No. 14899 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

KIRBY CO. OF BOZEMAN, INC., 

A Montana corporation, 

Petitioner and Appellant, 

VS. 

EMPLOYMENT SECURITY DIVISION 

OF THE MONTANA STATE DEPARTMENT 

OF LABOR AND INDUSTRY, 

Respondent and Respondent. 

Appeal from: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellant: 

Poore, Roth, Robischon and Robinson, Butte, Montana 

For Respondent: 

Robert Campbell, Helena, Montana 

Submitted on briefs: April 3, 1980 

Decided: July 22, 1980 

Filed: jUL23 

&&dl'- 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

Appellant Kirby Company of Bozeman (herein Kirby) is a 

Montana corporation with its principal place of business in 

Bozeman, Montana. Appellant Kirby is associated with Kirby 

Company, a division of Scott and Fetzer Company, as a direct 

factory distributor of vacuum cleaners and related products 

manufactured by Kirby Company. In that capacity, appellant 

is authorized to purchase Kirby Company products direct from 

the manufacturer and wholesale them to "area distributors" 

and "dealers." Kirby is also authorized to retail the 

products to the general public. 

Kirby's facility in Bozeman consists of a small store 

containing two offices and a repair shop. Ninety-eight 

percent of Kirby's retail sales are made by door-to-door 

salespersons referred to as "dealers." The dealers are 

recruited by Kirby or come to the organization on their own 

initiative. Salespersons sign a one-year written agreement 

when they become dealers. The agreement is automatically 

renewable annually and subject to termination on thirty 

days' notice. A salesperson must be authorized through a 

wholesale outlet like Kirby to sell Kirby products. 

Kirby president, David Sward, gives product demonstrations to new dealers and provides them with a sales guide 

booklet. Sward also conducts sales clinics for the dealers, 

but attendance at the clinics is not mandatory. New dealers 

sometimes accompany experienced dealers on their initial 

sales calls. Kirby furnishes leads to the dealers for a 

$5.00 fee. Kirby does not set the hours of the dealers or 

impose territorial restrictions upon them. Dealers are not 

reimbursed for expenses, guaranteed minimum earnings, or 
provided with any fringe benefits such as vacation pay or 

sick leave. The dealers are free to sell competing products, but apparently few do. Kirby encourages dealers to 

use business cards. The card introduced into evidence in 

this case included Kirby's name, address and phone number as 

well as the dealer's name and phone number. Kirby does not 

provide office space for the dealers. However, it does not 

appear that any of the dealers maintain separate office 

space for selling the Kirby products. The dealers apparently 

work door-to-door or out of their homes. 

The dealers buy products from Kirby for cash or on a 

thirty-day open account. Kirby gives the dealers the suggested retail price for the products. The dealers generally 

adhere to the set prices, although they are not required to 

do so. The dealers sell the products to customers for cash 

or on a conditional sales contract. The dealers negotiate 

their own terms on the contracts. Kirby is not required to 

purchase conditional sales contracts negotiated by dealers 

but does so on occasion. Dealers are not required to collect delinquent accounts on purchased contracts and are paid 

full commission on sales made even if the products are 

ultimately repossessed. Dealers also negotiate the kind and 

value of any trade-ins taken in connection with a sale. 

Kirby is obligated under the written agreement with the 

dealers to purchase any vacuums taken as trade-ins. ~irby 

is not, however, obligated to pay the dealer the same amount 

the dealer gave the customer for the trade-ins or to purchase items other than vacuums taken in trade. 

Kirby requires the dealers to keep records of the sales 

they make and to provide the customer information necessary 

for the warranties on the products sold. Kirby warrants the 
products sold and performs all service and repair work under 

the warranty. Dealers also customarily submit all sales 

receipts to Kirby. Customer checks are sometimes made out 

to Kirby rather than to the dealer. Kirby does not require 

this procedure but does so to enable the dealers to keep a 

more accurate record of their sales. Under this method, 

Kirby pays the dealers the amount their receipts exceed the 

wholesale price of merchandise sold every week to ten days. 

In February 1977 a tax examiner of the Employment 

Security Division of the Montana Department of Labor and 

Industry determined Kirby's dealers were employees within 

the meaning of Montana unemployment insurance law. Kirby 

would, therefore, be required to make contributions to the 

unemployment compensation division on the earnings of the 

dealers. Kirby appealed the decision to the tax appeals 

referee of the Employment Security Division who affirmed the 

decision of the tax examiner. Kirby then appealed the 

decision to the Board of Labor Appeals. The Board sustained 

the decision of the referee. 

