Silva v. Director of Div. of Employment Sec.

• Decision Date: 24 November 1986
• Parties: , 1987 A.M.C. 1458 Kenneth J. SILVA v. DIRECTOR OF the DIVISION OF EMPLOYMENT SECURITY et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1205

499 N.E.2d 1205

398 Mass. 609, 1987 A.M.C. 1458

Kenneth J. SILVA v. DIRECTOR OF the DIVISION OF EMPLOYMENT SECURITY et al.¹

Supreme Judicial Court of Massachusetts Barnstable.

Argued Oct. 10, 1986.

Decided Nov. 24, 1986.

Wendy Thaxter, Asst. Atty. Gen., for Director of the Div. of employment sec.

Christopher J. Snow, Provincetown, for the employer.

Before HENNESSEY, C.J., and LIACOS, ABRAMS, NOLAN and LYNCH, JJ.

ABRAMS, Justice.

The Director of the Division of Employment Security (director) appeals from a judgment of a District Court judge "annulling" a decision of the board of review of the division (board) which held that the plaintiff, Kenneth J. Silva, was an employer within the meaning of G.L. c. 151A, § 2, ² and that the services performed by one Gilbert Pacheco on the boat owned by the plaintiff constituted employment. After a hearing, the review examiner concluded that the plaintiff was Pacheco's employer. The plaintiff appealed to the full board, which affirmed the decision of the review examiner. The plaintiff appealed to the District Court, and the District Court "annulled" the board's decision. Pursuant to G.L. c. 151A, § 42 (1984 ed.), the director appeals to this court.

The director claims that the board's decision is based on substantial evidence and that the board correctly interpreted G.L. c. 151A, § 2. Therefore, she concludes the District Court judge erred in "annulling" the board's decision. We agree. We reverse and remand for entry of a judgment consistent with the board's decision.

We summarize the board's findings of fact. The plaintiff owns the F/V Gerda Riva, a fishing boat which operates as a scalloper from the port of Fairhaven. The boat usually carries a crew of from seven to nine people, including a captain. Pacheco was a deck hand on the boat from approximately March 14, 1983, until October 1, 1983, when he was laid off because of lack of work. Pacheco filed for unemployment benefits.

The plaintiff, as the owner of the vessel, hires a captain who is responsible for hiring and firing the crew, for operation of the boat while it is at sea, and for the disposal of the catch at auction. The captain also decides the itinerary of the boat. The captain, however, has no authority to make decisions regarding either the maintenance of the boat while it is docked or the purchase of other than "usual" items without the consent of the owner.

The captain turns over the proceeds from the sale of the catch to the plaintiff. The plaintiff retains forty per cent for himself and distributes an equal share of the remaining sixty per cent to the rest of the crew, including the captain. The plaintiff holds the captain responsible for the success of the operation; he expects the captain to discharge any crew member who limits profitability. If the plaintiff is displeased with the captain's performance, he fires the captain.

Based on this evidence, the board concluded that the captain acted as an agent of the plaintiff and that, therefore, "the direction and control [the captain] exercised over [Pacheco] was on behalf of and for the employer." The board further concluded that "[Pacheco] was an employee within the meaning of Section 2 of the law," and, therefore, was entitled to benefits.

The District Court judge, in reversing the board's decision, determined that the decision was not supported by substantial evidence and that there were no significant factual differences or other circumstances that distinguished the case at bar from the case of Maniscalco v. Director of the Div. of Employment Sec., 327 Mass. 211, 97 N.E.2d 639 (1951).

The question is whether the captain was the plaintiff's agent. If the captain is the plaintiff's agent, then the board's decision that the plaintiff could exercise direction and control over Pacheco is correct. The answer to that question can be found in the facts.

"It is ... the function of the board and not a judge to make findings of fact" in employment security cases. White v. Director of the Div. of Employment Sec., 382 Mass. 596, 599, 416 N.E.2d 962 (1981). See Manias v. Director of the Div. of Employment Sec., 388 Mass. 201, 205, 445 N.E.2d 1068 (1983); Graves v. Director of the Div. of Employment Sec., 384 Mass. 766, 769, 429 N.E.2d 705 (1981); Conlon v. Director of the Div. of Employment Sec., 382 Mass. 19, 24, 413 N.E.2d 727 (1980). If the findings of the board are supported by substantial evidence, and if there is no error of law, the court must affirm the board. See Keough v. Director of the Div. of Employment Sec., 370 Mass. 1, 3, 344 N.E.2d 894 (1976). See also Lycurgus v. Director of the Div. of Employment Sec., 391 Mass. 623, 627-628, 462 N.E.2d 326 (1984); Smith v. Director of the Div. of Employment Sec., 376 Mass. 563, 564, 382 N.E.2d 199 (1978), and cases cited. Cf. G.L. c. 30A, § 14(7)(e) (1984 ed.). Substantial evidence is "such evidence as a reasonable mind might accept as adequate to support a conclusion." G.L. c. 30A, § 1(6) (1984 ed.).

The evidence clearly supported the board's finding that the captain acts as an agent of the owner. While the boat is at sea, it necessarily is impossible for the owner to retain direct and immediate control over either the captain or the crew members. Nevertheless, in this case, the owner retained ultimate control over the ship, distributing the proceeds according to a formula he chose and retaining the power to discharge the captain if he were displeased. On these facts, there are sufficient indicia of direction and control by the owner to warrant the board's findings. ³

We next turn to the plaintiff's contention that Maniscalco v. Director of the Div. of Employment Sec., 327 Mass. 211, 97 N.E.2d 639 (1951), controls this case. We conclude that it does not. Unlike the instant case, in Maniscalco a majority vote of the crew determined where to fish, the type of fishing, the duration of the trip, and the selling price of the catch. The owners, even if they went along on the trip, had the same vote on all matters as any other crew member, and the owners gave no orders or commands. The owners retained a certain share for the use of the boats, and, if they went along as crew members, they received the same share as the other crew members.

Based on this evidence, we affirmed the judge's ruling that the board's finding that the owners were "employers" was not supported by substantial evidence. Contrary to the plaintiff's argument, we did not "[lay] down a rule of law that fishermen shipping on boats on the 'share' or 'lay' basis are not employees of the owner." Id. at 216, 97 N.E.2d 639. We said that the question is one of fact. In this case, there is no evidence of any kind of communal decision-making as in Maniscalco. Instead, if the owner is displeased with the profits returned by the captain and the crew that the captain hires, the owner fires the captain. There is a distinct hierarchy, with the owner maintaining direction and control through the captain. ⁴ Thus, the board's decision is supported by substantial evidence.

Furthermore, after the Maniscalco decisi...