State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: December 29, 2016 522892
________________________________
In the Matter of the Claim of
GREGORY A. MITCHELL,
Respondent.
THE NATION CO. LTD PARTNERS, MEMORANDUM AND ORDER
Appellant.
COMMISSIONER OF LABOR,
Respondent.
________________________________
Calendar Date: November 18, 2016
Before: Peters, P.J., McCarthy, Egan Jr., Lynch and Devine, JJ.
__________
Law Offices of Daniel Silverman, LLP, New York City (Daniel
A. Silverman of counsel), for appellant.
Murphy, Burns, Barber & Murphy, LLP, Albany (Catherine A.
Barber of counsel), for Gregory A. Mitchell, respondent.
Eric T. Schneiderman, Attorney General, New York City
(Steven Koton of counsel), for Commissioner of Labor, respondent.
Greenberg Traurig, LLP, Albany (Michael Grygiel of
counsel), for MPA-The Association of Magazine Media, amicus
curiae.
__________
Egan Jr., J.
Appeals from two decisions of the Unemployment Insurance
Appeal Board, filed October 8, 2015, which, among other things,
ruled that The Nation Co. Ltd Partners was liable for
unemployment insurance contributions on remuneration paid to
-2- 522892
claimant and others similarly situated.
The Nation, which was established in 1865 by abolitionists,
is a publication consisting of a print magazine (with
approximately 140,000 subscribers) and a website that is viewed
by approximately two million readers each month. In February
2010, claimant – an established media critic and former publisher
who was well known in his field – entered into a contract with
The Nation Co. Ltd Partners (hereinafter the company) to write
and manage a new blog focused on the media. The contract
identified claimant as a freelance writer, and it was anticipated
that claimant would write a daily or near-daily blog for The
Nation's website. In accordance with the terms of the contract,
claimant would be paid a "freelance payment" of $46,800, which
ultimately was paid in monthly installments, for his work on his
blog, and claimant would be separately compensated for any work
he authored for the company's print magazine. Claimant's
contract was subject to renewal on an annual basis, and claimant
continued blogging for The Nation until June 2014. During the
time that claimant was writing and managing his blog for The
Nation, claimant also published approximately eight books of
varying lengths and blogged for other entities, including The
Huffington Post.
After claimant's contract was not renewed in 2014, claimant
applied for unemployment insurance benefits and, in September
2014, the Department of Labor issued an initial determination
finding that claimant was an employee and that the company was
liable for additional contributions on claimant's earnings and
all other similarly situated employees. The company objected and
requested a hearing. After hearing testimony from claimant and
various of the company's representatives, the Administrative Law
Judge (hereinafter ALJ) upheld the initial determination,
prompting the company to appeal to the Unemployment Insurance
Appeal Board. The Board upheld the ALJ's findings, and these
appeals ensued.
The case law governing the existence of an employment
relationship often is more easily stated than applied. "Whether
an employment relationship exists within the meaning of the
unemployment insurance law is a question of fact, no one factor
-3- 522892
is determinative and the determination of the appeal board, if
supported by substantial evidence on the record as a whole, is
beyond further judicial review even though there is evidence in
the record that would have supported a contrary conclusion"
(Matter of Concourse Ophthalmology Assoc. [Roberts], 60 NY2d 734,
736 [1983] [citations omitted]; accord Matter of Empire State
Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 NY3d
433, 437 [2010]; see Matter of Kliman [Genesee Region Home Care
Assn., Inc.–Commissioner of Labor], 141 AD3d 1049, 1049 [2016]).
