Sinclair Builders, Inc. v. Unemployment Insurance Commission
2013 ME 76
| Me. | 2013Background
- Sinclair Builders, Inc. audited in 2010 by Maine Bureau of Unemployment Compensation over 24 individuals claimed as independent contractors.
- Bureau concluded all 24 were employees under 26 M.R.S. § 1043(11) and assessed unpaid unemployment taxes plus interest/penalties.
- Commission affirmed for bookkeeper, two salesmen, and 19 subcontractors; vacated two subcontractors; Sinclair appealed.
- ABC test governing employment status: (A) freedom from control, (B) service outside usual course/place of business, (C) independently established trade; employer bears burden to prove all three.
- Court applies 2010 statute version of the ABC test (pre-2011 amendment); reviews for substantial evidence and de novo statutory interpretation; remands for eighteen workers where Commission erred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Sinclair meet all ABC criteria for the bookkeeper? | Sinclair argues bookkeeper was free from control and outside Sinclair’s usual business. | Commission held bookkeeper not free from control and within Sinclair’s usual course. | Part B affirmed; bookkeeper within Sinclair’s usual course of business. |
| Did Sinclair meet all ABC criteria for the salesmen? | Salesmen were not free from Sinclair’s direction; Sinclair did not control sales method. | Commission found lack of freedom from direction; sales terms controlled by Sinclair. | Part A not satisfied; Sinclair failed to show freedom from direction; Commission affirmed on that issue. |
| Did Sinclair meet ABC criteria for the eighteen skilled workers? | Workers were independent contractors not subject to Sinclair’s control; services incidental to business. | Commission found lack of freedom/control and services within usual course. | Commission erred; Sinclair met parts A and B for these eighteen workers; judgment vacated as to them and remanded for tax recalculation. |
Key Cases Cited
- McPherson Timberlands, Inc. v. Unemployment Ins. Comm'n, 1998 ME 177 (Me. 1998) (ABC test interpretation; place of business and control considerations)
- Hasco Mfg. Co. v. Me. Emp't Sec. Comm'n, 158 Me. 413, 185 A.2d 442 (Me. 1962) (Salespeople not free from employer’s control; application of ABC test)
- Me. Auto Test Equip. Co. v. Me. Unemployment Ins. Comm'n, 679 A.2d 79, 80-81 (Me. 1996) (Control or direction over performance; right to control constitutes employment factor)
- Androscoggin Jr., Inc. v. Me. Unemployment Comp. Comm'n, 137 Me. 154, 16 A.2d 252 (Me. 1940) (Repair/maintenance as factor in usual course of business)
- Carpet Remnant Warehouse, Inc. v. N.J. Dep’t of Labor, 593 A.2d 1177 (N.J. 1991) (Factors indicating control; specific hours and means of performance; personal rendering of services)
- Alumiwall Corp. v. Indiana Employment Security Bd., 167 N.E.2d 60 (Ind. Ct. App. 1960) (Independent contractor status; limited control framework)