Standard Oil of Conn., Inc. v. Adm'r, Unemployment Comp. Act

• Citation: 134 A.3d 581,320 Conn. 611
• Decision Date: 15 March 2016
• Docket Number: No. 19493.,19493.
• Parties: STANDARD OIL OF CONNECTICUT, INC. v. ADMINISTRATOR, UNEMPLOYMENT COMPENSATION ACT.
• Court: Supreme Court of Connecticut

320 Conn. 611

134 A.3d 581

STANDARD OIL OF CONNECTICUT, INC.

v.ADMINISTRATOR, UNEMPLOYMENT COMPENSATION ACT.

No. 19493.

Supreme Court of Connecticut.

Argued Oct. 15, 2015.

Decided March 15, 2016.

Glenn A. Duhl, Hartford, with whom was Angelica M. Wilson, for the appellant (plaintiff).

Thomas P. Clifford III, assistant attorney general, with whom were Krista Dotson O'Brien, assistant attorney general, and, on the brief, George Jepsen, attorney general, and Phillip M. Schulz, assistant attorney general, for the appellee (defendant).

Michael C. Harringtonand Jennifer A. Corvo, Hartford, filed a brief for the Connecticut Business and Industry Association, Inc., as amicus curiae.

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH, McDONALD, ESPINOSAand ROBINSON, Js.

ZARELLA, J.

The plaintiff, Standard Oil of Connecticut, Inc., appeals from the judgment of the trial court dismissing its appeal from the decision of the Employment Security Appeals Division, Board of Review (board). The board denied in part the plaintiff's motion to correct findings of fact made by the appeals referee and concluded that the workers at issue are the plaintiff's employees under the test set forth in the Connecticut Unemployment Compensation Act (act), General Statutes § 31–222 et seq.On appeal, the plaintiff claims that the trial court applied the wrong legal standard in reviewing its motion to correct. The plaintiff also claims that the trial court improperly concluded that the workers were the plaintiff's employees under § 31–222(a)(1)(B)(ii)because they were subject to the plaintiff's control and direction in the performance of their services and they performed their services at the plaintiff's places of business. The defendant, the Unemployment Compensation Act Administrator, responds that the trial court applied the proper legal standard in reviewing the plaintiff's motion to correct and properly concluded that the workers were the plaintiff's employees under the test set forth in the act. We reverse the judgment of the trial court.

The following relevant facts and procedural history are set forth in the trial court's memorandum of decision. "The plaintiff ... [is in the business of selling and delivering home heating oil and also] provides home heating and alarm systems to residential customers. In doing so, it utilizes the services of certain individuals who [clean, service and install] heating/air conditioning systems or who [install] security systems (installers/technicians). In June of 2008, the ... Department of Labor conducted an audit of the plaintiff. Following the audit, the [defendant] determined that the installers/technicians were misclassified as independent contractors rather than as employees. The [defendant] further concluded that, due to this misclassification, the plaintiff owed $41,501.38 in unemployment contribution taxes, plus interest, for 2007 and 2008.

"The plaintiff appealed [from] the [defendant's] decision to the [appeals referee], who conducted an evidentiary hearing. Following this hearing, the appeals referee issued a decision with findings of fact, affirming the [defendant's] decision. The plaintiff then appealed to the [board]. The board modified the appeals referee's findings of fact and made additional findings in a decision on March 21, 2012. It determined that the plaintiff had met part C (General Statutes § 31–222[a][1][B][ii][III] ) of the test set out in ... § 31–222(a)(1)(B)(ii)(the ABC test) for determining whether the installers/technicians were independent contractors, but also determined that the plaintiff had failed to demonstrate that the installers/technicians were independent contractors under part A (General Statutes § 31–222[a][1][B] [ii] [I] ) and part B (General Statutes § 31–222[a][1][B][ii][II] ). The plaintiff ... appeal[ed] [to the trial court] on April 19, 2012, was granted an extension of time to file a motion to correct findings on May 18, 2012, and filed a motion to correct findings on August 30, 2012. The board issued a decision on the motion to correct findings on March 4, 2013, granting the motion in part and denying it in part. The board maintained its earlier decision as to the plaintiff's failure to meet parts A and B."

