Petition for Writ of Certiorari — State Line Delivery Service, Inc. v. Rivera

8 6 1 ® 3 9 ‘ Supreme Court, U.S,

[ FILED

MAR 18 1987

No.

JOSEPH F. SPANIOL, JR.

In The CLERK

|

Supreme Court of the United States

October Term, 1986

STATE LINE DELIVERY SERVICE, INC.,

Petitioner,

VS.

JUAN F. RIVERA and LILLIAN ROBERTS,

as Commissioner of the New York State

Department of Labor,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE COURT OF APPEALS

OF THE STATE OF NEW YORK

ALVIN ALTMAN

BRODSKY, LINETT, ALTMAN & McMAHON

Attorneys for Petitioner

888 Seventh Avenue

New York, New York 10106

(212) 245-7700

On the Writ:

James C. McMahon, Jr.

Bret L. Mercuris

Virgil Mountain, Inc. (212) 243-3332 (L602)

l.

QUESTIONS PRESENTED

Is a decision by the New York State Court of Appeals which

completely ignores and is in conflict with its own previous

holdings, without discussion, explanation, or hearing in that

forum, sufficient to deprive Petitioner of its reasonable

expectations of certainty in application of the laws respecting the

Status of independent contractors and unemployment insurance

liability?

Is a decision by the New York State Court of Appeals which

completely disregards prior law, upon which Petitioner relied in

establishing its transportation business, violative of the due

process clause of the Constitution, where said decision does not

purport to change existing law, but, in effect, destroys the entire

economics of motor carrier regulation in New York State?

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TABLE OF CONTENTS

Page

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OPINIONS BELOW ooo... cccccecccesscece ote ees 2

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CONSTITUTIONAL PROVISIONS 0o....ccccccccscccsssssccececeecoseeseecee. 2

SATIMOR OTC... 2

APPELLATE DIVISION DECISION .0....-c.cccccccceecseecseecseeeeeececcen. 4

‘NEW YORK COURT OF APPEALS DECISION ....................... 4

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Contents

Page

REASONS FOR GRANTING THE WRIT ...0..........cccccececeeeeeeeeees 5

ial sah asdbudonpesendseasoonsnmiahonenaanee 8

TABLE OF CITATIONS

Cases Cited:

Brinkerhoff-Faris Trust & Savings Company v. Hill,

281 U.S. 673, 50 S.Ct. 451, 74 L.Ed. 1107 (1930) ................... 5

Brooklyn Savings Bank v. O’ Neil, 324 U.S. 697,

65 S.Ct. 895, 89 L.Ed. 1296 (1945) reh. den., 325 U.S. 893

SD, saccaeecanteceucecsscssecesenstecoses 5

Juan F. Rivera v. State Line Delivery Service, Inc., 120 A.D.

2d 852, 501 N.Y.S.2d 964 (3rd Dep’t, 1986) .................::eeeeeeeee 2

Malinsky v. People of New York State, 324 U.S. 401,

GS S.Cr. 7B), BD L.Ed. 1029 (1D4ES) .......02- 2.200 2cccccccceccccencceesee 5

Contents

Page

Matter of Charles A. Field Delivery Service (Roberts), 66 N.Y

2d 516, 498 N.Y.S.2d 111, 488 N.E.2d 1223 (1985) ............... 7

Matter of New York and New Jersey Freightways, Inc.

(Ross), 55 A.D.2d 989, 391 N.Y.S.2d 197 (3rd Dep't, 1977) ...... 7

Matter of Want Ad Digest, Inc. (Roberts), 105 A.D.2d 895,

482 N.Y.S.2d 360 (39d Dep't, 1984) ..................cccccccscsccssceeceee. 7

Statutes Cited:

PE PPD tictntissnendicerelcacplinigisaeate eo ee ee 2

Ne SE IE peceicadiin neice ala 2

New York Labor Law §593(1) .........0.........0c0-cccccccccscsescceseseceeeee 7

Contents

Page

Other Authority Cited:

United States Constitutional Amendment XIV .................. 2,6, 7,8

APPENDIX TABLE

APPENDIX A—Decision, New York State Department

of Labor, by John E. Reilly, Administrative Law Judge,

Dated October 11, 1984 ..........c:ccceeeeee eaaa cin daiuneandonsiel aE la

APPENDIX B—Decision, New York State Department

of Labor Unemployment Insurance Appeal Board,

Filed August 21, 1985 ..........cccsscscessseeeseecereeeneceeceesessneeeasenene Sa

APPENDIX C—Decision, Supreme Court, State of

New York, Appellate Division Third Judicial Department,

Dated May 15, 1986 .............csccesseeeersecsesesssereeedecsscstseeseesseesees 9a

APPENDIX D—Order, Supreme Court, State of New

York, Appellate Division Third Judicial Department,

Emscred Fume 2, 1986 ...........02-sccccccccssscsccccncesescrccersssscccoesseees 13a

vi

Contents

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Page ;

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APPENDIX E—Memorandum Order, State of New York

Court of Appeals, Dated December 18,1986... 1Sa

APPENDIX F—Order, Supreme Court, State of New

York, Appellate Division Third Judicial Department,

Entered February 2, 1987 .on..........ccccccccccceccececesececeeeoeeeee.n.. 19a

APPENDIX G—Onder, State of New York Court of Appeals,

Dated February 19, 1987 oo.o.......cccccccccccecesecsseseseeeesseeeeeeesee... 2la

APPENDIX H—New York State Labor Law,

SOS OE OD escrsinininacieniihiehietba ee 22a

APPENDIX I—United States Constitution Amendment XIV,

SUUUUILS ~~ sscasniecnicebcsigneendimeneein pase nena 23a

No.

