Hasco Mfg. Co. v. Maine Employment Sec. Commission

• Decision Date: 19 November 1962
• Parties: HASCO MANUFACTURING CO. v. MAINE EMPLOYMENT SECURITY COMMISSION.
• Court: Maine Supreme Court

Page 442

185 A.2d 442

158 Me. 413

HASCO MANUFACTURING CO. v. MAINE EMPLOYMENT SECURITY COMMISSION.

Supreme Judicial Court of Maine.

Nov. 19, 1962.

Walter E. Foss, Jr., Portland, for plaintiff.

Frank A. Farrington, Milton L. Bradford, Asst. Attys. Gen., Employment Security Commission, Augusta, for defendant.

Before WILLIAMSON, C. J., and WEBBER, TAPLEY, SULLIVAN, DUBORD and SIDDALL, JJ.

WILLIAMSON, Chief Justice.

This case arising under the Maine Employment Security Law is before us on appeal from the decision of the Superior Court sustaining on review the action of the Employment Security Commission. R.S. c. 29, § 5, XIV. The issue is whether the services of certain individuals selling products of the appellant Hasco Manufacturing Company (for convenience herein called 'Hasco') constituted 'employment' under the statute. If so, the individuals were 'employees,' and not dealers or independent contractors as contended by Hasco, and their earnings were subject to contribution to the unemployment compensation fund.

Three points of appeal are designated: namely, that the decision is (1) against the law, (2) against the evidence, and (3) manifestly against the weight of the evidence. We are not concerned with points (2) and (3), which are applicable in the review of a jury verdict. In the instant case the findings of the Court are 'not to be set aside unless clearly erroneous.' Maine Rules Civil Procedure, Rule 52(a). Under point (1) we have before us the application of the statute properly construed to the facts found within the 'clearly erroneous' test.

The pertinent provisions of the Employment Security Law (R.S. c. 29) are:

'Sec. 3, XIX.

"Wages' means all remuneration for personal services, including commissions and bonuses and the cash value of all remuneration in any medium other than cash.'

'Sec. 3, XI, E, (commonly known as the 'ABC' test.)

'Services performed by an individual for remuneration shall be deemed to be employment subject to the provisions of this chapter unless and until it is shown to the satisfaction of the commission that:

'1. Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and

'2. Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

'3. Such individual is customarily engaged in an independently established trade, occupation, profession or business.'

The burden rested upon Hasco to establish exemption by meeting to conditions in (1), (2), and (3) of paragraph E. It is well established that the three conditions must be met. To satisfy one or two, and not all three, leaves the relationship for purposes of the Act one of 'employment.' Schomp et al. v. Fuller Brush Co., 124 N.J.L. 487, 12 A.2d 702, aff. 126 N.J.L. 368, 19 A.2d 780; Ross v. Cummins, 7 Ill.2d 595, 131 N.E.2d 521; State v. Stevens, 116 Vt. 394, 77 A.2d 844.

The common law rules relating to master and servant do not govern the meaning of the statutes. As the Vermont Court said, in construing like provisions:

'Unlike some of the unemployment statutes that may have been adopted in other states our statute contains no mention of the terms 'master,' 'servant' or 'independent contractor.' It is plain from its terms that the three concomitant conditions bring under the definition of 'employment' many relationships outside of the common law concepts of the relationship of master and servant.' State v. Stevens, supra, 77 A.2d at p. 847.

The findings of the presiding justice in the Superior Court set forth below are fully supported by evidence.

'A fair appraisal of the contentions when reduced to a simple narrative reveals the appellant to be corporation engaged in the fabrication of aluminum products in the form of windows, doors, storm sash, combination windows and garages. At its headquarters in Westbrook, Maine the company maintains its general business office and a product display area; there, prospective customers may examine products and make contact with salesmen, directly or by reference from the company management or clerical employees; telephone service is maintained; also it is about there products that Hasco conducts its institutionalized advertising program.

'The services of 'employees' as found by the 'Commission' are acquired by management upon the application of an individual desiring to sell Hasco products. No formal application for such service is made. No written contract for service is engaged in by the Company with a prospective seller of its merchandise; no formal training course is provided new salesman, though the neophyte is given an opportunity for assistance in following 'a couple leads to give * * * the idea' * * * to 'show * * * how it is done, and you catch on in this manner.' When on his own, the salesman armed with sample kit, business cards, price list, contract of sale, (changed November 6, 1958) with or without leads he commences his canvass without limitations as to area, number of contract or minimum number of sales. A 'closing' achieved, the purchase order is presented to Hasco, here it may be accepted or rejected. If approved, cash is accepted therewith, or if financed, it is processed at a financial institution, providing credit security is sanctioned. When a 'sale' is paid for in cash or if financed successfully, salesman receives 'commission' inclusive of expenses accountable as the difference in Hasco price list, cost and contract sale order price. Installation and costs thereof borne by Hasco is provided for in sales order, unless otherwise stated. Title to fixtures remains in Hasco on terms specified in 'Contract of Sale', or 'Purchase Order' form. A sales tax is paid by purchaser to appellant. Customer complaints are referred to salesman who serviced purchase. Fixtures improperly measured or rejected by purchaser are charged against commissions of...