Opinion ID: 2352860
Heading Depth: 1
Heading Rank: 3

Heading: Questions Concerning The Applicable Law.

Text: As to the claims of unconstitutionality, it is contended that the title to the amendment (Chapter 36 of the Acts of 1956) changing the title of Article 95A from Unemployment Compensation Law to Unemployment Insurance Law was defective because the title as changed does not describe the statute sufficiently. The contention is devoid of merit. While it is true that the amended statute embraced a comprehensive scheme for providing a system of unemployment benefits and obligations, it is clear that the title of the amending act embraced only one subject which was fully described therein  the changing of the name by which Article 95A should, after June 1, 1956, be known and cited  and that is all that is required. And, since the body of the act  which simply provided that the term unemployment insurance should be substituted for the term unemployment compensation wherever it appeared in Article 95A  was not at variance with the title, the amending act was not invalid by reason of a defective title. Time and time again we have said that before a statute will be held invalid on account of a defect in the title, it must be shown that something in the body of the act is entirely foreign to the subject matter described in the title. Neuenschwander v. Wash. San. Comm., 187 Md. 67, 48 A.2d 593 (1946). See also the recent cases of Allied American Co. v. Com'r, 219 Md. 607, 150 A.2d 421 (1959); Board of County Com'rs of Prince George's County v. Donohoe, 220 Md. 362, 152 A.2d 555 (1959); Magruder v. Hall of Records Comm., 221 Md. 1, 155 A.2d 899 (1959); Jacobs v. Klawans, 225 Md. 147, 169 A.2d 677 (1961). It is further contended that the statute is unconstitutional in that the enforcement of its provisions against the appellant was a denial of his right to due process, of his freedom of contract and of his right to privacy. As to due process, the claim is that the D.E.S. was without authority to issue a subpoena duces tecum to require the appellant to produce his business records before the hearing officer and thereby submit himself to an inquisition as grueling as an investigation by a grand jury. The contention is groundless. Although the appellant would have been protected against self-incrimination by the terms of § 12 (j) had he claimed that privilege, the statute, in addition to requiring the executive director to administer the law and cloaking him with full power and authority to do so, also specifically authorized representatives of the D.E.S. to issue subpoenas not only to require the attendance of an employer as a witness but also to compel him to produce such of his records as might be necessary for the purpose stated in the subpoena. Besides this, the courts of other states as well as the Federal courts (including the Supreme Court of the United States) have consistently held that the unemployment insurance (or compensation) statutes of other states having statutes similar to that in this State do not violate the due process or equal protection clauses of the Federal Constitution. See Carmichael v. Southern Coal Co., 301 U.S. 495 (1937), involving the Alabama statute, which is controlling on the question of due process, and Chamberlin v. Andrews, Stearns, et al., 299 U.S. 515 (1936), involving the New York statute. See also Howes Bros. Co. v. Mass. Unemp. Comp. Comm., 5 N.E.2d 720 (Mass. 1936); Maine Unemp. Comp. Comm., v. Androscoggin Junior, Inc., 16 A.2d 252 (Me. 1940); Wiley Motors v. Unemp. Comp. Comm., 31 A.2d 39 (Sup.Ct. N.J. 1943), aff'd 35 A.2d 894 (Ct. of E. & A.N.J. 1944); Rhode Island Unemp. Comp. Bd. v. Conway, 73 A.2d 109 (R.I. 1950). It has also been held that an unemployment insurance statute, which forbade the employer and employee to make a contract changing the burden of the required contributions, did not violate the constitutional guarantee of freedom of contract. Howes Bros. Co. v. Mass. Unemp. Comp. Comm., supra . See also 48 Am. Jur., Social Security, Unemployment Insurance, Etc., § 3. Furthermore, as we see it, the Maryland statute does not limit the right of the appellant to contract with an employee. All that the statute does is to authorize those who are charged with its enforcement to look through the tag placed on the employment relationship by the parties and determine, as a matter of fact, whether the relationship (regardless of what it may be called) comes within the purview of the statute. It has been held that even the freedom of contract is subject to legislative regulation in the interest of public welfare. See Blum v. Engelman, 190 Md. 109, 57 A.2d 421 (1948). The contention that an employer can take his relationship with an employee out of the statute by applying another name to it is clearly not sustainable. To so hold would nullify the very purpose of the statute. We do not know what the appellant had in mind in making the claim that he has a constitutional right to privacy. It may be  since he asserts that being compelled to disclose the names of his associates was a violation of his rights  that the appellant assumed that the issuance of the subpoena duces tecum, which he claims was unauthorized, was a violation of a constitutional right. Without attempting to define the constitutional guarantee of a right of privacy  see Wolf v. Colorado, 338 U.S. 25 (1949) and Frank v. Maryland, 359 U.S. 360 (1959)  we need only point out in answer to this contention that the right of both state and federal taxing authorities to compel production of books, papers and records pertinent to the establishment of the tax liability of an individual has long been held to be free from constitutional impediment. See, e.g., Foster