STATE OF MAINE SUPERIOR COURT CIVIL ACTION KENNEBEC, ss. DOCKET NO. AP-06-+53 ' KL .L'://-,' ',-- ' ... ,,/ !\J -JA)~'i.;''')·/ - V i' i :
WORLDWIDE LANGUAGE RESOURCES, INC.,
Petitioner
v. DECISION ON APPEAL
MAINE UNENIPLOYMENT INSURANCE COMMISSION,
Respondent
This matter comes before the court for review pursuant to 5 M.R.S. § 11001 et seq.
and M.R. Civ. P. soc. The final agency decision on appeal is a decision of July 14, 2006,
by the Maine Unemployment Insurance Commission ("Commission"). The issue
presented in that decision is whether the services provided by an individual for
petitioner Worldwide Language Resources, Inc. ("Worldwide") constituted
"employment" pursuant to 26 M.R.S. § 1043(11), and, if so, whether Worldwide was
therefore liable for unemployment taxes pursuant to 26 M.R.S. § 1221. Therefore, the
issue is not whether an individual who has made a claim for unemployment benefits is
entitled to receive them, rather it is whether the entity for which the person provided
his services was an "employer."
Standard of Review
When the decision of an administrative agency is appealed pursuant to M.R. Civ.
P. SOC, the court reviews the agency's decision directly for abuse of discretion, errors of
law or findings not supported by the evidence. Centamore v. Dept. ofHuman Services, 664
A.2d 369, 370 (Me. 1995). "An administrative decision will be sustained if, on the basis
of the entire record before it, the agency could have fairly and reasonably found the 2
facts as it did." Seider v. Bd. of Examiners of Psychologists, 2000 ME 206, «II 9, 762 A.2d 551,
555. The focus on appeal is not whether the court would have reached the same
conclusion as the agency, but whether the record contains competent and substantial
evidence which supports the result reached by the agency.
Facts
Included within the Commission's very detailed six and a half page decision are
two pages of descriptive findings concerning the nature of Worldwide's business and
its relationship to a specific translator. These findings are not challenged by
Worldwide, though the ultimate finding that Worldwide is an employer for purposes of
the unemployment tax is the critical issue on appeal. These detailed findings will not be
repeated, but may be summarized as follows.
Worldwide is a company headquartered in Rumford, Maine, in the business of
providing linguistic and translation services to clients, primarily the United States
military, throughout the world. In addition to the staff based in Maine, Worldwide
engages the services of "linguists"; American citizens who speak various languages for
which translation and interpretation services are needed by Worldwide's clients. The
linguists who work in the United States have generally been classified by Worldwide as
"employees", and unemployment tax has been paid for them. The linguists recruited to
work abroad, including in war zones, have been classified as subcontractors and
Worldwide does not pay taxes for them. Commission staff had previously agreed
with this classification by Worldwide since although Worldwide is based in Maine, the
work performed by the translators was done outside of the State. However, at some
point in time the Commission staff realized that the services in question would
nevertheless be considered employment if the employer's principal place of business
was located in Maine and the services were performed outside the United States. 26 3
M.R.S. § 1043(1l)(A-1)(4)(a). The Commission staff then took another look at the status
of Worldwide's oversea's linguists.
The present test case for the status of Worldwide as an employer concerns an
individual born in Iraq, living in the United States outside of Maine. This person grew
up speaking Arabic but is also fluent in English. The gentleman apparently had been
employed in the restaurant trade, but responded to an advertisement by Worldwide
seeking Arab linguists to provide services to the military in Iraq. The application was
accepted and the applicant signed a contract with Worldwide titled, "Independent
Subcontractor Agreement." Predeployment training was provided by the military, as
was his equipment. Upon arrival at the destination chosen by the military, he was met
by a site manager from Worldwide, who acted as a sort of "concierge" catering to the
needs of the translators. However, all further control and management of the translator
was done by military personnel. The translator in question worked in Iraq until the
military advised Worldwide that it could no longer permit him to provide his services
"down range" (in hostile, or "non-Green Zone" areas) for reasons that are not relevant to
the present case. Upon returning to the United States, the translator applied for further
work with Worldwide and a competitor, but also applied for unemployment benefits.
