Netmed Transcription Services v Clark – 17.24

Netmed Transcription Services v Clark
Digest No. 17.24

Section 421.42(1) and (5); 421.44(1)

Cite as: Netmed Transcription Services v Clark, unpublished opinion of the Wexford County Circuit Court, issued June 2, 2009 (Docket No. 09-21560-AE).

Appeal pending: No
Claimant: Theresa Clark
Employer: Netmed Transcription Services
Date of decision: June 2, 2009

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HOLDING: A claimant is an employee and not an independent contractor where the claimant’s services are integral to the employer’s business, the claimant depends on wages from the employer for living expenses, the claimant does not operate her own business, and the employer could discharge the claimant, had quality assurance standards and specific deadlines; and required the claimant to contact them to have work assigned.

FACTS:  Claimant worked as a medical transcriptionist for the employer. Despite Claimant being hired as an independent contractor and receiving a 1099, she considered herself an employee. Claimant had to rent a computer from the employer, but the employer provided the software. Claimant had to provide her own reference material, phone, and internet connection. The employer provided clients and required that items were due in 24 hours. Claimant went to her supervisor, Tami Gregg, if she was having any problems or needed to go on vacation. The ALJ found that Claimant was an employee. The Board of Review affirmed.

DECISION: The Circuit Court affirmed the Board of Review’s decision. Claimant is not ineligible for benefits.

RATIONALE:  The Board of Review applied the eight factor test laid out in McKissic v Bodine, 42 Mich App 203 (1972). Factor eight requires the factors to be weighed to “favorable effectuate the purposes of the Michigan Employment Security Act.” In doing so, the Board found that factors two, three, five, and seven predominated in favor of finding that Claimant was an employee.

Factor Two: Claimant’s services were integral to the employer’s business.

Factor Three: Claimant testified that she depended on wages from the employer for living expenses.

Factor Five: Claimant did not operate her own business.

Factor Seven: The employer could discharge Claimant, the employer had quality assurance standards and specific deadlines, and Claimant had to contact the employer for coverage or to have work reassigned.

Digest author: Andrea M. Frailey, Michigan Law, Class of 2017
Digest updated: November 3, 2017

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

Roadway Package Systems v Storey – 17.25

Roadway Package Systems v Storey
Digest No. 17.25

Section 421.42(1) and (5), and 421.44(1)

Cite as: Roadway Package Systems, Inc v Storey, unpublished opinion of the Wayne County Circuit Court, issued July 27, 2006 (Docket No. 05-535515-AE).

Appeal pending: No
Claimant: Craig Storey
Employer: Roadway Package Systems, Inc.
Date of decision: July 27, 2006

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HOLDING: A claimant who owns his own truck and delivers packages for an employer is still considered an employee when the employer exercises a significant level of control over the claimant’s actions.

FACTS:  Claimant worked as a truck driver delivering packages for the employer. The contract between the parties required Claimant to provide daily delivery service for a period of three years, to pick up and deliver packages on dates and times compatible with the schedules and requirements of the employer’s customers, to provide proof of timely maintenance and inspection of his truck, to use his truck exclusively for delivering RPS packages, to identify his truck with RPS logos to identify the truck as part of the RPS system, to wear the RPS approved uniform, and to permit RPS personnel to ride along.

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

RATIONALE:  The Board of Review applied the “economic reality” test and found that due to the nature of the relationship between the parties and the level of control exerted by the employer, Claimant was an employee. The Board of Review distinguished this from other cases where claimants who own their own vehicles were considered independent contractors by stating that in those cases the determinative factor was that the claimants also drove for other employers. In the current case, Claimant was precluded from driving for anyone else and was required to wear a uniform and outfit his truck as an RPS truck.

The Circuit Court affirmed the Board of Review decision. The Circuit Court disagreed with the argument put forth by RPS that the Board of Review has misapplied the legal precedent. In addition, the Circuit Court held that the fact that Claimant owned the truck is not determinative since he had to outfit the truck to very specific specifications put forth by RPS.

