Opinion
CV175015486
03-06-2018
THE FAMILY NETWORK, LLC v. ADMINISTRATOR, UNEMPLOYMENT COMPENSATION ACT
UNPUBLISHED OPINION
OPINION
Frechette, J.
The issue presented is whether the court should uphold the defendant’s, Unemployment Compensation Act Administrator’s, decision that the claimant, Giselle Ortiz, was an employee of the plaintiff, The Family Network, LLC, for purposes of unemployment compensation contributions. The plaintiff argues that the defendant incorrectly determined that the plaintiff exerted direction and control over the performance of Ortiz’s duties and incorrectly determined that Ortiz could not perform work outside the plaintiff’s course of business after termination.
FACTS
This decision will draw from the facts found by the Appeals Referee (referee) and adopted by the Employment Security Appeals Division Board of Review (board). The plaintiff provided contract services to the Connecticut Department of Children and Families (DCF), with services consisting of " supervised visitations."
The service was primarily a site-based service, with the aim to facilitate contact between children or youth in out-of-home care and their biological parents, relatives, or significant others; to monitor this contact; and to report on the contact to DCF workers.
On October 18, 2016, the defendant, Unemployment Compensation Act Administrator, ruled that the plaintiff was in an employer-employee relationship with the claimant, Giselle Ortiz (Ortiz); therefore, it was liable for any potential contributions for Ortiz’s services under the Connecticut Unemployment Compensation Act (CUCA). On November 4, 2016, the plaintiff filed a timely appeal. On December 23, 2016, the referee affirmed the defendant’s decision and made twenty-one findings of fact. On January 4, 2017, the plaintiff filed a timely appeal to the board contesting the referee’s determination that Ortiz was an employee and not an independent contractor.
On April 17, 2017, after reviewing the record of the appeal and the hearing before the referee, the board affirmed the referee’s decision, but made one modification to the referee’s findings of fact. The plaintiff appealed to the Superior Court on May 10, 2017, but failed to file a motion to correct.
The board added the following sentence to the referee’s findings of fact: " The contract between the claimant and the appellant required the claimant to provide ‘clear and concise’ written reports of her supervised visitations, for potential use in court."
Our Supreme Court has held that when the Superior Court reviews an appeal from the board, and no timely motion to correct has been filed with the board, the board’s factual findings are not subject to further review by the Superior Court. See JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, 265 Conn. 413, 422, 828 A.2d 609 (2003). The court only looks to whether the appeals referee’s and board’s conclusions are reasonably and logically drawn. See Howell. v. Administrator, 174 Conn. 529, 533, 391 A.2d 165 (1978); see also JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, supra, 417 (" [r]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency’s findings of basic fact and whether the conclusions drawn from those facts are reasonable" [internal quotation marks omitted] ).
DISCUSSION
" It is well established that [r]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency’s findings of basic fact and whether the conclusions drawn from those facts are reasonable ... Neither this court nor the trial court may retry the case or substitute its own judgment for that of the administrative agency on the weight of the evidence or questions of fact ... [The court’s] ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion ... [A]n agency’s factual and discretionary determinations are to be accorded considerable weight by the courts." (Citations omitted; internal quotation marks omitted.) Pajor v. Administrator, Unemployment Compensation Act, 174 Conn.App. 157, 170, 165 A.3d 265, cert. denied, 327 Conn. 977, 174 A.3d 801 (2017).
I
PART A OF THE ABC TEST
The plaintiff’s appeal challenges the board’s determination that Ortiz was an employee of the plaintiff and not an independent contractor. The board’s decision was premised on the notion that Ortiz was not free from the plaintiff’s control and direction under part A of the test outlined by § 31-222(a)(1)(B)(ii)(I). The defendant argues that the board’s conclusion that an employer-employee relationship existed between the plaintiff and Ortiz is reasonable because the record is replete with evidence to support such a conclusion. The plaintiff, on the other hand, argues that their reservation " to discharge the claimant at will" was not dispositive of whether the plaintiff retained control over Ortiz to form an employment relationship. The court agrees with the defendant.
There is a presumption that service is employment unless and until the recipient of the service can establish, irrespective of whether the common law relationship of master and servant exists, that all prongs of the so called ABC test of General Statutes § 31-222(a)(I)(B)(ii) are satisfied. " The test is conjunctive; all parts must be satisfied to exclude an employer from the Act." (Internal quotation marks omitted.) Latimer v. Administrator, 216 Conn. 237, 247, 579 A.2d 497 (1990).
