Worldwide Language Res., Inc. v. Maine Unemployment Ins. Comm'n
Opinion
STATE OF MAINE SUPERIOR COURT CIVIL ACTION
KENNEBEC, ss. DOCKET NO. AP-06-+53 '
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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
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
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.,
1998 ME 177, <JI 7, 714 A.2d 818, 821. The ABC test is detailed in the Employment 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
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.
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