*1 that, regulations, comply in order to with these argues Clean Harbors investigate and determine hazardous WMIL would have to Then, at exposed to Clean Harbors. Engelland might chemicals be Engelland to how to duty regulations had under these train WMIL respond WMIL failed to to unexpected releases. properly respond brief. argument duty Engelland’s employer agree that did have We WMIL and to of known hazardous chemicals investigate Engelland and warn workplace, in the training respond detect and to hazards provide However, emis- the accidental regulations. OSHA because pursuant identifiable to was not known or gas chlorine at Clean Harbors sion of had under the vol- Inc., duty, Inc. and WMIL no WMIL and WM WM train regulations, to warn and undertaking doctrine OSHA untary Engelland of this risk. any duty owe find that WM Inc. and WMIL did not
Because we gas regarding chlorine Engelland unexpected emission Harbors, other three elements of need not discuss the Clean any issue of mate genuine has not shown negligence. Clean Harbors and, therefore, liability no we find rial on its claim negligence fact argu address the other issues also need not negligence. under We granting the trial court’s parties. We affirm ments raised Inc. and WM summary judgment favor WMIL Affirmed. EJ., GREIMAN, J., concur.
QUINN, OF U.S.A., INC., Plaintiff-Appellant, v. THE DEPARTMENT CARPETLAND al., Defendants-Appellees. et EMPLOYMENT SECURITY Division) (5th No. 1—99—1983 District First Rehearing April 2001. denied Opinion filed November 2000 . *2 (Richard Rosenthal, Chicago Marcus and Nath & of L. Sonnenschein Zivitz, counsel), appellant. E for Ellen (Joel Bertocchi, General, Ryan, Attorney Chicago D. Solicitor James E. General, ap- Simko, counsel),
General, Attorney Darryl B. Assistant pellees. of the court: opinion
JUSTICE ZWICK delivered agency appeal, we must decide whether administrative U.S.A., (Carpetland), owed determining Inc. erred Act Unemployment Insurance under the unemployment contributions Act) (West 1998)) (the seq. installation et 405/100 and measure services. contractors by Lynn of a decision sought administrative review Employment Illinois Doherty, Director
Quigley *3 (Director), Depart- an Illinois Security adopted and affirmed determi- (Department) representative’s Employment Security of installation by performed found that work nation. The “employ- customers was Carpetland’s and measurers for contractors (820 et Act Insurance Unemployment ment” under the 405/100 (West 1998)) the and, therefore, section 212 of not under exempt seq. 1998). (West determined The Director further Act. 820 ILCS 405/212 penalties in $38,977.17 plus $200 interest Carpetland owes of 259 unemployment contributions behalf installation unpaid review, the On administrative and measure services. contractors judgment and entered affirmed Director’s decision court the circuit judgment. from that appeals now Carpetland Department. favor of the (1) the Director’s decision Carpetland contends appeal, On by installation contractors performed services Act meaning section within employment constituted (West 1998)) weight the manifest against ILCS 405/206 (2) deciding of law in as a matter evidence, circuit court erred them at by raising its claims waived constitutional Carpetland (3) due level, process was denied Carpetland administrative agree with decision. Because to the Director’s procedure leading contention, and third Carpetland’s first we need not address second claims.
BACKGROUND hear- following evidence was introduced the administrative representative. Carpetland before the is a ing Director’s U.S.A. retailer coverings, primarily During 1991, of floor carpet. Carpetland operated retail requested stores in Illinois. Each customer who installation terms, agreed following which were included in the customer’s contract with Carpetland: BY
“INSTALLATION SUBCONTRACTOR It is Carpetland understood that will not install said materials acceptance you Carpet- but that proposal of this authorize to [your] land installation. You authorize contract with a subcontractor on behalf make
Carpetland to issue to said subcontrac- [your] an tor on behalf installation specifica- work order with these agree tions. You pay specified the amount herein price which shall include the of all materials and the installation charges payable which are your to the subcontractor on behalf.” Next, Carpetland arranged and contracted with an installer complete the sales, installation. floor covering 75% sales, installation was price. included the sale and the In these customer paid directly for the installation.
