Claim of Cromer

• Decision Date: 05 March 1998
• Citation: 669 N.Y.S.2d 701,248 A.D.2d 773
• Parties: , 1998 N.Y. Slip Op. 1919 In the Matter of the Claim of Linda B. CROMER, Respondent. Transworld Systems Inc., Appellant. John E. Sweeney, as Commissioner of Labor, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 701

669 N.Y.S.2d 701

248 A.D.2d 773, 1998 N.Y. Slip Op. 1919

In the Matter of the Claim of Linda B. CROMER, Respondent Transworld Systems Inc., Appellant John E. Sweeney, as Commissioner of Labor, Respondent.

Supreme Court, Appellate Division Third Department.

March 5, 1998.

Bond, Schoeneck & King L.L.P. (Nicholas D'Ambrosio, Jr., of counsel), Albany, for appellant.

Dennis C. Vacco, Attorney-General (Steven Segal, of counsel), New York City, for John E. Sweeney, respondent.

Before MERCURE, J.P., and YESAWICH, PETERS, SPAIN and CARPINELLO, JJ.

SPAIN, Justice.

Appeal from a decision of the Unemployment Insurance Appeal Board, filed March 31, 1997, which, inter alia, ruled that Transworld Systems Inc. was liable for additional unemployment insurance contributions based on remuneration paid to claimant and those similarly situated.

Transworld Systems Inc. (hereinafter TSI) was engaged in the business of selling debt collection products and services. Claimant was a salesperson for TSI for approximately 14 years until she was terminated on October 5, 1994 for selling a competitor's product to one of TSI's prospective customers in violation of her sales agent agreement. Claimant applied for unemployment insurance benefits and, as is relevant here, the Unemployment Insurance Appeal Board ruled that claimant was an employee of TSI, that she was not an independent contractor, and that TSI was liable for additional unemployment insurance contributions based on remuneration paid to her and those similarly situated. TSI appeals.

Whether an employer-employee relationship exists depends on the employer's "control over the results produced by work and the means used to achieve those results" (Matter of Salamanca Nursing Home [Roberts], 68 N.Y.2d 901, 902-903, 508 N.Y.S.2d 939, 501 N.E.2d 588); notably, "control over the means is the more important factor to be considered" (Matter of Ted Is Back Corp. [Roberts], 64 N.Y.2d 725, 726, 485 N.Y.S.2d 742, 475 N.E.2d 113). "[I]ncidental control over the results produced without further indicia of control over the means employed to achieve the results will not constitute substantial evidence of an employer-employee relationship" (id., at 726, 485 N.Y.S.2d 742, 475 N.E.2d 113). In finding that claimant was an employee within the meaning of the Labor Law, the Board emphasized the fact that, prior to 1993, claimant received training under the stewardship of a person who ran TSI's district office; after said district manager was terminated in 1993, claimant received a commission based on a structure set by TSI, she used business cards with TSI's logo and sales materials with TSI's letterhead, she worked within a designated sales territory and she was prohibited from selling competitor's products to prospective clients of TSI. Even taking these factors into consideration, we nevertheless conclude that, based on the entire record, the Board's decision must be reversed.

The record unrefutably establishes that in 1993, claimant's prior relationship with TSI changed after the district manager under whom she worked was terminated. At that point, cla...