Hill Hotel Co. v. Kinney

• Decision Date: 20 December 1940
• Docket Number: 30878.
• Citation: 295 N.W. 397,138 Neb. 760
• Parties: HILL HOTEL CO. v. KINNEY, COM'R OF LABOR, ET AL.
• Court: Nebraska Supreme Court

295 N.W. 397

138 Neb. 760

HILL HOTEL CO. v. KINNEY, COM'R OF LABOR, ET AL.

No. 30878.

Supreme Court of Nebraska.

December 20, 1940

Syllabus by the Court.

1. The unemployment compensation law, providing that services performed by an individual for wages shall be deemed " employment," unless he is customarily engaged in an independently established trade, occupation, profession or business, does not change the common-law definition of " independent contractor." Comp.St.Supp.1939, sec. 48-702.

2. " In actual affairs an independent contractor generally pursues the business of contracting, enters into a contract with his employer to do a specified piece of work for a specific price, makes his own subcontracts, employs controls, pays and discharges his own employees, furnishes his own material and directs and controls the execution of the work." Reeder v. Kimball Laundry, 129 Neb 306, 261 N.W. 562.

3. Under the unemployment compensation law, the claim of an employee of an independent contractor, engaged for specific services at a fixed price, who hired his own employees, paid and controlled them in the performance of their duties without interference of others, is not allowable against the employer of the independent contractor.

4. Evidence that a hotel manager who engaged an orchestra leader to furnish music, directed the musicians when to play, when to stop, and cautioned them not to loiter around the place or disturb guests or employees of the hotel, does not evince such control over the musicians as to disprove the otherwise established relationship of independent contractor between the leader and the hotel.

Appeal from District Court, Douglas County; Day, Judge.

Proceeding under the Unemployment Compensation Law by John F. Elmore claimant, opposed by the Hill Hotel Company, alleged employer. From a judgment of the district court reversing an allowance of the claim by the appellate tribunal of the Unemployment Compensation Division, the claimant appeals, opposed by Vincent B. Kinney, Commissioner, Nebraska State Department of Labor, and others.

Affirmed.

In proceeding by musician to recover unemployment compensation as employee of hotel, the relation of orchestra leader who employed musician to hotel as " independent contractor" was not disproved by evidence that hotel manager instructed leader in regard to his duties under contract, insisted on proper behavior in the hotel, and cautioned musicians not to loiter around the place or disturb guests or employees of the hotel. Comp.Laws Supp. 1939, §§ 48-701 to 48-721.

Harold E. Pace and Lee & Bremers, all of Omaha, and Samuel T. Ansell, Jr., Russel Johnston, and I. B. Kirkland, Jr., all of Washington, D. C., for appellant.

Leon, White & Lipp, of Omaha, and John E. Sidner, of Lincoln, for appellees.

Heard before SIMMONS, C. J., ROSE, EBERLY, PAINE, CARTER, and MESSMORE, JJ., and TEWELL, District Judge.

ROSE Justice.

This is a proceeding under the unemployment compensation law. Comp.St.Supp. 1939, secs. 48-701 to 48-721.

John F. Elmore presented to the unemployment compensation division of the department of labor a claim for unemployment benefits chargeable against the account of the Hill Hotel Company. The claim contained the statement that claimant, a professional musician, with three other musicians, performing under the leadership of Bobby Bowman, had, as employee of the hotel company, furnished music from May, 1938, until January, 1939. The claim was resisted on the grounds that claimant was not an employee of the hotel company and that the music was furnished by Bowman, an independent contractor. The appellate tribunal of the unemployment compensation division of the Nebraska department of labor allowed the claim and the hotel company appealed to the district court for Douglas county where the allowance was reversed and the claim disallowed. Elmore appealed to the supreme court.

Was claimant an employee of the hotel company within the meaning of the statute cited? This is the question presented by the appeal. Among the statutory provisions are the following:

" Services performed by an individual for wages shall be deemed to be employment subject to this Act unless shown to the satisfaction of the commissioner that: (A) 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 (B) Such service is either outside the usual course of the business for which such service is performed or such service is performed outside of all the places of business of the enterprise for which such service is performed; and (C) Such individual is customarily engaged in an independently established trade, occupation, profession, or business." Laws 1937, ch. 108, sec. 2; Comp.St.Supp.1939, sec. 48-702.

The provisions quoted from the Nebraska statute are found in the unemployment compensation law of Washington and in construing them the supreme court of that state said:

" In the Restatement of the Law of Agency nine different items are recited as the principal elements to be considered in determining which relationship exists. In the enactment of the Unemployment Compensation Statute the legislature selected or picked out three elements to be considered. The legislature did not say, nor is the language capable of that interpretation, that each of those elements must exist one hundred per cent in order to establish the relationship of independent contractor. * * *

" The courts have never held that, in the determination of the relationship of independent contractor, there must be an absolute and complete freedom from control. The common law test and the statutory test are the same. * * *

" In drafting the statute the legislators attempted to codify the common law. They intended that the common law test of employment relationship should likewise be the test under the Unemployment Compensation Act." Washington Recorder Publishing Co. v. Ernst, 199 Wash. 176, 91 P.2d 718, 724, 124 A.L.R. 667.

In that case the statute was considered at great length and many authorities cited. While there is a diversity of views among the courts on this subject and the opinions are not always unanimous, the weight of authority is that legislatures in enacting unemployment compensation statutes did not intend to depart from the common-law definition of " independent contractor." That definition was adopted by the legislature of this state in the enactment of the workmen's compensation law and by the Nebraska supreme court in construing it. One definition reads...