Standard Oil of Connecticut v. Administrator, Unemployment Compensation Act (2014)

MEMORANDUM OF DECISION

The plaintiff, Standard Oil of Connecticut, provides home heating and alarm systems to residential customers.   In doing so, it utilizes the services of certain individuals who cleaned, serviced and installed heating/air conditioning systems or who installed security systems (the installers/technicians).   In June of 2008, the Connecticut Department of Labor conducted an audit of the plaintiff.   Following the audit, the administrator of the Connecticut Unemployment Compensation Act (Administrator) determined that the installers/technicians were misclassified as independent contractors rather than as employees.   The administrator further concluded that due to this misclassification the plaintiff owed $41,501.38 in unemployment contribution taxes, plus interest, for 2007 and 2008.

The plaintiff appealed the administrator's decision to the Employment Security Appeals Division Appeals Referee (appeals referee), who conducted an evidentiary hearing.   Following this hearing, the appeals referee issued a decision with findings of fact affirming the administrator's decision.   The plaintiff then appealed to the Employment Security Appeals Division Board of Review (board).   The board modified the appeals referee's findings of fact and made additional findings in a decision on March 21, 2012.   It determined that the plaintiff had met Part C (General Statutes § 31–222(a)(1)(B)(ii)(III)) of the test set out in General Statutes § 31–222(a)(1)(B)(ii) (the ABC test) for determining whether the installers/technicians were independent contractors, but also determined that the plaintiff had failed to demonstrate that the installers/technicians were independent contractors under Part A (General Statutes § 31–222(a)(1)(B)(ii)(I)) and Part B (General Statutes § 31–222(a)(1)(B)(ii)(II)).   The plaintiff filed its petition to appeal on April 19, 2012, was granted an extension of time to file a motion to correct findings on May 18, 2012, and filed a motion to correct findings on August 30, 2012.   The board issued a decision on the motion to correct findings on March 4, 2013, granting the motion in part and denying it in part.   The board maintained its earlier decision as to the plaintiff's failure to meet Parts A and B.

The plaintiff has filed this appeal with the court.

“The provisions of the [Connecticut Unemployment Compensation Act] disclose that pursuant to the plan effective under it, a fund is created by employers' involuntary contributions, out of which employees who lose their jobs may, after a waiting period, be paid benefits limited in amount and duration, while looking for work but unable to find it ․ That the purpose of the act is remedial in character is clear.   It is therefore to be construed liberally as regards beneficiaries, in order to accomplish its purpose.”  (Citation omitted.)  Waterbury Savings Bank v. Danaher, 128 Conn. 78, 82–83, 20 A.2d 455 (1941).  “Indeed, the legislature underscored its intent by expressly mandating that the act ‘shall be construed, interpreted and administered in such manner as to presume coverage, eligibility and non disqualification in doubtful cases.”  (Internal quotation marks omitted.)  Mattatuck Museum–Mattatuck Historical Society v. Administrator, Unemployment Compensation Act, 238 Conn. 273, 278, 679 A.2d 347 (1996).

Judgment for that of the administrative agency on the weight of the evidence or questions of fact “[R]eview of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency's findings of basic fact and whether the conclusions drawn from those facts are reasonable ․ [T]he trial court may [not] retry the case or substitute its own judgment ․ [Its] ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion.”  (Internal quotation marks omitted.)  JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, 265 Conn. 413, 417, 828 A.2d 609 (2003).

“If, however, the issue is one of law, the court has the broader responsibility of determining whether the administrative action resulted from an incorrect application of the law to the facts found or could not reasonably or logically have followed from such facts.   Although the court may not substitute its own conclusions for those of the administrative board, it retains the ultimate obligation to determine whether the administrative action was unreasonable, arbitrary, illegal or an abuse of discretion.”  (Internal quotation marks omitted.)  Mattatuck Museum–Mattatuck Historical Society v. Administrator, Unemployment Compensation Act, supra, 238 Conn. 276.   Thus, “[c]onclusions of law reached by the referee [and board] must stand if they resulted from a correct application of the law to the facts found and could reasonably and logically follow from such facts.”  Robinson v. Unemployment Security Board of Review, 181 Conn. 1, 5, 434 A.2d 293 (1980).

“The Unemployment Compensation Act (act) defines employment in General Statutes § 31–222(a)(1)(A) and (B).  Besides codifying the common law rules used to determine the existence of an employer-employee relationship, the act was amended in 1971 to include the use of what is popularly known ․ as the ‘ABC test.’   The ABC test is utilized to ascertain whether an employer-employee relationship exists under the act.   The ABC test is embodied in subdivisions (I), (II) and (III) of § 31–222(a)(1)(B)(ii) ․ In order to demonstrate that he is not an employer and therefore has no liability for unemployment taxes under the act, a recipient of services must show that he has satisfied the criteria necessary to establish nonliability under all three prongs of the ABC test ․ “Under the ABC test any service provided by an individual is considered employment, unless and until the recipient of the services provided has sustained the burden of showing ‘to the satisfaction of the administrator that (I) such individual has been and will continue to be free from control and direction in connection with the performance of such service, both under his contract for the performance of service and in fact;  and (II) such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed;  and (III) such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed ․’ General Statutes § 31–222(a)(B)(ii) ․” (Citations omitted, internal quotation marks omitted, footnote omitted.)  Latimer v. Administrator, Unemployment Compensation Act, 216 Conn. 237, 245–47, 579 A.2d 497 (1990).  “This statutory provision is in the conjunctive.   Accordingly, unless the party claiming the exception to the rule that service is employment shows that all three prongs of the test have been met, an employment relationship will be found.”  JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, supra, 265 Conn. 419.

The plaintiff argues, first, that a number of the factual findings made by the board should be reversed or modified, and that the court should make additional findings.   Second, the plaintiff argues that it demonstrated that it does not control or direct the performance of the installers/technicians work under part A of the test.   Finally, the plaintiff asserts that it demonstrated either that the work the installers/technicians perform is outside the scope of the plaintiff's business or that they perform their work outside of its place of business, proving either of which satisfies part B of the test.   The court will consider each of these issues in turn.