"While many factors are to be considered, the primary factor is
the degree of control exercised by [the purported] employer"
(Matter of Lane [Hartnett], 160 AD2d 1060, 1061 [1990] [citations
omitted], lv denied 76 NY2d 714 [1990]; see Matter of DeVaul
[Guardi–Commissioner of Labor], 138 AD3d 1371, 1371 [2016]) –
specifically, evidence of the purported employer's control over
the means used to achieve the results produced (see Matter of
Empire State Towing & Recovery Assn., Inc. [Commissioner of
Labor], 15 NY3d at 437; Matter of Greystoke Indus. LLC
[Commissioner of Labor], 142 AD3d 746, 746-747 [2016]; Matter of
Eckert [Fox Mobile Distrib. LLC–Commissioner of Labor], 133 AD3d
1075, 1076 [2015]). As a result, "[i]ncidental control over the
results produced – without further evidence of control over the
means employed to achieve the results – will not constitute
substantial evidence of an employer-employee relationship"
(Matter of Hertz Corp. [Commissioner of Labor], 2 NY3d 733, 735
[2004]; see Matter of McAlevey [Agewell Physical Therapy &
Wellness, P.C.–Commissioner of Labor], 126 AD3d 1219, 1220
[2015]). Finally, "where the details of the work performed are
difficult to control because of considerations such as
professional and ethical responsibilities," courts have "applied
the overall control test where substantial evidence of control
over important aspects of the services performed other than
results or means is sufficient to establish an employer-employee
relationship" (Matter of Empire State Towing & Recovery Assn.,
Inc. [Commissioner of Labor], 15 NY3d at 437-438 [internal
quotation marks and citation omitted]; see Matter of Columbia
Artists Mgt. LLC [Commissioner of Labor], 109 AD3d 1055, 1057-
1058 [2013]).
As is it not the role of this Court to second-guess
determinations rendered by administrative agencies or, more to
-4- 522892
the point, independently review and weigh the evidence adduced at
an administrative hearing (see e.g. Matter of Edscott Realty
Corp. v Town of Lake George Planning Bd., 134 AD3d 1288, 1290
[2015]), application of the substantial evidence standard often
has compelled this Court to affirm decisions rendered by the
Board or its administrative counterparts – even where the record
contains evidence that would support a contrary conclusion (see
e.g. Matter of Aussicker [Park Ride Fly USA–Commissioner of
Labor], 128 AD3d 1264, 1265-1266 [2015], lv dismissed 26 NY3d 944
[2015]; Matter of Wilner [Primary Stages Co. Inc.–Commissioner of
Labor], 128 AD3d 1148, 1149-1150 [2015], lv dismissed 26 NY3d 955
[2015]). The Court of Appeals, however, recently considered the
meaning of the term "substantial evidence" in the context of an
unemployment insurance appeal, holding that "'[s]ubstantial
evidence consists of proof within the whole record of such
quality and quantity as to generate conviction in and persuade a
fair and detached fact finder that, from that proof as a premise,
a conclusion of ultimate fact may be extracted reasonably –
probatively and logically'" (Matter of Yoga Vida, NYC, Inc.
[Commissioner of Labor], 28 NY3d 1013, 1015 [2016], quoting 300
Gramatan Ave Assoc. v State Div. of Human Rights, 45 NY2d 176,
181 [1978]). While the Court of Appeals' recitation of the law
may have simply restated a well-settled legal principle, its
application of the substantial evidence standard to the record
before it suggests that the Court, in reversing the Board and
finding that the yoga instructors at issue constituted
independent contractors, engaged in a more detailed, qualitative
and arguably less deferential analysis of the various employment
factors.1 Following the Court of Appeals' lead in this regard,
1
To be sure, the Court of Appeals did not expressly signal
that it was shifting its focus or otherwise refining the
substantial evidence standard of review, but that conclusion may
be inferred upon considering the points raised by the dissent,
which recited in detail the various factors that supported the
Board's finding of an employment relationship – factors that the
majority discounted in finding that the subject claimants were
independent contractors (Matter of Yoga Vida, NYC, Inc.
[Commissioner of Labor], 28 NY3d at 1016-1017 [Fahey, J.,
dissenting]). Further, although the Court of Appeals applied the
-5- 522892
we find that, regardless of the analysis employed, the Board's
decision here is not supported by substantial evidence in the
record as a whole.
