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Matter of 12 Cornelia Street, Inc.

Court of Appeals of the State of New York
Jun 15, 1982
56 N.Y.2d 895 (N.Y. 1982)

Summary

In Matter of 12 Cornelia St. (Ross) (56 N.Y.2d 895), the Court of Appeals set forth some of the characteristics which it considered illustrative of an independent contractor rather than an employee status.

Summary of this case from Matter of Manhattan Manor Nursing Home

Opinion

Argued May 14, 1982

Decided June 15, 1982

Appeal from the Appellate Division of the Supreme Court in the Third Judicial Department.

John L. Bell for appellant.

Robert Abrams, Attorney-General ( Peter H. Schiff, Paul S. Shemin and Grace A. Brannigan of counsel), for respondent.

John T. De Graff, Jr., and Michael T. Wallender for New York State Association of Realtors, Inc., amicus curiae.


MEMORANDUM.

The order of the Appellate Division should be reversed, with costs, and the determination of the Unemployment Insurance Administrative Law Judge reinstated.

The decision of the Unemployment Insurance Appeal Board that petitioner's real estate salespersons are "employees" and that respondent thus properly assessed petitioner for additional contributions for unemployment insurance is not supported by substantial evidence. A determination that an "employer-employee" relationship exists must rest upon evidence that petitioner exercises control over the results produced by its salespersons or the means used to achieve the results ( Matter of Sullivan Co. [ Miller], 289 N.Y. 110). The only rational conclusion that can be drawn from the record on this appeal is that such control is lacking and that the salespersons are therefore appropriately to be considered independent contractors rather than employees of petitioner.

The following characteristics are illustrative of the nature of the relationship between petitioner and its associated salespersons: salespersons are paid commissions upon gross sales, if any, without deduction for taxes, and are not entitled to draw against commissions; they are permitted to work whatever hours they choose (although a voluntary time schedule has been set up by the salespersons themselves, to which not all adhere), out of their own homes or petitioner's office, and are free to engage in outside employment; petitioner provides limited facilities and supplies for the use of salespersons, but the salespersons otherwise bear their own expenses; attendance at periodic sales meetings is not required; whatever initial training is provided by petitioner may be availed of or not at the salesperson's option; a group insurance plan covers the salespersons, but the salespersons themselves pay the premiums; and, while petitioner assigns leads to salespersons on a rotating basis, the majority of leads come from the salespersons themselves. In the face of uncontradicted evidence of these characteristics of petitioner's relationship with its salespersons, it cannot be said that substantial evidence exists to support the finding of the appeal board that the relationship is one of employment ( Matter of Watz [ Equitable Life Assur. Soc. of U.S. — Ross], 60 A.D.2d 259, affd 46 N.Y.2d 876; Matter of Barrett [ Stovroff Herman — Ross], 56 A.D.2d 688).

Although respondent has not pressed the argument on this appeal, we note further that the appeal board's reliance on the Secretary of State's regulation (19 N.Y.CRR 175.21) regarding broker supervision over real estate salespersons is misplaced. The existence of this regulation and its imposition of responsibility upon the broker is an insufficient predicate, by itself, on which to base a finding that the relationship is not one of independence but of employment (see Matter of Sullivan Co. [ Miller], 289 N.Y. 110, supra; Matter of McCabe Willig Realty [ Ross], 80 A.D.2d 935).

Chief Judge COOKE and Judges JASEN, GABRIELLI, JONES, WACHTLER, FUCHSBERG and MEYER concur.

Order reversed, with costs, and matter remitted to the Appellate Division, Third Department, with directions to remand to the Unemployment Insurance Appeal Board for further proceedings in accordance with the memorandum herein.


Summaries of

Matter of 12 Cornelia Street, Inc.

Court of Appeals of the State of New York
Jun 15, 1982
56 N.Y.2d 895 (N.Y. 1982)

In Matter of 12 Cornelia St. (Ross) (56 N.Y.2d 895), the Court of Appeals set forth some of the characteristics which it considered illustrative of an independent contractor rather than an employee status.

Summary of this case from Matter of Manhattan Manor Nursing Home

In Comelia, the salespersons were not required to attend regular sales or any type of meeting and training was not mandatory.

Summary of this case from GRIFFIN v. DCJ CATERING CORP.

In Comelia, the salespersons were permitted to work whatever hours they chose (although a voluntary time schedule had been established).

Summary of this case from GRIFFIN v. DCJ CATERING CORP.

In Comelia, while the salespersons were assigned leads, the majority of their sales contracts came form their own efforts.

Summary of this case from GRIFFIN v. DCJ CATERING CORP.
Case details for

Matter of 12 Cornelia Street, Inc.

Case Details

Full title:In the Matter of 12 CORNELIA STREET, INC., Appellant. PHILIP ROSS, as…

Court:Court of Appeals of the State of New York

Date published: Jun 15, 1982

Citations

56 N.Y.2d 895 (N.Y. 1982)
453 N.Y.S.2d 402
438 N.E.2d 1117

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