Three installers and one measurer testified at the hearing before representative describing their relationships Carpetland as well as the nature their businesses. Installers measurers could hire helpers Smith, employees installer, work for them. Joseph during hearing testified that he of a president company called Works, Inc., The Tile which was an installation service that covering floor installations and other carpet companies. Smith changed Floors, later the name J. to Smith payments entity. made to this Smith testified that he engaged helpers, both as represen- and subcontractors. The that, tative Works, found while there Inc., was no record for The Tile files, in the Department’s there was Flooring, a record for J. Smith Inc., May representative 1994. The may concluded that Smith have corporate created a entity, truly entity but he did not work for that since Smith did adhere to corporate formalities. structure Weiss, measurer,
Kenneth W. hearing. also testified at the He *4 stated that for part the first of 1991 he his worked for father’s Service, company, Carpet through G.W. entity that business he performed carpet measuring for as well as for others. There is no information in Carpet the record to show that Ser- G.W paid any vice unemployment contributions on Weiss’ behalf. For the
1072 company that he created his own year, second half of Weiss testified Service, which had and dealt called Ken Weiss Measure no filed an tax directly Weiss stated that he income Carpetland. as for the first half of 1991 and Gary return a subcontractor of Weiss for of the second half. hearing he installed Lawson testified at the 1991
James stores, carpet including for carpets, vinyl and some hardwood floors Carpet Lawson stated under the name Lawson’s Service. Carpetland, few, a helper a and hired but part-time he full- or advertised sufficiently qualified. Depart- they not had to fire them because Department Carpet that Lawson’s Service had ment records showed during the first six reported having employee one account number of months 1991. Craig’s 1991 he worked for
Craig during Panozzo testified that worker, Tile, president, he sole proprietor, Custom where acted installing ceramic owner. Panozzo work He has stated that he no flooring and marble new construction. Department, he used his own social number with the employer account number, federal income security corporate he not file a and that did made to Payments by in 1991 were tax return in 1991. therefore concluded that Panozzo Craig representative Panozzo. The Tile Custom because corporate entity Craig’s for the truly did work corporate he structure formalities. did adhere to
ANALYSIS
Review
the Administrative
reviewing
a final decision under
(West 1998)),
agency’s
review the
seq.
Law
et
5/3—101
Corp.
XL Disposal
not the circuit court’s determination.
decision and
207,
293,
202,
297
Zehnder,
3d
709 N.E.2d
App.
v.
questions
extends to all
Department’s
of the
decision
Judicial review
Depart
Furniture Co. v.
presented by
and fact
the record. Cohen
law
978, 981,
N.E.2d
Security,
App.
Ill.
3d
718
Employment
307
findings are
to be
held
1058,
Department’s
The
factual
deci
may
set aside such
only
court
prima
reviewing
true and
facie
Co
weight of the evidence.
if
are
to the manifest
contrary
sions
However,
Department’s conclusions
hen,
App.
3d at 981.
to de novo
subject
and are
deference
are not entitled
such
law
Service,
Se
Employment
Inc. v.
Messenger
AFM
review.
In this that the court circuit in finding provided by Director erred that the services the installation contractors and employment by Carpet- measure services constituted meaning land within the of section 206 of the Act and these individuals were not the exception contractors under in *** Employment section 212. is “any defined under Act as service performed by an employing individual for an unit.” 820 ILCS 405/206 (West 1998). An exception to this broad definition is contained in sec 212, tion exempting independent “employment” from contractors providing: performed unit,
“Service an employing individual such whether the employs individual others in connection with performance services, employ- such shall be deemed to be proven any proceeding unless and until it is where is- such sue involved that—
A. Such individual has been and will continue be free from control or performance services, direction over the of such both fact; under his contract of and in service Such B. is either service outside the usual course of the business for which performed such service is or that such service is places outside all the the enterprise of business of which such performed; service is engaged
C. Such independently individual is in an established trade, (West occupation, profession,or business.” 820ILCS 405/212 1998).