In order to prevail, the plaintiff bears the burden of proving part A of the test and proving either of the two parts of part B. As this is an appeal, the court will consider whether the board had substantial evidence for its findings and will consider whether the board properly applied the law.

Motion to Correct Findings of Fact

The board of review made the following findings of fact, as corrected after the plaintiff's motion to correct findings of fact, on March 4, 2013.

“1. [The plaintiff] is primarily in the business of home heating oil delivery.   It also advertises and sells heating and cooling equipment, and the installation, maintenance and repair of such equipment.   For example, [the plaintiff] advertises its twenty-four hour or ‘no heat’ call service.   In addition, [the plaintiff] advertises and sells home security alarm systems, and the installation, maintenance, and monitoring of such systems.  [The plaintiff] specifically advertises the sale of installed heating and cooling equipment and security systems, and it contracts directly with its customers regarding that installation.

“2. Approximately 90% of [the plaintiff]'s business is generated from its home heating oil delivery service.   The remaining % of the business results from its heating and cooling system installation and repair, home alarm system installation and maintenance and its service work which is routinely part of the service contracts it offers its customers.   The employer advertises home heating oil delivery, heating and cooling installation, monitoring and maintenance, tank removal, service work and home alarm system installation to its customers and potential customers in the yellow pages.

“3. [The plaintiff] does not own or operate the tools, machinery or heavy duty vehicles required to install heating systems, tank removal or home alarm installation.   As a result, it ‘contracts' the work to individuals who routinely perform such work either for their own business or self employment.   The vast majority of the heating and cooling equipment and security systems sold by [the plaintiff] are installed by the installers on behalf of [the plaintiff].   After installation, [the plaintiff] has long-term arrangements with its customers to service the heating and cooling equipment and to provide monitoring of the security systems.

“4. Heating and cooling installation, home alarm installation, and tank removal are performed by a variety of individuals who either own their own business and/or are self-employed (installers).   Service and maintenance work on the heating and cooling systems are performed by a variety of individuals who either own their own business and/or are self-employed (service technicians).   The installers and technicians are licensed or certified to perform their services in accordance with state law.

“5. Installers are neither supervised by Standard Oil nor does [the plaintiff] inspect their work.   There is no representative of Standard Oil on the premises at anytime [sic] during the installation project while it is in progress nor upon its completion.   The same is applicable to the technicians.

“6. [The plaintiff] determines the equipment to be installed for each project and requires the installer to use the parts supplied by [the plaintiff].   On occasion, the installer may supplement with its own/other parts as deemed necessary to be reimbursed or replaced by [the plaintiff].   Installers use their own equipment and tools to complete each project.   The installer does not pay for the equipment installed on the project which is provided by [the plaintiff].   The same is applicable to the technicians.   The installers and technicians also provide and pay for their own transportation without reimbursement by [the plaintiff].   The boiler installers supplying [sic] piping, tubing, fittings and cement as necessary for boiler installations, in addition to the parts that [the plaintiff] supplies and requires the installers to use.  [The plaintiff] provided nozzles and strainers to individuals who serviced customers who had no heat or needed their furnaces cleaned.   The security system installers receive from [the plaintiff] wires and ‘everything down to the screws,’ and they supply no parts at all.

“7. The installers and technicians are free to accept or reject any assignment which is offered to them, and can determine which days they will perform services for [the plaintiff].

“8. [The plaintiff] bills each customer and accepts payment to [the plaintiff] for installation and service work.   Neither the installers nor the technicians bill or accept payment from the customer.

“9. Installers and technicians are encouraged to display [the plaintiff's] name on their clothing (shirts, hats), and the utility vehicles they use to perform their work.  [The plaintiff] requires the security system installers to display photo badges which identify them as subcontractors of [the plaintiff].   The installers and technicians are not required to display the [plaintiff's] name on their apparel or vehicles, and security system installers are required to display photographic identification badges identifying themselves as subcontractors for [the plaintiff].  [The plaintiff] provides the installers and technicians with shirts and hats labeled ‘Standard Oil’ with the understanding that wearing these items could alleviate any customer concern or confusion when they appear at a customer's residence.

“10. Installers and technicians are limited to provide the installation/service which [the plaintiff] has sent them to perform.   If a customer requests additional work/services, the installer/technician must direct the customer to contact [the plaintiff] directly.   Installers/technicians are not allowed to perform additional work/services for said customers without permission and/or direction from [the plaintiff].

“11. The installers and technicians are required to provide the services personally.   They are not permitted to subcontract, although they may hire assistants to help them perform the work and may supervise their employees as they see fit.   The installers and technicians are not allowed to use casual, pick-up or day laborers when providing services in customers' homes.

“12. Each of the installers and technicians has an independent business which provides the same types of services that [the installers and technicians] perform on behalf of [the plaintiff].   Many of the installers and technicians have business cards and advertise their businesses.   The heating and cooling equipment installers are required to have box trucks which are capable of transporting large equipment, such as boilers and oil burners.   In addition, many of the installers and technicians earned at least some of their income from sources other than [the plaintiff], during the years in question.

“13. [The plaintiff] makes arrangements directly with the customer regarding all installation and service.   It schedules installation and service appointments with all the customers, and then finds an installer or technician who can take the assignment.   If they accept an assignment from [the plaintiff], the installers and technicians must perform their work within a designated time frame which was set by [the plaintiff] and the customer.

“14. Installers and technicians are required to sign a Contract Agreements [sic] which has been drafted by [the plaintiff].   The Agreement requires installers and technicians to maintain a current license and specific insurance coverage(s).  The agreements state that the installers/technicians shall at all times exercise independent judgment and control in the execution of any work, job or project they accept.

“15. The installers and technicians are paid a set rate per piece of work.   They cannot negotiate the pay rate, which is established by [the plaintiff].  [The plaintiff] requires the installers and technicians to submit their invoices for payment no later than Friday of the week in which they satisfactorily complete their assignments.

“16. Installers and technicians generate a percentage of [the plaintiff]'s revenues.   This portion of [the plaintiff]'s business and profitability is dependent on the installation/service work provided by the Installers/technicians.