In The

Supreme Court of the United States

October Term, 1986

STATE LINE DELIVERY SERVICE, INC..

Petitioner,

vs.

JUAN F. RIVERA and LILIAN ROBERTS, as Commissioner of the

New York State Department of Labor,

Respondents

PETITION FOR WRIT OF CERTIORARI

TO THE COURT OF APPEALS OF THE

STATE OF NEW YORK

Petitioner, State Line Delivery Service, Inc. (“State Line”)

respectfully prays that a writ of certioran issue to review the

memorandum decision of the New York Court of Appeals, made and

entered December 18, 1986, which reversed the Order of the New

York Supreme Court, Appellate Division Third Judicial Department.

which Order had held that Respondent, Juan F. Rivera, was an

independent contractor and not an employee of Petitioner, State Line.

OPINIONS BELOW

The opinion of the New York Court of Appeals is not reported. A

copy is annexed as Appendix E. The opinion of the New York

Supreme Cour, Appellate Division Third Judicial Department, is

reported at 120 A.D.2d 852, 501 N.Y.S.2d 964 (3d Dep't, 1986). A

copy is annexed as Appendix C. A copy of the opinion of the New

York State Unemployment Insurance Appeal Board is annexed as

Appendix B. A copy of the decision of the Administrative Law Judge

of the New York State Unemployment Insurance Appeal Board is

annexed as Appendix A.

JURISDICTION

This petition is filed pursuant to 28 U.S.C. §1257(3) and 28

'.S.C. §2101(c), within the time allowed by law.

CONSTITUTIONAL PROVISIONS

The principal constitutional provision involved is Section | of the

Fourteenth Amendment of the United States Constitution. A copy is

annexed as Appendix |.

STATEMENT OF THE CASE

The decision of the New York Cour of Appeals as to which

review is mow sought makes it impossible for the motor carrier

industry in the State of New York to function with any degree of

certainty w:th the use of independent contractors—who are an integral

part of the transaction of such business. Because the business

operations of Petitioner were specifically designed in reliance on the

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laws of the State, and because the Court of Appeals has acted in

complete disregard of its own interpretation of those laws, Petitioner

and other motor common carriers similarly situated are now unable to

transact business in a manner originally calculated to comply with such

laws.

State Line has been in the messenger service business for

approximately seven (7) years. It picks up and delivers envelopes and

small packages between points in Westchester County and points in

the City of New York. State Line is certified to engage in the

messenger service business by the New York State Department of

Transportation.

State Line utilizes “owner-operators”—independent delivery

persons—who own and operate their own equipment to make

deliveries. State Line may utilize as many as fourteen (14) owner-

Operators in its service, however, this number varies daily. The

claimant, Juan F. Rivera, was one of these “owner-operators.””

In October, 1983, Rivera voluntarily chose to discontinue his

association with State Line in order to retum to school, and filed a

claim for unemployment insurance benefits effective December 12,

1983.

Initially, the Commissioner of Labor determined the claimant

eligible for unemployment insurance. State Line objected to this

determination because the claimant was not an employee, but an

independent contractor.

A hearing was held on August 27, 1984 before Administrative

Law Judge John E. Reilly and continued thereafter on October 4,

1984. In a decision filed on January 24, 1985, the Administrative

Law Judge determined that the claimant and all others similarly

situated were, in fact, independent contractors and not employees of

State Line. (Appendix A).

The Commissioner of Labor appealed the decision of the

Administrative Law Judge to the Unemployment Insurance Appeal

Board, which, in a decision filed on August 21, 1985 reversing the

Administrative Law Judge, determined that State Line Owner-operators

were “part-time” delivery persons, and that State Line exercised such

supervision, direction and control, so as to establish an employer-

employee relationship under the Unemployment Insurance Law.

(Appendix B).

THE APPELLATE DIVISION DECISION

The Appellate Division, Third Department, reversed the Appeal

Board. It held that there was not substantial evidence of record to

Support the finding that the delivery drivers were State Line

employees. Accordingly, this Court sustained the finding of the

Administrative Law Judge that State Line’s owner-operators were

“independent contractors.”

oat

THE NEW YORK COURT OF APPEALS DECISION

In a memorandum decision, the New York Court of Appeals,

reversed the Appellate Division on the basis of the “substantial

evidence test” alone. The Court found that, despite the record as a

~ whole, some evidence did exist to support a finding of employee

status. This decision was rendered by the Court of Appeals without

the usual briefing and oral argument which accompanies the

determination of an issue as significant as the one at har.

REASONS FOR GRANTING THE WRIT

It is respectfully submitted that the New York Court of Appeals, in

reaching its decision, failed to consider serious federal equal protection

and due process violations, both procedural and substantive in nature,

committed by the Unemployment Insurance Appeal Board.

In Brinkerhoff-Faris Trust & Savings Company v. Hill, 281 U.S.

673, 50 S.Ct. 451, 74 L.Ed. 1107 (1930), this Court clearly stated the

position that the federal guaranty of due process extends to state action

through its judicial, as well as through its legislative, executive, or

administrative, branch of government. Said the Court, at 281 U.S.