The employer
proof
has a strict burden of
and must
all
prove
three requirements of section 212 before an
will
exemption
granted.
be
Service,
O’Hare-Midway
Baker,
108,
Limousine
Inc. v.
112,
(1992);
Bradley,
First,
analyze
determine
the installers
section
perfor
from
direction over the
and measurers were free
control and
by Carpetland.
of their
“Direction or control” means
mance
services
worker,
employer
right
has
to control and direct
that an
done,
also
it should be
only as to the work
be done but
how
56 Ill. Adm. Code
whether or not
that control
is exercised.
partic
be made on the
2732.200(g)
This determination must
case,
indica
2732.200(g)
section
lists
factors
ular facts
each
but
making
its decision.
tive of those used
(1990); Cohen, 307 Ill.
through (g)(25)
§§ 2732.200(g)(1)
Adm. Code
App. 3d at
court these 25 factors when ignored representative that her control. The Director noted her decision *6 Code, the all of which considered similar factors to ones listed the were relevant. they 25 the that creates these factors states
The section of Code following types “The are illustrative mandatory: are not ‘direc will examine to determine whether questions subject to review and the type or control’ exists. The of business tion questions will are asked relationship being examined determine *** (1990). 2732.200(g) § 56 Ill. Adm. Code under Section.” question one or answer or combination Code further states: “No or control ex will determine whether direction questions answers totality of will reality or circumstances ists but rather the business Ill. Code if Adm. determine direction or control exists.” (1990). Nonetheless, agree Carpetland that 2732.200(g) we § generally ap which are by regulations out are factors factors set businesses, they are and installation plicable carpet to sales set relevant, have considered factors and that the Director should exercised control by considering Carpetland whether out the Code Accordingly, consider measurers. the individual installers and over the 25 factors. assign did
First, Carpetland not “issue the record shows measurers, nor did for the installers ments” or “schedule work” Ill. Adm. Code requirements.” time “quotas” it set or “make (1990). Rather, called installers 2732.200(g)(1) § of per-job basis. Installers assignments them fered called, presented evidence to work when were free refuse conflicted with when their schedules they regularly did so showed that customers. Carpetland’s the needs that it provide did not with the installers agreement
Carpetland’s or measurers the installers or the methods used could dictate alter (1990). 2732.200(g)(2) § Ill. performing their services. 56 Adm. Code completed their work as determined Measurers and installers job required best Nor to was for the hand. were workers follow or specific completing routine schedule in their 56 Ill. Adm. work. (1990). § 2732.200(g)(3) job long Code As as the was done to the satis customer, faction of Carpetland’s Carpetland remained uninvolved the installation.
Neither required report were subcontractors specific any regular location or at Adm. intervals. Ill. Code (1990). 2732.200(g)(4) § Testimony suggested that at one Carpet- least land store set for the their up “mailboxes” installers to collect work orders, but there was no requirement personally pick orders, one up might expect as to be employee required do. the hearing require established at it did not installers or measurers to provide spent given records of time on a (1990). job. § Code 2732.200(g)(5) Adm. Nor did require the installers or measurers a specific work minimum per number of hours or day per week. 56 Adm. Code (1990). 2732.200(g)(6) § were employed Workers not treated as if on a basis,” “permanent is made clear the fact that Carpetland sales people were contact each installer or each measurer time a job new § available. 56 Ill. Adm. Code 2732.200(g)(7) Work ers in any way reimbursed costs associated with their jobs. § Code 2732.200(g)(8) Adm.
