Court Opinion

ID: 3152333
Source: CourtListenerOpinion
Date Created: 2015-11-05 16:10:30.277304+00
Date Added: 2024-06-11T07:38:35.479447
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: November 5, 2015                   519702
__________________________________

In the Matter of the Claim of
   DWAYNE E. SCOTT,
                    Respondent.

CR ENGLAND INC.,                            MEMORANDUM AND ORDER
                    Appellant.

COMMISSIONER OF LABOR,
                    Respondent.

(And Three Other Related Claims.)
__________________________________

Calendar Date:   September 10, 2015

Before:   Lahtinen, J.P., Garry, Lynch and Devine, JJ.

                             __________

      Strongin Rothman & Abrams, LLP, New York City (Barry S.
Rothman of counsel), for appellant.

      Murphy, Burns, Barber & Murphy, LLP, Albany (Catherine A.
Barber of counsel), for Dwayne E. Scott, respondent.

      Eric T. Schneiderman, Attorney General, New York City (Dawn
A. Foshee of counsel), for Commissioner of Labor, respondent.

                             __________

Garry, J.

      Appeals from eight decisions of the Unemployment Insurance
Appeal Board, filed November 26, 2013, which ruled, among other
things, that CR England Inc. was liable for additional
unemployment insurance contributions on remuneration paid to
claimants and others similarly situated.
                              -2-                519702

      CR England Inc. is a for-hire authorized motor carrier
under permit from the US Department of Transportation, with
headquarters in Utah. Claimants, who are New York residents,
performed services for CR as long-haul tractor-trailer truck
drivers transporting freight throughout the continental United
States, pursuant to an agreement providing that they were
independent contractors (hereinafter the agreement). After
claimants applied for unemployment insurance benefits, the
Department of Labor (hereinafter DOL) determined that claimants
and others similarly situated were employees rather than
independent contractors and that CR was liable for additional tax
contributions. The claims were subsequently consolidated.
Following a hearing requested by CR, an Administrative Law Judge
determined, among other things, that claimants were employees and
that CR's requests regarding claimants Thomas R. Stevens and
Michael P. Murtagh were untimely. Upon appeal, the Unemployment
Insurance Appeal Board sustained the decisions. CR appeals.

      Initially, CR contends that claimants did not engage in
covered employment within New York as defined in Labor Law § 511
(3) (c). This claim is raised for the first time upon appeal.
We reject CR's contention that it is jurisdictional and may
therefore be asserted at any time. The Labor Law charges DOL and
the Board with the duty of determining whether a claimant engaged
in covered employment (see Labor Law §§ 511, 597, 621 [3]). In
carrying out this statutory obligation, a determination that a
claimant was not so engaged results in a finding that the
claimant is ineligible for unemployment insurance benefits, but
does not affect the agency's jurisdiction over the claim (see
e.g. Matter of Allen [Commissioner of Labor], 100 NY2d 282, 287-
288 [2003]). As this contention was thus required to be
preserved, it is not properly before this Court and will not be
considered (see Matter of Horvath [Residence Inn/Buffalo Lodging
Assoc., L.L.C.-Commissioner of Labor], 32 AD3d 1089, 1089 [2006];
Matter of Altman [Commissioner of Labor], 3 AD3d 658, 659
[2004]).

      The Board did not err in determining that the hearing
requests relative to Stevens and Murtagh were untimely.
"Pursuant to Labor Law § 620 (2), an employer has 30 days to
request a hearing after the mailing or personal delivery of a
                              -3-                519702

notice of determination from which it claims to be aggrieved"
(Matter of Preyer [Dische-Commissioner of Labor], 121 AD3d 1216,
1216 [2014], appeal dismissed 24 NY3d 1204 [2015], lv denied 25
NY3d 906 [2015] [citation omitted]; accord Matter of Tartaglia
[Aegis Capital Corp.-Commissioner of Labor], 128 AD3d 1304, 1305
[2015]; see 12 NYCRR 461.2). As to Stevens, DOL issued a notice
of determination dated January 17, 2008 finding that he was an
employee and not an independent contractor. This determination
further directed CR to submit amended quarterly reports and to
pay contributions on Stevens' earnings and those of all other
similarly employed persons dating back to "at least the first
quarter of 2005." On January 25, 2008, DOL issued a separate
determination awarding him benefits. CR submitted a request for
a hearing dated February 25, 2008. This request referenced only
the determination of January 25, on the stated basis that Stevens
had been discharged for misconduct; neither the initial
determination nor the issue of classification was mentioned. CR
thereafter requested a hearing on the issue of Stevens'
classification in May 2008. Contrary to CR's contention, we find
that it was aggrieved by the requirements of the initial
determination, notwithstanding the fact that benefits were
subsequently awarded, and it was required to make a timely
request for a hearing (see Labor Law § 620 [2]).

      CR's February 25, 2008 request for a hearing was filed
within the statutory period applicable to the January 17, 2008
determination, as it is deemed to have received that
determination no later than five business days following the date
on the determination (see 12 NYCRR 461.2). Nonetheless, the
inferences to be drawn from the language of the February 25, 2008
request posed factual issues for the Board to resolve. On this
record, the Board was not bound to conclude that the limited
request made by CR encompassed either the January 17, 2008
determination or the issue of Stevens' classification, and we
thus defer to the Board's determination of this issue (compare
Matter of Chism [Community Blood Council of Greater N.Y.-Levine],
42 AD2d 914, 915 [1973]).