679-680:

“If the [due process violation] were attained by an

exercise of the state’s legislative power, the

transgression of the due process clause of the 14th

Amendment would be obvious ... The violation is

none the less clear when that result is accomplished

by the state judiciary in the course of constructing an

otherwise valid ... state statute.” (citations omitted]

Where a state court fails to pass on evidence or make findings of

fact bearing on a question of federal law because, under their

respective views, the facts referred to are immaterial, the Supreme

Court of the United States is not relieved from the duty of examining

the evidence for the purpose of determining what facts reasonably

might be and presumably would be found therefrom by the state court.

Brooklyn Savings Bank v. O'Neil, 324 U.S. 697 at 703, 65 S.Ct

895, 89 L.Ed. 1296 (1945), reh. den., 325 U.S. 893, 65 S.Ct. 1189,

89 L.Ed. 2005 (1945); Malinski v. People of New York State, 324

U.S. 401, 65 S.Ct. 781, 89 L.Ed. 1029 (1945).

With respect to the evidence in this action, adduced before an

Administrative Law Judge of the New York Unemployment Insurance

Appeal Board, the New York Court of Appeals found that

“subst antial” evidence existed in the record to support the findings of

the Unemployment Insurance Appeal Board. (Appendix B).

The manner in which the “substantial evidence test’ was

disregarded by the New York Court of Appeals in reversing the

Appellate Division, Third Department, clearly violated due process and

equal protection guarantees of the 14th Amendment because it failed to

account for the evidence contained in the record below as a whole.

Similarly, at the hearing before the Administrative Law Judge, the

claimant did not appeal. A “Summary of Interview”, dated April 17,

1984, given by claimant, was marked in evidence. This Summary

constituted the Commissioner’s case.

At the conclusion of the hearing, State Line’s counsel moved to

dismiss the proceeding upon the ground that his night to cross-examine

claimant was foreclosed by receipt of the Summary in evidence.

Clearly, administrative proceedings, including proceedings

concerming unemployment insurance, must afford parties thereto the

basic mght of cross-examination. Regardless of the merits in a

particular case, a party whose nights are being determined at a quasi-

judicial administrauve hearing must be given the opportunity to cross

examine witnesses. Similarly, while hearsay evidence is admissable

in an administrative hearing, a determination must be supported by

some substantial evidence which is acceptable in a court of law and

which approaches a minimum standard of fairness.

Receipt of the Summary Interview did not permit cross-

examination. Deprivation of this nght was a constitutional infirmity

fatal to the Commissioner’s and the claimant’s case, and further

demonstrates the arbitrary and capricious character of the Court of

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Appeals’ reliance on the decision below.

Finally, the New York Court of Appeals failed to address, in any

way, its complete disregard for New York statutes and the wide

departure from precedent taken by Unemployment Insurance Appeal

Board. Such failure by the New York Court fails to afford State Line

equal protection of the laws in violation of the Fourteenth Amendment.

First, the Court overlooked the fact that under no circumstances

could Juan Rivera ever be entitled to unemployment benefits, by

reason of the voluntary termination of his association with State Line

for the purposes of retuming to school (Hearing Transcript p. 17,

104/84) (Labor Law §593(1)). So much was argued to the Court

below and reference to this fact was made in the papers submitted to

the Court of Appeals.

Second, the Court overlooked the fact that the holding of the

Unemployment Insurance Appeal Board [which was reversed by the

Appellate Division and reinstated by this Court] was squarely in

conflict with its own decisions and decisions of this Court based upon

factually identical situations. Matter of New York and New Jersey

Freightways, Inc. (Ross), 5S A.D.2d 989, 391 N.Y.S.2d 197 (3rd

Dep’t 1977); Matter of Want Ad Digest, Inc. (Roberts), 10S A.D.2d

895, 482 N.Y.S.2d 360 (3rd Dep’t 1984).

Because of the inconsistency of the Board's determination, and its

clear and obvious repugnance to its own pnor determinations in

similar matters, without explanation, the law requires a determination

that the actions of the Board in this case—and that the decision below

which was based upon those proceedings—were “arbitrary and

capricious.” Matter of Charles A. Field Delivery Service (Roberts), 66

N.Y.2d 516, 498 N.Y.S.2d 111, 488 N.E.2d 1223 (1985).

The failure of the Court of Appeals to address the foregoing

matters in any way deprives State Line of its constitutional nght of

equal protection of the laws as guaranteed by the Fourteenth

Amendment to the Constitution.

CONCLUSION

The New York Court of Appeals’ decision below raises significant

constitutional issues which the Court should address.

Accordingly, the writ should be granted.

Dated: New York, New York

March 16, 1987

Respectfully submitted,

ALVIN ALTMAN

Brodsky, Linett, Altman & McMahon

Attorneys for Petitioner

Office and P.O. Address

888 Seventh Avenue

New York, New York 10106

(212) 245-7700

On the Writ:

James C. McMahon, Jr.

Bret L. Mercuris

aber eniion

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APPENDIX A—DECISION, NEW YORK STATE

DEPARTMENT OF LABOR, BY JOHN E. REILLY,

ADMINISTRATIVE LAW JUDGE,

DATED OCTOBER I1, 1984

New York State Department of Labor

Administrative Law Judge Section

‘DECISION

Name

JUAN F. RIVERA (LEAD CASE)

SSA # ALI # L.O. #

060-46-9883 34-19079 512

STATE LINE DELIVERY SERVICE, INC.

