Vogue v. Adm'r, Unemployment Comp. Act, AC 42845

• Decision Date: 19 January 2021
• Docket Number: AC 42845
• Citation: 202 Conn.App. 291,245 A.3d 464
• Court: Connecticut Court of Appeals
• Parties: VOGUE v. ADMINISTRATOR, UNEMPLOYMENT COMPENSATION ACT

202 Conn.App. 291

245 A.3d 464

VOGUE

v.ADMINISTRATOR, UNEMPLOYMENT COMPENSATION ACT

AC 42845

Appellate Court of Connecticut.

Argued September 16, 2020

Officially released January 19, 2021

Santa Mendoza, for the appellant (plaintiff).

Krista D. O'Brien, assistant attorney general, with whom, on the brief, were William Tong, attorney general, and Philip M. Schulz, assistant attorney general, for the appellee (defendant).

Bright, C. J., and Cradle and Suarez, Js.

SUAREZ, J.

The plaintiff, Vogue, appeals from the judgment of the trial court, rendered in favor of the defendant, the Administrator of the Unemployment Compensation Act, dismissing the plaintiff's appeal from the decision of the Board of Review of the Employment Security Appeals Division (board).¹ The board had affirmed the decision of an appeals referee of the Employment Security Appeals Division (appeals division), who had affirmed the decision made by the defendant, following an audit of the plaintiff, that the plaintiff was liable for unpaid unemployment compensation contributions under the Unemployment Compensation Act (act), General Statutes § 31-222 et seq., with respect to one of its employees. The primary issue in this appeal is whether the court improperly interpreted and applied part B of the so-called "ABC test" of the act, which governs whether an employment relationship exists for purposes of the act.² We affirm the judgment of the trial court.

The following undisputed facts and procedural history underlie the present appeal. The plaintiff leases retail space in an indoor shopping mall in Waterford. It sells, among other things, body jewelry and body piercing services. In 2013, the plaintiff entered into an agreement with an individual, Mark Sapia, whereby, in exchange for a portion of Sapia's profits, Sapia would sell tattoo services from the rear portion of the plaintiff's store. On March 11, 2016, after one of the defendant's field officers conducted an audit of the plaintiff's business for 2014 and 2015, the defendant concluded that Sapia was an employee of the plaintiff, not an independent contractor as the plaintiff had maintained. Consequently, the defendant reclassified payments made to Sapia in 2014 and 2015 by the plaintiff as wages, and, with respect to those wages, the plaintiff was liable for the payment of contributions required under the act. The defendant, however, did not conclude that the plaintiff wilfully had failed to report Sapia as an employee.

In March, 2016, the plaintiff appealed from the defendant's decision to the appeals division. On August 15, 2016, an appeals referee conducted an evidentiary hearing. In a memorandum of decision dated September 2, 2016, the appeals referee set forth several findings of fact. After discussing relevant legal principles, the appeals referee concluded that the defendant properly had determined that Sapia was an employee of the plaintiff, not an independent contractor. Thus, the appeals referee affirmed the defendant's decision and dismissed the plaintiff's appeal.

The appeals referee's findings were as follows: "(1) [Sapia] worked as a tattoo artist at [the plaintiff's store] from approximately 2013 through the time of the audit.

Sapia himself personally performs the tattoo services for the customers at [the plaintiff's store]. The owner of [the plaintiff] classified Sapia as an independent contractor when the company was [completing] a registration form with the [defendant].

"(2) Based on that information, the [defendant] conducted an audit of [the plaintiff] and checked its payroll records and the status of individuals working for that company. [The plaintiff] had four employees working for the company, not including the owner or [Sapia].

"(3) When Sapia began working for [the plaintiff], the parties agreed that when [Sapia] tattooed the customer, Sapia would get 50 percent of the sales price and the owner would get the other 50 percent. Sapia was allowed to use the credit card machine for [the plaintiff's store] when selling his tattoo services. Sapia did not have to pay to use that credit card machine. The owner would then give Sapia his percent[age] of the credit card sales once those transactions were approved by the credit card company. [The plaintiff] had a back room in the store where Sapia was to perform his tattoo work on the customers. The price of the tattoo was determined by Sapia.

