Charles A. Field Delivery Service, Inc., Matter of

Citation498 N.Y.S.2d 111,488 N.E.2d 1223,66 N.Y.2d 516
Parties, 488 N.E.2d 1223 In the Matter of CHARLES A. FIELD DELIVERY SERVICE, INC., Respondent. Lillian Roberts, as Commissioner of Labor, Appellant.
Decision Date19 December 1985
CourtNew York Court of Appeals

MEYER, Judge.

A decision of an administrative agency which neither adheres to its own prior precedent nor indicates its reason for reaching a different result on essentially the same facts is arbitrary and capricious. The order of the Appellate Division, 112 A.D.2d 505, 491 N.Y.S.2d 601, confirming the determination of the Unemployment Insurance Appeal Board that respondent's delivery persons are independent contractors for whom respondent need make no unemployment insurance contribution should, therefore, be reversed and the matter remitted to the Board for further proceedings in accordance with this opinion.


Respondent operates a delivery service pursuant to a contract with a medical laboratory. Respondent's drivers are called directly by the laboratory and on the basis of those calls pick up specimens from the offices of physicians who use the laboratory's services. The driver takes them to Albany County Airport for transportation to the laboratory. Upon completion of the laboratory's testing and analysis the results are delivered to a collection center, from which they are picked up by respondent's drivers and delivered to the forwarding physician. The drivers collect no money from the physicians and channel any complaints received directly to the laboratory without informing respondent.

The drivers have no written contract with respondent and are terminable at will. They use their own vehicles and pay for their own gas, tolls, insurance and other expenses. They are free to determine the order in which calls will be made and to make pickups or deliveries for others, for which respondent receives no part of the compensation, so long as all pickups and deliveries under respondent's contract with the laboratory are completed on the day received. A driver who is unable to work on a particular day is responsible for finding a replacement driver for that day.

Drivers are not required to complete time sheets or other records or forms for respondent, except an itemized invoice covering a two-week period and stating the names, addresses and dates of pickups and deliveries made during that period. Each driver is compensated by respondent on the basis of the number and type of the jobs completed by him during the period, the amount paid for any given delivery being computed by respondent's president on the basis of the distance traveled and the time expended in completing it. No taxes are withheld from a driver's compensation, nor is workers' compensation insurance provided.

The Commissioner of Labor determined that respondent's drivers were employees rather than independent contractors and assessed a deficiency of $2,834.40 against respondent under the Unemployment Insurance Law (Labor Law § 570). Respondent having requested a hearing, the administrative judge agreed that the drivers were employees, but on respondent's appeal to the Unemployment Insurance Appeal Board, that body reversed, concluding that respondent "did not have the right to exercise significant control over the method or manner by which the drivers chose to complete performance of their delivery services" 1 and on reconsideration, adhered to that decision. In neither its original decision nor its decision on reconsideration did the Board cite any precedent for its determination.

On the Commissioner's appeal to the Appellate Division that court affirmed, without opinion, two Justices dissenting. The dissenters, finding that the facts of the case were "indistinguishable, in any significant respect" from two earlier Board decisions which had been confirmed by both the Appellate Division and the Court of Appeals (Matter of Di Martino 59 N.Y.2d 638, 463 N.Y.S.2d 189, 449 N.E.2d 1267, affg. 89 A.D.2d 829, 453 N.Y.S.2d 192; Matter of Wells 59 N.Y.2d 638, 463 N.Y.S.2d 189, 449 N.E.2d 1267, affg. 87 A.D.2d 960, 451 N.Y.S.2d 213) and concluding that "it is incumbent on the Board to decide like cases the same way or explain the departure voted to reverse. (112 A.D.2d, at p. 507, 491 N.Y.S.2d 601.) We agree that, absent an explanation by the agency, an administrative agency decision which, on essentially the same facts as underlaid a prior agency determination, reaches a conclusion contrary to the prior determination is arbitrary and capricious. And we conclude, as did the dissenters below, that the present case involves facts indistinguishable from those of the Di Martino and Wells cases. We, therefore, reverse and remit to the Board for further proceedings.


Stare decisis is no more an inexorable command for administrative agencies than it is for courts (see, Wachtler, Stare Decisis and a Changing New York Court of Appeals, 59 St. John's L.Rev. 445, 452). 2 They are, therefore, free, like courts, to correct a prior erroneous interpretation of the law (Matter of Pascual v. State Bd. of Law Examiners, 79 A.D.2d 1054, 1055, 435 N.Y.S.2d 387, lv. denied 54 N.Y.2d 601, 442 N.Y.S.2d 1027, 425 N.E.2d 901; Matter of Leap v. Levitt, 57 A.D.2d 1021, 395 N.Y.S.2d 515, lv. denied 42 N.Y.2d 807, 398 N.Y.S.2d 1029, 368 N.E.2d 45) by modifying or overruling a past decision (see, Davis, Administrative Law §§ 20:10-20:11 Jaffe, Judicial Control of Administrative Action, at 587-588). They are, likewise, free, like courts, to determine how disputed facts are to be decided, judging credibility and drawing such inference as they find reasonable in order to resolve contested questions of fact (Matter of McSweeney v. Hammerlund Mfg. Co., 275 App.Div. 447, 450, 90 N.Y.S.2d 347; see, Matter of Dresher 286 App.Div. 591, 146 N.Y.S.2d 428; Gabrielli and Nonna, Judicial Review of Administrative Action in New York: An Overview and a Survey, 52 St. John's L.Rev. 361, 363; Jaffe, Judicial Review: Questions of Law, 69 Harv.L.Rev. 239, 241), and it is not within the power of the courts to impose factual consistency.

The policy reasons for consistent results, given essentially similar facts, are, however, largely the same whether the proceeding be administrative or judicial--to provide guidance for those governed by the determination made (Matter of Howard Johnson Co. v. State Tax Commn., 65 N.Y.2d 726, 727, 492 N.Y.S.2d 11, 481 N.E.2d 551); to deal impartially with litigants; promote stability in the law; allow for efficient use of the adjudicatory process; and to maintain the appearance of justice (Davis, Doctrine of Precedent as Applied to Administrative Decisions, 59 W.Va.L.Rev. 111, 128-136). The underlying precept is that in administrative, as in judicial, proceedings "justice demands that cases with like antecedents should breed like consequences" ( id., at 117; accord, Koslow, Standardless Administrative Adjudication, 22 Admin.L.Rev. 407, 424; Kramer, Place and Function of Judicial Review in the Administrative Process, 28 Fordham L.Rev. 1, 8). Legislative awareness of the policy considerations involved is evident from Labor Law § 534, the third unnumbered paragraph of which requires that the Board "maintain a current index, by topic, of the principles of law established by the decisions rendered by the board and the courts concerning matters arising under and make copies of the index available for public inspection and examination at all locations where unemployment insurance hearings are conducted. 3

From the policy considerations embodied in administrative law, it follows that when an agency determines to alter its prior stated course it must set forth its reasons for doing so. Unless such an explanation is furnished, a reviewing court will be unable to determine whether the agency has changed its prior interpretation of the law for valid reasons, or has simply overlooked or ignored its prior decision (Kramer, op. cit., at 68-70)....

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