Handley v. State, Division of Employment Security

387 S.W.2d 247, 1965 Mo. App. LEXIS 705
CourtMissouri Court of Appeals
DecidedFebruary 1, 1965
DocketNo. 24160
StatusPublished
Cited by6 cases

This text of 387 S.W.2d 247 (Handley v. State, Division of Employment Security) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Handley v. State, Division of Employment Security, 387 S.W.2d 247, 1965 Mo. App. LEXIS 705 (Mo. Ct. App. 1965).

Opinion

CROSS, Presiding Judge.

This action was filed in the Circuit Court of Cole County by plaintiff-appellant Lowell K. Handley, an individual doing business as Mutual Readers League of the Ozarks, to obtain judicial review of an order of the Industrial Commission of Missouri denying Handley’s application for review of a decision made by the Appeals Tribunal of the Division of Employment Security of Missouri to the effect that certain individuals who performed service for Handley as sales managers, telephone solicitors, home solicitors and closers were in his “employment” within the meaning of that term as it is defined in the Missouri Employment Security Law and that Handley was an “employer”, subject to its provisions, and liable for tax payments thereby imposed. The decision of the Appeals Tribunal is deemed to be the decision of the Industrial Commission for the purpose of judicial review. Section 288.200, subd. 1 V.A.M.S. The circuit court entered judgment affirming that decision after finding that it was supported by competent and substantial evidence and this appeal followed.

Appellant Lowell K. Handley is sole owner of the Mutual Readers League of the Ozarks and as such is engaged in a business described as a “budget magazine agency” offering magazine subscriptions for sale on a monthly payment plan. Handley is franchised under a contract with a parent organization, Mutual Readers League, Inc., of Des Moines, Iowa, which permits him to operate on its behalf on a shared profit basis in a territory within an approximate 200 [249]*249mile radius of Springfield, Missouri. He maintains his principal business office in Springfield, and employed one office worker there as a personal secretary. He obtains orders for magazine subscriptions by utilizing the services of various sales people.

Describing his method of operation Handley testified in substance as follows: He “buys” subscription orders from sales people who obtain the orders by telephone and door-to-door solicitation. These individuals, eighty per cent of whom are experienced in that type of selling, are classified as sales managers, telephone solicitors, home solicitors and closers.

Handley operates through the medium of sales managers whose services he engaged by written contracts, terminable by him without notice and by the sales manager (designated as contractor) upon 24 hour notice. The contracts grant to “contractor” the right to sell budget magazine subscriptions and provide that he should be paid a specified commission on each subscription order — amounting to either 9 or 13 per cent.

In the year 1961 Handley had a total of six sales managers but only three at any one time. They worked out of offices located in the cities of Springfield, Bolivar, Mon-ett and Joplin, in Missouri; Harrison, in Arkansas; and Pittsburg, in Kansas. The expense of maintaining these offices was shared by Handley and the sales managers on a fifty-fifty basis. Sales managers (and solicitors and closers as well) are not furnished a drawing account, expense money, a car, postage or advertising material, including business cards and other items of solicitation. Some limited supplies consisting of purchase contract blanks, sales cards and stationery are furnished to Handley by the parent Mutual Readers League. These are "passed along” by him for use by the sales people. The sales managers are responsible directly to Handley, and their basic responsibility is to hire solicitors and closers and to complete the sales.

As to the means by which sales managers were permitted to obtain their sales, Hand-ley stated, “They can either do it — well, they can do it however they want Some of them do it through the telephone soliciting program or through door-to-door sales program, and it is up to them to hire and train who they want”. Sales managers hired, fired and instructed solicitors and closers. Commissions earned by solicitors and closers were paid to them by Handley but were charged against and deducted from the commissions paid by him to sales managers, with the result that the total expense to Handley of a particular sale was the 9 or 13 per cent paid to the sales manager.

The sales managers were not assigned to or limited as to any particular territory in which they might operate and Handley exercised no control over them in that respect. Their only limitation would be that of their own telephone service area. Handley made no attempt to tell sales managers who their employees would be. He did not require managers, solicitors or closers to work any specific hours or to make any set number of calls or produce any set number of contracts. No reports were required of sales managers.

Solicitors could operate either at home or in the office facility furnished by sales managers or by Handley. Instructions given to beginning telephone solicitors consisted of a printed sales talk to read over telephone. Office space and a telephone were available to them but they were free to work at home or elsewhere. They were not assigned any particular territory. Telephone solicitors secured the names of prospects from the telephone book and called them by telephone. When such a person indicates he is interested in buying a subscription, a “closer” is sent out to contact the prospect and complete the sale. Sales managers set the amount of commission per order paid to their solicitors and closers. Telephone solicitors who work at home are usually paid two or three dollars commission on each completed order. Telephone solicitors who work in Handley’s office and use his telephone are ordinarily paid $1.15 per hour. Closers did not work out of the office but [250]*250acquired their “leads” by contacting sales managers or solicitors. These leads do not pass through any kind of bookkeeping system in Handley’s office and he keeps no record of them. He has no record of how many leads were closed by the closers and had no way of knowing what they were doing on the job. The only sales record kept by him is on the sales after they are completed — a collection record. Handley was concerned only when a contract was produced and turned over to him by the sales manager.

The sales people are not under bond, do no collecting and are not required to keep any record of their activities, Handley holds no meetings for them to promote sales. All sales personnel, including sales managers, solicitors and closers are free to take employment on the side and some of them do.

Handley asserts that he does not attempt to exercise any control over sales managers, solicitors or closers as to how to go about their work. That is up to them. He is interested only in the product of their work— in their results. He sets no quotas for them to produce. They make no report of what they do in the field. “That is entirely their own business”. Handley stated in reference to the contracts made with sales managers that it was his intentionAby executing them, to make those persons independent contractors. The same type of contracts are entered into with closers in some instances. No withholding for federal income tax or social security tax is deducted by Handley from any commissions paid and no question has been raised as to his liability for federal unemployment tax. He carries no workmen’s compensation insurance on any sales person.

Testifying on behalf of the Division, one of its field auditors, William A. Ward, identified its Exhibit No. 1 as a record covering the interval from January 1, 1961 to May 13, 1961, showing disbursements of commissions and wages paid by Handley to some 109 individuals during that time.

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Bluebook (online)
387 S.W.2d 247, 1965 Mo. App. LEXIS 705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/handley-v-state-division-of-employment-security-moctapp-1965.