“17. [The plaintiff] sells service contracts to its customers which is central and core to its home heating oil delivery service.   While [the plaintiff] maintains a staff of employees to perform such services, it ‘contracts' with the technicians to perform the same/similar services to its customers.   These technicians are subject to the same terms and conditions as the installers in regard to appointments, billing, clothing, work performed and licensing and insurance requirement.

“18. The administrator previously identified Walter Camp as an employee in a prior audit.  [The plaintiff] report/reported Mr. Camp as an employee at the time of the referee's hearing(s).

“19. The parties stipulated that section A–19 in the contract, Right to Fire, would not be a factor in the adjudication of this case.

“20. The contracts contain a restrictive covenant which prohibits the installers from soliciting work from or doing business with any of [the plaintiff]'s customers for whom they have performed services.

“21. Five of the installers/technicians, Brian Borchert, Walter Camp, Edward Chickos, Jr., William Parks and Gary Vannart, responded ‘yes' to a question on the administrator's questionnaire asking if [the plaintiff] has the right to direct how they perform their work.   None of the installers or technicians responded ‘no’ to that question.

“22. [The plaintiff] has instructed the security installers to run an extra wire through its keypads and to use a certain type of conductor.   Moreover, the installers can only install the equipment which has been provided by [the plaintiff].  [The plaintiff] provides the technicians with nozzles, strainers, and filters for cleaning oil burners.

“23. Any problems arising between a customer and the installer/technician must be referred to [the plaintiff].   If a customer complains about an installation or service during the warranty period set forth in [the plaintiff]'s contract with the installer/technician, [the plaintiff] has the right to send the installer/technician back to the customer site to fix the problem or require the installer/technician to pay for the repair.

“24. [The plaintiff] does not provide the installers and technicians with an employee handbook, and it does not pay for their training or require any specific type of training on its products.

“25. The installers and technicians can realize a profit or a loss from their provision of services to [the plaintiff].

“26. While [the plaintiff] has no installers on payroll, it has on occasion used a company employee to install equipment when no installers were available.  [The plaintiff] has employees who clean and service its heating and cooling equipment, in addition to the technicians who are at issue in this case.

“27. In his payroll audit report dated July 23, 2009, the administrator agreed with [the plaintiff]'s classification of certain individuals as independent contractors.

“28. The technicians and installers performed all work outside of the offices of [the plaintiff].

“29. The installers and technicians are free to accept or reject assignments offered to them without adverse consequences.

“30. The installers and technicians were required to return to correct problems found with their work.  [The plaintiff] warrants the installed equipment, including parts and labor.”

The plaintiff filed claims of error regarding the board's decision on its motion to correct findings on March 13, 2013, and also argued for many of its proposed corrections in its memorandum in support of its appeal.  “Practice Book § 22–4 provides in relevant part that “[i]f the appellant desires to have the finding of the [employment security board of review] corrected he or she must, within two weeks after the record has been filed in the superior court, unless the time is extended for cause by the board, file with the board a motion for the correction of the finding.'  ․ [An appellant's] failure to file a timely motion for correction of the board's finding in accordance with § 22–4 prevents further review of those facts found by the board.”  JSF Promotions, Inc. v. Administrator, Unemployment Compensation Act, supra, 265 Conn. 422.

The defendant has not contested the timeliness of the plaintiff's appeal, or of the plaintiff's motion to correct findings.   The court finds that the plaintiff timely filed the appeal and the motion to correct findings, and will therefore move to the substance of the plaintiff's claims.

“Corrections by the court of the board's finding will only be made upon the refusal to find a material fact which was an admitted or undisputed fact, upon the finding of a fact in language of doubtful meaning so that its real significance may not clearly appear, or upon the finding of a material fact without evidence.”  Practice Book § 22–9(b).  “To refuse to find the facts which a party seeks to have stated because the commissioner deems them ․ immaterial is not ordinarily fair to the parties ․ because they are entitled to have found such proven facts as they deem it necessary to present to the court upon the appeal ․ Even though these facts may have been disputed, the company was entitled to a statement of what the panel's findings upon them were.”  Lanyon v. Administrator, Unemployment Compensation Act, supra, 139 Conn. 31;  see also Jacques v. H.O. Penn Machinery Co., 166 Conn. 352, 364, 349 A.2d 847 (1974);  Kish v. Nursing & Home Care, Inc., 47 Conn.App. 620, 627 (1998), aff'd, 248 Conn. 379 (1999);  Mazziotti v. Administrator, Unemployment Compensation Act, Superior Court, judicial district of Ansonia–Milford, Docket No. CV–105010619–S (January 26, 2012, Moran, J.T.R.).   The board may “[exercise] [its] discretion in determining that the proposed facts [are] not material to [its] finding.”  Kish v. Nursing & Home Care, Inc., supra, 47 Conn.App. 627 (1998).  “While the court cannot make a finding as a substitute for that of the [board], it may, when the evidence calls for it, remand the case to the [board] for a rehearing and finding of facts in accordance with the evidence.”  (Internal quotation marks omitted.)  Cennamo v. Administrator, Unemployment Compensation Act, 22 Conn.Sup. 302, 306, 170 A.2d 739 (1961).

The plaintiff has requested that the court correct findings of fact made by the administrator.   Certain prior requests were granted by the board;  the plaintiff did not choose to question others.   The court will address these in the order they appear in the plaintiff's claims of error.

The plaintiff requests the court to correct Finding of Fact 22, stating that the plaintiff gives security installers instructions to run an extra wire through its keypads and instructs them regarding which wire to use.   The plaintiff argues that it only instructs the installers to do this because doing so is necessary for the security systems to function.   The board based this finding on specific testimony of one of the plaintiff's installers, which it then generalized to the rest of the installers.   October 20, 2010 Hearing Transcript, 123–25.   The board was within its discretion to construe the installer's testimony as it did, and to then generalize it to all installers.   Therefore the court may not disturb it.