At the outset, we are satisfied that claimant – an
experienced, well-known and established writer, author and media
critic – qualifies as a professional for purposes of our
analysis.2 Hence, our focus will be whether the company
exercised "control over important aspects of the services
performed" by claimant (Matter of Empire State Towing & Recovery
Assn., Inc. [Commissioner of Labor], 15 NY3d at 437). In
concluding that claimant was an employee, the Board cited the
following factors: the requirement that claimant identify himself
as a writer for The Nation, that he was assigned an intern for
assistance, reimbursed for certain expenses, restricted from
publishing the same content with competitors, required to use The
Nation's software system to post his blog entries and that, on
one occasion, was directed to continue to write on a particular
topic after he expressed a desire to go in another direction.
While it is true that claimant was required to identify
himself as a writer for The Nation, was paid an annual salary in
monthly installments and was reimbursed for certain business-
related expenses, it is equally true that claimant received a
means and results test to the yoga instructors at issue
(apparently concluding that they were not professionals and,
hence, were not subject to the overall control test), the
critical examination of the relevant factors considered by the
Court would apply with equal force in ascertaining whether a
purported employer exercised "control over important aspects of
the services performed" (Matter of Empire State Towing & Recovery
Assn., Inc. [Commissioner of Labor], 15 NY3d at 437). In other
words, regardless of the test employed, the level of inquiry is
the same.
2
Our conclusion in this regard is case specific and should
not be interpreted as standing for the proposition that anyone
who writes a blog will qualify as a professional for purposes of
the unemployment insurance law.
-6- 522892
1099 form each year, filed his taxes as self-employed, was not
required to obtain permission prior to taking a vacation and
neither received fringe benefits nor was covered by the union
contract pertaining to The Nation's staff writers (compare Matter
of Berger [Gail & Rice, Inc.–Commissioner of Labor], 143 AD3d
1024, 1025-1026 [2016], with Matter of Guidotti [Swissport USA,
Inc.–Commissioner of Labor], 119 AD3d 1265, 1266 [2014]).
Similarly, although claimant was assigned an intern, one of The
Nation's senior editors testified that the role of the intern was
not content-based editing but, rather, centered around issues of
"quality control," i.e., making sure that any links embedded in
claimant's posts worked properly and that any "images [were]
sized correctly." With respect to The Nation's software system,
which was the mechanism via which claimant's blog entries were
posted to The Nation's website, the senior editor testified that
"there was a guide to inputting content into . . . [The Nation's]
content management system," which was something that "all writers
need[ed] to do," and that this system contained "rough guidelines
about our house style," i.e., "when something is italicized, when
it's not." As for claimant's ability to post – on another
website – materials that he had authored for The Nation,
claimant's contract provided that, while The Nation retained
exclusive rights to the actual contents of claimant's posts,
claimant could cross-post materials authored for The Nation after
48 hours – with attribution to The Nation and a corresponding
"link[-]back" to the original post. Beyond that qualified
restriction, the hearing testimony makes clear that, during his
time with The Nation, claimant not only was permitted to write
for other entities but was actively encouraged to do so (see
Matter of Berger [Gail & Rice, Inc.–Commissioner of Labor], 143
AD3d at 1025). Indeed, as noted previously, during the relevant
time period, claimant blogged for The Huffington Post and
authored roughly eight books of varying lengths.
Turning to the actual degree of supervision or control
exercised over claimant's work, the record reveals that claimant
was not formally interviewed for his position (compare Matter of
Cole [Niagara Falls Hous. Auth.–Commissioner of Labor], 142 AD3d
1264, 1266 [2016]), worked from home utilizing his personal
laptop, set his own hours and did not suffer any adverse
consequences if he did not post a story (compare Matter of Morris
-7- 522892
[Source Interlink Media, LLC–Commissioner of Labor], 131 AD3d
1287, 1288 [2015], lv dismissed 26 NY3d 1137 [2016], with Matter
of Crahan [Progress Rail Servs. Corp.–Commissioner of Labor], 116
AD3d 1277, 1278 [2014]). Additionally, claimant did not have a
supervisor (see Matter of Berger [Gail & Rice, Inc.–Commissioner
of Labor], 143 AD3d at 1025) and was not permitted to work from
The Nation's offices. Significantly, the record makes clear that
claimant generally was not assigned to write on a particular
topic and could post a story to his blog prior to it being edited
by The Nation's staff (compare Matter of Redwoodturral [Everest
Prod. Corp.–Commissioner of Labor], 133 AD3d 1064, 1065 [2015]).
