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In re 12 Cornelia Street, Inc.
Citations: 56 N.Y.2d 895; 438 N.E.2d 1117; 453 N.Y.S.2d 402; 1982 N.Y. LEXIS 3503
Court: New York Court of Appeals; June 15, 1982; New York; State Supreme Court
The Court reversed the Appellate Division's order and reinstated the determination of the Unemployment Insurance Administrative Law Judge, concluding that the Unemployment Insurance Appeal Board's classification of the petitioner’s real estate salespersons as “employees” was not supported by substantial evidence. The Court emphasized that an "employer-employee" relationship must be based on evidence of control over the salespersons' outcomes or methods, which was found lacking. Key characteristics of the relationship indicated that the salespersons functioned as independent contractors: they earned commissions on gross sales without tax deductions, had flexible working hours, could work from home or the office, and were allowed to pursue outside employment. The petitioner provided limited resources and expenses were primarily borne by the salespersons themselves. Attendance at sales meetings was not mandatory, and training was optional. While the petitioner assigned leads, most originated from the salespersons. The Court found that these factors did not substantiate the Appeal Board’s conclusion of employment. Additionally, reliance on the Secretary of State’s regulation regarding broker supervision was deemed insufficient to negate the independent contractor status. The order was reversed, and the matter was remitted for further proceedings aligned with the Court's findings. Concurrence was noted from Chief Judge Cooke and several other judges.