Discussion
The Employment Security Law defines employment very broadly to
presumptively include any "services performed by an individual for remuneration."
Vector Marketing Corp. v. Unemployment Insurance Comm., 610 A.2d 272, 274 (Me. 1992).
Worldwide has the burden of refuting the presumption that services performed here
constitute employment. To rebut this statutory presumption, Worldwide has the
burden of proving that its relationship with the claimant satisfies all three prongs of the
so-called ABC test. McPherson Timberlands v. Maine Unemployment Insurance Camm., 4
1998 ME 177,
Security Law at 26 M.R.S. § 1043(11)(E), as follows:
Services performed by an individual for remuneration shall be deemed to be employment subject to this chapter unless and until it is shown to the satisfaction of the bureau that: (1) Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; (2) Such service is either outside the usual course of the business for which service is performed, or that such service is performed outside of all places of business of the enterprise for which such services is performed; and (3) such individual is customarily engaged in an independently established trade, occupation, profession or business.
The Commission decided that Worldwide failed to meet its burden on any of the three
parts of the ABC test.
Of the three tests, the first - freedom of control or direction - presents
Worldwide's strongest arguments. In Worldwide's favor are the facts that the translator
provided his services directly to the military at locations designated by the military;
Worldwide had no right to interfere in or influence such decisions; Worldwide
provided no quality control or quality assurance for the services; no services were
provided on Worldwide's premises; Worldwide did not have knowledge of any "down
range" locations where the services were needed; and the translator did not report on
his progress or accept supervision over his work from Worldwide. On the other hand,
the Commission noted that Worldwide retained certain rights to control its translator,
even if those rights were not exercised.
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STATE OF MAINE SUPERIOR COURT CIVIL ACTION KENNEBEC, ss. DOCKET NO. AP-06-+53 ' KL .L'://-,' ',-- ' ... ,,/ !\J -JA)~'i.;''')·/ - V i' i :
WORLDWIDE LANGUAGE RESOURCES, INC.,
Petitioner
v. DECISION ON APPEAL
MAINE UNENIPLOYMENT INSURANCE COMMISSION,
Respondent
This matter comes before the court for review pursuant to 5 M.R.S. § 11001 et seq.
and M.R. Civ. P. soc. The final agency decision on appeal is a decision of July 14, 2006,
by the Maine Unemployment Insurance Commission ("Commission"). The issue
presented in that decision is whether the services provided by an individual for
petitioner Worldwide Language Resources, Inc. ("Worldwide") constituted
"employment" pursuant to 26 M.R.S. § 1043(11), and, if so, whether Worldwide was
therefore liable for unemployment taxes pursuant to 26 M.R.S. § 1221. Therefore, the
issue is not whether an individual who has made a claim for unemployment benefits is
entitled to receive them, rather it is whether the entity for which the person provided
his services was an "employer."
Standard of Review
When the decision of an administrative agency is appealed pursuant to M.R. Civ.
P. SOC, the court reviews the agency's decision directly for abuse of discretion, errors of
law or findings not supported by the evidence. Centamore v. Dept. ofHuman Services, 664
A.2d 369, 370 (Me. 1995). "An administrative decision will be sustained if, on the basis
of the entire record before it, the agency could have fairly and reasonably found the 2
facts as it did." Seider v. Bd. of Examiners of Psychologists, 2000 ME 206, «II 9, 762 A.2d 551,
555. The focus on appeal is not whether the court would have reached the same
conclusion as the agency, but whether the record contains competent and substantial
evidence which supports the result reached by the agency.
Facts
Included within the Commission's very detailed six and a half page decision are
two pages of descriptive findings concerning the nature of Worldwide's business and
its relationship to a specific translator. These findings are not challenged by
Worldwide, though the ultimate finding that Worldwide is an employer for purposes of
the unemployment tax is the critical issue on appeal. These detailed findings will not be
repeated, but may be summarized as follows.