"(4) The owner also had Sapia sign an agreement when they started working together, which indicated that Sapia was an independent contractor, outlined the payment arrangements, and allowed the owner to review or check the work performed by Sapia. That agreement also stated that [Sapia] was responsible for correcting any mistakes with the tattoos and that [the plaintiff] could deduct moneys from Sapia if a customer complaint was not resolved.

"(5) Although the agreement also required that Sapia carry his own business liability insurance, Sapia did not do so, which the owner knew.

"(6) The owner provided Sapia with a sterile environment at the store where [the plaintiff] is located for him to perform his tattoo services for the general public. Sapia is registered with the state of Connecticut as a tattoo technician, and when he is placing the tattoos on the customers, he must do so in a sterile environment.

"(7) Sapia did provide his own ink and needles in order to place the tattoos on the customers he serviced at [the plaintiff's store]. Sapia also used his own laptop for his work.

"(8) [The plaintiff] keeps track of all of the tattoo sales made by Sapia when he is working in the store. When a customer paid for the tattoo in cash, then Sapia would keep 50 percent of the sale for himself and turn over the other 50 percent to the owner. The owner did not pay any other moneys to Sapia in 2014 and 2015. Sapia only performed his tattoo services during the store hours established by [the plaintiff] because the owner did not issue a store key to Sapia, who could not access the store on his own.

"(9) When Sapia sold a tattoo and applied the tattoo on the customer, the customer received a receipt, which listed the business name of the [plaintiff] company, Vogue, as well as the phone number, address and website for [the plaintiff company] Vogue. The [plaintiff's] owner also required that Sapia have the customers sign a waiver/release form, which was an agreement between [the plaintiff] and the customer, to release both [the plaintiff] and Sapia from various types of liability.

"(10) [The plaintiff] is in the business of providing piercings, selling jewelry for the piercing, and offering tattoo services. [The plaintiff] advertises through its website and its Facebook page that a customer can have piercings or tattoos done at its store and lists the hours that the tattoo artist is in the store.

"(11) [The plaintiff] provides a back room in the store where Sapia is able to perform his tattoo services for the customers of [the plaintiff]. [The plaintiff] also provides a table, chairs, and cleaning supplies for that room.

"(12) Sapia does not have to submit an invoice to [the plaintiff] in order to be paid his 50 percent of the tattoo services that he provides to the customers at [the plaintiff's store]. Sapia does not pay any rent to [the plaintiff] to use the employer's sterile room to perform his services, and all advertisements are done by [the plaintiff], other than [Sapia] mentioning his tattoo services on his social media sites, which also include the contact information at [the plaintiff's store].

"(13) The [plaintiff's] owner was not aware of any insurance or other paperwork to show that Sapia had established his own business or that he had his own company [that] offered tattoo services to the general public.

"(14) When the field auditor [for the defendant] conducted the audit, the only income reported by Sapia was the moneys that he received from [the plaintiff]."

In September, 2016, the plaintiff appealed from the decision of the appeals referee to the board. In a memorandum of decision dated January 19, 2017, the board expressly adopted the findings of fact of the appeals referee without modification, with the exception of the tenth finding of fact, to which the board added the following finding: "Sapia is the only tattoo artist performing tattoo services for the [plaintiff]."

Like the appeals referee, the board stated that its analysis of whether Sapia was an employee for purposes of the act was governed by the ABC test that is codified at General Statutes § 31-222 (a) (1) (B) (ii) (I), (II) and (III), with parts A, B, and C of the test corresponding to clauses (I), (II) and (III), respectively, of the statute. Section 31-222 (a) (1) (B) (ii) defines " ‘[e]mployment’ " 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 ...." In light of the fact that the ABC test is written in the conjunctive, "unless the party claiming the exception to the rule that service is employment shows...