Opinion ID: 2071703
Heading Depth: 1
Heading Rank: 2

Heading: Installers

Text: Joseph H. Smith testified that he had been in the business of carpet installation for 27 to 28 years. He is. now self-employed with a company known as J. Smith Floors, Inc. During 1991, he was the selfemployed president of an Indiana corporation known as Tile Works, Inc., which sold and installed floor coverings. Smith estimated that about 75% of Tile Works' business consisted of performing installations for retail or commercial customers of Carpetland and other companies. About 25% consisted of in-house sales and installations. Of the portion of his business that involved installations for other companies, about 30% of the work was for Carpetland; the rest was for Builder's Square, Colortile, and other retailers who were competitors of Carpetland. At the time of the hearing, Smith continued to do work for Carpetland, under the same arrangement that existed in 1991. When Carpetland has a job for Smith in Illinois, he is contacted directly by the salesperson and, after accepting the job, receives a work order via fax. The work order contains the name and contact information for the customer and a description of the work to be done, including a diagram for placement of the floor covering. Depending on the job, he might have to visit the site to evaluate it. He occasionally declines jobs if his schedule is full, the job is too big or too small, or the job will not pay well. Smith has a basic price for various types of jobs, which he adjusts up or down depending on the size and complexity of the job. He quotes a price to Carpetland and, if they reach an agreement, he takes the job. If not, the job will go to someone else. He includes in his quoted price any anticipated incidental expenses such as parking. If his costs are less than his original estimate, he retains the extra profit. If the job costs him more than his estimate, he suffers the loss. The actual installation work is performed by Smith's employees. In general, he has 10 to 12 employees but increases that number to 25 or 30 during busy seasons. He uses subcontractors when he is short-handed. Carpetland is not involved in his staffing decisions, does not suggest or recommend that he increase or decrease staff, and does not refer potential employees to him. Any training needed is provided by Smith. One of his employees picks up the carpeting or other material at Carpetland and transports it to the customer's site. Smith supervises the actual installation. Only rarely will someone from Carpetland be present during the installation. Smith provides any materials or supplies needed for installation, such as adhesives for vinyl or tile, mortars and grouts for ceramic and marble, and seam tape, tack strips, and other materials for carpeting. When purchasing these supplies, Smith determines which suppliers he will use and deals directly with suppliers who sell only to the trade. Smith also provides all of the necessary tools, in which he estimated he has invested $15,000 to $18,000. In addition, Smith owns three delivery trucks and maintains a 3,500 square foot warehouse and an office with a staff of four. After completing a job for Carpetland, Smith submits an invoice on his company stationery, accompanied by a copy of the work order. Usually, he does this by mail. Carpetland pays him twice a month, with a check made out to his company. He estimated that his company does about one job per month for Carpetland. Smith guarantees his work for one year from the date of installation. If the customer complains to Carpetland, the matter is referred to him for resolution. He does not receive complaints directly from Carpetland customers once his installers have left the customer's premises. Smith testified that in 1991, he had an Illinois Department of Employment Security account number and a federal employer identification number. Tile Works filed a corporate tax return in 1991. Smith uses his own business cards, containing the name of his company and his own telephone number. He advertises his business in local newspapers and in the yellow pages. James Lawson testified that he had been the sole proprietor of Lawson's Carpet Service in Decatur, Illinois, for 20 years. In 1991, approximately 75% of his business consisted of carpet installations for customers of the Carpetland store in Decatur and occasionally for the stores in Champaign and Bloomington. He continues to do business with Carpetland under the same arrangement that existed in 1991. Lawson calls the store to advise the manager that he is available for work. Sometimes, he is given work immediately. At other times, the store will call him back with assignments. He occasionally turns down work. Lawson takes vacation or holiday time as it suits him and informs Carpetland that he will not be available. Lawson's Carpet Service generally employs Lawson, one full-time employee, and one part-time employee. He pays his employees by the hour and pays withholding taxes and FICA on their behalf. He also makes unemployment compensation contributions for them. He hires by word of mouth or by placing newspaper ads and trains his own employees. Carpetland has never referred a potential employee to him, nor has Carpetland recommended that he hire or terminate any employee. Lawson