Digest author: Andrea M. Frailey, Michigan Law, Class of 2017
Digest updated: November 4, 2017

 

Coppens v Hayes – 17.22

Larry Coppens, d/b/a Strawberry Tree & Landscaping v. Matthew L. Hayes
Digest No. 17.22

Section 421.41; Section 421.42

 

Cite as: Coppens v Hayes, unpublished opinion of the Oakland County Circuit Court, issued October 12, 2005, (Docket No. 05-064176-AE).

Appeal pending: No
Claimant: Matthew L. Hayes
Employer: Larry Coppens, d/b/a Strawberry Tree & Landscaping
Date of decision: October 12, 2005

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HOLDING: The Board of Review’s decision is affirmed. The claimant is eligible for benefits.

FACTS: The claimant did yard work for employer until he was laid off when the employer’s machinery broke down. The UIA found the claimant was a covered employee under the Act. The ALJ agreed and the Board of Review affirmed.

DECISION: Employment relationship was reasonably found because the economic reality test and the definition of employer under MCL 421.41(1)(ii) were both satisfied.

RATIONALE: The Board’s decision was properly supported by evidence and was justified in setting the burden of proof on the claimant. Under the economic reality test’s eight factors, the Board was supported in its finding of an employment relationship because: (1) the employer didn’t incur contractual liability for terminating the claimant; (2) the claimant’s work formed an integral part of the employer’s business; (3) whether the claimant dependent of the job as a means of support was not in evidence and therefore did not factor into the analysis; (4) the employer supplied all the claimant’s work ; (5) there was no evidence the claimant held himself out to the public as ready to perform the relevant job duties; (6) there was not evidence whether the work was customarily performed by an independent contractor so this factor did not factor into the analysis; (7) the employer controlled the claimant’s work by telling him how he would be paid, when to report to work, and what to do; and (8) the purpose of the Act and deference to the agency supported the finding of the employment relationship.

The court also found an employment relationship was present under the definition of “employer” under MCL 421.41(1)(ii)  since the employer paid a total remuneration of $1000 or more per year.

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: October 25, 2017

Bureau of Worker’s and Unemployment Compensation v Detroit Medical Center – 17.21

Bureau of Worker’s and Unemployment Compensation v Detroit Medical Center
Digest no. 17.21

Section 421.43(o)(v) & (q)(ii)

Cite as: Bureau of Unemployment Compensation v Detroit Medical Ctr, 267 Mich App 500 (2005).

Appeal pending: No
Claimant: Marquetta Jones
Employer: Detroit Medical Center
Docket No.: 252777
Date of decision: July 26, 2005

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HOLDING: Claimant’s medical residency was not excluded from the Act’s coverage as (1) a work training program because the residency had no purpose to alleviate unemployment, poverty, or welfare dependence; nor (2) student employment because the employer was an non-profit organization.

FACTS: Claimant was a former medical resident (still registered as a full-time student during residency). After the UIA determined that medical residency was employment covered by the Act, an ALJ reversed. The board and circuit court affirmed. On appeal, the parties stipulated that the claimant was subject to the employer’s control and received remuneration.

DECISION: It was clear error for the ALJ, Board and circuit court to exclude the claimant’s employment as a medical resident from coverage under Section 421.43(o)(v) & (q)(ii).

Claimant’s medical residency was not excluded from the Act’s coverage as (1) a work training program because the residency had no purpose to alleviate unemployment, poverty, or welfare dependence; nor (2) student employment because the employer was an non-profit organization.

RATIONALE: Relying on Dana v American Youth Foundation, 257 Mich App 208; 668 NW2d 174 (2003), the court explained that interpretation of the work-relief and work-training exclusions in the Federal Unemployment Tax Act, 26 U.S.C. § 3301 et seq. are highly persuasive authority in resolving the similar exclusion in MCL § 421.43(o)(v). Dana followed U.S. Department of Labor guidance to interpret the exclusion, and held that in order to qualify as an exclusion from employment, a work-relief or work-training program must satisfy all mandatory requirements of the Department of Labor guidance (including that the products or services must be secondary to providing financial assistance, training, or work-experience to individuals to relieve them or unemployment or poverty). The court decided that the medical residency’s product or service was secondary to the purpose of training future doctors, but that there was no purpose of relieving the residents of unemployment, or poverty, or welfare dependence. Therefore, the medical residency could not be an excluded work-training program and it was clear error to hold otherwise.