None of installers, any employees, measurers or or of their bonuses, were included in Carpetland-sponsored pensions, paid vaca tions, pay any sick other program benefit that other employees enjoyed. 56 Ill. Adm. Code 2732.200(g)(9) Carpet- carry did compensation land workers’ insurance on the installers *7 (56 § Ill. 2732.200(g)(10) (1990)), Adm. Code nor did it (56 deduct social security § 2732.200(g)(ll) taxes Ill. Adm. Code (1990)), as was employees. done its other Nor did Carpetland report government workers’ incomes to the federal Internal Revenue Ser (1990). § vice Form 2732.200(g)(12) W-2. 56 Ill Adm. Code not did bond the Ill. installers or measurers Adm. (1990)). § Code 2732.200(g)(13) Although it is true that installers were required to $1,000 enter into a arrangement whereby hold-back by held to quality insure the of each work should installer’s there be a customer it is complaint, significant that installers were guarantee also Carpetland’s to quality to customers the their work period year for a of one after the installation. This fact militates of Carpetland’s position favor that the were installers not employees employees do generally guarantee because not the work of Instead, guarantees it is that employers. typically employer
their the work the employee. and
Garpetland sup did not “furnish the worker with materials (14) (1990). § plies.” 2732.200(g) carpeting Ill. Adm. Code The Garpetland to installers padding by were not materials furnished carpeting padding were cut for and owned because they up by Although time were the installers. picked customer at the carpeting padding in Cohen that were this court determined (Co job their at a “primary provided materials” to installers for use 983), hen, agree analysis we do not with court’s Ill. to particular carpeting had been sold of this customer, factor. Once the (the delivery to the installer customer’s carpeting with providing “the worker” his agent) fairly equated cannot be Furthermore, all materials used the installers in “materials.” tacks, razors, jobs, glue, tape were their such performing addition, In it is clear provided by installers themselves. equipment either tools or provided installers and measurers were not (as below), in more detail factors which by Garpetland we discuss Act. 56 employer is an under the Ill. finding Garpetland favor not (1990). 2732.200(g)(14) § Adm. Code
Garpetland any did furnish of the measurers or installation accounts, accounts, drawing expense transportation, contractors with 2732.200(g)(15) § 56 Ill. Adm. Code cards or “order blanks.” Carpetland’s position yet factor which favors This another measurers were contractors. that the installers and Garpetland never at clearly record also demonstrates its employment measurers and tempted types to limit the other fact, many provided pursue. Garpetland installers could Ill. competitors. to Adm. regular services on a basis an 2732.200(g)(16) something employer § This is would Code doing, Garpetland never at prevent yet to its from want over subcontractors’ other work. tempted exercise control to through (g)(20) refer 2732.200(g)(17) sections Administrative Code customers, fix sell ability particular restricting employee’s terms), reserving right (including credit ing the terms of sale putative territory which restricting approve contracts 2732.200(g)(17) Code work. 56 Adm. employee performs his customers Garpetland did determine through (g)(20) free ac remained in that each installer installer would service each repercussion job, apparent without any particular or refuse cept free, example, to turn Installers and measurers relationship. that was dif geographic in a area jobs the customer was down because much work to had too other simply or because ficult to service do.
Contrary arguments appeal, Carpetland to the of the Director on right discharge not have the a measurer or installer once he had did given job. 2732.200(g)(21) § hired to a Ill. Adm. Code perform been given a a accepted job Carpetland Once an installer had with customer, between the terms of the contract the installer and the fixed, prevented Carpetland customer were and this fact from be terminating the installer. The same would not true with a employee, Carpetland traditional at-will or contractual whom could mid-job obligation. terminate further without 2732.200(g)(22) through (g)(24) Carpet- Sections refer whether ever required meetings land installers or to attend measurers or train- courses, ing Carpetland right appoint whether ever retained the supervisors Carpetland over the work and whether reserved for itself right and regulations again, set rules over the work. Once these all factors favor that Carpetland’s position the installers and measur- were independent ers contractors. Finally, discussed, as previously Carpetland “purport did ***
guarantee performed” services Ill. Adm. Code (1990)), § 2732.200(g)(25) but the facts show that was not done any meaningful way. The that Director found each installer under its agreement with Carpetland one-year was to issue guarantee a of its work directly guarantee and this customer was backed $1,000 by Carpetland hold-back the contractor’s work. This not, factor favors that finding Carpetland reality, was guarantor performed by of the work the installers reality because the economic of the situation that fully was the installers were underwriting the guarantees best, made to the Carpetland customer. At acted as a “sec ondary guarantor” guarantee for the by offered the installer. The pri mary risk might that a unhappy customer be with the installation was therefore by installer, borne Carpetland.