The plaintiff requests the court to correct Finding of Fact 16, stating that installers and technicians generate a percentage of the plaintiff's revenue and that “this portion” of Standard Oil's profitability is dependent on installations and service work performed by installers/technicians.   The plaintiff claims that there was no evidence to support this conclusion;  the board counters that it had copious evidence that the plaintiff does not sell equipment that it does not install, that the installers/technicians install almost all of the heating and air conditioning systems and ninety percent of the security systems, and that the plaintiff advertises installation and service of heating and cooling equipment, and installation and monitoring of security systems.   October 20, 2010 Hearing Transcript, 141–42, 144–45, 139, 140, 132–33, October 21, 2010 Hearing Transcript, 66, 120–21, 133, 122–24, 132–33.   Based on this evidence, it appears clear that the work of the installers/technicians is an important part of the plaintiff's business, and the board does not appear to have acted without evidence in concluding that these parts of the plaintiff's business would not be profitable without the services provided by the installers/technicians.

The plaintiff requests that the court correct the portion of Finding of Fact 6 stating that the plaintiff determines the equipment to be installed for each project and requires the heating system installer to use parts supplied by the plaintiff.   The plaintiff emphasizes that it provides products, such as boilers, burners, and furnaces, while the installers use a variety of materials and equipment to install the products.   August 26, 2010 Hearing Transcript, 131–32;  October 20, 2010 Hearing Transcript, 20–21, October 21, 2010 Hearing Transcript, 49–51, 57–58;  October 20, 2010 Hearing Transcript, 9–10.   They also note it is undisputed that the installers provide and use their own tools and heavy equipment to effectuate the installation.   October 20, 2010 Hearing Transcript, 9–10, 19–20;  October 21, 2010 Hearing Transcript, 70, 120;  Record 23, 201, 244.   The finding does contain subsequent sentences addressing these issues.   It states that the installers use their own equipment and tools, and that the boiler installers supply piping, tubing, fittings and cement as necessary in addition to the parts the plaintiff supplies.   The board appears to have substantially complied with the plaintiff's request.   The plaintiff disputes the emphasis on it providing equipment;  the plaintiff would prefer if the finding stated that the installers/technicians provided all equipment, except that the plaintiff occasionally provides equipment.   This type of nuanced conclusion based on the facts is within the province of the trier of fact.   In addition, the plaintiff would prefer use of the term “products” for what it provides and the use of “equipment” for what the installers provide.   This careful editing of the board's decision would certainly go beyond the scope of a motion to correct the findings.   Moreover, the plaintiff's executive vice president while testifying used the generic terms parts and equipment to describe items provided by both the plaintiff and the installers.   October 20, 2010 Hearing Transcript, 58.   The court will therefore not disturb this finding.

The plaintiff requests that the court delete the portion of Finding of Fact 6 stating that installers may supplement the products provided by the plaintiff with their own parts, for which the plaintiff will then either reimburse them or provide a replacement.   The essence of this finding revolves around the testimony of one installer/technician, Edward Chickos, that he once needed an extra part which he provided, then billed the plaintiff for.   The plaintiff claims that this was an isolated incident, while the board counters that it was an illustrative example of how the plaintiff did business.   The testimony does not indicate that this was an out of the ordinary occurrence;  Chickos describes it as a regular occurrence.   October 20, 2010 Hearing Transcript, 34.   Moreover, the plaintiff's executive vice president also stated that an invoice included reimbursement for “parts from [an installer/technician's] truck.”   October 20, 2010 Hearing Transcript, 79, 83–84.   The board therefore did have sufficient evidence to make this finding.

The plaintiff requests that the court delete Finding of Fact 17, stating that the installers/technicians perform the same or similar work that the plaintiff's employees perform.   The plaintiff notes that its employees do additional work that installer/technicians do not do, such as deliver oil, respond to emergency calls, and repair systems.   The board's response to this request makes clear that it found the work performed by the installers/technicians is the same or similar to certain work also provided by the plaintiff's employees, such as cleaning and repair.   The court will not disturb this finding.

The plaintiff requests the court delete Finding of Fact 13, stating that the plaintiff arranges a time for installations or service with a customer, then finds an installer or technician who can take the assignment.   The plaintiff claims that the installers/technicians can set their own time or reschedule.   The board cites to a variety of testimony upholding its determination.   The court will not disturb this finding.

The plaintiff requests the court delete Finding of Fact 26, which states that the plaintiff has used a company employee to install equipment when no installers were available, and that the employees clean and service the heating and cooling equipment, which the technicians also do.   The plaintiff argues that this is based on testimony by its vice president that it may have had employees do some alarm installations and that there may have been a situation where an employee did a furnace or air conditioning installation.   October 21, 2010 Hearing Transcript, 122–24.   The vice president also testified that these services were outside of the course of the plaintiff's business.  Id. The plaintiff's claim is that, in effect, the vice president pleaded lack of knowledge which would be insufficient for the board to make this finding.   The board asserted that this testimony was sufficient for its determination.   Interpreting the vice president's statement is best left to the board;  the court will not disturb this finding.

The plaintiff requests the court modify Finding of Fact 18, which states that Walter Camp was previously identified as an employee in a prior audit and that the plaintiff “report/reported” Camp as an employee at the time of the referee's hearing.   The plaintiff asserts that it never reported Camp as an employee;  the department of labor reclassified him as an employee in 2004 and 2005.   Based on this, the department of labor attorney during the referee's hearing suggested that, circumstances being substantially similar, Camp would be an employee in 2007 and 2008.   October 20, 2010 Hearing, 226–27.   The board asserts that the plaintiff, in its motion, assumedly the motion to correct findings dated August 30, 2012, admits reporting wages for Camp. In said motion, the plaintiff states that the Administrator introduced a printout, over the plaintiff's objection, from the Connecticut Automated Benefits System, listing wages earned by Camp. The essence of the board's assertion is that it concluded from the reporting of wages that Camp was an employee in 2004 and 2005, then absent evidence to the contrary, inferred that he would be an employee in 2007 and 2008.   The board was within its discretion to draw this inference;  the court will not disturb it.

