{ "id": 173598, "name": "COHEN FURNITURE COMPANY, Plaintiff-Appellee, v. THE DEPARTMENT OF EMPLOYMENT SECURITY et al., Defendants-Appellants", "name_abbreviation": "Cohen Furniture Co. v. Department of Employment Security", "decision_date": "1999-10-01", "docket_number": "No. 3-98-0648", "first_page": "978", "last_page": "985", "citations": [ { "type": "official", "cite": "307 Ill. App. 3d 978" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "530 N.E.2d 541", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1988, "pin_cites": [ { "page": "544" }, { "page": "544", "parenthetical": "the court noted as evidence of control that the employer provided the contract and the workers were not required to execute a contract for every job they did for the employer" } ], "opinion_index": 0 }, { "cite": "175 Ill. App. 3d 793", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3553905 ], "weight": 2, "year": 1988, "pin_cites": [ { "page": "797" }, { "page": "797" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/175/0793-01" ] }, { "cite": "390 N.E.2d 333", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1979, "opinion_index": 0 }, { "cite": "76 Ill. 2d 99", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2984872 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/ill-2d/76/0099-01" ] }, { "cite": "692 N.E.2d 295", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1998, "pin_cites": [ { "page": "302" }, { "page": "302" } ], "opinion_index": 0 }, { "cite": "181 Ill. 2d 191", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 821407 ], "weight": 2, "year": 1998, "pin_cites": [ { "page": "205" }, { "page": "205" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/181/0191-01" ] }, { "cite": "657 N.E.2d 1141", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1995, "pin_cites": [ { "page": "1144" } ], "opinion_index": 0 }, { "cite": "276 Ill. App. 3d 281", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 927690 ], "year": 1995, "pin_cites": [ { "page": "284" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/276/0281-01" ] }, { "cite": "659 N.E.2d 82", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1995, "pin_cites": [ { "page": "84" } ], "opinion_index": 0 }, { "cite": "276 Ill. App. 3d 584", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 927661 ], "weight": 2, "year": 1995, "pin_cites": [ { "page": "588" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/276/0584-01" ] }, { "cite": "585 N.E.2d 123", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1991, "opinion_index": 1 }, { "cite": "146 Ill. 2d 61", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5597072 ], "year": 1991, "opinion_index": 1, "case_paths": [ "/ill-2d/146/0061-01" ] }, { "cite": "659 N.E.2d 82", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1995, "opinion_index": 1 }, { "cite": "276 Ill. App. 3d 584", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 927661 ], "weight": 2, "year": 1995, "opinion_index": 1, "case_paths": [ "/ill-app-3d/276/0584-01" ] } ], "analysis": { "cardinality": 708, "char_count": 15907, "ocr_confidence": 0.803, "pagerank": { "raw": 1.2242949215286952e-07, "percentile": 0.6042319455690274 }, "sha256": "2122f609fdc72065a752b9e7169aef0910e7c10e93131dd480aed1a0db7de94d", "simhash": "1:ada3942376e3bb72", "word_count": 2564 }, "last_updated": "2023-07-14T21:00:41.446378+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "COHEN FURNITURE COMPANY, Plaintiff-Appellee, v. THE DEPARTMENT OF EMPLOYMENT SECURITY et al., Defendants-Appellants." ], "opinions": [ { "text": "JUSTICE HOMER\ndelivered the opinion of the court:\nIn this appeal we must determine whether the trial court erred in reversing the decision of the Department of Employment Security by finding that Cohen Furniture Company did not owe any contributions under the Unemployment Insurance Act (820 ILCS 405/100 et seq. (West 1996)), for its carpet installers because the installers were independent contractors. After our careful review, we reverse.\nFACTS\nCohen Furniture Company (Cohen) sells home furnishings, including carpeting. Cohen\u2019s advertised price for carpet sometimes includes the cost of installation, but even when it does not, Cohen is willing to arrange for installation. To do so, Cohen engages the services of a carpet installer from a list that it maintains.\nIn December 1995, the Department of Employment Security (Department) issued a \u201cdetermination and assessment\u201d against Cohen, finding that Cohen was responsible for $3,504.26 in unpaid contributions under the Unemployment Insurance Act (Act) (820 ILCS 405/2200 (West 1996)), for a number of its employees, including 12 carpet installers. Cohen filed a written protest to the assessment and requested an administrative hearing, arguing that because the carpet installers were independent contractors, it was exempt from making contributions for them pursuant to section 212 of the Act (820 ILCS 405/212 (West 1996)).\nAfter reviewing the evidence presented during the hearing, the Director of the Department found that Cohen failed to present sufficient evidence on any of the three factors in section 212 of the Act to prove that the carpet installers were independent contractors. Therefore, the Department found that the evidence supported a finding that the carpet installers were employees and that Cohen was responsible for the unpaid contributions.\nCohen filed a complaint for administrative review in the trial court. The trial judge reversed the Department\u2019s decision with respect to the 12 carpet installers, finding that the decision in United Delivery Service, Ltd. v. Didrickson, 276 Ill. App. 3d 584, 659 N.E.2d 82 (1995), was directly on point. The Department\u2019s appeal followed.