Under CUCA, General Statutes § 31-222 et seq. (ABC test), any service provided by an individual is considered employment, unless and until the recipient of the services provided has sustained the burden of proving " to the satisfaction of the administrator that (I) such individual has been and will continue to be free from control and direction in connection with the performance of such service, both under his contract for the performance of service and in fact; and (II) such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed; and (III) such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed ..." General Statutes § 31-222(a)(1)(B)(ii).
Thus, under part A of the ABC test, in order to categorize an employee as independent contractors, the plaintiff bears the burden of showing that the claimant who worked for her " has been and will continue to be free from control and direction in connection with the performance of such service, both under [her] contract for the performance of service and in fact ..." General Statutes § 31-222(a)(1)(B)(ii)(I).
" The fundamental distinction between an employee and an independent contractor depends upon the existence or nonexistence of the right to control the means and methods of work." Beaverdale Memorial Park, Inc. v. Danaher, 127 Conn. 175, 179, 15 A.2d 17 (1940). " The test of the relationship is the right to control. It is not the fact of actual interference with the control, but the right to interfere, that makes the difference between an independent contractor and a servant or agent." (Internal quotation marks omitted.) Caraher v. Sears, Roebuck & Co., 124 Conn. 409, 413-14, 200 A. 324 (1938). " The decisive test is who has the right to direct what shall be done and when and how it shall be done? Who has the right of general control?" (Emphasis in original.) Latimer v. Administrator, supra, 216 Conn. 248.
In the present case, there are many facts that support the contention that the plaintiff exerted control and direction over Ortiz. First, the plaintiff and Ortiz entered into an agreement that the plaintiff drafted, which could be terminated by either party, and/or if Ortiz did not abide by the terms or did not maintain her approved credentialing status with DCF. See Beaverdale Memorial Park, Inc. v. Danaher, supra, 127 Conn. 179 (" [t]he right to discharge is one of the strong indications that the relationship is one of employment" [internal quotation marks omitted] ). Second, in the contract, Ortiz was precluded from competing with the plaintiff, further evidencing the existence of control.
The agreement provides in relevant part that " the agreement [could] be terminated by either party at any time."
The agreement provides in relevant part: " The Family Network, LLC asks that workers not accept outside referrals from other agencies or from DCF as individuals you are credentialed under The Family Network, LLC and it would be a conflict of interest to do so." The term " ask" implies a direct question or demand, rather than a suggestion. See Shays v. Federal Election Commission, 414 F.3d 76, 104 (D.C. Cir. 2005) (the term " ‘ask,’ which ordinarily means ‘to call upon for an answer’ or ‘to make a request’- terms implying a direct question or demand" [emphasis added] ); see also National Labor Relations Board v. Kal Kan. Foods, Inc., 889 F.2d 1095 (9th Cir. 1989) (contract provided overtime to be on a voluntary basis; however, the court held the overtime requested of employees was a " mandatory requirement of overtime as a condition of continued employment" ). " [H]owever one dresses it up, an employer’s ‘request’ that carries the condition of discharge is a term or condition of employment." Crummy v. Enterprise Minnesota, Docket No. A11-703, 2012 WL 360391, *7 (Minn.Ct.App. February 6, 2012).
In addition to the right to discharge and Ortiz’s services restriction, the following facts are also indicative of control: Ortiz transported the child in a car seat supplied by the plaintiff to the visitation site in her personally-owned vehicle, but did not use any other equipment; Ortiz never subcontracted the work to anyone; Ortiz was required to submit reports on the 15th and last day of the month in order to receive payment; the agreement also stated the plaintiff would provide a clinical supervisor to review Ortiz’s cases with Ortiz every month and required Ortiz to write visitation plans; Ortiz was required to submit the visitation plans to the plaintiff, which maintained client files at its office; Ortiz was also required to maintain current training certificates, such as First Aid and CPR certificates under the agreement.
Therefore, based on the foregoing, the court concludes that the board’s findings reasonably supported its conclusion that Ortiz was not free from the plaintiff’s control and direction under part A of the test.
II
PART C OF THE ABC TEST
The plaintiff’s appeal further challenges the board’s determination that Ortiz was an employee of the plaintiff, and not an independent contractor, on the basis that Ortiz was not customarily engaged in the business of providing supervised visitation services. The defendant argues that the board’s decision that an employer-employee relationship existed between the plaintiff and Ortiz was reasonable because the record is replete with evidence to support such a conclusion. In response, the plaintiff argues the board erred when it concluded that the plaintiff failed part C of the ABC test because Ortiz did not assume employment following her termination. The court agrees with the defendant.