The plaintiff filed claims of error and an appeal with the trial court. Following oral argument, the court dismissed the appeal on March 24, 2014. The court rejected the plaintiff's claim seeking to correct the board's factual findings and upheld the board's determination that the plaintiff had failed to satisfy parts A and B of the ABC test. This appeal followed.

Section 31–222(a)(1)(B)(ii)defines "employment" in relevant part as any service performed by "any individual who, under either common law rules applicable in determining the employer-employee relationship or under the provisions of this subsection, has the status of an employee. Service performed by an individual shall be deemed to be employment subject to this chapter irrespective of whether the common law relationship of master and servant exists, unless and until it is shown to the satisfaction of the administrator that (I) such individual has been and will continue to be free from control and direction in connection with the performance of such service, both under his contract for the performance of service and in fact; and (II) such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed; and (III) such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed...." Because the provision is in the conjunctive, the party claiming the exception to the rule that the service is employment must show that all three prongs of the test have been satisfied. E.g., JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, 265 Conn. 413, 419, 828 A.2d 609 (2003).

"[W]hen interpreting provisions of the act, we take as our starting point the fact that the act is remedial and, consequently, should be liberally construed in favor of its beneficiaries.... Indeed, the legislature underscored its intent by expressly mandating that the act shall be construed, interpreted and administered in such manner as to presume coverage, eligibility and nondisqualification in doubtful cases. General Statutes § 31–274(c)." (Internal quotation marks omitted.) Tuxis Ohr's Fuel, Inc. v. Administrator, Unemployment Compensation Act, 309 Conn. 412, 423, 72 A.3d 13 (2013). We also note that "exemptions to statutes are to be strictly construed." Daw's Critical Care Registry, Inc. v. Dept. of Labor, 42 Conn.Supp. 376, 389, 622 A.2d 622 (1992), aff'd, 225 Conn. 99, 622 A.2d 518 (1993). Nevertheless, the act "should not be construed unrealistically in order to distort its purpose." F.A.S. International, Inc. v. Reilly, 179 Conn. 507, 516, 427 A.2d 392 (1980). "While it may be difficult for a situation to exist where an employer sustains his burden of proof under the ABC test ... it is important to consider that [t]he exemption [under the act] becomes meaningless if it does not exempt anything from the statutory provisions ... where the law and the facts merit the exemption in a given case." (Citation omitted; internal quotation marks omitted.) Daw's Critical Care Registry, Inc. v. Dept. of Labor, supra, at 389–90, 622 A.2d 622. Rather, "statutes are to be construed so that they carry out the intent of the legislature.... We must construe the act as we find it...." (Citations omitted; internal quotation marks omitted.) Johnson v. Manson, 196 Conn. 309, 314–15, 493 A.2d 846 (1985), cert. denied, 474 U.S. 1063, 106 S.Ct. 813, 88 L.Ed.2d 787 (1986).

Having conducted a comprehensive review of the board's modified findings of fact, we conclude that the trial court improperly determined that the installers/technicians were the plaintiff's employees under the first two prongs of the ABC test.¹

I

We begin with the plaintiff's claim that the installers/technicians were free from its control and direction under part A of the ABC test. The plaintiff contends that the uncontroverted evidence establishes that the installers/technicians retained control and direction over the method and means of their work. The defendant responds that the installers/technicians performed their work subject to the plaintiff's control and direction. We agree with the plaintiff.

The following additional facts are relevant to our resolution of this claim. Although the board modified its findings of fact² following a review of the plaintiff's motion to correct, it did not alter its earlier conclusion that the plaintiff had failed to satisfy part A of the ABC test. Thereafter, in upholding the board's conclusion, the trial court noted the board's findings that "the plaintiff advertises installed heating, cooling, and security systems; it makes appointments with customers, then finds an installer or technician who can take the assignment; it does not permit installers or technicians to subcontract; it encourages them to wear apparel bearing the plaintiff's name; it can send an installer or technician back to correct a deficient installation; it pays the installers or technicians a set rate per piece; and it requires them to submit payment invoices no later than the Friday after they complete the work. The board stated that five installers/technicians [indicated] that the plaintiff has the right to direct how they perform their work in a questionnaire. The board did not credit later statements by two of the installers/technicians that the plaintiff did not have [that] right. The board also stated that the installers can only install equipment provided by the plaintiff and that the technicians use nozzles, filters, and strainers which are provided by the plaintiff for cleaning oil burners. In addition, the board...