No. 88-131 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

IN THE MATTER OF UNEMPLOYMENT 

INSURANCE TAX CONTRIBUTION, 

PIONEER BASEBALL LEAGUE, 

Employer and Appellant, 

-vsJAMES FRIEDRICHS, 

Cla.imant and Respondent. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Robert Holmstrom, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Richard J. Carstensen, Billings, Montana 

For Respondent : 

Melanie A. Symons, Dept. of Labor & Industry, Helena, 

Montana 

Submitted on Briefs: July 8, 1988 

Decided: August 23, 1988 
Mr. Justice R. C. McDonough delivered the Opinion of the 

Court. 

Pioneer Baseball League (the League) appeals from the 

order of the District Court of the Thirteenth Judicial 

District, Yellowstone County. The order affirmed the 

decision of the Board of Labor Appeals that the $300 per 

month plus expense allowance paid to League umpires 

constitutes employment subject to the unemployment insurance 

law. We affirm. 

The League presents two issues for our review: 

1. What is the burden of proof for determining whether 

services are subject to the unemployment insurance law? 

2. Is the compensation paid to League umpires subject to 

the unemployment insurance law? 

The League is a professional, minor-league baseball 

league with teams in Montana, Idaho, Utah and Canada. Its 

headquarters are in Billings, Montana. The League obtains 

umpires for its games from the National Association of 

Professional Baseball Leagues. The League and the umpires 

enter into a Uniform Umpire Contract provided by the National 

Association, which sets forth the terms of employment. James 

L. Friedrichs entered into such a contract with the League on 

June 18, 1985. 

The contract provided that Friedrichs would be employed 

to render skilled services as an umpire. He was paid $300 

per month, with an allowance of $1,050.00 per month for 

travel, lodging and other expenses. The contract could be 

assigned by the League, or terminated by the League at any 

time upon giving Friedrichs notice. The contract also 

provided that Friedrichs could not perform services as an 

umpire for any party other than the League unless he obtained 

the League's consent. 
In 1986 when he no longer worked for the League, 

Friedrichs filed an unemployment claim. In his total of 

claimed employment, he included time spent as an umpire for 

the League. Subsequent proceedings led to a January 6, 1987, 

decision by a Labor Department Appeals Referee that the 

services rendered to the League by Friedrichs constituted 

employment subject to the unemployment insurance law. On 

March 7, 1987, the Board of Labor Appeals adopted the 

referee's decision, and on December 9, 1987, the District 

Court of the Thirteenth Judicial District affirmed the 

Board's decision. This appeal followed. 

The main issue in this appeal is whether Friedrichs was 

an "employee" of the League for purposes of unemployment 

insurance contributions. The standard of review in cases 

appealed from the Board of Labor Appeals is controlled by 5 

39-51-2410(5), MCA, which states in relevant part: 

In any judicial proceeding 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. 

The operation of this section has been discussed 

previously by this Court, most recently in Zimmer-Jackson 

Assoc. v. Dept. of Labor (Mont. 1988),752 P.2d 1095, 1097, 45 

St.Rep. 679, 681: 

When reviewing a decision of the Board of Labor 

Appeals, the District Court must treat the findings 

of the Board as conclusive if they are supported by 

substantial evidence and are absent fraud. 

[citations] This Court is held to the same 

standard when reviewing a Roard of Labor Appeals 

decision. [citation1 . 

The facts found by the Board were adopted as conclusive by 

the District Court, and are not disputed in this appeal. As 
it appears from the record that the Board's findings were 

supported by substantial evidence, "[wle must determine 

whether the District Court committed an abuse of discretion 

by affirming the Board's decision. [citation] ." Zimmer, 752 

The League first seeks definition of the burden of proof 

required for a showing that the unemployment insurance law is 

inapplicable to a particular employment arrangement. The 

League has sought to show that Friedrichs was an independent 

contractor, and the League was therefore not required to make 

unemployment insurance contributions based on his 

compensation. The League argues that S 39-51-203 (4) , MCA, 

fails to give an adequate definition of employment that is 

subject to the law. However, the League's brief on this 

point misstates the applicable version of the statute. The 

events at issue here took place in 1985 and are governed by 

the version of the statute in force at that time: 

Employment Defined... 

(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 department 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. 

Section 39-51-203 (4) , MCA (1985) . This version of the 

statute ennunciates the "ABC" test for independent contractor 
status. Chapter 51, Part 2 of Title 39 was amended and 

rearranged in the 1987 version of the Code, and the wording 

of this section was changed to remove the ABC test. The 

League bases its vagueness argument on the 1987 version of 

the statute, which must he read in conjunction with other 

sections of the Code, and which is not applicable to this 

case. The burden of proof under fi 39-51-203 (4) , MCA (1985) , 

is set out in the statute itself and amply discussed in cases 

from this Court applying the statute. 

11. 

The League disagrees with the District Court's holding 

that compensation paid to umpires is subject to the 

unemployment insurance law. According to the League, the 

court misapplied fi 39-51-203(4), MCA (1985), to the 

undisputed facts of this case. The League argues that under 

the statute, its umpires are independent contractors not 

covered by the unemployment insurance law. In order to 

establish independent contractor status, all three parts of 

the ABC test set out above must be met. Zimmer, 752 P.2d at 

1098, citing Standard Chem. Mfg. Co. v. Employment Sec. 

(1980), 185 Mont. 241, 605 P.2d 610; and Pat Griffin Co. v. 

Employment Security Com'n (1974!, 163 Mont. 529, 519 P.2d 

147. 

The first, or "A" part of: the test requires that the 

individual in question "he free from control or direction 

over the performance of such services." We have held this to 

be the most important of the three test elements. Zimmer, 

752 P.2d at 1098, and cases cited. The record shows that 

under the contract between Friedrichs and the League, the 

League dictated Friedrichs's monthly compensation and expense 

allowance, without giving him the opportunity to negotiate 

those terms. The League controlled his game assignments, and 

determined who his co-workers would be. Friedrichs was also 

forbidden from contracting with another employer without 
League permission, and the League reserved the right to 

terminate him at any time. This combination of facts 

provides ample evidence that Friedrichs was not free from 

control or direction by the League as to how he performed his 

services. 

The League's arrangement with Friedrichs fails to meet 

the first element of the ABC test, and therefore fails the 

entire test under our holding in Zirnmer and its predecessors. 

Friedrichs was an employee of the League, and his 

remuneration was subject to the unemployment insurance law. 

We find no abuse of discretion in the District Court's 

decision to affirm the Board's ruling. 

We affirm the decision of the District Court. 

Chief Justice 

&/ 

Justice