On this latter point, claimant testified that the content
of his blog was "determined in a general sense" by conversations
with The Nation's editors and that he "sometimes" was not allowed
"to go in a certain direction." For example, if the "traffic" on
his blog indicated that a particular topic was popular, he would
be encouraged "to stick with it" until the topic had run its
course. Although claimant testified that he had a vested
interest in keeping The Nation's editors happy, i.e., the renewal
of his annual contract, he acknowledged that he "had the right"
to reject particular suggestions, and the record reflects that
claimant could write about whatever topic interested him – within
the broad subject areas of media and politics. Notably, when
presented with a suggested topic by The Nation's editor in chief,
claimant testified that he "would kind of judge how important"
that particular issue was to the editor; if he thought that the
topic was "really important," he would respond to the suggestion
but, if he sensed that the suggestion was "a little more off the
cuff," he would ignore it.
The lack of supervision and control over claimant's work is
further reflected by the testimony offered by The Nation's
editors. One of The Nation's senior editors testified that,
while editors "would often make suggestions" and could "ask for
corrections" or remove a post if it "didn't meet the standards of
the publication," claimant "was really free day-to-day to
determine what he would write about and when." Although claimant
was given "a broad direction to write about the media . . . and
politics," "the contents of the post and the topic were really
. . . entirely his choice." Unlike staff writers, claimant
-8- 522892
could not be compelled to write on a particular topic and, while
The Nation preferred that claimant post his articles early in the
workday and that such articles be submitted for editorial review
prior to posting on the website, the senior editor made clear
that claimant had no established work hours, could post whenever
and from wherever he wished and that there were "no
repercussions" and "no consequences" if claimant posted an
article later in the day without editorial review or,
alternatively, did not post at all on a given day.
This testimony was echoed by The Nation's editor in chief,
who testified that she "trust[ed claimant] to manage [his] blog
in ways that would be of value to traffic and readers," and that
"[i]t was [claimant's] decision what to select, when to write,
[and] how much to write each day." With respect to the
discretion vested in the bloggers writing for The Nation, the
editor in chief succinctly testified, "[W]e give them the keys to
the car in a sense and they do their thing." Finally, the
testimony offered by The Nation's editors reveals that all
writers for The Nation – employees and independent contractors
alike – were required to utilize The Nation's content management
system, and the editorial review to which claimant's (and other
writers') work was subject amounted to nothing more than the
standard, industry-wide "quality control" review for grammar,
syntax, working links within articles and the like. Simply put,
there were "basic rules" that all writers "should follow" and, on
this point, the case law makes clear that "[t]he requirement that
the work be done properly is a condition just as readily required
of an independent contractor as of an employee and [is] not
conclusive as to either" (Matter of Yoga Vida NYC, Inc.
[Commissioner of Labor], 28 NY3d at 1016 [internal quotation
marks and citations omitted]; see Matter of Crahan [Progress Rail
Servs. Corp.–Commissioner of Labor], 116 AD3d at 1278). Upon due
consideration of the record as a whole, and for all of the
reasons previously discussed, we find that the Board's decisions
are not supported by substantial evidence and, as such, must be
reversed.3
3
Our conclusion in this regard would be no different if we
utilized the test applicable to nonprofessionals. Further, in
-9- 522892
Peters, P.J., McCarthy, Lynch and Devine, JJ., concur.
ORDERED that the decisions are reversed, without costs, and
matter remitted to the Unemployment Insurance Appeal Board for
further proceedings not inconsistent with this Court's decision.
ENTER:
Robert D. Mayberger
Clerk of the Court
reaching this result, we have not considered the Department of
Labor's Guidelines for Determining Worker Status: Magazine
Publishing Industry, as the ALJ rejected claimant's attempt to
enter that document into evidence at the administrative hearing,
and it is not clear from the record whether either the ALJ or the
Board took such guidelines into consideration in rendering their
respective decisions.