DRIVER WASN'T AN INDEPENDENT CONTRACTOR
Northeast Logistics, Inc. (NLI), acted as a broker between drivers and clients who wished to have items transported. After TMI applied to be a driver, NLI conducted a background check, required proof of insurance coverage, and entered into an “Owner Operator Agreement,” wherein the driver was responsible for all expenses, including the cost of any equipment and fuel (except that the pay could be increased in times of high-fuel prices), and an administrative fee was due to NLI for each day’s assignments. (Among other things, work could be refused or subcontracted out, and client complaints were made directly to NLI and were addressed by the latter.)
Upon the termination of the relationship, TMI applied for unemployment benefits, and the Department of Labor determined that TMI was an “employee,” and that NLI was thus responsible for unemployment insurance contributions based on the money paid to TMI. After the company objected, an Administrative Law Judge agreed with the Department of Labor, and the Unemployment Insurance Appeal Board affirmed.
When the case reached the Appellate Division, Third Department, it concluded that the since the issue as to whether an employment relationship existed was a “question of fact,” it was compelled to defer to the administrative agencies which reviewed the matter, particularly given that their decisions were supported by “substantial evidence.” (The AD3 felt it was precluded from modifying the outcome, or substituting its judgment for that of the underlying agencies, even if the evidence might have supported a contrary conclusion.)
One judge on the panel, however, noted his dissent, and indicated he would have reversed the case, writing, in part, “it is my view that the record lacks substantial evidence of the requisite control to establish an employer-employee relationship.”
Let’s just say, we're calling it quits right there …
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DECISION