The plaintiff requests that the court add a finding of fact stating that a contractor agreement was executed by each of the installers/technicians, asserting that the parties stipulated that they signed and were subject to a contractor agreement.   October 20, 2010 Hearing Transcript, 102;  October 21, 2010 Hearing Transcript, 19.   The board responded that Finding of Fact 14, which it modified, states that the installers/technicians were required to enter into a contractual agreement.   The plaintiff asserts, nonetheless, that the difference between being required to enter into a contract and actually entering into a contractual agreement is material to the board's decision.   As it has nowhere been suggested or even implied that the installers/technicians did not enter into the contracts, the court will not disturb the board's conclusion that this was not a material fact.

The plaintiff requests the court modify Finding of Fact 12 to indicate that the installers/technicians have their own customers separate from the plaintiff.   The board responded that it could not find sufficient evidence that each installer/technician had their own customers.   In addition, the finding does state that “[e]ach of the installers and technicians has an independent business which provides the same types of services that [the installers and technicians] perform on behalf of [Standard Oil] ․ In addition, many of the installers and technicians earned at least some of their income from sources other than [Standard Oil], during the years in question.”   The court will not disturb this finding.

The plaintiff requests the court modify Finding of Fact 14 to state that each of the installers and technicians maintains liability insurance coverage at their own expense.   The plaintiff claims that the parties stipulated to this in front of the appeals referee.   The board refused to make this finding;  it found that the installers/technicians were required to have liability insurance, but it did not find that they all actually did so.   During the October 20, 2010 hearing, the parties apparently reached an agreement that no further evidence of insurance coverage was necessary, and stipulated that evidence of insurance need not be provided for each installer/technician.   October 20, 2010 Hearing Transcript, 101–02;  October 21, 2010 Hearing Transcript, 76, 111.   While the parties did stipulate to this fact, the board is within its discretion to determine which facts are material to its decision.   The court therefore will not alter the board's finding.

The plaintiff requests the court issue a finding that the installers/technicians do not maintain offices at the plaintiff's facility.   The board did adopt a finding, Finding of Fact 28, stating that the technicians and installers performed the work outside of the offices of the plaintiff.   The parties stipulated that all work was performed outside of the offices of the plaintiff, but the plaintiff claims it presented undisputed evidence that the installers/technicians did not maintain offices at the defendant's facility, and requests the court to modify the finding accordingly.   The testimony the plaintiff represents in its brief as undisputed evidence fails to demonstrate that the installers/technicians had no offices at the plaintiff's offices.   There are numerous statements that they performed all work outside of the offices, and occasional statements that they had their own place of business.   This would not preclude them from having an office at the plaintiff's offices.   The plaintiff's executive vice president did testify that the plaintiff does not maintain offices for the installers/technicians;  October 21, 2010 Hearing Transcript, 130;  but this one statement is not sufficient for the court to disturb the finding of the board.

The plaintiff requests that the court find that the installers and technicians are not paid an hourly wage and receive no fringe benefits.   The board responded that Finding of Fact 15 stated that they are paid a fixed price per job;  stating that they are not paid an hourly wage and receive no fringe benefits would be redundant.   The plaintiff asserts that the parties stipulated to this fact.   It is true that the plaintiff's attorney stated that he believed it was unnecessary to “revisit the fact that they didn't get any benefits that may go with being an employee ․” October 20, 2010 Hearing Transcript, 183.   The referee asked if the defendant's attorney agreed, and the defendant's attorney stated that she did agree.  Id., 184.   At the following day's hearing, the defendant's attorney reiterated that “we don't think that they ever paid benefits ․ so we'll stipulate that.”   October 21, 2010 Hearing Transcript, 29.   Again, while the parties stipulated to this fact, the board was within its discretion to state the facts which it found were material to its determination.

Finally, the plaintiff asserts that the board should have adopted a finding of fact stating that the installers/technicians do not receive instruction or direction from the plaintiff in performing their services.   The plaintiff accurately states that this issue is key to Part A of the ABC test, regarding control and direction.   The board and the plaintiff argue at cross purposes regarding this issue.   The plaintiff cites to a plethora of evidence that it does not supervise the installers/technicians, is not physically present during installations and service calls, does not instruct or direct the installers/technicians on how to perform their services, and does not tell them the sequence of installation jobs or how to do the work.   In response, the board states that the plaintiff instructs the installers regarding which parts to use, including requiring them to use parts that it supplies, and that the plaintiff directs the installers/technicians when to perform their assignments.   In addition, the findings of fact do cover some of the evidence which the plaintiff cites for this proposition.   For example, Finding of Fact 5 states that installers are not supervised by the plaintiff and that the plaintiff does not inspect their work, and Finding of Fact 24 states that the plaintiff does not provide an employee handbook, pay for training, or require any specific training.   The general phrase “instruction or direction from Standard Oil in performing their services” could be applied to both instruction as to how to do the job, regarding which the plaintiff's evidence adheres, and as to when to do the job and what to use, regarding which the evidence cited by the board adheres.   The board was therefore within its discretion in determining not to make the broad finding of fact urged by the plaintiff, and instead in making multiple findings of fact which cover much of the same material.

Part A of the ABC Test:  Control

The court will now turn to whether the plaintiff satisfied part A of the ABC test.   As noted earlier, in order to prove that an individual is not an employee, the plaintiff must first demonstrate that “(I) such individual has been and will continue to be free from control and direction in connection with the performance of such service, both under his contract for the performance of service and in fact ․” General Statutes § 31–222(a)(B)(ii).  “Part A of the test invokes essentially the same criteria as the independent contractor test at common law ․ The fundamental distinction between an employee and an independent contractor depends upon the existence or non-existence of the right to control the means and methods of work ․ Some jurisdictions require very little supervision over the details of performance in order to find control and, therefore, the presence of the employment relationship.   The statutory requirement of control in this state, however, is that which the common law exacts.”  (Citations omitted, footnotes omitted, internal quotation marks omitted.)  F.A.S. International, Inc. v. Reilly, 179 Conn. 507, 512, 427 A.2d 392 (1980).  “[A]n independent contractor is one who, exercising an independent employment, contracts to do a piece of work according to his own methods and without being subject to the control of his employer, except as to the result of his work.   This rule has been amplified in subsequent cases but the basic principle has not been altered.”  (Internal quotation marks omitted.)  Id., 513.  “Whether one is an employee or an independent contractor is therefore a question of fact.”  Id. “The test of the relationship is the right to control.   It is not the fact of actual interference with the control, but the right to interfere, that makes the difference between an independent contractor and a servant or agent ․ An employer-employee relationship does not depend upon the actual exercise of the right to control.   The right to control is sufficient ․ The decisive test is who has the right to direct what shall be done and when and how it shall be done?   Who has the right of general control?”  (Citations omitted, emphasis altered.)  Latimer v. Administrator, Unemployment Compensation Act, 216 Conn. 237, 248, 579 A.2d 497 (1990).

