12 Cornelia St., Inc. v. Ross

• Decision Date: 15 June 1982
• Citation: 438 N.E.2d 1117,453 N.Y.S.2d 402,56 N.Y.2d 895
• Parties: , 438 N.E.2d 1117 In the Matter of 12 CORNELIA STREET, INC., Appellant. Philip ROSS, as Industrial Commissioner, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 402

453 N.Y.S.2d 402

56 N.Y.2d 895, 438 N.E.2d 1117

In the Matter of 12 CORNELIA STREET, INC., Appellant Philip ROSS, as Industrial Commissioner, Respondent.

Court of Appeals of New York.

June 15, 1982.

John L. Bell, Plattsburgh, for appellant

Robert Abrams, Atty. Gen. (Peter H. Schiff, Paul S. Shemin and Grace A. Brannigan, Asst. Attys. Gen., of counsel), for respondent.

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

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 83 A.D.2d 681, 443 N.Y.S.2d 707 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. 289 N.Y. 110, 44 N.E.2d 387). 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...