Kirby then filed a petition for judicial review of the 

Board's decision in District Court, Gallatin County. The 

District Court, the Honorable W. W. Lessley presiding, held 

a hearing at which the parties presented arguments on the 

legal issues involved in the case. Judge Lessley subsequently entered findings of fact and conclusions of law 

upholding the decision of the Board of Labor Appeals. his 

appeal followed. 

Kirby raises the following issues on appeal: 

1. Did the District Court err in entering findings of 

fact different from the findings of fact made by the ~oard 

of Labor Appeals? 
2. Did the District Court err in concluding Kirby's 

dealers are employees within the meaning of Montana's unemployment insurance law? 

Section 39-51-2410(5), MCA, sets out the scope of 

judicial review of decisions of the Board of Labor Appeals. 

That section reads in pertinent part: 

"In any judicial proceedings under 39-51-2406 

through 39-51-2410, the findings of the board 

as to the facts, if supported by evidence and 

in the absence of fraud, shall be conclusive 

and the jurisdiction of said court shall be 

confined to questions of law . . ." 

Under the plain meaning of this statute and the case 

law interpreting it, the District Court must treat the 

findings of the Board as conclusive, if the findings are 

supported by the evidence and in the absence of fraud. 

Noone v. Reeder (1968), 151 Mont. 248, 252, 441 P.2d 309. 

The District Court should, therefore, limit its review of 

the findings of the Board to a consideration of whether they 

are supported by the evidence. The District Court should 

not enter findings different from the Board's without first 

determining the Board's findings are not supported by the 

evidence. 

Here, the District Court affirmed the decision of the 

Board. In doing so, however, the court entered findings of 

fact different from those adopted by the Board. The District Court did not state that it felt the findings of the 

Board were not supported by the evidence. In fact, the 

District Court filed a memorandum in support of the findings 

and conclusions it reached. In the memorandum, the District 

Court set out as the only issue on appeal whether there was 

substantial evidence to support the decision of the Board. 

Under this standard the court listed evidence from the 
record to support the Board's decision that Kirby exercised 

sufficient control over the dealers to warrant the finding 

of an employer-employee relationship between Kirby and the 

dealers. 

~irby now attacks the procedure employed by the District Court in deciding the case as improper because the 

court entered findings different from those adopted by the 

Board. Kirby argues it was error for the lower court to 

enter the different findings under section 39-51-2406, MCA, 

unless the court first determined the Board's findings are 

not supported by the evidence. Kirby asks this Court to 

reverse the decision of the District Court because of this 

procedural error. 

Under section 39-51-2410, MCA, it is not proper for the 

District Court to enter findings of fact different from 

those affirmed by the Board without first determining the 

findings are not supported by the evidence. Therefore, we 

agree with Kirby that the District Court erred in doing so 

here. We do not, however, agree with Kirby's contention 

that this procedural error requires reversal of the District 

Court' s decision. 

This Court will not reverse or remand a decision of the 

District Court when the eventual result in the ~istrict 

Court must be the same. Green v. Green (1978), 176 Mont. 

532, 579 P.2d 1235, 35 St.Rep. 800, 803. Here, reversing 

and remanding because the District Court entered its own 

findings without first declaring the Board's findings were 

not supported by the evidence would undoubtedly result in 

the District Court once again affirming the ~oard's decision. 

The District Court made it clear that it found the 

Board's findings were supported by the evidence in the 
memorandum the court filed. In the memorandum the District 

Court stated the only issue it was considering was whether 

there was substantial evidence in the record to support the 

decision of the Board. The court then listed evidence from 

the record supporting the Board's conclusion that ~irby 

exercised sufficient control over the dealers to warrant the 

finding of an employer-employee relationship between Kirby 

and the dealers. If we reversed the case and remanded it to 

the District Court, the court would simply withdraw its 

findings of fact and redeclare its decision based on the 

memorandum filed. Such an action would be a needless exercise on the part of the District Court and would ultimately 

do no good for Kirby. We will not, therefore, reverse on 

this issue. 

The second issue involves the determination of whether 

the dealers are employees or independent contractors as a 

matter of law. We recently discussed the distinction between employees and independent contractors in the context 

of unemployment insurance contributions in Standard Chem. 

Mfg. Co. v. Employment Sec. (1980), Mont. , 605 

P.2d 610, 37 St.Rep. 105. In Standard Chemical we recognized that two tests are used to determine whether an employment or independent contract relationship exists. Standard 

Chemical, 605 P.2d at 612, 37 St.Rep. at 107. The first 

test is the statutory "ABC" test, which is set out in section 39-51-203(4), MCA: 

"(4) Service performed by an individual for 

wages is considered to be employment subject 

to this chapter unless and until it is shown 

to the satisfaction of the division that: 

"(a) such individual has been and will continue 

to be free from control or direction over the 

performance of such services, both under his 

contract and in fact; 
"(b) such service is either outside the usual 

course of the business for which such service 

is performed or that such service is performed 

outside of all the places of business of the 

enterprise for which such service is performed; 

and 

"(c) such individual is customarily engaged in 

an independently established trade, occupation, 

profession, or business." 