In F.A.S. International, Inc. v. Reilly, supra, 179 Conn. 513–14, “[t]he professionals utilized by F.A.S. employed different techniques or approaches in their criticism and analysis of student work.   The plaintiff's only concern was with the result or end product of their efforts.   F.A.S. exercised no control over the means and method of their performance.” (court upheld the Superior Court's finding that the professionals were independent contractors, reversing the administrator's determination).   In Daw's Critical Care Registry v. Department of Labor, 42 Conn.Sup. 376, 622 A.2d 622 (1992), aff'd 225 Conn. 99;  622 A.2d 518 (1993) (per curiam), the Superior Court reversed the board's finding of control;  Id., 400;  stating that “the decisive test is who has the right to direct what shall be done and when and how it shall be done”;  Id., 394.   Of particular importance to the court was that the defendant did not “establish the hours when they were to work ․ [and] did not furnish any materials or tools necessary to do their job.   Insofar as who furnishes the tools, materials or equipment to be used in the services involved, it is essential to keep in mind the rationale underlying that criterion.   When it is the employer who does so, the inference of right of control in the employer is a matter of common sense and business, otherwise it is not.”  Id., 395–96.   In addition, the court did note that requiring name tags suggests control.   Id., 397.

In Latimer v. Administrator, Unemployment Compensation Act, supra, 216 Conn. 249, the court upheld the trial court's dismissal of the plaintiff's challenge to the board's finding that the plaintiff's home health aids were employees.   The court cited a variety of factors:  “[t]he retention of the right to discharge, [was] a strong indication that [the] relationship ․ was one of employment ․ The right to terminate [an employment] relationship without liability is not consistent with the concept of an independent contract ․ Moreover, payment of a worker at an hourly rate, [was] persuasive evidence that the status of the worker is that of an employee rather than that of an independent contractor.”  Id. Other factors weighed in favor of an employee-employer relationship in Latimer.   The purported independent contractors made known their hours of availability, then the plaintiff determined when they would work;  the plaintiff determined not just what would be done, but who would do it;  the purported independent contractors did not make a significant investment in tools;  finally, the purported independent contractors were not in a position to realize a profit or loss;  they were paid an hourly wage.  Id., 250.   The court also placed special emphasis on the fact that the plaintiff's agent monitored the purported independent contractors, determining whether their work was satisfactory.  Id., 250–51.   This “evinces a right to control and direct the [purported independent contractors] by the recipient of their services.”  Id., 251.

In addition, the Latimer court noted that “[t]he fact that the [purported independent contractors] signed an agreement that they were ‘independent contractors' is of no moment.   Language in a contract that characterizes an individual as an independent contractor [rather than an employee] is not controlling.   The primary concern is what is done under the contract and not what it says ․ Such provisions in a contract are not effective to keep an employer outside the purview of the act when the established facts bring him within it.   We look beyond the plain language of the contract to the actual status in which the parties are placed.”  (Citations omitted.)  Id., 251–52.

In Chute v. Mobil Shipping & Transportation Co., 32 Conn.App. 16, 20–21, 627 A.2d 956, cert. denied, 227 Conn. 919, 632 A.2d 688 (1993), the Appellate Court affirmed the board's decision that a worker was an independent contractor rather than an employee because he worked for several different firms, used his own equipment, was permitted to work for other clients, and “held himself out as an independent contractor, using a separate letterhead and doing business under various firm names ․”

In AAD Vantage of South Central Connecticut, Inc. v. Administrator, Unemployment Compensation Act, Superior Court, judicial district of New Haven, Docket No. CV–96–0382334 (September 16, 1998, Freedman, J.T.R.), the court determined that salespeople were not independent contractors where “the plaintiff retained the right to terminate a salesperson if he was not using his best efforts to secure customers;  and the plaintiff retained the right to establish criteria to determine what constituted a salesperson's ‘best efforts.’ “

In Stone Hill Remodeling v. Administrator, Unemployment Compensation Act, Superior Court, judicial district of Waterbury, Docket No. CV–089398–S (February 21, 1991, Blue, J.) (3 Conn. L. Rptr. 829), the court determined that where a putative employer and a contractor performed carpentry work together in addition to the plumbing and electrical work for which the contractor was hired, the putative employer exerted sufficient control over the contractor to render the contractor an employee under part A. In a board decision, Pettway v. SZ Enterprises, Inc., Board Case No. 9006–BR–10 (12/23/2011), the board determined that Part A was not satisfied because the employer controlled the details of how vacuum cleaner salespeople sold door to door, including how many demonstrations to give, and required them to report how long a given visit was.   The court also noted that the employer provided materials and scripts.

The plaintiff also cites to several out-of-state cases, but given the variety of case law from within Connecticut and the possibility that other states are applying different standards, the court will focus on the Connecticut case law above.   Each party claims that the case law supports their position.

In its decision, the board lists a number of facts which it determined suggested that the installers/technicians were employees.   The board noted that the plaintiff advertises installed heating, cooling, and security systems;  it makes appointments with customers, then finds an installer or technician who can take the assignment;  it does not permit installers or technicians to subcontract;  it encourages them to wear apparel bearing the plaintiff's name;  it can send an installer or technician back to correct a deficient installation;  it pays the installers or technicians a set rate per piece;  and it requires them to submit payment invoices no later than the Friday after they complete the work.   The board stated that five installers/technicians stated that the plaintiff has the right to direct how they perform their work in a questionnaire.   The board did not credit later statements by two of the installers/technicians that the plaintiff did not have the right.   The board also stated that the installers can only install equipment provided by the plaintiff and that the technicians use nozzles, filters, and strainers which are provided by the plaintiff for cleaning oil burners.   In addition, the board also initially listed the right to terminate without liability as a strong indication of an employer-employee relationship, but in its decision on the plaintiff's motion to correct findings removed this as a factor, amending finding 19 to say that the parties stipulated that right to fire would not be a factor.

