Mr C’s Barber Shop v. Freiheit – 17.26

Mr C’s Barber Shop v. Freiheit
Digest No. 17.26

Section 421.42(1) and (5)

Cite as: Mr. C’s Barber Shop v Freiheit, unpublished opinion of the Genesee County Circuit Court, issued June 17, 1985 (Docket No. 84-700-AV).

Appeal pending: No
Claimant: Karen Freiheit
Employer: Mr. C’s Barber Shop
Date of decision: June 17, 1985

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HOLDING: Claimant is considered an employee under MCL 421.42 despite the fact that when she was hired, she signed a lease agreement renting out a chair in the barber shop.

FACTS:  Claimant was an apprentice at the employer’s barber shop from January 1980 until July 25, 1981. Claimant signed a lease with the employer to rent a chair at the barber shop for $95 per week. The employer determined what hours Claimant worked, when Claimant would take a lunch break, and when the shop would be open (it was closed for deer-hunting season). The employer also granted vacation requests and determined how much vacation could be taken. Claimant provided her own shears and tools, but the employer provided all lotions, shampoos, and other products. The employer became dissatisfied with Claimant’s work and tried to fire her. Claimant asked to be allowed to stay for two more weeks and finish her apprenticeship. The employer agreed.

Claimant filed for UI benefits and was denied because the Agency said her work at the barber shop was not employment. Claimant appealed and the ALJ found that Claimant was not an employee. The Board of Review affirmed the ALJ decision, but upon a request for rehearing put forth by the Claimant, the Board of Review reversed the ALJ decision and found Claimant to be an employee. The employer appealed.

DECISION: The Board of Review’s decision finding that Claimant was an employee was affirmed by the Circuit Court. Claimant is not disqualified from receiving benefits.

RATIONALE:  Upon reviewing the economic reality test that had been adopted by Michigan Courts, the Circuit Court found that the determination of whether a claimant is an employee or an independent contractor must be done on a case by case basis. The Circuit Court reviewed the fact of this case in light of the Michigan Employment Security Act’s purpose to lighten the burden caused by unemployment.

The Circuit Court believed that the Board of Review’s decision was consistent with the standards laid out in McKissic v Bodine, 42 Mich App 203 (1972). The Court pointed to the fact that the employer set vacations, furnished supplies, set hours, and could discharge Claimant at will. Based on the fact that the employer “fired” Claimant instead of terminating the lease means that, despite calling this a lease agreement, it was, in fact, an employment agreement.

Digest author: Andrea M. Frailey, Michigan Law, Class of 2017
Digest updated: 10/31/2017