SSA # ALJ # LO, #

14-30530 84- 19080 E

Decision mailed and duly filed in the Departmen of Labor on Jan. 24,

1985.

FINDING OF FACTS: Hearings were held at which a representative

of the employer, the attorney for the employer and a representative of

the Commissioner of Labor appeared. Testimony was taken.

Claimant Juan F. Rivera filed an original claim effective December 12,

1983 thereby establishing a base period from December 13, 1982

through December 11, 1983. By initial determination claimant was

ruled eligible for unemployment insurance benefits at a benefit rate of

$148.00. The objecting party State Line Delivery objects to this

determination on the grounds that claimant and all other similarly

Situated are independent contractors and not employees.

Claimant J.F.R. was associated with the objecting party from

November 1982 through October 1983 at which time his association

with this organization came to anend. Claimant's association with the

objecting employer commenced when J.F.R. answered a newspaper

advertisement for a person to make deliveries for a delivery service.

The person that was to make deliveries had to own his own vehicle.

J.F.R. was interviewed by the company and added to its staff of

Owner-operators. These persons made pick ups and delivered letters

and small packages. These persons were to call the establishment

whenever they were ready to work. If the company had an

assignment available for them it was given them. If the company did

not have an assignment for these persons they did no work. There

was no requirement that these owner-operators contact the

establishment on any fixed schedule. The owner-operator provided

his own motor vehicle, paid his own tolls, paid for his own gas, paid

for his own automobile repairs and his own automobile insurance. If

he wished to engage the services of a helper this helper would be paid

by the owner-operator.

The owner operator was paid on a sliding commission scale Starting at

50% and ending at 60%. Each owner-operator negouated his own

individual commission with the objecting party. The objecting party

supplied no logo for the owner-operator’s vehicle and supplied no

identification (such as identity cards) showing that the owner-operator

was associated with the objecting party. The company did supply

Bills of Lading which were used to show pick up and delivery the

delivery. The owner-operator retumed these signal receipts to the

company approximately once a week. The owner operator had to keep

his own records if he wished to be sure he was being reimbursed

correctly by the company. There was no requirement that the owner

operator keep a work log. The owner-operator was also required to

Carry cargo insurance. The company offered the owner operator cargo

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insurance at special discounts if it was purchased through the

company. The objecting party deducted the amount owed for cargo

insurance from the payments that were due the owner-operator. The

owner operator mapped out his own routes. The owner-operator was

also allowed to work for other organizations at the same time that he

were associated with the objecting party.

The company had other people who performed similar tasks. These

persons were actual employees. However the employer set up a

schedule for them on a daily basis, they had to report daily to the

premises to pick up their schedule and work, and they had to keep a

log and file reports and follow established routes. When they finished

an assignment they had to report in to the dispatcher. They told the

customers that they were employees of the objecting party. The

company supplied motor vehicles to these persons and paid all

expenses connected with said motor vehicles.

QPINION: I find that based upon the evidence before me that claimant

J.F.R. was an independent contractor and not an employee. There

was no employer-employee relationship established here. The

evidence shows that J.F.R. was an independent contractor. He was

his own boss and he did not have to perform any services for the

objecting party unless he wished to do so. It is to be noted that the

objecting party in so far as J.F.R. and all other owner-operators

similarly situated are concemed did not establish sufficient control

over their operations so as to show them to be employees within the

meaning of the Law. It is to be further noted that these owner-

operators could work for competitors of the objecting employer at the

same time that they worked for the objecting employer. They could

work one day for the objecting employer and not contact the objecting

employer for long periods of time or ever again if they so desired. I

therefore find that under these circumstances that claimant J .F.R. was

an independent contractor and not an employee.

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DECISION: The initial determination of eligibility is overruled.

Claimant and all other similarly situated are independent contractors

and not employees of the objecting employer. Claimant therefore is }

not eligible to file a valid original claim based upon his association

with the objecting party.

/s/ JOHN E. REILLY

ADMINISTRATIVE LAW JUDGE

10/11/84

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APPENDIX B—DECISION, NEW YORK STATE

DEPARTMENT OF LABOR UNEMPLOYMENT

INSURANCE APPEAL BOARD,

FILED AUGUST 21, 1985

NEW YORK STATE DEPARTMENT OF LABOR

UNEMPLOYMENT INSURANCE APPEAL BOARD

RE: NAME

JUAN F. RIVERA

S.S. NO. E.R. NO. CASE NO, A.B. NO.

060-46-9883 84-19079 362,000

STATE LINE DELIVERY SERVICE, INC.

5.5. NO, E.R. NO. CASENO, AB.NO,

14-30530 84-19080 362,001

Decision mailed and duly filed in the Department of Labor on Aug. 21,

1985.

PRESENT: G. DOUGLAS PUGH, JOHN F. LENNON,

MEMBERS

The Commissioner of Labor appeals from the decision of the

administrative law judge filed January 24, i985, overruling the

determination of the Commissioner of Labor holding the employer

liable for contributions an remuneration paid to the claimant and all

other persons who performed services under similar circumstances,

and sustaining the employer’s objection to the payment of benefits to

claimant, that claifiant is an indpendent contractor.

Hearings were held before the administrative law judge at which

all parties were accorded a full opportunity to be heard and at which a

representative of the employer, the attomey for the employer, and a

representative of the Commissioner of Labor appeared and testimony

was taken. The board considered the arguments contained in the

written statement submitted on behalf of the Commissioner of Labor

and of the employer on appeal.