v. United States, 265 F.2d 183 (C.A. 2nd, 1959), cert. den., 360 U.S. 912 (1959); Falsone v. United States, 205 F.2d 734 (C.A. 5th, 1953), cert. den., 346 U.S. 864 (1953); Gange Lumber Co. v. Henneford, 53 P.2d 743 (Wash. 1936); Annotation, Constitutionality of statutory provisions for examination of records, books or documents for taxation purposes, 103 A.L.R. 522. Although this Court has not heretofore had an occasion to consider the basic questions raised here concerning the constitutionality of the statute, [1] we did have occasion in Md. Unemp. Compensation Board v. Albrecht, 183 Md. 87, 36 A.2d 666 (1944), to remark (at p. 94) that the presumption in favor of constitutionality is particularly strong because the Unemployment Compensation Law is a remedial statute and should be construed as far as possible in such way that its objective of alleviating economic distress may be accomplished. In Celanese Corp. of America v. Davis, 186 Md. 463, 47 A.2d 379 (1946), we held that an amendment of the tax provisions was not unconstitutional as being discriminatory as applied to the employer. And, in State, Use of Emp. Sec. Bd. v. Rucker, 211 Md. 153, 126 A.2d 846 (1956), we reiterated that the statute should be liberally construed. In the instant case, we hold that there is nothing in the statute violative of the appellant's right to due process and freedom of contract. We come now to the consideration of the principal question of whether the appellant was an employer within the meaning of the UIL during the period in controversy. Section 20, in enumerating and defining the technical terms of the statute, has made it easy to interpret those parts of the statute with which we are presently concerned. By subsection (e) an employing unit is defined as any individual or type of organization    which has in its employ one or more individuals performing services for it   . Subsection (g)(1) defines employment as service    performed for remuneration or under any contract of hire, written or oral, express or implied. Subsection (g)(6) provides that services performed by an individual for wages or under any contract of hire shall be deemed to be employment subject to this article [UIL], irrespective of whether the common-law relationship of master and servant exists, unless and until it is shown to the satisfaction of the executive director 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 of service and in fact; and (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 of the same nature as that involved in the service in question. We think it is clear that the appellant falls squarely within the statutory definitions of employment and of an employing unit. He is an individual and he has, or had, other individuals in his employ performing services for him for remuneration or under a contract of hire. The fact that such employed individuals were designated by the employer as associates and part-time helpers, or even as independent contractors, in the absence of proof of that fact, had no effect on his liability to make contributions to the unemployment fund. See In Re Zeits, 31 N.E.2d 209 (Ind. 1941), in which it was held that senior partners, who had employed junior partners to work in a box manufacturing plant for hourly credits subject to withdrawal ten days after accrual, were held to be an employing unit within the meaning of the statutory definition of that term, which was the same as it is here. Other than this the employer admitted that he had employed part-time helpers and there was absolutely no proof that any of his employees were independent contractors. Moreover, since the services thus performed are presumed to be employment under the statute  regardless of whether or not there was a common-law relationship of master and servant between the employer and employee  until it is shown by the employer, who has the burden of so showing, that a person rendering such service comes within all three of the enumerated exceptions  (A) freedom from control or direction; (B) service outside the usual course of business; and (C) customary engagement in an independently established occupation  which was not done in this case, the conclusion that the appellant is liable for such contributions as are due and payable is inescapable. There is considerable authority to the effect that the enumeration of the A-B-C tests does not indicate that all of the conditions creating the exceptions must concur. See 48 Am. Jur., supra, § 17. But there is also authority to the contrary. See, for example, Zelney v. Murphy, 56 N.E.2d 754 (Ill. 1944). We think it is apparent that in this State, where the three tests are stated conjunctively instead of disjunctively, the legislature has indicated that in order to exempt a person rendering services for another from the operation of the statute that person must come within all three of the exceptions. We also think it is clear that the statute is controlling on the question of whether the definition of employment is more inclusive than the common-law relationship of master and servant. Since § 20(g)(6) specifically provides that it is, that is an end of the matter. See Karlson v. Murphy, 56 N.E.2d 839 (Ill. 1944); Singer Sewing Machine Co. v. State Unemp. Comp. Comm., 116 P.2d 744 (Ore. 1941); Industrial Comm. v. Northwestern Mutual L. Ins. Co., 88 P.2d 560 (Colo. 1939). The action of the lower court in affirming the decision of the board of appeals was correct and its order to that effect will be affirmed. The D.E.S. will, of course, make such adjustments as are proper (as suggested by Judge Macgill) when the appellant complies with the decision of the board as he must do. Order affirmed; appellant to pay the costs.