In considering
very
the 25
specific
factors set out
section
2732.200(g), it
Carpetland
is clear that
that
it
established
did not
type
exercise the
of “control” over the installers and measurers which
212(A)
prevent
would
making
it from
out
section
claim. By our
count, no less than 24 of the
25 factors set out
regulations
suggest
that
does not
the install
“control”
ers and
only
measurers. The
factor
favors the Director’s
decision
is the fact that it
set
and collected
installa
charge
2732.200(g)(17)
tion
from the customer.
Ill. Adm. Code
not,
certainly
by itself,
While this is
it
significant,
does
outweigh the
of the
way
terms
contract and the
in which
and the
It
installers and measurers conducted
is therefore
business.
212(B)
212(C)
necessary, briefly, to address sections
of the Act.
212(B)
showing
is met
by Carpetland by
Section
of all
places
measurers
services “outside
busi
enterprise
performed.”
ness
which such service is
820 ILCS
(West 1998).
405/212(B)
Director
suggests
“place
busi
carpeting
ness” of
is the
place where its customers want
*9
installed, in
represent Carpetland’s
that the installers and measurers
However,
they perform
Carpetland
interests when
their
custom
work.
given
clear
in
and in
veiy
ers are
notice
both the contract terms
the
way
actually operate
in which the
and
that the
installers
measurers
Carpetland. The
representing
installers and measurers are not
record
their own
and that
shows
installers used
business cards
they
Carpetland’s insignias.
vehicles
used were not labeled with
The
of
responsibility
quality
installers and measurers took
their
very
O’Hare-Midway
This
different
than
situation in
work.
is
Service,
passengers
Limousine
where the
were unaware
dealing
company
drivers who
claimed were not its
were
Service,
O’Hare-Midway
App. 3d at
employees. See
Limousine
Service,
Didrickson,
113;
also
Ltd.
Delivery
see
United
v.
(1995).
584, 589,
Finally, requirements met the of section in engaged and measurers were establishing that installers (West 405/212(C) “independently established businesses.” 820 1998). looking explained requires Our court has that this test supreme enterprise capable is employee runs an purported to whether the Bradley, purported employer. Jack operation independent of of Security, 146 Ill. 2d Department Employment Inc. v. of (1991). case, Here, the work received every in almost N.E.2d of than through was shown be less one-third Adm. Code total business volume. See contractor’s (1990). 2732.200(e)(1) they had made showed that § The installers all businesses and owned capital of their substantial investments that his vehicles. Each installer testified one or more business tools, representing enterprise acquired quantities had considerable $5,000 $18,000. Some had sizeable invest between and investments of 56 Ill. Adm. equipment as well. See ments offices and warehouse 2732.200(e)(2) (1990). measurers, It was installers and the § Code profits of gained and that bore losses Carpetland, (1990). 2732.200(e)(3) Virtu § 56 Ill. Adm. Code operations. See these he advertised stated that ally every or measurer who testified installer ' out business services, by passing or through phone book his either 56 Ill. Adm. Code of mouth. See through word cards (e)(12) (1990). handled The 2732.200(e)(4), installers §§ names and main- their used own reporting, their own tax Code 56 Ill. Adm. or offices. See shops own tained their (e)(7) (1990). expressly informed 2732.200(e)(5), (e)(6), §§ coverings. installation of floor not handle the that it did its customers 2732.200(e)(8) involved company Each § 56 Ill. Adm. Code See Carpet- employees without helpers hired its own in installation 2732.200(e)(9) The § Ill. Adm. Code See 56 approval. land’s that the provided installer and each agreement between Employ Department make to the Illinois reports installer would 2732.200(e)(10) 56 Ill. Adm. Code Security. See records keep accurate and measurers failed fact that these manifestly insufficient to is diligently report keeping Poor record Carpetland. make them themselves, to transform inadequate in and of are negligent reporting, to an from that of an contractor employment status employee. hearing short, overwhelming presented at the evidence after
showed that the installers and measurers who work products employees Carpetland. the sale many of the fac recognized Justice Slater his dissent Cohen regulations mistakenly applied in the have so that tors set out been coverage anytime Act “almost a business under the *10 customers,” compensates party providing another service to its Cohen, only ancillary even the service “is to its business.” when (Slater, J., dissenting). agree at 985 We with this assess App. 3d developing Although many ment of the law. there are cases (see, e.g., Bradley, Jack properly give the Act a “liberal construction” Inc., 73), only taking done after into 146 Ill. 2d at this should be relationship consideration the realities of the and the factors agency assessing party has when a is an promulgated contractor. great advantages system
