By Thomas M. Kester
To prepare for this summary, I didn’t actually start off by reading the case. Instead I watched the Smokey and the Bandit trilogy to understand what is an “integral” and “necessary part of doing business” for a trucking operation. I didn’t learn much, other than that Trans Ams were badass in the 1980s. I also watched Optimus Prime in the Transformers films, but Optimus Prime never hauls any freight so I am like 90% sure Transformers is fictional.
This case arose from Bradford’s appeal from a Department of Labor assessment that three workers were employees of Bradford, and an evidentiary hearing where an administrative law judge (ALJ) upheld the Department’s determination. Bradford then appealed to the Employment Security Board (Board), which adopted the ALJ’s findings. The ultimate finding (and the meat-and-potatoes of the case) was the three workers were "employees" for purposes of assessing unpaid unemployment-compensation contributions by Bradford.
Ms. Eileen Bradford testified that she opened an unregistered bookkeeping business in 2008 and had three clients. Only one (Bradford) had a written agreement with Ms. Bradford. She never sent invoices to the other two. Ms. Bradford’s son was the president of Bradford and she, herself, served as the secretary and treasurer of Bradford during the disputed events. In 2010, Ms. Bradford hired Mr. Swenor to help with Bradford’s books. Ms. Bradford signed Mr. Swenor’s checks on behalf of Bradford and Mr. Swenor worked out of Ms. Bradford’s home. When Mr. Swenor left, Ms. Bradford hired Ms. Reed (her son’s fiancee and a babysitter by trade) and Ms. Reed worked under similar circumstances as Mr. Reed. After Ms. Reed left, Ms. Bradford took Bradford’s books over again. Just like the game “Hot Potato,” Bradford didn’t want to be stuck with Ms. Bradford, Ms. Swenor, or Mr. Reed in its control.
Onto the good stuff—the ALJ and Board used some test under a Vermont statute that basically says “all workers who receive wages are presumed to be employees, and the burden is on the employer to rebut this presumption.” Rebuttable presumptions can be understood like “whoever smelt it, dealt it,” which is a presumption (the detector passed the noxious odors) that can be rebutted (“Me?! Nuh uh. You totally stunk up the room”) with evidence (“Look—the dog passed out right behind you”). To rebut the presumption employer will use something called the “ABC” test. Unlike what the Jackson 5 will tell you, it’s not as easy as 1-2-3. The “ABC” means something similar to “assent, benefit, and control” of the employer over the person (which is used a lot in principal-agent determinations—but that's a riveting tale for another day). Now, if any of the three elements are not found then it “compels the conclusion that an employer-employee relationship exists.” Without further ado:
The three elements of the exception are: (1) the worker “has been and will continue to be free from control or direction over the performance of such services”; (2) “[s]uch service is either outside the usual course of the business for which such service is performed, or . . . such service is performed outside of all the places of business of the enterprise for which such service is performed”; and (3) “[s]uch individual is customarily engaged in an independently established trade, occupation, profession or business.”So the Board found that Bradford kinda passed one, failed two, and failed most of three. On review, Bradford challenges just the Board’s finding under two. Bradford believed that bookkeeping was not an “integral” or “necessary part of doing business.” This is opposed to hustlers and the mob, where (according to my accountant, Carrie D. Fore) bookkeeping is an integral (and deadly) aspect of those “businesses” (“I guess Jimmy “Break Your” Patella’s employment will require us to pay unemployment compensation contributions. Who knows if he will get injured on the job or get ‘fired’”).
The rest of the opinion is pretty bogged down in boring legal analysis. After consulting with my attorneys (Hyde, Alda, Eva, Dance & Associates), they suggested I summarize it. All three employees failed not only two but also three. Further, Bradford failed to carry the evidentiary burden necessary to overcome the Board and ALJ’s opinions. Finally, “as a corporate officer [Ms.] Bradford effectively managed and directed herself or others performing bookkeeping services on behalf of employer” and thus failed part one.
If you don’t pass the A-B-C, ole’ smokey will be on your tail I reckon, good buddy.
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