The second test is the common-law test. We stated the 

common-law test in Standard Chemical as follows: 

"'"An independent contractor is one who renders 

service in the course of an occupation, and 

represents the will of his employer only as to 

the result of his work, and not as to the means 

whereby it is accomplished, and is usually not 

paid by the job. (And see Neyman v. Pincus, 

82 Mont. 467, 267 P. 805.)" 

"'The vital test in determining whether a person employed to do a certain piece of work is 

a contractor or a mere servant, is the control 

over the work which is reserved by the employer. 

Stated as a general proposition, if the contractor is under the control of the employer, 

he is a servant; if not under such control, he 

is an independent contractor.'" 605 P.2d at 

613, 37 St.Rep. at 108, quoting from Pat Griffin Co. v. Employment Security Comm'n (1974), 

163 Mont. 529, 519 P.2d 147. 

The scope of our review is limited in applying these 

tests. Standard Chemical, 605 P.2d at 613, 37 St-Rep. at 

108. We will not overturn the decision of the District 

Court to uphold the decision of the Board unless it can be 

shown the lower court abused its discretion in doing so. 

Standard Chemical, 605 P.2d at 613, 37 St.Rep. at 109. 

Under this standard, we first consider the amount of 

control Kirby exercised over the dealers here, as control is 

the most crucial factor which distinguishes employees from 

independent contractors. Standard Chemical, 605 P.2d at 

613, 37 St.Rep. at 109. Here, as in Standard Chemical, the 

right of control is a close question. However, a tax examiner, 
a tax appeals referee, the Board of Labor Appeals and the 

~istrict Court have all reviewed the facts as set out above 

and reached the conclusion that Kirby exercised sufficient 

control over the dealers to form an employer-employee relationship for the purposes of the unemployment insurance 

statutes. Although the question may be close, we agree. 

Kirby trained the dealers in the method of marketing 

Kirby products by giving them initial demonstrations of the 

products, providing them with a sales guide booklet, and 

conducting sales clinics. Kirby regulated the price dealers 

charged for the products by suggesting retail prices which 

the dealers generally adhered to. Kirby customarily received the dealers' sales receipts and paid the dealers 

their commissions. Finally, and possibly most importantly, 

dealers had to be authorized through a wholesale outlet like 

Kirby to sell Kirby products and Kirby could terminate the 

contract granting the dealers that authorization without 

cause on thirty days' notice. Under Standard Chemical, this 

setup represents the kind of control, although in some 

aspects indirect, that is sufficient to establish an employeremployee relationship within the meaning of our unemployment 

insurance statutes. Given these facts, we certainly cannot 

say the District Court abused its discretion in affirming 

the decision of the Board of Labor Appeals finding the 

dealers were employees of Kirby. Therefore, we affirm the 

decision of the District Court holding the dealers to be 

employees of Kirby for unemployment insurance purposes. 

In so holding, we note that this decision is in accord 

with the majority of other jurisdictions that have considered the question of whether vacuum cleaner salespersons 

are employees or independent contractors for unemployment 
compensation purposes under similar fact situations. Kirkpatrick v. Peet (1967), 247 Or. 204, 428 P.2d 405; Beaman v. 

Superior Products, Inc. (1961), 89 Ariz. 119, 358 P.2d 997; 

Bevan v. California Employment Stabilization Commission 

(1956), 139 Cal.App.2d 668, 294 P.2d 524; Sudduth v. California Employment Stabilization Commission (1955), 130 

Cal.App.2d 304, 278 P.2d 946; Murphy v. Daumit (1944), 387 

Ill. 406, 56 N.E.2d 800; In Re Electrolux Corp. (1942), 288 

N.Y. 440, 43 N.E.2d 480; Electrolux Corp. v. Board of Review 

(1942), 129 N.J.L. 154, 28 A.2d 207; cf. Electrolux Corp. v. 

Danaher (1941), 128 Conn. 342, 23 A.2d 135. 

Kirby attempts to distinguish the above cases by 

pointing out facts in each which vary from the facts here. 

However, the distinctions Kirby attempts to make are far 

less significant than the similarities between the cases. 

We, therefore, adopt the above-cited cases as additional 

authority for affirming the decision of the District Court 

on this issue. 

Affirmed. 

We concur: I 

~,A.P. 

Chief Justice