Based on the record and testimony in this case, the Board makes

the following

FINDINGS OF FACT: The employer is in the business of providing

pick-ups and delivery service of letters and small packages in an area

composing of the five boroughs of New York City, Westchester

County and parts of New Jersey. The employer employs four persons

to carry out delivery services on a scheduled, full-time basis, and they

are paid on an hourly basis. They drive vans and cars owned by the

employer, and the employer pays all the expenses connected with the

vehicles. The employer acknowledges that these individuals are

employees. The employer-corporation also engages the services of

approximately fifteen deliverypersons, who perform delivery services

using their own vehicles and who pay all the expenses incurred in

Operating their vehicles. The employer considers these

deliverypersons independent contractors. The claimant was engaged

as such a deliveryperson. The employer obtained the services of the

deliverypersons by referral and by advertising in the newspaper.

When the employer engages a deliveryperson, the individual is

interviewed by the employer and the nature of the employer's

operation is explained to the deliveryperson. The deliverypersons call

the employer's dispatcher to obtain assignments. They are then told

where to go for pick-ups and where to make the deliveries. In

approximately eighty percent of the assignments, the deliveryperson

must complete the delivery by the deadline set by the employer's

customer. The employer supplies the deliverypersons with bills of

lading in quadruplicate and on which the employer's letterhead is

printed. One of these forms is left with the business where the pick-

up is made, as a receipt. The recipient of the delivery signs the form

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and is given one copy. The delivery person returns two copies of the

bill of lading to the employer. The employer pays the deliverypersons

weekly, using the bills of lading to determine the amount of work that

they have done. The employer pays the deliverypersons on a

Commission basis, which the employer determines for each individual

on a sliding scale between fifty percent and sixty percent. The

employer bills the customers, and a deliveryperson receives a

commission regardless of whether or not a customer pays the

employer. The employer requires the deliverypersons to carry cargo

insurance, and offers them the insurance under the employer's policy.

The cost of the insurance is deducted from the deliveryperson’s

weekly pay. The employer also rents “beepers” to some of the

deliverypersons at a rate of $5 per week. By means of the “beeper”,

the employer is then able to noufy a deliveryperson that an assignment

is available. While working for the employer, the deliverypersons

were allowed to accept assignments from other companies that provide

delivery service.

The claimant filed an original claim for benefits effective

December 12, 1983, thereby establishing a base period from

December 13, 1982 through December 11, 1983. He was credited

with 37 weeks of employment and remuneration of $10,963 with this

employer. Claimant's benefit rate was established at $148.

OPINION; The credible evidence establishes that the employer

exercised sufficient supervision, direction and control over the

services rendered by the deliverypersons, or retained the nght to

exercise such Supervision, direction and control, so as to establish an

employer-employee relationship under the Unemployment Insurance

Law. The deliverypersons were told when and where to make

pickups and deliveries, and were often given deadlines for the

completion of an assignment. The employer set the rate of

commission for the deliverypersons and billed the customers. If a

customer failed to pay the delivery charges, the employer sull paid the

deliverypersons. The fact that the deliverypersons provided their own

vehicles is similar to workmen providing their own tools and does not

necessanly signify an independent contractor status. Furthermore, the

fact that a deliveryperson had no regular schedule does not make that

person any less of an employee. The employer's operation required,

in addition to a certain number of full-time deliverypersons, a

sufficient number of part-time deliverypersons to serve the fluctuating

needs of its customers. The services rendered by the claimant and the

other deliverypersons were an integral part of the business without

which the employer could not operate. Under the circumstances

herein, we conclude that the claimant and all other deliverypersons

were employees of the employer herein and not independent

contractors, and the claimant should be credited with his weeks of

employment and remuneration with the employer during his base

penod.

DECISION; The determination of the Commissioner of Labor is

Sustained.

The objection of the employer is overruled.

The decision of the administrative law judge is reversed.

G. DOUGLAS PUGH, MEMBER

JOHN F. LENNON, MEMBER

RY-JK

APPENDIX C—DECISION, SUPREME COURT, STATE

OF NEW YORK, APPELLATE DIVISION THIRD

JUDICIAL DEPARTMENT, DATED MAY 15, 1986

120 A.D. 2d 852

In the Matter of the Claim of Juan F.

RIVERA, Respondent,

State Line Delivery Service,

Inc., Appellant.

Lillian Roberts, as Commissioner of

Labor, Respondent.

Supreme Court, Appellate Division,

Third Department.

May 15, 1986.

Brodsky, Linett, Altman & McMahon (James C. McMahon, Jr.,

of counsel), New York City, for appellant.

John D. Chestara, Troy, for Juan F. Rivera, respondent.

Before KANE, J.P., and MAIN, MIKOLL, HARVEY and

YESAWICH, JJ.

HARVEY, Justice.

Appeal from a decision of the Unemployment Insurance Appeal

Board, filed August 21, 1985, which, inter alia, ruled that claimant

was entitled to receive benefits.

10a

State Line Delivery Service, Inc. (State Line) maintains a

messenger service business, picking up and delivering letters and

small packages in and around New York City. In order to carry out

delivery services, State Line has four full-time employees. These

employees are paid on an hourly basis and provided with vehicles

which are fully maintained by State Line. Additionally, State Line

uses the services of approximately 15 owner-operators who it

contends are independent contractors. Claimant was such an owner-

operator for State Line from November 1982 to October 1983. The

Unemployment Insurance Appeal Board, reversing the Administrative

Law Judge, awarded benefits to claimant after finding that claimant

was an employee and not an independent contractor This appeal by

State Line ensued.