It was also clear error to exclude Claimant’s medical residency as student employment under MCL § 421.43(q)(ii) because it was undisputed that the employer was a non-profit organization (which are excepted from the student employment exclusion).

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: October 24, 2017

 

Dana v American Youth Foundation – 17.20

Dana v American Youth Foundation
Digest no. 17.20

Section 43(u)

Cite as: Dana v American Youth Foundation, 257 Mich App 208 (2003).

Appeal pending: No
Claimant: Candice Dana
Employer: American Youth Foundation
Docket no.: B97-00302-RO1-147335W
Date of decision: June 24, 2003

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COURT OF APPEALS DECISION: Service in an Americorps program is not exempt from coverage under Section 43(o)(v). (See statutory amendment described below.)

FACTS: Claimant served in the AmeriCorps program in a program administered by employer. Claimant received a monthly stipend, health insurance, childcare allowance, and an educational award. When she completed her term of service, claimant applied for unemployment benefits.

RATIONALE: The Michigan Court of Appeals held the claimant’s services to be covered employment under Section 43(o)(v). Under Section 43(o)(v) work-relief and work-training programs are exempt from coverage. The Court held that service in the AmeriCorps program was not a work-relief or work-training program and is not exempt from coverage under Section 43(o)(v).

However, AmeriCorps Service is exempt under Section 43 if the service ended on or after July 23, 2004, the effective date of Act 243 Public Acts 2004. The amendment added a new subsection to Section 43-Section 43(u) which provides:

Except as otherwise provided in section 42(6), the term “employment” does not include any of the following:

(u) Service performed in an Americorps program but only if both of the following conditions are met:

(i) The individual performed the service under a contract or agreement providing for a guaranteed stipend opportunity.

(ii) The individual received the full amount of the guaranteed stipend before the ending date of the contract or agreement.

Digest Author: Board of Review (original digest here)
Digest Updated:  
11/04

Canto v McLaren Regional Medical Center – 17.19

Canto v McLaren Regional Medical Center
Digest no. 17.19

Section 43

Cite as: Canto v McLaren Regional Medical Center, unpublished opinion of the St Clair Circuit Court, issued July 23, 2002 (Docket No. 01-00382-AE).

Appeal pending: No*
Claimant: Emmanuel Canto
Employer: McLaren Regional Medical Center
Docket no.: L1999-00047-2736
Date of decision: July 23, 2002

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CIRCUIT COURT HOLDING: Participation in an accredited medical residency program is excluded from the MES Act definition of “employment” pursuant to Sections 43(o)(5) and 43(q)(2).

FACTS: Claimant is a doctor who completed employer’s 3-year family practice residency program. The residency program includes didactic work, classroom work, lectures and supervised clinical experience. The residency program was created to develop resident’s clinical skills and train physicians. Residents cannot bill for patient care; Medicare/Medicaid compensates the hospital separately. Residents’ stipends are reimbursed by federal sources. There was no relation between the number of hours worked and the amount claimant was paid. There is no expectation of employment after completion of the residency.

DECISION: The services claimant rendered are exempt from coverage under Sections 43(o)(5) and 43(q)(2).

RATIONALE: Section 43(o)(5) excludes from employment those individuals who are participants in a work-training program that is assisted or financed in whole or in part by a federal agency. Residency programs are “work-training” programs as they impart clinical skills to physicians, which allow them to properly perform their work. These programs are federally funded. Section 43(q)(2) excludes from the definition of employment, “services performed by a college student of any age, but only when the student’s employment is a formal and accredited part of the regular curriculum of the school.” In this matter, claimant was involved in a program that was part of an accredited program of instruction.

*Note an appeal in another case involving this same issue is currently pending at the Michigan Court of Appeals: Bureau of Worker’s Unemployment Compensation v Detroit Medical Center, Mich App Case No. 252777-D

Digest Author: Board of Review (original digest here)
Digest Updated:
11/04