Worldwide is a company headquartered in Rumford, Maine, in the business of
providing linguistic and translation services to clients, primarily the United States
military, throughout the world. In addition to the staff based in Maine, Worldwide
engages the services of "linguists"; American citizens who speak various languages for
which translation and interpretation services are needed by Worldwide's clients. The
linguists who work in the United States have generally been classified by Worldwide as
"employees", and unemployment tax has been paid for them. The linguists recruited to
work abroad, including in war zones, have been classified as subcontractors and
Worldwide does not pay taxes for them. Commission staff had previously agreed
with this classification by Worldwide since although Worldwide is based in Maine, the
work performed by the translators was done outside of the State. However, at some
point in time the Commission staff realized that the services in question would
nevertheless be considered employment if the employer's principal place of business
was located in Maine and the services were performed outside the United States. 26 3
M.R.S. § 1043(1l)(A-1)(4)(a). The Commission staff then took another look at the status
of Worldwide's oversea's linguists.
The present test case for the status of Worldwide as an employer concerns an
individual born in Iraq, living in the United States outside of Maine. This person grew
up speaking Arabic but is also fluent in English. The gentleman apparently had been
employed in the restaurant trade, but responded to an advertisement by Worldwide
seeking Arab linguists to provide services to the military in Iraq. The application was
accepted and the applicant signed a contract with Worldwide titled, "Independent
Subcontractor Agreement." Predeployment training was provided by the military, as
was his equipment. Upon arrival at the destination chosen by the military, he was met
by a site manager from Worldwide, who acted as a sort of "concierge" catering to the
needs of the translators. However, all further control and management of the translator
was done by military personnel. The translator in question worked in Iraq until the
military advised Worldwide that it could no longer permit him to provide his services
"down range" (in hostile, or "non-Green Zone" areas) for reasons that are not relevant to
the present case. Upon returning to the United States, the translator applied for further
work with Worldwide and a competitor, but also applied for unemployment benefits.
Discussion
The Employment Security Law defines employment very broadly to
presumptively include any "services performed by an individual for remuneration."
Vector Marketing Corp. v. Unemployment Insurance Comm., 610 A.2d 272, 274 (Me. 1992).
Worldwide has the burden of refuting the presumption that services performed here
constitute employment. To rebut this statutory presumption, Worldwide has the
burden of proving that its relationship with the claimant satisfies all three prongs of the
so-called ABC test. McPherson Timberlands v. Maine Unemployment Insurance Camm., 4
1998 ME 177,
Security Law at 26 M.R.S. § 1043(11)(E), as follows:
Services performed by an individual for remuneration shall be deemed to be employment subject to this chapter unless and until it is shown to the satisfaction of the bureau that: (1) Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; (2) Such service is either outside the usual course of the business for which service is performed, or that such service is performed outside of all places of business of the enterprise for which such services is performed; and (3) such individual is customarily engaged in an independently established trade, occupation, profession or business.
The Commission decided that Worldwide failed to meet its burden on any of the three
parts of the ABC test.
Of the three tests, the first - freedom of control or direction - presents
Worldwide's strongest arguments. In Worldwide's favor are the facts that the translator
provided his services directly to the military at locations designated by the military;
Worldwide had no right to interfere in or influence such decisions; Worldwide
provided no quality control or quality assurance for the services; no services were
provided on Worldwide's premises; Worldwide did not have knowledge of any "down
range" locations where the services were needed; and the translator did not report on
his progress or accept supervision over his work from Worldwide. On the other hand,
the Commission noted that Worldwide retained certain rights to control its translator,
even if those rights were not exercised. As examples of such right to control, the
Commission points to Worldwide's ability to terminate the contract, a monetary refusal
fee, forfeiture of bonuses or pay and right to refuse travel compensation. Also,
determination of the length of the contract, determination of misconduct while on duty
and a noncompete provision present control elements. Although it probably is a close 5
call, there are these facts in the record to support the Commission's decision on this
prong of the test despite the almost total lack of control over the actual performance of
the translating duties.