      DOL issued a notice of determination relative to Murtagh on
April 18, 2008, which classified him as an employee, but later
determined that he was ineligible for benefits on another ground.
                              -4-                519702

CR was aggrieved by the classification determination, which
imposed the same requirements upon CR as the classification
determination pertaining to Stevens. Nevertheless, CR failed to
request a hearing until July 2, 2008. Although CR argues that
its delays in both instances should be excused, as it reasonably
believed that it was not aggrieved for unemployment insurance
purposes if no benefits were awarded, "the statutory time period
in which to request a hearing is to be strictly construed, and
the statute contains no provision permitting an extension of time
in which an employer can request a hearing" (Matter of Rago
[Resource One, Inc.-Commissioner of Labor], 22 AD3d 1002, 1002
[2005]; accord Matter of Hickman [Maximum Litigation Support
Servs., LLC-Commissioner of Labor], 111 AD3d 1000, 1000 [2013];
Matter of Agarwal [Bilingual Seit & Preschool, Inc.-Commissioner
of Labor], 108 AD3d 807, 808 [2013]). Accordingly, the Board's
timeliness determinations will not be disturbed.

      As to the classification of claimants as employees rather
than independent contractors, "[w]hether an employer-employee
relationship exists is a question of fact, to be decided on the
basis of evidence from which it can be found that the alleged
employer exercises control over the results produced . . . or the
means used to achieve the results" (Matter of Charles A. Field
Delivery Serv. [Roberts], 66 NY2d 516, 521 [1985] [internal
quotation marks and citations omitted]; see Matter of Short
[Ranger Transp.-Sweeney], 233 AD2d 676, 677 [1996]). The record
reveals that CR requires all newly hired drivers, upon completing
an initial training period, to choose whether they will provide
services as independent contractors or employees; claimants chose
to be independent contractors and signed the agreement
identifying them as such. CR asserts that the agreement gives it
markedly less control over claimants and others who elect the
status of independent contractors than it has over drivers who
elect to work as employees. For example, claimants were not
required to report to CR daily although employee drivers were,
and claimants were free to refuse load assignments and select
their own routes, while employee drivers were not.

      CR further asserts that the trucking industry is heavily
regulated and that many provisions in the agreement that appear
to limit or control its relationship with claimants – such as
                              -5-                519702

requirements obliging claimants to display signs indicating that
their trucks were being operated by CR and prohibiting them from
carrying passengers without CR's consent – are in fact required
by federal statutes and regulations. We agree that compliance
with government requirements, by itself, "should not be found to
be dispositive of an employee-employer relationship" (Matter of
Choto v Consolidated Lbr. Transp., Inc., 82 AD3d 1369, 1370
[2011]; see 49 CFR 376.12 [c] [1]; see generally Matter of
Leazard [TestQuest, Inc.-Commissioner of Labor], 74 AD3d 1414,
1414-1415 [2010]; Matter of Wannen [Andrew Garrett
Inc.—Commissioner of Labor], 57 AD3d 1029, 1030 [2008]).
However, here the Board did not rely solely upon required
regulatory terms but, instead, found that the agreement went
beyond regulatory requirements in several respects that gave CR
control over the means by which claimants fulfilled their work
responsibilities.1

      CR required claimants to use electronic on-board recorders
in their trucks and installed them at CR's cost if claimants'
trucks did not have them. The regulations do not mandate the use
of these devices but, instead, provide alternative means of
compliance (see 49 CFR 395.8, 395.15). CR also reimbursed
claimants for certain tolls, required claimants to load and
unload freight, and compensated claimants for performing this
task or for their expenses in hiring workers to do so; the
applicable regulations specify only that contracts between motor
carriers and drivers must indicate which party will be
responsible for these duties and expenses and the terms of such
compensation (see 49 CFR 376.12 [e]). Notably, claimants were
required to work exclusively for CR. Additionally, CR
established the rates by which claimants were paid, bore the risk
of loss by paying claimants whether or not the customer paid CR

    1
        The regulations require motor carriers to establish
safety management controls and maintain satisfactory safety
ratings (see 49 CFR 385.5, 385.7 [a], [b]; 390.11). The Board
erred insofar as it determined that CR exceeded its regulatory
obligations by requiring claimants to undergo retraining when CR
deemed it necessary; this met, but did not exceed, these
regulatory standards.
                              -6-                  519702

for the load, required claimants to contribute to a reserve fund
for safety-related truck repairs and maintenance, arranged for
claimants' insurance – deducting the cost from their pay – and
dealt with customer complaints about claimants' services. Thus,
we find that the record as a whole contains substantial evidence
supporting the Board's determination that claimants were CR's
employees (see Matter of Wright [Central Transp., Inc.-
Commissioner of Labor], 58 AD3d 988, 989-990 [2009], appeal
dismissed 12 NY3d 843 [2009]; Matter of Short [Ranger Transp.-
Sweeney], 233 AD2d at 677-678; compare Matter of Choto v
Consolidated Lbr. Transp., Inc., 82 AD3d at 1369-1370).

     Lahtinen, J.P., Lynch and Devine, JJ., concur.

     ORDERED that the decisions are affirmed, without costs.

                             ENTER:

                             Robert D. Mayberger
                             Clerk of the Court