Askew v. Macomber
| Citation | 247 N.W.2d 288,398 Mich. 212 |
| Decision Date | 07 December 1976 |
| Docket Number | No. 13,13 |
| Parties | Carrie ASKEW, Plaintiff-Appellee, v. M. Alicia MACOMBER, Defendant-Appellant, (Joan R. Kelly, Administratrix of the Estate of M. Alicia Macomber,Substituted Defendant-Appellant), and Second National Bank of Saginaw and Michigan Mutual Liability Company, Defendants-Appellees. |
| Court | Supreme Court of Michigan |
Harvey Van Benschoten, Saginaw, for plaintiff-appellee.
Smith & Brooker, P.C. by Francis B. Drinan, Saginaw, for defendant-appellant.
Davidson & Breen, P.C. by John Davidson, Saginaw, for defendants-appellees.
The defendant-appellant, the estate of M. Alicia Macomber, 1 appeals from a Court of Appeals decision 2 finding defendant-appellant to be the sole employer of the plaintiff and therefore exclusively liable for workmen's compensation payments. We affirm the Court of Appeals.
The plaintiff was injured in April of 1969 as a result of a slip and fall on the porch steps at Mrs. Macomber's home. Defendants do not dispute plaintiff's injury. The question on appeal is whether the Court of Appeals erred in finding that Mrs. Macomber was the sole employer of the plaintiff. 3
In November of 1965, then 95 year old Mrs. Macomber entered into an agreement with the defendant Second National Bank of Saginaw (hereinafter the Bank). Mrs. Macomber's interest was represented by her attorney. The 'agency agreement' required the Bank to perform essentially fiscal duties. 4 Additionally, paragraph 3 of the agreement provided:
The workmen's compensation appeal board found as a matter of fact that plaintiff was approached in 1968 by Mrs. Macomber's attorney. Plaintiff had previously worked for Mrs. Macomber's attorney as a nurse. The plaintiff was referred to Mrs. Hosmer, trust administrator at the Bank whose duties were to oversee the affairs of the Macomber estate. The appeal board found that Mrs. Hosmer arranged for plaintiff to work for Mrs. Macomber pursuant to the Bank's obligations under the agency agreement. The appeal board, contrary to the referee, found as a matter of fact that plaintiff was an employee of the Bank. The Bank was held liable for plaintiff's workmen's compensation benefits. The Court of Appeals reversed.
The appellate courts of this state are bound by the appeal board's findings of fact. 5 As the Court of Appeals properly noted, however, the question of whether the Bank is the plaintiff's employer for purposes of workmen's compensation is an issue of law properly left to our determination. 6
We do not consider the Bank's liability with respect to the discharge of its duties as fiduciary, but decide only that narrow question presented by the parties.
Relying on recent decisions of the Michigan appellate courts, the appellant contends that the Bank was an employer of the plaintiff under the 'economic realities' of the instant situation. 7 Under the economic reality test, among the relevant factors to be used are (1) control of a worker's duties, (2) the payment of wages, (3) the right to hire and fire and the right to discipline, and (4) the performance of the duties as an integral part of the employer's business towards the accomplishment of a common goal. Under the application of the economic reality test, the Bank was not the plaintiff's employer.
(1) Although the bank discussed salary and hours with the plaintiff, that was the end of its attempt to control her. Unlike the labor broker cases, Mrs. Askew did not report to the Bank each day to await assignment. After plaintiff was hired, she reported to Mrs. Macomber's home and was guided by her. The Bank took no role in the day-to-day supervision of the performance of plaintiff's tasks.
(2) Mrs. Askew went to the Bank to receive her weekly pay, but the check was drawn on the Macomber estate, a separate IRS account. No Bank funds were utilized. This procedure was consonant with the agency agreement. It comprised no more than a transfer of Mrs. Macomber's funds to plaintiff.
