In Re the Determination of the Unemployment Insurance Liability of Balhorn-Moyle Petroleum Co.
315 N.W.2d 481
S.D.
1982
Check Treatment

*1 481 ture, precisely of situa- type missible discrimination. We find that the “[i]t maximizes of possibility tion that the a decision Commission’s was not clearly erro- made, being other- consciously selection by We, neous or affected error of law. wise, race, color, sex, religion basis of on the therefore, the judg- reverse circuit court’s Id. origin.” or national ment and reinstate decision of the Com- mission. Appellee introduced statistical hearing at the that

evidence to demonstrate All the Justices concur. being were not at promoted women as men same rate within the Division. In States, v. United 324, 97

Teamsters 431 U.S. 1843, (1977), 52

S.Ct. L.Ed.2d 396 Su

preme recognized Court that statistical evi may competent

dence be proving employ may

ment discrimination and in fact

only proof available avenue of “to uncover by

clandestine covert discrimination n.20, 431 employer[.]” U.S. at 341 97 S.Ct. In the of Matter Determination of United 1857, quoting at 52 L.Ed.2d at 418 Unemployment Liability Insurance of 86, States v. Ironworkers Local 443 F.2d BALHORN-MOYLE PETROLEUM 544, (9th 1971). Supreme 551 Cir. COMPANY. warned, however, Court that the usefulness No. 13385. depends of statistics on all of the surround ing facts circumstances. case Supreme Court of South Dakota. us, before statistical evidence intro 19, on Briefs Considered Nov. 1981. appellee duced was limited and incom plete. regarding promotion The statistics 3, Decided Feb. 1982. Department were derived from the entire the Unemployment rather than Division drawn very

and were from a small total

sample.* Statistics drawn from such a sample are probative

small of little value.

Cf. Morita v. Southern Cal. Permanente Group,

Medical (9th 1976), 541 F.2d 217 Cir. denied,

cert. 429 U.S. 97 50 S.Ct. (1977) insignif (sample eight

L.Ed.2d 765 of Bd., v. Whitingham and State

icant) Sch. (Vt.1979) 996 (sample twenty-

410 A.2d of with Teamsters v. Unit insignificant)

eight States, supra

ed 6,472 signifi (sample reasons,

cant). these For the statistical evi prove

dence was sufficient to that explanation hiring

Division’s of its unworthy of credence.

Appellee failed to demonstrate legitimate, nondiscriminatory

Division’s hiring unworthy

reasons for Waits were imper- and merely pretext

credence * Appellee following passover introduced into dates rate. evidence the had a 4.6% 36.5% women, two-year professional positions occupied In the are statistics. period, over a represented people applied promotions whereas women at the rate positions. promotion pool. Female candidates for in the available labor 49.2% passover had an male candi- rate while 11.6% *2 Johnson, Gen.,

Drew C. Sp. Atty. Asst. Aberdeen, appellant South Dakota Dept, Labor, Unemployment Ins. Divi- sion.
Thomas Bangs, McCullen, E. Simmons of Butler, Foye Simmons, Rapid & City, for appellee Balhorn-Moyle Petroleum Co. HENDERSON, Justice.

ACTION The Unemployment Insurance Division of South Dakota of Labor (Department) appeals the trial court which held that the relation- ship between Balhorn-Moyle Petroleum Company (Company) and Stuart Hemenway was that of By and distributor. judgment, court, its the trial reversed the administrative decision of the Secretary of Labor who ruled that this relationship that of an employer-employee. Under the Secretary decision, of Labor’s would liable for unemployment insur- ance Hemenway. taxes on We affirm the trial judgment. court’s

