Opinion ID: 2071703
Heading Depth: 1
Heading Rank: 4

Heading: Carpetland

Text: John L. Booth, Carpetland's vice president of operations, explained that a Carpetland salesperson calculates the cost of a floor covering based on dimensions provided by the customer. However, if the customer does not know the dimensions or wants to arrange for installation, an actual measurement is required. The salesperson has the option of doing the measuring himself or referring the job to a measuring service. If a measuring service is used, half the cost is deducted from the salesperson's commission. The salesperson explains to the customer that the measuring service is an independent business, over which Carpetland has no control, but that the salesperson will relay the customer's request as to a convenient time for the measuring to occur. After the results of the measuring are communicated to the salesperson, he recalculates the price and informs the customer of any adjustment. Booth further testified that measurers are not Carpetland employees. They do not participate in any Carpetland employee benefit program such as insurance or paid vacation. Measurers may take vacation time or other time off without clearing it with Carpetland. Carpetland does not provide them with vehicles or reimburse them for mileage. Carpetland does not require that the measurers work only for Carpetland. Carpetland neither trains the employees of the measuring services nor instructs the measurers on the performance of their work. Measurers are not required to come to a Carpetland store for any purpose and representatives of Carpetland do not go to customer's locations to review or supervise the work of measurers. If a measuring service makes an error that results in extra cost, such as a need for additional carpeting, Carpetland holds the measurer responsible for the expense. Carpetland pays the measuring services on a per-measure basis at a rate that is negotiated individually. Different stores have different arrangements with the measuring services as to how often they are paid, usually weekly or biweekly. The measuring service submits invoices to Carpetland, on the service's own bill or letterhead. Carpetland pays the amount of the invoice, without deductions for payroll taxes. Carpetland does not enter into written contracts with the various measuring services, but does require that each service provide certificates of automobile and liability insurance as a condition of doing business. Carpetland specifically informs its customers that it does not provide installation services. If the customer wants to have the floor covering installed, Carpetland will subcontract the work to an installer. Booth identified a form that was used in all Carpetland stores as an installation subcontract. The form contains the customer's name and address, the material to be installed, the areas to be covered, and the installation price. The price of installation is negotiated between the store and the installer and is based on a base price per square yard, plus any add-ons such as preparation of the floor. The base price varies from store to store and, within a single store, from installer to installer. Installers are free to decline jobs and do so on occasion. Once the installer accepts the job, this document is signed by the store manager and the installation subcontractor. The installer then contacts the customer to arrange a time for installation, picks up the materials from Carpetland, and completes the installation. If the installer encounters unanticipated problems, such as the need to move heavy furniture or remove old flooring, he attempts to negotiate payment with the customer. The installer is free to do such additional work without charging the customer, but may insist on additional payment. If the installer and the customer do not reach an agreement, Carpetland might elect to absorb the cost. It is possible that the job would not go forward at all. Carpetland could not compel the installer to do the additional work without additional payment. Carpetland does not provide any on-site supervision to the installers. When using a new installation service, a Carpetland representative may visit the work site to observe the quality of the work, until the company is satisfied that the installer's work is up to its standards. Carpetland does not limit the installers' other employment. They are free to accept contracts from others, including Carpetland's competitors. Carpetland provides no training and is not involved in the hiring, firing, or disciplining of the installers' employees. Carpetland does not control their days or hours of work or their vacation schedules. The installers provide their own tools and supplies; Carpetland provides only the carpeting and padding or other floor covering it has sold to the customer. Checks are issued on a biweekly basis after the installer submits an invoice showing that the work was done. The amount is calculated on the fee per square yard that was negotiated between Carpetland and the individual installer. In 1991, the range was from $2.20 to $2.75 per square yard, with the average around $2.50. Carpetland charges the customers $3.00 per square yard for installation and makes a profit on each installation contract. No taxes are withheld. The installers are required to carry liability insurance and Carpetland demands documentation of coverage. If a customer calls the Carpetland store with a complaint, the person who takes the call fills out a complaint form. The store first determines whether the complaint is related to the product it sold or to the installation. Installation problems might include a seam that is coming apart or a ripple in the carpeting. Carpetland determines which installer did the work and contacts him to make the necessary repair. A copy of the complaint form is provided to the installer, who sends it back to Carpetland with the customer's signature to document that the problem has been resolved to the customer's satisfaction. Carpetland requires its installers to guarantee their work for one year, so if such a problem occurs within one year of the original installation, the installer bears the expense of the repair. In the unusual circumstance that an installation problem appears later, Carpetland would pay an installer to make the repair. Booth testified regarding written retainage agreements under which Carpetland retains a portion of the fees due to the installer until a fund of $1,000 is created. This money is used to defray the costs; of repairs necessitated by improper installation. If an installer ceases doing business with Carpetland, the fund, including interest, is paid out in thirds, in 30-day increments, to allow for the possibility that a complaint may arise regarding one of the installer's last jobs. Not all installers agree, but Carpetland does prefer to have such an arrangement. Booth explained that Carpetland also solicits work on a contract basis, in addition to its retail sales. Such a contract might involve floor coverings for a commercial building or new housing construction. When the bids on such a project include both materials and labor, the Carpetland salesperson solicits bids from several installers so that he may make his bid as low as possible. Thus, installers who regularly do work for Carpetland may bid against each other for these jobs. According to Booth, neither measurers nor installers are identified in any way as Carpetland employees. They do not wear uniforms or other apparel with a Carpetland name or logo. They are not given Carpetland business cards to use. They use their own vehicles, which do not carry the Carpetland name.