{1,2} On this appeal, State Line contends that the Board’s

finding that claimant was its employee rather than an independent

contractor is not supported by substantial evidence on the record. We

agree. Although no single factor is dispositive in determining whether

an employer-employee relationship exists, the control exercised over a

claimant is a significant factor (Master of Want Ad Digest [Roberts],

105 A.D.2d 895, 482 N.Y.S.2d 360; Matter of Ted Is Back Corp.

[Roberts], 103 A.D.2d 932, 478 N.Y.S.2d 178, affd. 64 N.Y.2d

725, 485 N.Y.S.2d 742, 475 N.E.2d 113).

The relationship between the two parties resulted from claimant’s

answering State Line’s newspaper advertisement which stated,

“Owner operator needed to work on commission for high volume

messenger service 914-939-6500.” Claimant agreed to furnish his

own vehicle and pay all the expenses of gasoline, iolls, oil,

maintenance and insurance. In addition to the ordinary insurance

involving motor vehicles, claimant was required by State Line to carry

Cargo insurance at his own expense. For his services, he was given a

percentage of the commissions charged State Line’s customers.

Claimant committed himself to no particular amount of services.

When he wished to make himself available, he telephoned State Line’s

lla

dispatcher and accepted such work as he desired from that made

available by the dispatcher. He was free to choose any route to

perform the services. He was not prohibited from soliciting

assignments from other companies similarly situated and he was not

prohibited from carrying on his business with one or more additional

companies while providing services for State Line. Owner-operators

were free to hire helpers without notification to the company and

claimant availed himself of that opportunity. He was given no fringe

benefits of any nature by State Line, and no income or social security

taxes were withheld from claimant’s compensation. State Line had

never been sued as a defendant in an automobile accident in which a

vehicle of an owner-operator was involved and no claim for workers’

compensation had ever been made by an owner-operator.

Once a work assignment was accepted by an owner-operator, he

was subjected to only one control and that was a ume limitation for

delivery established, not by State Line, but by the customer involved.

In that respect the control was similar to that which we observed in

Matter of Paragon Process Serv. (Roberts), 103 A.D.2d 882, 477

N.Y.S.2d 1009, where the attorneys engaging the services of the

process service organization established the various requirements for

service. We conclude that the facts in the record fail to establish such

control over claimant as to constitute an employer-employee

relationship (see, Master of 12 Cornelia St. [Ross], 56 N.Y.2d 895,

453 N.Y.S.2d 402, 438 N.E.2d 1117; Matter of Paragon Process

Serv. [Roberts], supra, 103 A.D.2d p. 882, 477 N.Y.S.2d 1009).

Decision reversed, without costs, employer’s objection to

claimant’s eligibility for benefits is sustained, and matter remitted to

the Unemployment Insurance Appeal Board for further proceedings

not inconsistent herewith.

MAIN and MIKOLL, JJ., concur.

124

KANE, J.P., and YESAWICH, J., dissent and vote to affirm in

a memorandum by YESAWICH, J.

We respectfully dissent and vote to affirm. The evidence recited

by the majority undeniably points to the conclusion that claimant was

an independent contractor, but the record also contains other evidence

which we believe justifies the contrary determination reached by the

Board. The following factors bear favorably on the Board’s decision:

first, the employer, at its pleasure, daily dispensed delivery

assignments—most of which had time deadlines for completion (see,

Matter of DiMartino [Ross], 59 N.Y.2d 638, 463 N.Y.S.2d 189, 449

N.E.2d 1267); second, workers like claimant were responsible for

completing bills of lading displaying, not theirs, but the employer's

letterhead; third, the employer alone solicited and billed customers;

fourth, and perhaps most important, the employer fixed the

commission rate of its workers and paid them whether or not the

customer ultimately paid it for the services rendered (see, Matter of

Rinaldi [Corsi], 281 A.D. 1051, 121 N.Y.S.2d 155, lv. denied 306

N.Y. 982). And it is of some significance, as the Board recognized,

that employment of delivery persons was integral to the daily

Operations of the employer’s business; in fact, they sometimes

outnumbered the employer’s regular employees by a three-to-one

margin. If claimant was indeed a truly independent contractor, he

would have had real control over the work or service that State Line

agreed to furnish its customers, as well as the price of his labor, and

State Line would not have unilaterally dominated each of the critical

elements of their business relationship.

sb TN 1 eA PD ill HD a td

c 13a

APPENDIX D—ORDER, SUPREME COURT, STATE OF

NEW YORK, APPELLATE DIVISION THIRD JUDICIAL

DEPARTMENT, ENTERED JUNE 2, 1986

At a Term of the Appellate Division

of the Supreme Court of the State of

New York, heid in and for the Third

Judicial Department, at the Justice

Building in the City of Albany, New

York, commencing on the 10th day

of March, 1986.

PRESENT:

HON. T. PAUL KANE,

Justice Presiding,

HON. ROBERT G. MAIN,

HON. ANN. T. MIKOLL,

HON. PAUL J. YESAWICH, JR..,

HON. NORMAN L. HARVEY,

Associate Justices.

In the Matter of the Claim of

JUAN F. RIVERA,

App. Div.

Respondent, Docket

STATE LINE DELIVERY SERVICE, INC., #51415

Appellant,

LILLIAN ROBERTS, as Commissioner

of Labor,

Respondent.

