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09/14/93 VETERANS SERVICES v. LABOR AND INDUSTRIAL

September 14, 1993

VETERANS SERVICES, INC., APPELLANT,
v.
LABOR AND INDUSTRIAL RELATIONS COMMISSION OF MISSOURI AND MISSOURI DIVISION OF EMPLOYMENT SECURITY, RESPONDENTS.



APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY, MISSOURI. The Honorable James F. McHenry, Judge

Before Spinden, P.j., Fenner and Hanna, JJ.

The opinion of the court was delivered by: Fenner

Appellant, Veterans Services, Inc., appeals from the judgment of the circuit court affirming the decision of respondent, Labor and Industrial Relations Commission (Commission). The issue involved herein is whether individuals hired by Veterans Services to conduct telephone solicitations for donations to Veterans Services are independent contractors or employees for purposes of the Missouri unemployment compensation laws. The Commission determined that said individuals were employees. The Commission's determination was affirmed on appeal to the circuit court and Veterans Services initiated this appeal. *fn1

Veterans Services is engaged in the business of retail sales for the benefit of veterans. Veterans Services obtains donations of new and used goods from businesses and individuals which goods are then sold in its three retail stores. Among its other efforts to obtain donations of goods, Veterans Services hires individuals as solicitors to make telephone contacts seeking donations. Veterans Services has two categories of solicitors, field coordinators and field callers.

At the time of the hearing herein, Veterans Services had four field coordinators. Each month, field coordinators receive a number of pages from a public directory which lists individuals by name, address, and telephone from an area where Veterans Services' trucks will be picking up goods during the month. The field coordinators are advised as to what day a truck will be on a given street.

In the past, the lists were sometimes picked up from Veterans Services by the field coordinators and sometimes mailed to the field coordinators. Under current practice, the lists are sent to the field coordinators by courier. After receiving their lists, the field coordinators attempt to solicit donations from the individuals listed. Field coordinators generally engage the assistance of others referred to as field callers to call the individuals listed. In order to obtain the assistance of field callers, field coordinators are free to use whatever means they might choose. Some techniques used by field coordinators to secure field callers are advertising, posting notices, and word of mouth. Field coordinators sometimes obtain field callers by Veterans Services advising of individuals calling Veterans Services interested in work.

Field coordinators receive a sum designated as "ad money," regardless of whether they advertise or not. Ad money is determined by a formula based on the number of trucks picking up goods. Postage money is also provided to field coordinators on a formula basis.

Field coordinators decide without input from Veterans Services whether to hire a particular field caller. Veterans Services does not supply or direct any form of application for field callers. Field callers often have other jobs in addition to their work for Veterans Services. However, the record suggests that field callers are not allowed to do similar work for another group that solicits donations.

After field callers complete the telephone calls to the individuals listed, they report the addresses of the individuals who have items to donate to the field coordinators. The field coordinators keep track of this information and report it to Veterans Services' offices. Field coordinators and field callers are paid every two weeks.

When a Veterans Services' truck picks up saleable items at an address provided by a field coordinator, the coordinator is credited with a "good stop." If a field coordinator has 1-20 good stops per sheet of a list, they receive 10 cents per stop; if there are 21-27 good stops, they receive 15 cents per stop; if there are 28 or more good stops, they receive 20 cents per stop.

A new field caller receives a booklet from the field coordinator which lists the goods that Veterans Services will and will not accept. The booklet also has guidelines, which are not mandatory, as to the time of day most appropriate to make calls. Field callers set their own schedule and are free to have someone else make calls for them. They receive no supplies and no expense money from Veterans Services. They are paid on the basis of the number of good stops and are not entitled to draw on their commissions. Neither field coordinators nor field callers pick up donated goods.

STANDARD OF REVIEW

On appeal from a decision of the circuit court affirming a decision of the Labor and Industrial Relations Commission, an appellate court reviews the decision of the Commission, not the decision of the circuit court. Burns v. Labor & Indus. Relations Comm'n, 845 S.W.2d 553, 554 (Mo. banc 1993). If supported by competent and substantial evidence and absent fraud, the findings of fact of the Commission are conclusive. Id . at 554-55. An appellate court reviews the evidence in the light most favorable to the findings and decision of the Commission and disregards all opposing and unfavorable evidence. Id . at 555.

