Stage Road Poultry Catchers v. Commonwealth, Department of Labor & Industry
2011 Pa. Commw. LEXIS 620
Pa. Commw. Ct.2011Background
- Stage Road Poultry Catchers (Stage Road) operates under two joint venture agreements (2003 and 2006) to provide chicken catching services on a job-by-job basis as co-owners for profit; general agents Snook and Snook have broad authority to advance the venture’s interests.
- Catchers are paid based on live pounds caught, with Stage Road deducting expenses and distributing the remainder among Catchers; no hourly wages or salaries are paid.
- Processors own the chickens and control job specifics (time, place, location, pounds, and price per pound) via faxes to Stage Road; Stage Road receives these job details and assigns Catchers for each job.
- Stage Road does not supervise Catchers, does not provide training or equipment, and Catchers typically travel in Stage Road vans; Catchers sign Joint Venture Agreements stating they are not employees.
- Department of Labor and Industry (Tax Services) assessed unemployment contributions against Catchers as Stage Road employees for periods 2004–2006 and 2006–2008, prompting Stage Road’s reassessment petitions.
- The Commonwealth Court reversed the Department’s denial of reassessment, concluding the Catchers were not controlled employees and could be independent contractors under Section 4(l)(2)(B) of the Unemployment Compensation Law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Department’s findings are supported by substantial evidence | Stage Road—challenging findings 12, 14, 15, 18 | Department—claims findings supported by record | Yes, in part; some findings reversed as not substantial evidence |
| Whether the Catchers are employees or independent contractors under 4(l)(2)(B) | Catchers were independent contractors, not employees | Catchers were employees under degree of employer control | Catchers were independent contractors for purposes of unemployment coverage |
| Whether the Joint Venture Agreements and processor control establish “control” over Catchers | Agreements show Catchers not employees; little Stage Road control | Elements of control exist under department’s interpretation | Department erred in finding lack of freedom from direction and control |
| Whether the Catchers’ engagement constitutes an independently established trade or business | Catchers freely accepted or rejected jobs for third parties | Engagement tied to Stage Road’s venture; not independently established | Second prong satisfied; Catchers may engage in services for others |
Key Cases Cited
- Beacon Flag Car Co., Inc. v. Unemployment Comp. Bd. of Review, 910 A.2d 103 (Pa. Super. Ct. 2006) (factors for independent-contractor status, including control and look to client for continued work)
- CE Credits Online v. Unemployment Comp. Bd. of Review, 946 A.2d 1162 (Pa.Cmwlth. 2008) (two-prong test for independent-contractor status; control and trade/business)
- Danielle Viktor, Ltd. v. Dep't of Labor and Indus., Bureau of Employer Tax Operations, 586 Pa. 196 (Pa. 2006) (assignment fluidity supports independent-contractor status)
- Kuhn v. Unemployment Comp. Bd. of Review, 432 A.2d 1156 (Pa.Cmwlth. 1981) (two-prong test for self-employment under Section 4(l)(2)(B))
- Venango Newspapers v. Unemployment Comp. Bd. of Review, 631 A.2d 1384 (Pa.Cmwlth. 1993) (second prong—independently established trade or business)