(6) Other facts to be considered in the economic reality test are the right to hire and fire, and the right to discipline. WCAB found that the Bank had the authority to hire the plaintiff and impliedly the right to fire her. It is not clear whether the attorney (deceased at the time of hearing) hired plaintiff and the Bank arranged hours and payment details, or whether the Bank hired her on the attorney's recommendation, but the case does not turn on this point. As the Court of Appeals noted, this fact alone does not confer employer status on the Bank if it was merely executing its duties as Mrs. Macomber's agent.
There was no testimony indicating that any discipline was ever administered. However, the Bank was not involved in the day-to-day supervision of plaintiff's tasks.
(4) Not even the appellant would argue that banks are in the business of supplying nurses for elderly people. The work of caring for Mrs. Macomber is not an integral part of the Bank's business. 8
Plaintiff offers some recent Michigan decisions in support of its argument that the Bank was Mrs. Askew's employer and therefore plaintiff was covered by the Bank's Workmen's Compensation Insurance. These cases, however, are inapposite to the facts of this proceeding. The leading cases applying the economic reality test and finding an employer-employee relationship have involved labor brokers. 9 Labor brokers garner profits by efficiently matching workers with temporary work needs. Their very existence depends on the act of supplying a labor force for other concerns. That Is their business. In the labor broker context, one would have to answer affirmatively the following: 'Is the work being performed an integral part of the employer's business?' 10 We cannot say that hiring nurses for other businesses or individuals is an integral part of the banking business.
Another distinguishing factor in the instant matter is the existence of an explicit agency agreement. None of the cases cited by appellant involves such an agreement. It is interesting to note that the plaintiff in one of the labor broker cases claimed the existence of a principal-agent relationship. The Court of Appeals and this Court rejected the argument because it clashed with the economic reality of the fact situation. 11
Although we agree generally with the Court of Appeals opinion, we do not agree that '(t)he ultimate test is: Whose is the work being done?' There is no 'ultimate' test under the 'economic reality' theory.
As Mr. Justice Smith stated in Schulte v. American Box Board Company, 358 Mich. 21, 33, 99 N.W.2d 367, 372 (1959):
In summary, when we view the economic realities of the instant case, the authorities relied upon by appellant are inapposite. The Bank was operating pursuant to an express agency agreement. The employment of nurses was not an integral part of the Bank's business. Although the bank drafted the check for plaintiff's wages, the funds came from the Macomber estate, a separate account. Although the Bank discussed wages and hours with the plaintiff and arranged the hiring of plaintiff for Mrs. Macomber, it took no part in the day-to-day control or supervision of plaintiff's duties. So far as we know, plaintiff had no occasion even to go to the Bank except to receive her pay once each week and there is no evidence of any attempt by the Bank to supervise or discipline plaintiff. The Bank's actions on behalf of Mrs. Macomber were those of an agent on behalf of a principal.
Under the criteria of the economic reality concept, M. Alicia Macomber was the employer of Carrie Askew. 12
The Court of Appeals is affirmed.
The issue in this case is the determination of who the 'employer' is for purposes of the Worker's Disability Compensation Act.
We hold that the Workmen's Compensation Appeal Board properly found on the facts of this case that 'economic reality' existed solely in the employment relation between plaintiff-appellee Carrie Askew and defendant-appellee Second National Bank of Saginaw. Therefore, Second National Bank of Saginaw is plaintiff's 'employer' under the 'act' and exclusively liable for the worker's compensation payments.
Accordingly, we reinstate the decision of the Workmen's Compensation Appeal Board and reverse the Court of Appeals.
On November 5, 1965, Alice Macomber, then 95 years old, entered into an 'Agency Agreement' with defendant Second National Bank of Saginaw (hereinafter referred to as 'the Bank'). Under the agreement Mrs. Macomber was principal, the Bank agent. The agreement was executed with the aid of an attorney, Jerome Weadock. The Bank's responsibilities under the terms of the agreement were that it would hold and manage Mrs. Macomber's property, 'deliver' it to...
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