FACTS 1, 1980, Effective January entered into a twelve- agreement month written whereby Hemen- gasoline provided by the Com- pany Sturgis, Dakota, and sold it at a service station. This station was owned Company. agreement terms of required operate to the service station full-time, but the operation hours of were question Nothing him. solely by agency’s to be determined fact unless the agreement prohibited Hemenway from is affected of law error or is clearly hiring paying employees own light erroneous in of the evidence in the conducting him in business at assist entire record. We find no errors of law but His with him. station. wife worked Secretary hold that of Labor’s decision provided erroneous under the evidence in *3 pay utility telephone all and bills. Hemen- 1-26-36(5); this record. SDCL Matter of way carry could on other service station Clay-Union Corporation, Electric 300 decided, business as he related activities (S.D.1980). N.W.2d 58 respon- which he would bear total financial agreement The Hemenway between and sibility. Hemenway kept regard, this his Company specifically provided: the repairs records for own automotive and re- parties Agreement to this intend station, performed services the lated at and that the relationship between them creat- own whereby had his state sales license tax by Agreement ed this is indepen- that of he collected and remitted sales tax to the dent contractor-supplier. Neither Opera- inventory. He owned state. the Hemen- [Hemenway] any agent, tor employee nor advertising for his own and Operator servant of shall be or shall be purchase gasoline suppli- could from other employee, agent deemed to be an or serv- language agreement ers. The in the found ant of Company], Supplier [the specifically “respective refers to the busi- is only interested in the results obtained nesses” of the Company. and Agreement, under this and the manner active conducted an automobile conducting and means of the operation of repair party business. Either could termi- the service station is under the sole con- reason, agreement, the by giv- nate Operator. trol of ing written notice other party to the at thirty days prior agreement’s least the Department’s position that, It is the when expiration. juxtaposed against is the 61-1-11, provisions of SDCL the relation-

ISSUE ship Company between the and constitutes that of employer-employee. an the Secretary by Did err ruling of Labor Secretary of so an Labor found. We do employer-employee that relationship agree. not existed between the and Stuart

Hemenway? We hold that it did. conjunctive A provided test is for in (emphasis added): 61-1-11 DECISION performed by Services an individual for nature, appeal In an of this we wages employment shall be deemed to be review record of the administrative subject to this title unless and until it is agency the same as the manner trial shown to the of the depart- satisfaction court, by unaided any presumption that its ment that: decision is correct. of Matter South Lincoln (1) Such individual has been and will System Rural Water Application Permit continue to be free control or 4300-3, (S.D.1980); No. 295 743 N.W.2d performance direction over the of such Dakota Public Utilities Commission services, both under contract of ser- v. Tail Power company, Otter 291 N.W.2d fact; vice and in (S.D.1980). cognizant 291 This is Court (2) is either Such service outside the great weight given that be should to the usual course of the business for findings which made and the inferences drawn such performed, service is or that such agency questions on of fact. SDCL Further, performed service is outside of all may 1-26-36. court sub places stitute its agency enterprise for that business weight performed; as to of the evidence on the which such is service 484 earnings

