Tak v. Sd Unemployment Ins. Div., No. 24343.

CourtSupreme Court of South Dakota
Writing for the CourtBjorkman
Citation736 N.W.2d 840,2007 SD 68
PartiesTAK COMMUNICATIONS, Appellant, v. SOUTH DAKOTA UNEMPLOYMENT INSURANCE DIVISION, Appellee.
Decision Date11 July 2007
Docket NumberNo. 24343.
736 N.W.2d 840
2007 SD 68
TAK COMMUNICATIONS, Appellant,
v.
SOUTH DAKOTA UNEMPLOYMENT INSURANCE DIVISION, Appellee.
No. 24343.
Supreme Court of South Dakota.
Considered on Briefs May 22, 2007.
Decided July 11, 2007.

Craig A. Pfeifle of Lynn, Jackson, Shultz & Lebrun, Rapid City, South Dakota, A. Stevenson Bogue of McGrath, North, Mullin & Kratz, Omaha, Nebraska, Attorneys for appellant.

Shannon George-Larson, South Dakota Department of Labor Pierre, South Dakota, Robert B. Anderson of May, Adam, Gerdes & Thompson, Pierre, South Dakota, Attorneys for appellee.

BJORKMAN, Circuit Judge.


[¶ 1.] TAK Communications (TAK) appeals from the circuit court's judgment affirming the Administrative Law Judge's (ALJ) decision that Diana Dillman (Dillman) and others similarly situated were employees of TAK, rendering TAK liable for contributions to the unemployment compensation fund based on their wages. We affirm.

FACTS

[¶ 2.] TAK is a South Dakota corporation which contracts with cable companies across the United States to perform their sales campaigns. In South Dakota TAK's only client is Midcontinent Communications (Midco). Dillman began working for

736 N.W.2d 841

TAK in June 2004 after signing an Independent Contractor Agreement (Agreement) which TAK drafted. Prior to her work with TAK, Dillman, educated through the tenth grade, had always acted as an employee of others, never having owned or operated her own business. She came to TAK with no prior sales experience.

[¶ 3.] The Agreement, which Dillman contended she did not fully comprehend, provided that Dillman "is not and will not be considered an employee of TAK Communications, Inc. and that the relationship between [sic] and [Dillman] is on [sic] of principal-independent contractor rater [sic] than employer-employee." In the Agreement, Dillman represented that as contractor she was "properly organized and validly existing under the laws of the State of South Dakota. Attached as Exhibit A is a copy of Contract's [sic] certificate of organization or registration." Despite this language, no Exhibit A was attached to the Agreement, Dillman established no such organization, and she executed the Agreement solely in her own name.

[¶ 4.] According to the Agreement, Dillman was to supply her own materials, provide her own insurance, set her own hours, and bear the risk of not earning any commission due to lack of sales. TAK provided Dillman with forms and sales materials to allow her to sell Midco products. It also provided her with a shirt and identification tag with Midco's name on them, although Dillman was not required to wear either item. Dillman's training consisted of accompanying other sales personnel to learn how to sell the product and she was provided guidance from a TAK representative on sales techniques. She was responsible for her own transportation, was to purchase her own peddler's license for each municipality in which she sold, and was provided with "turf sheets" indicating areas in which to market the products.

[¶ 5.] While TAK allows its sales associates to operate other businesses independent of their relationship with TAK, and some of its sales associates did so, Dillman was not among them. Dillman had never obtained a sales tax license, either before, during, or after the time she sold for TAK. Apart from her relationship with TAK, Dillman had no sales experience prior to, during, or after the conclusion of her relationship with TAK. During the time Dillman sold for TAK she never used a business name, did not advertise the sale of other products, and had no separate business premises. Dillman had no peddler's license before TAK's representative, Pam Boyden, ordered her to stop selling until she obtained one. When Dillman paid the fee and obtained the required license, it listed TAK Communications above Dillman's name and contained TAK's address rather than Dillman's.

[¶ 6.] In 2005 Dillman ceased selling for TAK. After her relationship with TAK ended, she eventually returned to work full time as an employee for another business. Following an investigation, the South Dakota Unemployment Insurance Division (Division) issued a determination notice concluding that Dillman was TAK's employee, and that services she and others similarly situated provided to TAK were subject to the unemployment insurance laws. TAK appealed Division's determination. The ALJ concluded that Dillman was free from TAK's control in the performance of her service, however, she was not customarily engaged in an independently established trade, occupation, profession, or business, thus rendering her, and others similarly situated, TAK employees under SDCL 61-1-11. TAK appealed the ALJ's decision to the circuit court.

736 N.W.2d 842

[¶ 7.] The circuit court affirmed both of the ALJ's determinations. TAK then appealed to this Court. Division did not file a notice of review as to the ALJ's conclusion that Dillman was free from TAK's control, leaving us with the sole issue of whether the circuit court erred in affirming the ALJ's decision that Dillman was not customarily engaged in an independently established trade, occupation, profession, or business as provided in SDCL 61-1-11(2).

STANDARD OF REVIEW

[¶ 8.] Agency findings are subject to the same standard of review as circuit court findings. This Court must decide, in light of all the evidence, whether the findings are clearly erroneous. "If after careful review of the entire record we are definitely and firmly convinced a mistake has been committed, only then will we reverse." Streeter v. Canton School Dist., 2004 SD 30, ¶ 14, 677 N.W.2d 221, 225. Whether an individual is an employee or an independent contractor raises a mixed question of law and fact; as such, it is "fully reviewable by this Court." Egemo v. Flores, 470 N.W.2d 817, 820 (S.D.1991) (citing Appeal of Hendrickson's Health Care Service, 462 N.W.2d 655, 658 (S.D. 1990)). We give no deference to the decision of either the ALJ or the circuit court. Midland Atlas Co., Inc. v. South Dakota Dep't of Labor, 538 N.W.2d 232, 235 (S.D....

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1 practice notes
  • Sioux Falls Shopping News v. Dept. of Rev., No. 24616.
    • United States
    • Supreme Court of South Dakota
    • April 23, 2008
    ...whether, in light of all the evidence, the findings are clearly erroneous. TAK Communications v. South Dakota Unemployment Ins. Div., 2007 SD 68, ¶ 8, 736 N.W.2d 840, 842. "`If after careful review of the entire record we are definitely and firmly convinced a mistake has been committed, onl......
1 cases
  • Sioux Falls Shopping News v. Dept. of Rev., No. 24616.
    • United States
    • Supreme Court of South Dakota
    • April 23, 2008
    ...whether, in light of all the evidence, the findings are clearly erroneous. TAK Communications v. South Dakota Unemployment Ins. Div., 2007 SD 68, ¶ 8, 736 N.W.2d 840, 842. "`If after careful review of the entire record we are definitely and firmly convinced a mistake has been committed, onl......

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