The board acknowledges a number of factors which tend to show that the plaintiff did not exercise control and direction.   These include that the installers/technicians signed independent contractor agreements stating they would exercise independence;  that they were free to accept or reject assignments, can determine the days on which they will work, are not supervised while performing their work;  that the plaintiff does not check on their work;  that they are licensed and certified, that the plaintiff does not provide them with an employee handbook and does not pay them for training or require training;  that the installers/technicians may hire employees to assist them and are free to supervise their employees;  that the installers/technicians can realize a profit or a loss;  and that they provide their own tools, transportation, and insurance.

The plaintiff reiterates those points that the board acknowledges as indicating lack of control, and takes issue with some of those which the board lists as suggesting control.   The plaintiff notes that no installer or technician stated that the plaintiff actually controls their work, and the plaintiff's executive vice president stated that it does not have a right to control.   It asserted that the board's reliance on the five answers to questionnaires stating that the plaintiff has the right to control their work went in the face of a significant amount of evidence to the contrary.   It also notes that while it provides the installers/technicians with the large products to install, such as boilers, furnaces, and alarm systems, it also permits them to use whatever parts and tools they wish, including fittings, wire, cement, and insulation.   Regarding installation of alarm systems, it notes that it does require certain wires because those wires, made by the plaintiff, are necessary for the system to function.   Regarding their schedule, the plaintiff asserts that the installers/technicians have no set hours or work schedule, while the board states that they are not required to accept an assignment, but that once they accept an assignment they agree to work on a specific day in either the morning or afternoon.   Regarding uniforms, it notes that the installers/technicians are not required to wear uniforms, but merely encouraged to.   It also stresses that they hold themselves out as independent contractors.

The plaintiff makes a compelling case regarding a number of factors suggesting that the installers/technicians are not employees, but the court is not convinced that the board lacks substantial evidence for its decision.

Part B of the ABC Test:  Place of Business or Course of Business

The court will now turn to Part B of the ABC test, which as stated earlier requires proof that “(II) such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed ․” General Statutes § 31–222(a)(B)(ii).   The plaintiff bears the burden of establishing either that the services were outside the usual course of its business or that the services were performed at a location outside of its place of business.   The plaintiff need only prove one of these in order to satisfy this part of the test.   Unlike the prior section, which was very fact-driven and regarding which there was significant established law, this question involves two questions of law.   First, how the plaintiff's course of business should be defined and second, how the plaintiff's place of business should be defined.

In Mattatuck Museum–Mattatuck Historical Society v. Administrator, Unemployment Compensation Act, 238 Conn. 273, 278, 679 A.2d 347 (1996), the Supreme Court analyzed and defined various terms in Part B. It first clarified that “Prong B does not refer to the type of business, but, rather, to the specific business activities engaged in by the enterprise.   Accordingly, with respect to this prong, we examine the particular activities engaged in by the plaintiff.”  Id., 279.  “[U]sual, in accordance with its common usage, simply means that an activity is performed by the enterprise on a regular or continuous basis.   In the terms of § 31–222(a)(1)(B)(ii)(II), if the activity is not performed on a regular or continuous basis, then the employer has satisfied prong B because the activity is outside the usual course of the business of the enterprise.”  (Footnote omitted, internal quotation marks omitted.)  Id., 279–80.   Finally, it notes that the percentage of revenue generated by the activity is not a factor, and that “usual course of business, as used in § 31–222(a)(1)(B)(ii)(II), means that the enterprise performs the activity on a regular or continuous basis, without regard to the substantiality of the activity in relation to the enterprise's other business activities.”   Id., 281.

The first issue is whether installation of heating, cooling, and alarm units is part of the plaintiff's usual course of business where the majority of the plaintiff's business is in the provision of oil and of services on installed units, where the plaintiff does not own the necessary equipment to perform installations, and the plaintiff relies on the installers-technicians to perform installations, but the plaintiff does advertise installed units and does use technicians to perform some of the same tasks as employees.

In Mattatuck, supra, 238 Conn. 282, the court determined that the art courses offered by a museum were within its regular course of business even though they were outside of the main focus of the museum, presenting objects of interest for public view.   The museum advertised the art courses, scheduled them, and held itself out as offering them.   These traits are all common to the present case.   The plaintiff advertises installation, holds itself out as providing installation, and schedules the installers/technicians.   The percent of its revenue derived from installation is not relevant, although it should be noted that unlike in Mattatuck, the installations are an integral part of the business.   The plaintiff cannot deliver oil or perform other services if the customers have not already had the proper equipment installed.   There are two additional factors mentioned in Mattatuck which are not present here.   The museum listed the art teacher at issue as part of its faculty and provided a discount to members for art courses.   The record is not entirely clear whether either of these apply to this case.   There was testimony that the plaintiff stated on its website that installation would be performed by its licensed technicians, but the board did not issue a finding regarding whether the plaintiff held out the installers/technicians as employees.   The plaintiff provides a variety of service contracts, some of which may provide a discount on some services provided by installers/technicians, but the board did not make a finding to that effect.

In Daw's Critical Care Registry v. Department of Labor, 42 Conn.Sup. 376, 622 A.2d 622 (1992), aff'd 225 Conn. 99;  622 A.2d 518 (1993) (per curiam), the court considered both aspects of part B of the test.   It first determined that medical care provided by nurses was beyond the plaintiff's course of business:  “[T]he simple and overriding fact is that Daw's does not perform patient care but it brokers nurses.   In so doing it is nurses who perform nursing services when at medical facilities, which is a function beyond the usual course of Daw's and beyond what, in fact, it holds itself out to do.”   Id., 403.  Daw's is readily distinguishable from the present case in that here, the plaintiff determines what services the installers/technicians will perform.   In addition, while in Daw's the plaintiff's task ended with the provision of nurses, here the plaintiff's task begins with the work of the installers/technicians.   After a unit is installed, the plaintiff continues to provide a variety of services at the customer's site.   The present case is more similar to Mattatuck than to Daw's regarding course of business, therefore the board properly determined that the services provided by the installers/technicians were within the plaintiff's course of business.