14a

STATE LINE DELIVERY SERVICE, INC., having appealed

from a decision of the Unemployment Insurance Appeal Board, filed

on the 21st day of August, 1985, and said appeal having been

presented during the above-stated term of this Court, and having been

argued by James C. McMahon, Jr., Esq., of counsel for appellant,

and by John D. Chestara, Esq., of counsel for respondent, and, no

brief having been submitted on behalf of the Commissioner of Labor,

and, after due deliberation, the Court having rendered a decision on

the 15th day of May, 1986, (Justices Kane and Yesawich, Jr.

dissenting), it is hereby

ORDERED that the decision so appealed from be and the same

hereby is reversed without costs, the objection of the employer, State

Line Delivery Service, Inc., to the eligibility for benefits of claimant,

Juan F. Rivera, is sustained and this matter remitted to the

Unemployment Insurance Appeal Board for further proceedings not

inconsistent with the decision of this Court.

ENTER:

DATED AND ENTERED: June 2, 1986

1Sa

APPENDIX E—MEMORANDUM ORDER, STATE OF

NEW YORK COURT OF APPEALS,

DATED DECEMBER 18, 1986

STATE OF NEW YORK

COURT OF APPEALS

MEMORANDUM

3 No. 484

In the Matter of Juan F. Rivera,

Respondent,

State Line Delivery Service, Inc.,

Respondent,

Lillian Roberts, as Commissioner of Labor,

Appellant.

3 No. 485

In the Matter of James P. Ross, et. al.,

Respondents,

Majestic Messenger Service, Inc.,

Appellant,

Lillian Roberts, as Commissioner of Labor,

Respondent.

16a

3 No. 486

In the Matter of Joan M. Fox,

Appellant-Respondent,

James Whalen, d/b/a Whalen’s Service,

Respondent,

Lillian Roberts, as Commissioner of Labor,

Respondent- Appellant.

(SSM 128) Robert Abrams, Attomey General (Richard S. LoPirmo of

counsel) for the appellant.

Alvin Altman, NYC, for respondent Service.

John D. Chestara, Troy, for respondent Rivera.

(SSM 130) Evan J. Spelfogel, NYC, for appellant.

Donald W. Boyajian, Albany, for respondent Ross.

Robert Abrams, Attomey General (Rochelle M. Baron of counsel) for

respondent Roberts.

(SSM140) David J. Wukitsch, Albany, for appellant.

Daniel P. Forsyth, Buffalo, for respondent Whalen.

Robert Abrams, Attomey General (Iris A. Steel of counsel) for

respondent Roberts.

MEMORANDUM

The orders of the Appellate Division in Rivera and Fox should

be reversed, with costs, and the decisions of the Unemployment

Insurance Appeals Board reinstated and the order of the Appellate

Division in Ross should be affirmed, with costs.

17a

In each of these cases whether the relationships of the

operators-deliverers with the delivery companies is that of employees

or independent contractors involves a question of fact as to whether

there is evidence of either controi over the results produced or over the

means used to achieve the results (Matter of Field Delivery Service

[Roberts], 66 NY2d 516, 521; Matter of Ted is Back Corp. [Roberts],

64 NY2d 724, 725; Matter of 12 Cornelia Street [Ross], 56 NY2d

895, 897; Matter of Sullivan [Miller], 289 NY 110, 112). The

agency’s determination of this question of fact, if supported by

substantial evidence on the record as a whole, is beyond further

judicial review even though there is evidence in the record to support a

contrary conclusion (Mazter of Field Delivery Service, supra; Matter of

Concourse Ophthalmology Assoc. [Roberts], 60 NY2d 734, 736;

Matter of Morton [Miller], 284 NY 167; Matter of Stork Restaurant v.

Boland, 282 NY 256.) The determination in each case by the

Unemployment Insurance Appeal Board that the relationship was that

of employer-employee is amply supported by proof in the record.

There being substantial evidence to sustain the determinations, the

judicial inquiry is complete (Marter of Field Delivery Service, supra;

Matter of Villa Maria Institute of Music [Ross], 54 NY2d 691, 692).

Moreover, the agency determinations in these three cases are

consistent with prior cases with substantially similar facts (Matter of

Field Delivery Service, supra at §20; see, Matter of DiMartino [Buffalo

Courier Express Co. - Ross], 89 AD2d affd 59 NY2d 638; Matter of

Wells [Utica Observer-Dispatch & Utica Daily Press [Roberts], 87

AD2d 960 affd 59 NY2d 638).

We have considered the other arguments raised by the parties

and find them to be without ment.

18a

Case #484 - Mir. of Rivera

On review of submissions pursuani to section 500.4 of the Rules,

order reversed, with costs, and decision of the Unemployment

Insurance Appeal Board reinstated in a memorandum. Chief Judge

Wachtler and Judges Meyer, Simons, Kaye, Alexander, Titone and

Hancock concur.

Case #485 - Mtr. of Ross

On review of submissions pursuant to section 500.4 of the Rules,

order affirmed, with costs, in a memorandum. Chief Judge Wachter

and Judges Meyer, Simons, Kaye, Alexander, Titone and Hancock

concur.

Case #486 - Mir. of Fox

On review of submissions pursuant to Section 500.4 of the Rules,

order reversed, with costs, and decision of the Unemployment

Insurance Appeal Board reinstated in a memorandum. Chief Judge

Wachter and Judges Meyer, Simons, Kaye, Alexdander, Titone and

Hancock concur.

