in the usual course of the business of the restaurant owner. There are cases holding that the unauthorized playing of copyrighted music by an orchestra under similar circumstances was "for profit," because the furnishing of music was a part of a business in which the proprietor made, or expected to make, a profit. Herbert v. Shanley Co., 242 U.S. 591; Sarpy v. Holland (1908) 2 Ch. 198, 213. Under Workmen's compensation laws it has been held that a workman was acting within the usual course of his employer's business while entertaining customers or prospective customers of the business. Commercial Casualty Ins. Co. v. Strawn (Tex.Civ.App.)44 S.W.2d 805; Solar-Sturges Mfg. Co. v. Industrial Comm., 315 Ill. 352,146 N.E. 572. Also, that setting off fire-works on the fourth of July to attract "crowds and patronage" to a "pleasure resort" was in the usual course of business of the proprietor of the resort. Hasenfus v. Industrial Comm., 184 Wis. 281,199 N.W. 158.

My views as expressed above were put in writing and submitted when it was thought that the grounds of the decision were fully stated in the opinion by the Chief Justice. Later, the opinion by Justice Blume in which the Chief Justice concurs, was submitted. In that opinion it seems to be decided that employment within the act does not include service performed by an independent contractor under the general law of master and servant, and my statement above that that question is not decided is inaccurate.