The second issue is whether the homes of customers qualify as the plaintiff's place of business where the plaintiff will provide continued services at the customer's home in the form of oil delivery, occasional cleaning and tune-up work, and other services, but the plaintiff does not maintain an on-site presence.

Mattatuck did not reach this issue, but Daw's again is illustrative.   As noted above, in Daw's the plaintiff did not provide nursing care;  it provided nurses to hospitals, who then used those nurses to provide care.   The hospital was therefore not a place of business for the plaintiff.   In the present case, the plaintiff provides cleaning, tune-up, heating, and alarm monitoring services after the installation work is concluded.   The plaintiff has a continuing presence in its customers' homes in a way the plaintiff in Daw's did not.

The parties both discuss the Greatorex v. Stone Hill Remodeling, Board No. 1169–BR–88 (January 9, 1989), board decision and its appeal, Stone Hill Remodeling v. Administrator, Unemployment Compensation Act, Superior Court, judicial district of Waterbury, Docket No. CV089398–S (February 21, 1991, Blue, J.) (3 Conn. L. Rptr. 829).   The board in Greatorex noted that it found that the job site was the employer's place of business by contract between the employer and customer, but it did not reach a conclusion as to whether the work was outside of the regular scope of business, because some work (carpentry) was within the scope of the employer's business while other work (plumbing, electricity) was outside it.  Greatorex v. Stone Hill Remodeling, supra, Board No. 1169–BR–88.   In addition, the employer was also on-site, doing carpentry work;  this further bolstered the decision as to the place of business aspect.  Id. The Superior Court did not consider the part B analysis, because the Board “found the facts and law sufficiently unclear that it did not reach a conclusion as to part B.” Stone Hill Remodeling v. Administrator, Unemployment Compensation Act, supra, Superior Court, judicial district of Waterbury, Docket No. CV–089398–S.   Two potential take-aways from Greatorex are that a contract between the plaintiff and its customers could establish whether the customers' location is a place of business;  see also Feshler v. Hartford Dialysis, Board No. 995–BR–88 (December 27, 1988);  and that the presence of the employer on-site performing other tasks suggests that the location is a place of business.   Here, the record in the present case does not contain any contracts between the plaintiff and its customers and the employer is likely to be on-site sporadically to provide further services, and will have a continual presence in that it will be providing oil, but it does not appear that the plaintiff had employees present at the same time as the installer/technicians.

In Alward v. At Your Service, Board Case No. 9008–BR–93 (March 29, 1993), the employer arranged servers of various types for parties, including caterers, bartenders, and entertainment.   The plaintiff was a bartender who the defendant arranged work for on various occasions.   The board found that the employer satisfied the ABC test.   The employer worked from home and assigned servers to customer's venues.   These venues were outside of the business premises under part B of the ABC test.   The court distinguished this from “those sites which become the employer's place of business, such as a construction site or a client's home, when the employer is physically present or has the right to supervise and control the work performed at the site.”  Id.

Regarding this element, the court is inclined to look to the decisions of other jurisdictions due to the paucity of Connecticut authority.   In Carpetland U.S.A. v. Illinois Dept. Employment Security, 201 lll.2d 351, 776 N.E.2d 166 (2002), the plaintiff, a carpet store, utilized measurers and installers who it classified as independent contractors to measure and install carpets that it sold to customers.   Applying an Illinois statute substantially similar to the Connecticut statute, the board determined that both installers and measurers were employees.  Id., 355, 397–98.   The Illinois Supreme Court determined that the board had substantial evidence for its decision as to the measurers, but was erroneous as to the installers.  Id., 396.   The court determined that installation of carpets was not within the regular course of business of a carpet store, therefore the plaintiff had met Part B as to the installers.¹  Id., 384–92.   Regarding the measurers, the court first determined that measurements, which were also performed by salespeople, were part and parcel to the sale of carpets, the plaintiff's core business, then determined that “when a Carpetland salesperson visits a customer's premises to obtain measurements necessary for the quoting of a price and the closing of a sale, he is representing his employing unit's interest.   So, too, is a measurer to whom the salesperson might delegate this task.   As a result, the premises being measured are Carpetland's place of business for purposes of section 212(B).”  (Internal quotation marks omitted.)  Id., 391.   Neither part of part B was therefore satisfied for the measurers.   In Carpet Remnant Warehouse v. Dept. of Labor, 125 N.J. 567, 592, 593 A.2d 1177 (1991), on the other hand, the New Jersey Supreme Court determined that customers' homes were not the carpet companies' place of business;  place of business “refers only to those locations where the enterprise has a physical plant or conducts an integral part of its business.”

Based on the preceding case law, the court finds that the board properly determined that the customers' locations were a place of business of the plaintiff.   The plaintiff engages the installers/servicers to perform certain tasks as part of a continuing provision of services at the customers' locations.   Some of these tasks overlap with those performed by employees.   Others are performed predominantly, and possibly exclusively, by putative independent contractors, but nonetheless the tasks are part of ongoing activity at the customer's location.

Based on the foregoing, the court determines that the board had substantial evidence for its findings as to both part A and part B of the ABC test, therefore the installers/technicians are employees of the plaintiff.   The appeal is dismissed.

GILARDI, J.T.R.

FOOTNOTES

FN1. Carpetland does provide an excellent analysis as to Part A and as to the course of business aspect of Part B, but because there is Connecticut authority regarding those parts, the court need not utilize it..  FN1. Carpetland does provide an excellent analysis as to Part A and as to the course of business aspect of Part B, but because there is Connecticut authority regarding those parts, the court need not utilize it.

Gilardi, Richard P., J.T.R.