State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: April 23, 2015 519219 

________________________________

In the Matter of the Claim of

KERRY PICKTON,

Respondent.

PRIORITY ASSIST INC., MEMORANDUM AND ORDER

Appellant.

COMMISSIONER OF LABOR,

Respondent.

________________________________

Calendar Date: March 23, 2015

Before: McCarthy, J.P., Egan Jr., Devine and Clark, JJ.

__________

Jackson Lewis PC, Melville (Christopher M. Valentino of

counsel), for appellant.

Cynthia Feathers, Glens Falls, for Kerry Pickton,

respondent.

Eric T. Schneiderman, Attorney General, New York City

(Steven Koton of counsel), for Commissioner of Labor, respondent.

__________

Clark, J.

Appeals from two decisions of the Unemployment Insurance

Appeal Board, filed August 29, 2013, which ruled, among other

things, that Priority Assist Inc. was liable for additional

unemployment insurance contributions on remuneration paid to

claimant and others similarly situated.

Priority Assist Inc. is a corporation that sells

automobiles to service personnel on United States Navy vessels in
-2- 519219 

international waters, who may pick the vehicles up after the end

of their deployment. Priority Assist is based in New York and

retained sales representatives like claimant to promote and sell

automobiles aboard the vessels (see Labor Law § 511 [3], [5]

[b]). After claimant stopped working for Priority Assist in

2009, he sought unemployment insurance benefits. The Department

of Labor determined that claimant was an employee of Priority

Assist and, as such, required it to make additional unemployment

insurance contributions based on remuneration paid to claimant

and others similarly situated from 2008 onward. The Unemployment

Insurance Appeal Board ultimately upheld that determination and

established the claim for benefits, and Priority Assist appeals.

Priority Assist initially asserts that claimant and others

similarly situated performed work in federal enclaves – i.e.,

lands purchased by the federal government, with state consent,

"for the Erection of Forts, Magazines, Arsenals, dock-Yards, and

other needful Buildings" – and that the Board accordingly lacked

jurisdiction to hold it liable for unemployment insurance

contributions (US Const, art I, § 8, cl 17). Even assuming that

United States Navy vessels that have never been part of a state

constitute federal enclaves, "exclusive jurisdiction over [such

an] area . . . remains with the United States, except as modified

by statute" (Howard v Commissioners of Sinking Fund of City of

Louisville, 344 US 624, 627 [1953] [emphasis added]). Inasmuch

as federal law provides that "[n]o person shall be relieved from

compliance with a [s]tate unemployment compensation law on the

ground that services were performed on land or premises owned,

held, or possessed by the United States," the Board retained

jurisdiction here (26 USC § 3305 [d]). 

Turning to the merits, "the existence of an employment

relationship is a factual issue for the Board to decide and its

determination will be upheld if supported by substantial

evidence" (Matter of Automotive Serv. Sys., Inc. [Commissioner of

Labor], 56 AD3d 854, 855 [2008]; see Matter of Empire State

Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 NY3d

433, 437 [2010]). "An employer-employee relationship exists when

the evidence shows that the employer exercises control over the

results produced or the means used to achieve the results," with

the latter more important (Matter of Empire State Towing &
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Recovery Assn. [Commissioner of Labor], 15 NY3d at 437 [citation

omitted]; see Matter of Smith [College Network Inc.–Commissioner

of Labor], 109 AD3d 1058, 1059 [2013]). 

There is substantial evidence in the record before us to

conclude that Priority Assist exercised sufficient control over

the work of claimant and others similarly situated to establish

an employer-employee relationship (see Matter of Interladi

[Cremosa Foods Co., LLC–Commissioner of Labor], 70 AD3d 1150,

1150-1151 [2010]; Matter of Greenspan [Adco Paper & Packaging

Co.–Commissioner of Labor], 31 AD3d 1092, 1093 [2006]).

Specifically, Priority Assist arranged passage on Navy vessels

for claimant, paid him a set draw against his commissions, and

reimbursed him for his travel expenses. Claimant was

additionally provided with promotional materials, business cards

and a laptop to assist him in making sales once on board. 

Priority Assist further required claimant to attend training and

regular meetings, and instructed him in appropriate sales

techniques. The foregoing evidence supports the Board's

determination, and we reject Priority Assist's contention that it

contradicted either the Board's informal guidelines or its prior

decisions.

We are, however, persuaded that remittal is required due to

questions regarding the timeliness of the claim for benefits (see

Labor Law §§ 520, 527). "It is well settled that registering and

certifying for benefits in accordance with the Labor Law and the

applicable regulations is a necessary prerequisite to eligibility

for benefits" (Matter of Newman [Commissioner of Labor], 23 AD3d

816, 816 [2005] [citations omitted]; see Matter of Fleischer

[Commissioner of Labor], 45 AD3d 1094, 1095 [2007]; Matter of

Canellos [Commissioner of Labor], 21 AD3d 636, 636 [2005]). The

Department's records indicate that claimant filed for benefits in

December 2010 and, accordingly, that the base period used to

determine his eligibility for benefits encompassed none of the

time he was working for Priority Assist. The record also

indicates, however, that claimant filed a timely claim for

unemployment insurance benefits in North Carolina that was

transferred to New York for jurisdictional reasons, and

"compensation shall not be denied or reduced to an individual

solely because he files a claim in another [s]tate" (26 USC
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§ 3304 [a] [9] [A]). The Board failed to resolve this relevant

question and, accordingly, "its decision[s] must be reversed and

the matter remitted for further development of the record"

(Matter of Panek [City of Syracuse–Roberts], 111 AD2d 466, 466-

467 [1985]; see Matter of Montauk Improvement v Proccacino, 41

NY2d 913, 914 [1977]; Matter of Fleischer [Commissioner of

Labor], 45 AD3d at 1095).

McCarthy, J.P., Egan Jr. and Devine, JJ., concur.

ORDERED that the decisions are modified, without costs, by

reversing so much thereof as allowed claimant unemployment

insurance benefits; matter remitted to the Unemployment Insurance

Appeal Board for further proceedings not inconsistent with this

Court's decision; and, as so modified, affirmed.

ENTER:

Robert D. Mayberger

Clerk of the Court