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Cite as: Netmed Transcription Services v Clark, unpublished opinion of the Wexford County Circuit Court, issued June 2, 2009 (Docket No. 09-21560-AE).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

Martell v. Department of Labor and Economic Growth – 17.29

Martell v. Department of Labor and Economic Growth
Digest No. 17.29

Section 421.43

Cite as: In re the Claim of Marie E Martell, unpublished opinion of the Employment Security Board of Review issued August 4, 2006 (Docket No. B 2004-13571-RMI-l-76079W).

Court: Employment Security Board of Review (now the MCAC)
Appeal pending: No
Claimant: Marie Martell & Joy Witte (These claimants’ cases were joined. The court notes, “[w]hile the two cases were not consolidated, they do arise from similar facts.”)
Employer: State of Michigan, Department of Labor & Economic Growth
Date of decision: August 4, 2006

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HOLDING: The Board of Review determined that two commissioners on the Workers Compensation Appellate Commission were “in employment” for purposes of section 43(o) of the the Act. Accordingly, Claimants were not precluded from eligibility for benefits as section 43(o)(iii)(E) requires of those holding “designated” “major nontenured policymaking or advisory” positions.

FACTS: The former Governor Engler appointed claimants to the Worker’s Compensation Appellate Commission (WCAC) as commission member, effective September 30, 2002. Claimants’ responsibilities including reviewing appeals and related motions on appeal from decisions of the Worker’s Compensation Board of Magistrates and writing corresponding decisions and orders. Claimants became unemployed pursuant to Executive Order 2003-14 and 2003-18, which decreased the number of WCAC commission members from seven to four.

Claimants filed an application for unemployment insurance, but was found not eligible pursuant to section 43(o)(iii)(E) of the MESA, which precludes those holding “designated” “major nontenured policymaking or advisory” positions from UI eligibility.

DECISION: Claimants were not in “designated” “major nontenured policymaking or advisory” positions. Because claimants was not in one of these positions, the ALJ’s decision finding her not eligible for benefits should be reversed.

RATIONALE: The Board of Review’s decision rested on a relatively complex statutory interpretation exercise. It began by recognizing the five prongs section 43(o)(iii)(E) requires for an individual to be found not under the definition of the section’s definition of employment. For the exclusion to apply, the Act requires that the position be: (1) under or pursuant to the laws of the state, (2) designated as a, (3) major, (4) nontenured, and (5) policy making or advisory position.

The Board takes the first two points together to determine if a claimant’s position was “designated.” Looking to a Pennsylvania court’s resolution of a similar issue, the Board reviews the statute that established the WCAC and notes that nowhere in the statute or the legislative history is there indication that WCAC Commission members were to be considered “designated under or pursuant to the [law].” After determining the claimant’s position has not been so designated, the Board recognizes this finding is fatal to the Agency’s position.

Notwithstanding this dispositive finding, the Board reviews the remaining considerations. The Board determines that the term “major” is intended to modify “nontenured policymaking or advisory position.” After an exhaustive delve into the meaning of “nontenured”, the Board determines the term is ambiguous and thus should be construed in favor of the Claimant. Next, the Board determines that because the WCAC Commission members do not have broad policymaking power, their position cannot be considered major, and thus, the Agency loses on this point, too. Because the claimants were not so designated by state law, they were “employees” and eligible for benefits.

Digest author: Travis Miller, Michigan Law, Class of 2018
Digest updated: December 23, 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