Decided December 18, 1986

19a

APPENDIX F—ORDER, SUPREME COURT, STATE OF

NEW YORK, APPELLATE DIVISION, THIRD JUDICIAL

DEPARTMENT, ENTERED FEBRUARY 2, 1987

At a Term of the Appellate Division of the

Supreme Court of the State of New York,

held in and for the Third Judicial Department,

at the Justice Building in the City of Albany,

New York, commencing on the Sth day of

January, 1987.

PRESENT: HON. T. PAUL KANE,

Justice Presiding;

HON. ROBERT G. MAIN,

HON. ANN T. MIKOLL,

HON. PAUL J. YESAWICH, JR.,

HON. NORMAN L. HARVEY,

Associate Justice.

In the Matter of the Claim of ‘

JUAN F. RIVERA,

Respondent,

STATE LINE DELIVERY SERVICE, INC., App. Div.

Docket

Appellant, #51415

LILLIAN ROBERTS, as Commissioner

of Labor,

<r eee ee eee eres

The above-named appeliant having appealed to the Court of

Appeals from an order of the Appelate Division of the Supreme Court,

Third Judicial Department, entered in the office of the clerk on June 2,

1986, which reversed a decision of the Unemployment Insurance

Appeal Board filed August 21, 1985, and said appeal having been

presented in the Court of Appeals by Honorable Robert Abrams,

Attomey General of the State of New York, counsel for appellant,

Commissioner of Labor, and by Brodsky, Linett, Altman and

McMahon, Esqs., counsel for respondent, State Line Delivery

Service, Inc., and by John D. Chestara, Esq., counsel for respondent,

Juan F. Rivera, and, after due deliberation, the Court of Appeals, on

review of the submissions pursuant to section 500.4 of its rules,

having reversed the order of the Appellate Division, with costs, and

having reinstated the decision of the Unemployment Insurance Appeal

Board, and having ordered that the record and proceedings in that

court be remitted to this court to be proceeded upon according to law,

and the remittitur of the Court of Appeals having been filed in this

court, it is hereby

ORDERED that the order of the Court of Appeals be, and the

same hereby is, made the order of this court; and it is further

ORDERED that the order of the Appellate Division be, and the

same hereby is, reversed, with costs; and it is further

ORDERED that the decision of the Unemployment Insurance

Appeal Board be reinstated.

ENTER:

DATED AND ENTERED: February 2, 1987

2la

APPENDIX G—ORDER, STATE OF NEW YORK,

COURT OF APPEALS, DATED FEBRUARY 19, 1987

STATE OF NEW YORK,

COURT OF APPEALS

At a session of the Court, held at Court of

Appeals Hall in the City of Albany on the

nineteenth day of February A.D. 1987.

PRESENT, HON. SOL WACHTLER, Chief Judge, Presiding.

ee ee ee ee ee ee ee Oe Ee RO OO OEE eee

In the Matter of Juan F. Rivera,

Respondent,

State Line Delivery Service, Inc.,

Respondent,

Lillian Roberts, as Commissioner of

Labor,

ee ee OR OO OE eee eee

A motion for reargument to the Court of Appeals in the above

cause having been heretofore made upon the part of the respondent

State Line Delivery Service, Inc. herein and papers having been

submitted thereon and due deliberation thereupon had, it is

ORDERED, that the said motion be and the same hereby is

dismissed as unumely.

/s/ Donald M, Sheraw

Clerk of the Court

22a

APPENDIX H—NEW YORK STATE LABOR LAW,

§593 I(aXb 1 & 2)

§593. Disqualification for benefits

1. Voluntary separation.

(a) No days of total unemployment shall be deemed to occur after

a claimant's voluntary separation without cause from his last

employnient prior to the filing of his claim until he has subsequently

worked in employment on not less than three days in each of five

weeks and earned remuneration at least equal to five times his weekly

benefit rate. In addition to other circumstances that may be found to

constitute good cause, voluntary separation from employment shall not

in itself disqualify a claimant if circumstances have developed in the

course of such employment that would have justified the claimant in

refusing such employment in the first instance under the terms of

subdivision two of this section or if the claimant, pursuant to an option

provided under a collective bargairiing agreement or written employer

plan which permits waiver of his right to retain the employment when

there is a temporary layoff because of lack of work, has elected to be

separated for a temporary period and the employer has consented

thereto.

(b) A disqualification as provided in this subdivision shall also

apply after a claimant's voluntary separation from his last employment

prior to the filing of his claim if such voluntary separation was due to

claimant's

(1) marriage, or

(2) following his spouse to another locality.

APPENDIX I—UNITED STATES CONSTITUTION

AMENDMENT XIV, SECTION I

AMENDMENT XIV.—CITIZENSHIP; PRIVILEGES AND

IMMUNITIES; DUE PROCESS; EQUAL PROTECTION;

APPORTIONMENT OF REPRESENTATION; DISQUALIFI-

CATION OF OFFICERS; PUBLIC DEBT; ENFORCEMENT

Section |. All persons born or naturalized in the United States,

and subject to the jurisdiction thereof, are citizens of the United States

and of the State wherein they reside. No State shall make or enforce

any law which shall abridge the privileges or immunities of citizens of

the United States; nor shall any State deprive any person of life,

liberty, or property, without due process of law; nor deny to any

person within its jurisdiction the equal protection of the laws.