One of the of our economic to determine which areas of individuals and businesses are allowed and are too pursue, economic are best suited to endeavor effectively.The record risky profitably to be handled or complicated selling would be shows that determined that its business it consumers, installing coverings the floor coverings floor but that followed installers. has professional sold would be left to to interfere in the openly attempted model and has not have also built businesses of the installers and measurers who certainly did not Assembly Our independent businesses. General ability organizations such passing intend in the Act to restrict and those run the installers and measurers organizations in our state such separate establish businesses. Business as those in given guidance involved the current case must be as to what conduct will cause them to run afoul of “independent contrac- provisions tor” of the Act. The failure of the Department to do so the current case has resulted in Department a decision that is unsup- portable presented. under the facts Accordingly, the decision of the Director must be reversed. reasons,
For the foregoing the decision of the Director is reversed. Reversed.
QUINN, J., concurs. THEIS,
JUSTICE
dissenting:
majority
appears
find
and the trial court
political motivation,
made their determinations based on
rather than
disciplined analysis
statutory
a
factors. Because I do not believe
erroneous,
the Director’s
I
clearly
judg-
decision was
would affirm the
the circuit court.
agree
majority
I do
a
consistency
there is need for
uniformity
in order to
give
guidance
businesses
this area.
Significantly,
already
issues
this case have
been resolved Co
Security,
hen
Department Employment
App.
Furniture Co. v.
307 Ill.
978,
(1999),
Cohen,
strikingly
Carpetland established routine for its Cohen, setting by contracting routine found in with the customer approximate Carpetland required the date and time for installation. nails, materials, glue, the installers to furnish their own minor such as materials, etc., primary carpet the installers with the providing while materials, along the picked up these padding. Installers and then store measuring diagrams, contract and importantly, designated jobsite. Most materials to the delivered these as the carpeting as well price reflected both the customer’s contract costs, profit. made a from which installation work, in Cohen. of the quality controlled the Carpetland also neat, “in a job the perform all installers Carpetland required and to job specifications” in accordance with workmanlike manner year. Carpetland for one guarantee the installation and then as- complaints regarding installation handled all customer no If the installer problem. installer to resolve the signed original paid repairs for the longer Carpetland, Carpetland worked for “retainage agreements.” replacements, partly funded that the suggest all the same result as Cohen: installers These facts contractors. and not 212(A) (820 405/212(A) (West In its discussion of section 1998)), the Director she should have majority criticizes because Code the 25 factors delineated in the Code. 56 Ill. Adm. considered (1990). However, nothing in the record to show 2732.200(g) there is contrary, the Director’s decision ignored the Director Code. To the specifically 2732.200(g). references the relevant factors found in section notes, majority mandatory, As the itself those factors are not analysis I believe the require Code does not of each illustration. cir reality totality Director examined the adequately in her cumstances determination. I do not
Lastly, majority there are few facts stated factual find completely representative’s believe are accurate. ings, Carpetland right inspect quality did have the by sending a right representative installer’s work and exercised this assignments, contrary to the with the installer for the first four or five Additionally, contrary majority’s majority’s opposite assertion. guarantor not the of the installer’s statement work, regarding installa complaints handled all customer original If tion and then referred them to the installers. ultimate Carpetland bore the longer Carpetland,
no worked for Further, majority contends that responsibility repairs. for the considerable enterprises acquired that their “had installers testified $5,000 and tools, of between quantities representing investments any sup fact $18,000.” 3d at 1078. I find no mention fact. representative’s findings in the porting this assertion reasons, For I these dissent.