Part C of the ABC test requires the plaintiff to prove that the claimants were " customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed ..." Section 31-222(a)(1)(B)(ii)(III). The interpretation on the statute is clear, and the Supreme Court has stated that such independent activity must " exist separate and apart from" the individual’s relationship with the employer such that it " will survive the termination of that relationship." F.A.S. International, Inc. v. Reilly, 179 Conn. 507, 515, 427 A.2d 392 (1980). " [T]he appropriate inquiry under part [C] is whether the person engaged in covered employment actually has such an independent business, occupation, or profession, not whether he or she could have one." Kirby of Norwich v. Administrator, Unemployment Compensation Act, 328 Conn. 38, 50, A.3d (2018); Labor & Logistics Management v. Administrator, Superior Court, judicial district of Hartford, Docket No. CV-09-4042142-S (October 3, 2012, Domnarski, J.) (54 Conn.L.Rptr. 824).
" [T]he adverb ‘independently’ modifies the word ‘established’ and in that context, fairly construed, means that the trade, occupation, profession or business was established independently of the ‘employer.’ ... Moreover, such ‘independently established activity’ must be one in which the ‘employee’ is ‘customarily engaged.’ Customarily’ has been said to mean ‘usually, habitually, regularly.’ ... The use of ‘is,’ the present tense, shows that the ‘employee’ must be engaged in such independently established activity at the time of rendering the service which is the subject of inquiry. An established business has been said to be one that is ‘permanent, fixed, stable, or lasting.’ " (Citations omitted.)
The Connecticut Supreme Court held that the agency has to consider the " totality of the circumstances" in determining whether an individual has an independently established trade, occupation, profession or business. See Southwest Appraisal Group, LLC v. Administrator, Unemployment Compensation Act, 324 Conn. 822, 839-40, 155 A.3d 738 (2017). In determining whether an individual has an independently established trade, occupation, profession or business, the following factors are considered: " (1) the existence of state licensure or specialized skills; (2) whether the putative employee holds himself or herself out as an independent business through the existence of business cards, printed invoices, or advertising; (3) the existence of a place Of business separate from that of the putative employer; (4) the putative employee’s capital investment in the independent business, such as vehicles and equipment; (5) whether the putative employee manages risk by handling his or her own liability insurance; (6) whether services are performed under the individual’s own name as opposed to the putative employer; (7) whether the putative employee employs or subcontracts others; (8) whether the putative employee has a saleable business or going concern with the existence of an established clientele; (9) whether the individual performs services for more than one entity; and (10) whether the performance of services affects the goodwill of the putative employee rather than the employer." Id., 839-40.
Under the " totality of the circumstances" analysis articulated in Southwest Appraisal Group, LLC, the court holds that Ortiz did not have an independent trade based on the following findings: (1) Ortiz had a license in accordance with the agreement with the plaintiff; (2) Ortiz did not have or use business cards or printed invoices nor did she have a place of business; (3) Ortiz did not have a place of business because she provided supervised visitation services at places such as libraries, restaurants, or homes of the clients; (4) Ortiz transported the child in a car seat supplied by the plaintiff, but Ortiz did not use any other materials or tools in the performance of her services; (5) Ortiz transported the child to the visitation site in her personally-owned vehicle, which she was required to maintain her own automobile insurance according to the agreement; (6) although Ortiz was providing supervised visitation services, she wore a badge with her name and that of the plaintiff; (7) Ortiz did not employ others nor subcontract her work in providing supervised visitation services; (8) Ortiz did not have established clientele separate from the clients for whom she provided services pursuant to her relationship with the plaintiff; and (9) neither before, during, nor after her relationship with the plaintiff did Ortiz provide supervised visitation services for another entity.
Therefore, under the " totality of the circumstances" analysis, the court concludes that the board’s findings did reasonably support its conclusion that the plaintiff failed to satisfy part C of the ABC test because there is no evidence that Ortiz had an independently established business at the time she provided services to the plaintiff.
CONCLUSION
For the foregoing reasons, the plaintiff has failed to satisfy parts A and C of the ABC test; therefore, the appeal is dismissed.
Daw’s Critical Care Registry, Inc. v. Dept. of Labor, 42 Conn.Supp. 376, 407, 411, 622 A.2d 622 (1992), aff’d, 225 Conn. 99, 622 A.2d 518 (1993).