Wolverine Transportation & Storage v. Downey – 17.27

Wolverine Transportation & Storage v. Downey
Digest No. 17.27

Section 421.42

Cite as: Wolverine Transportation & Storage, Inc v Downey, unpublished opinion of the Macomb County Circuit Court, issued March 23, 2007 (Case No. 2006-4021-AE). 

Appeal pending: No
Claimant: Edward Downey
Employer: Wolverine Transportation and Storage, Inc.
Date of decision: March 23, 2007

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HOLDING: The “economic reality” test set forth in McKissic v Bodine, 42 Mich App 203, 208-209; 201 NW2d 333 (1972) (Digest No. 20.04), determines whether a party is an independent contractor or an employee. The court held that Claimant was an employee under the “economic reality” test and, therefore, eligible for benefits.

FACTS: Claimant transported cars to auctions for Wolverine Transportation and Storage, Inc. (“Wolverine”). He was not working for anyone else while performing services for Wolverine.

Claimant had to abide by specific rules set by Wolverine for transporting services. Claimant testified at the ALJ hearing that he signed an independent contractor agreement with Wolverine. Claimant’s services for Wolverine ended when his manager informed him he would not get work for a week. Claimant felt he was being forced out due to work being slow. 

DECISION: Board of Review’s decision finding Claimant not disqualified from receiving benefits is affirmed. 

RATIONALE: Although the parties agreed that they signed an agreement stating Claimant was an independent contractor, labels given in a contract are not dispositive of whether a person is an independent contractor or employee. See Lincoln v Fairfield-Nobel Co, 76 Mich App 514, 520;(1977) (holding that “[t]he manner in which the parties designate the relationship is not controlling”.)

Claimant was an employee, not an independent contractor, under the economic reality test. Transporting cars was Wolverine’s only business, and Claimant was engaged in transporting cars for Wolverine. Claimant also worked full-time for Wolverine and did not work for anyone else during this time, or make himself available to the public as a transport driver.

Moreover, Claimant’s services are considered employment because Wolverine exercised sufficient control over him. Capital Carpet Cleaning and Dye Co, Inc v Employment Sec Com’n, 143 Mich App 287, 292;(1985); See, also, Foster v Michigan Employment Security Comm’n, 15 Mich App 96, 107 (1968) (”[C]ontrol or direction in performance can be implicit if the nature of the business is such that all the control the employer needs and desires to exercise can be effected by establishing a certain pattern of operation and engaging persons to participate therein knowing that if they respond normally they will conform to the established, workable and profitable pattern.”).

Digest author: Rita Samaan, Michigan Law, Class of 2017
Digest updated: 10/31/2017