(3) customarily is en- ket and their cannot be construed Such individual Therefore, gaged independently wages. although agree in an established as trade, occupation, profession “commission,” or busi- the term ment uses Hemen- ness. way’s earnings, which flow from self-em ployment, cannot be under SDCL verbiage emphasized As indicated 61-1-1(9). Administrator, v. See Micca Un however, 61-1-11, before the three Act, employment Compensation 26 Conn. addressed, subsections of this statute are it 16, Supp. (1965); Mississippi 209 A.2d 682 alleged must first shown that em- Employment Security v. Med Commission wages. ployee performs services for Sarah lin, (1965). Caldwell, 252 Miss. 171 496 So.2d Coventry, Inc. v. 243 Ga. (1979). Several facts indicate S.E.2d reasons, foregoing For the we hold that in the instant this is not the situation ruling by Labor case. relationship erroneous in that Legislature “wages” defined as Our has Hemenway was between the *4 services, paid “all remuneration for includ- since, employer-employee not that of an ing commissions and bonuses and cash 61-1-1(9), wages paid under no were SDCL paid any value of all remuneration in medi- Company Hemenway. to 61-1-1(9). um other than SDCL cash[.]” We affirm the of the trial clearly “paid.” The statute uses the word court. Here, Company paid wages no to He- services; only gasoline was menway for WOLLMAN, J., MORGAN, J., C. and supplied. Hemenway obligated was to to- concur. tally Company any gaso- reimburse the for dispensed, excepting line for three and one- FOSHEIM, JJ., DUNN and dissent. per gallon half each sold. This reim- cents Company bursement occurred between the DUNN, (dissenting). Justice Hemenway daily and on a basis. Hemen- join I Justice Fosheim’s dissent. way any Company’s was not listed on of the payroll any security 61-1-1(9) nor were social wages records defines as “all SDCL paid by Hemenway services, taxes within the con- paid including remuneration for agreement. text of this commissions and bonuses and the cash value paid any of all remuneration in medium We believe that the evidence ” Hemenway other than cash . . . . Company pay shows that the did not per gallon gallon gaso- 3½ cents for each Rather, wages Hemenway. to all indica line sold from his The station. 3½ cents relationship that the tions are to effect pro- was remuneration for the services he Hemenway Company between including working Balhorn-Moyle vided for distributor, with He- that of and full-time, collecting payment at the station menway retaining a certain amount of the customers, making daily a gaso sale monies received from his accounting Balhorn-Moyle. to agreement speaks line. It is true that “commission,” majority opinion alleges in terms and that the lan that the 61-1-1(9) wages guage of states that word “commission” as used in the statute SDCL services, paid phrase are for in modifies the for serv- remuneration “remuneration[s] Rather, cluding This the terms The term “com ices. is correct. commissions[.]” missions,” however, phrase modifies the “commissions and bonuses and the cash val- and, paid paid any ue of all remuneration in medium “remunerations services” hence, specific examples than cash” are ipso every does not facto transform other wages. paid 2-14-1. “remuneration for services.” Even commission into See SDCL earning money Balhorn-Moyle agrees within the realm of that a commission is Persons here, Hemenway, have involved and thus the 3½ cent remu- self-employment, such as qualifies wage. neration as a withdrawn themselves from the labor mar- indicates, supplying Fosheim’s dissent As Justice with accurate rec- Hemenway is control gas pumped under considerable ords of the amount of Balhorn-Moyle, money payment gas there- in and direction taken Reading Hemenway/Balhorn-Moyle pumped. rela- the words 61- fore the of SDCL 1-1(9) tionship ordinary would not meet the 61-1-11 in their sense I come to the test. three-part paid conclusion that He- commissions

menway automatically wages. FOSHEIM, (dissenting). Justice support As further the statement majority opinion to the gets never automatically wages commissions are not three-part test of because SDCL 61-1-11 the majority decision cites a Connecticut stops at the first line county case Mississippi court and a Su- per statute and decides that cents 3½ preme Court case. Neither of those cases is gallon paid by commission factually in one similar to the is not meaning within the us, before involve neither the issue of com- 61-1-1(9). statute of SDCL 1980 that wages, missions as and neither State has read: defining wages statute identical to South 1, 1947, Dakota’s. January “wages”

Effective services, all paid means remuneration If the commission wage, 3½ cent is a including commissions and bonuses and court will have decide if the three-part value the cash of all remuneration test of 61-1-11 is met. The fran- cash, any medium other than but exclud- chise between ing 61-1- remuneration described §§ the Company plainly shows that *5 61-1-35, 32 to inclusive. Gratuities cus- is under considerable control and direction tomarily an in the individual See Company. Agreement, Cove- of his employment persons course Operator, example. nants of Because employer, gratuities other than his if such this I the Hemenway/Company don’t think fifty percent constitute or of the more relationship would survive SDCL 61-1- employee’s earnings employer from such 11(1). shall be as paid treated value employer. reasonable cash paid

remuneration in other medium

than cash reasonable amount of

gratuities shall be estimated and deter- prescribed

mined accordance with rules department[.]

by the paragraph page

In the last on Dakota, opinion, the majority refers to the above STATE of South Plaintiff Appellee, statute and states: “The term ‘commis- sions,’ however, ‘remu- phrase modifies the v. and, hence, paid for nerations services’ does BULLIS, V. Arnold Defendant ipso every facto transform commission Appellant. logic I wages.” into cannot follow the No. 13344. this sentence. The majority opinion cites support 2-14-1 in sentence. of that Supreme Court of Dakota. 2-14-1 states: “Words stat- used [in ordinary to be on understood in their Briefs Nov. 1981. Submitted utes] except also sense that words defined Decided Feb. 1982. explained in 2-14-2 are to be understood § explained.” Hemenway as defined or thus ren- commission for services gas pumping Company’s

dered —