Although the Commission's decision on the first or "control" prong is close, it is
of little consolation to Worldwide since it must prove all three prongs and clearly fails
on the second and third ones. The second prong concerns the usual course of business
of the punitive employer and the location of its places of business and the places the
services are performed. The services the translator provided are exactly the type of
services Worldwide is in the business of facilitating and they are provided where the
clients wish to have them provided. Worldwide's place of business is not the world as a
whole, but the specific places in the world where it sends its linguists and provides
support through its site managers. Furthermore, the Commission was correct in its
analysis distinguishing a previous Superior Court decision (Alley v. Maine
Unemployment Insurance Comm., 2005 W.L. 2723188 (Me. Super.» where incidental
referrals of other court reporters was held not to be employment.
Finally, with regard to the third prong the Commission was also not mistaken in
its interpretation that the inquiry should look at what the individual did prior to his
employment to determine whether he was "customarily" engaged in an independently
established trade. As used in the statute, the word "customarily" requires an
examination of what the individual's previous occupations have been. In this case,
although the individual was bilingual, there is no evidence that he had ever used this
skill professionally, and the only known occupational history is as a restaurant worker.
Furthermore, as noted by the Commission, even if the newly minted translator
attempted to use these abilities professionally after his termination by Worldwide, the 6
"noncompete" provision in his contract would have seriously limited the availability of
such work.
In light of the foregoing, the court concludes that there is substantial evidence of
record to support the findings and conclusions of the Commission, at least as to the
second and third prongs of the ABC test, that there was no abuse of discretion, and
there were no errors of law by the Commission. Therefore, the entry will be:
The decision of the Commission is AFFIRMED.
Dated: March Z$ ,2007 s. :if!iEf¥------- Justice, Superior Court Date Filed ~8f-1.J,.1... qf-/vOg.6---- Kennebec Docket No. __Aa.F"-Ol.Ll.L6=-..LS..L3 _ County
Action P.r:..t:.eJ..t-Li-Lt-Li.uownL-J.f..l.ol..1r.--J;Bu:e::..lvt-.iue::.ll'lI--l _ 80C
J. STUDSTRUP
l.J nr 1 'h.Ji r1 '" T TnC" Ys. Matne TTn",mnl nument Insurance Connnission Plaintiff's Attorney Defendant's Attorney
Jeffrey A. Meyers. Esq. Kelly L. Turner. AAG 99 Middle Street Elizabeth J. Wyman. AAG Manchester. NH 03101 6 State House Station -Christopher Hawkins. Esq. Augusta; Maine 04333-0006
Date of Entry
8/14/06 Petition for Review. filed. s/Meyers. Esq. 8/29/06 Letter entering appearance. filed. s/Turner. AAG
9/19/06 Motion for Enlargment of Time to File the Administrative Record. filed. s/Turner. AAG Proposed Order. filed. 9/21/06 ORDER. Mills. J. It is hereby ordered. upon Motion of the Respondent and without objection by the Petitioner. that the deadline for filing the administrative record is enlarged to October 18. 2006. Copies mailed to attys. of record. 10/18/06 Administrative Record. filed. s/Turner. AAG 10/24/06 Notice of briefing schedule mailed to attys of record.
11/27/06 Brief of Petitioner. Worldwide Language Resources. Inc. in Support of Administrative Appeal. filed. s/Meyers. Esq.
12/27/06 Brief of Respondent Maine Unemployment Insurance Commission. filed. s /Wyman. AAG 1/12/07 Reply of Petitioner Worldwide Lahguage Resources. Inc. to Brief of Respondent Maine Unemployment Insurance Commission. filed. s/Meyers. Esq.
1/30/07 Notice of Appearance. filed. s/Hawkins. Esq. 2/1/07 Assented-To Motion For Admission Pro Hac Vice of Christopher T. Vrountas. Esq. s/Meyers. Esq. (filed 01/31/07) Proposed Order. Exh. A (Affidavit of Christopher T. Vrountas), and Exh. B (Affidavit of Leonard D. Zamansky).
2/7/07 Hearing had on oral arguments, Hon. Kirk Studstrup (no courtroom clerk) Matter taken under advisement.