estimated that five years of training and experience are necessary to become a fully qualified installer. The products are constantly changing and he must keep up-to-date. He communicates directly with carpet manufacturers regarding recommended installation procedures, such as which type of adhesive to use with a particular product. After accepting a job, Lawson calls the customer directly to discuss details such as whether existing carpeting must be removed. They also set up a time for the installation. He then obtains the roll of carpeting from the store and transports it in his company's van to the customer's home or business, where he cuts it to fit. The installer must also be able to properly prepare the floor to which the carpeting is being applied. On some jobs, he must lay a new floor or patch the existing floor before he can install the floor covering. When he finds such a situation, he explains it to the customer, quotes a price, and gets the customer's permission to do the work. Because he gives a one-year warranty, he will not do the job if the customer declines to allow him to properly prepare the floor. He also works with the customer to determine where seams will be placed. Considerations include the traffic pattern in the room and the arrangement of furniture. If the customer authorizes additional services that were not included in the original estimate, Lawson will negotiate a price directly with the customer. The customer may pay him directly, or they will agree to pass the charge through Carpetland. This is likely to occur when a customer is using a credit card and wants the carpet purchase and installation to be treated as one credit transaction. Lawson and his employees use tools owned by Lawson Carpet Service, including power tools such as stretchers, tackers, and trimmers. He purchases tools directly from suppliers. Carpetland does not lend him tools or help him acquire tools. He estimated his total investment in tools at $5,000. All supplies used in the installation process are also provided by Lawson, including tape, metal trim, staples, and knife blades. Advertising for Lawson Carpet Service includes yellow pages ads, ads in school and church bulletins, and business cards. In addition to using the Lawson Carpet Service name, these ads include his logo. These materials do not mention Carpetland. Lawson negotiates with Carpetland and his other clients for the cost of each job. He sets his price based on the size and complexity of the job. He charges more for carpeting a stairway, for example, than for a floor. He quotes his price to the salesperson, who might make a counteroffer. Lawson also does contract jobs for builders or commercial customers. He bids on a job and negotiates directly with the customer, who then purchases floor covering from Carpetland or another supplier. In these cases, he bills the customer directly for his installation services. Only rarely does a representative from Carpetland visit a work site. This might occur if Lawson discovered a flaw in the carpeting and Carpetland was going to have to replace it, or if the quantity of carpeting provided by Carpetland was insufficient. Lawson guarantees his work for one year. He provides one of his business cards to the customer, who may call him directly if a problem arises with the installation. The customer might also contact Carpetland and the problem would be referred to him. Lawson would make the repair, incurring the cost of new carpet if necessary. Carpetland does not reimburse him. If he determines that the problem was not his responsibility, he will charge the customer or Carpetland for the repair, as appropriate. Lawson submits a bill to Carpetland twice a month and receives a check for the billed amount several days later. He does not participate in any employee benefit programs. Craig Panozzo testified that he incorporated his business, Craig's Custom Tile, in 1989. In 1991, approximately 25% of the work done by his company was for the Carpetland store in Matteson, Illinois. At the time of the hearing, he continued to do ceramic and marble tile installation for retailers and builders and does remodeling work on his own. A Carpetland employee calls Panozzo when a job comes up, usually giving him 10 to 14 days' notice. He will turn the job down if he does not have the time to do it or if the job is too big for him to do alone. If he accepts the job, he picks up a work sheet from Carpetland and the tile from the distributor in Crestwood, Illinois. All of the work he does for Carpetland is on new construction, so he does not have to visit the site before agreeing to a price per square foot, as he would have to do for a remodeling job. Panozzo provides the necessary supplies such as pads, adhesives, cement, grout, and caulk. The cost of supplies is built into his price. He also provides his own tools, such as saws, in which he has invested approximately $5,000. Periodically, Panozzo turns in a recap sheet to Carpetland, along with the worksheet for each job. He stops by Carpetland several days later to pick up a check made out to Craig's Custom Tile. When he takes a vacation, he notifies Carpetland that he will be gone. Panozzo also acknowledged that he did not have an account with the Department or a federal employer identification number.