I - PRIOR TO JULY 1, 1989

In its first point on appeal, Veterans Services argues that the Labor and Industrial Relations Commission erred by finding that field coordinators and field callers were employees and not independent contractors pursuant to the statutory test of section 288.034.5, RSMo 1986, in effect prior to July 1, 1989. *fn2

Prior to July 1, 1989, section 288.034.5, RSMo 1986, provided as follows:

5. Irrespective of the usual tests for determining the existence of the independent contractor relationship as at common law, service performed by an individual for remuneration shall be deemed to be employment subject to this law unless it is shown to the satisfaction of the division that:

(1) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and

(2) 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

(3) Such individual is customarily engaged in an independently established trade, occupation, profession or business.

All three subsections of section 288.034.5, RSMo 1986, must be satisfied before an individual will be deemed an independent contractor. Burns , 845 S.W.2d at 556. The Commission determined that field coordinators and callers did not meet the requirements of subsections (1) and (3). There is no dispute that the field coordinators and callers meet the requirements of subsection (2).

We find that the field coordinators and callers do not meet the requirements of subsection (3). Since all three subsections must be satisfied, it is not necessary to analyze whether the requirements of subsection (1) are met.

Section 288.034.5(3) requires a showing that the individual is customarily engaged in an independently established trade, occupation, profession, or business. In Koontz Aviation v. Labor & Industrial Relations Commission , 650 S.W.2d 331, 334 (Mo. App. 1983), this court cited with approval Vermont Securities, Inc. v. Vermont Unemployment Compensation Commission, 118 Vt. 196, 104 A.2d 915 (1954). Vermont Securities considered a statute worded identically to section 288.034.5(3), RSMo 1986, and held that:

The adverb "independently" clearly modifies the word "established", and must carry the meaning that the trade, occupation, profession or business was established, independently of the employer or the rendering of the personal service forming the basis of the claim. The present tense "is" indicates the individual must be engaged in such independent activity at the time of rendering the service involved. "Customarily" means usually, habitually, regularly. Fuller Brush Co. v. Industrial Comm., 99 Utah 97, 104 P.2d 201, 129 A.L.R. 511. The language used contemplates that one engaged in an independently established trade, occupation, profession or business has a proprietary interest therein to the extent that he can operate it without hindrance from any individual whatsoever. Murphy v. Daumit, 387 Ill. 406, 56 N.E.2d 800; Life & Casualty Ins. Co. v. Unemployment Compensation Comm., 178 Va. 46, 16 S.E.2d 357. An established business is one that is permanent, fixed, stable and lasting. Unemployment Compensation Comm. v. Collins, 182 Va. 426, 29 S.E.2d 388.

Vermont Securities, 104 A.2d at 917.

In Koontz, this court also held that the ultimate issue is whether the person performing the services is an entrepreneurial enterprise enjoying such a degree of economic independence that the enterprise can survive any relationship with the particular person contracting for the services. Koontz Aviation , 650 S.W.2d at 334 (citing Revlon Service, Inc. v. Employment Division, 567 P.2d 1072, 1075 (1977)).

According to the criteria established in Vermont Services and cited with approval in Koontz, Veterans Services did not show that the field coordinators and callers were established independently of Veterans Services. The record does not reflect that these individuals could operate their business as field coordinators or field callers without their relationship with Veterans Services, or with economic independence. The field coordinators and callers were dependent upon Veterans Services for their business. There was no evidence to show that the coordinators or callers performed similar services for others independent of Veterans Services. There was even testimony that the field callers were not allowed to make calls for other organizations which sought donations. The names for the coordinators and callers to contact were provided by Veterans Services and the coordinators and callers were required to meet the pickup schedules as determined by Veterans Services. The record does not reflect that the business of these individuals as coordinators or callers could have survived or even had any existence independent of Veterans Services.

There was competent and substantial evidence to support the decision of the Labor and Industrial Relations Commission that the field coordinators and callers were employees and not independent contractors pursuant to the criteria established under section 288.034.5, RSMo 1986, as effective prior to July 1, 1989.

Veterans Services' first point is denied.

II - SUBSEQUENT TO JUNE 30, 1989

In its second point, Veterans Services argues that the Labor and Industrial Relations Commission erred by finding that field coordinators and field callers were employees and not independent contractors pursuant to the statutory test of section ...


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