\nANALYSIS\nJudicial review of the Department\u2019s decisions extends to all questions of law and fact presented by the record. 820 ILCS 405/2205 (West 1996); 735 ILCS 5/3 \u2014 110 (West 1996). On review, the Department\u2019s factual findings are held to be prima facie true and correct, and a reviewing court may set aside such decisions only if they are contrary to the manifest weight of the evidence. Jones v. Department of Employment Security, 276 Ill. App. 3d 281, 284, 657 N.E.2d 1141, 1144 (1995). However, administrative agencies are not entitled to such deference on questions of law, which are subject to de novo review. City of Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191, 205, 692 N.E.2d 295, 302 (1998).\nIn the instant case, this court must decide whether the Department erred in determining that Cohen was responsible for unpaid contributions under the Act because its carpet installers did not meet the independent contractor exception set forth in section 212 of the Act. To do so, we must interpret the statutory provision, as well as consider the legal effect of the factual determinations made by the Department. When the question presented for review involves a mixed question of law and fact such as this, the reviewing court must apply the \u201cclearly erroneous\u201d standard. City of Belvidere, 181 Ill. 2d at 205, 692 N.E.2d at 302.\nThe Act requires all employers to make contributions to a fund based upon \u201cwages payable for employment.\u201d 820 ILCS 405/1400 (West 1996). This fund provides money to involuntarily unemployed workers and their families to ease the burdens caused by unemployment.\nIn arguing that it was not required to make contributions for its carpet installers, Cohen relies upon section 212, which creates an exception for independent contractors and provides:\n\u201cService performed by an individual for an employing unit, whether or not such individual employs others in connection with the performance of such services, shall be deemed to be employment unless and until it is proven in any proceeding where such issue is involved that\u2014\nA. 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; and\nB. Such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and\nC. Such individual is engaged in an independently established trade, occupation, profession, or business.\u201d 820 ILCS 405/212 (West 1996).\nAn employer seeking this exemption from unemployment contributions has the burden of proof, and all three elements must be established before the exemption will be allowed. United Delivery Service, Ltd., 276 Ill. App. 3d at 588, 659 N.E.2d at 84; 56 Ill. Adm. Code \u00a7 2732.200(d) (1991).\nWhen interpreting the term \u201cindependent contractor\u201d under section 212 of the Act, courts are not guided by the common law principles pertaining to independent contractor status. See Criffitts Construction Co. v. Department of Labor, 76 Ill. 2d 99, 390 N.E.2d 333 (1979). Rather, section 212 uses the term in a much broader sense. The terms of the three statutory elements dictate whether the exemption operates, and the designation or description that the parties apply to their relationship is not controlling. 56 Ill. Adm. Code \u00a7 2732.200(b) (1991). Therefore, even though the standard-form contract utilized by the parties in this case purports to be an independent contractor agreement, that designation does not control.\nControl or direction for the purpose of section 212(A) means that an employer has the right to control and direct the worker, not only as to the work to be done, but also as to how it should be done, whether or not that control is exercised. 56 Ill. Adm. Code \u00a7 2732.200(g) (1991). This determination must be made on the particular facts of each case, but section 2732.200(g) of the Illinois Administrative Code identifies a number of relevant factors to be considered. See 56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(1) through (g)(25) (1991).\nA review of her written decision shows that the Department Director carefully considered the evidence in light of the relevant factors when she decided that Cohen failed to show that the carpet installers were free from its control and direction. After our careful review, we are unable to find that decision to be clearly erroneous. In fact, the record in this case shows the many ways in which Cohen retained the right to control and direct the carpet installers\u2019 work.\nControl is indicated when the employer issues assignments, schedules work, sets quotas, or requires the worker to follow a routine. 56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(1), (g)(3) (1991); see Bennett v. Department of Employment Security, 175 Ill. App. 3d 793, 797, 530 N.E.2d 541, 544 (1988). In this case, Cohen exercises such control because it determines which installer will be hired for an installation job, issues all job assignments, and sometimes schedules when the work will be done.\nCohen also establishes a routine for the carpet installers to follow for each assignment. When a customer wants Cohen to arrange for carpet installation, Cohen contacts an installer about performing the work. Sometimes Cohen arranges a time for installation on behalf of the customer. Installers pick up the carpeting and padding from Cohen\u2019s warehouse during designated hours. When a job is complete, the installers return the work order to Cohen, itemizing the labor and material charges according to Cohen\u2019s standard fee list. The installers work three to four days per week and are issued checks from Cohen on a weekly basis for payment for services rendered.\nEngaging a worker on a permanent basis is another factor indicating direction or control under section 212(A) of the Act. See 56 Ill. Adm. Code \u00a7 2732.200(g)(7) (1991). Cohen\u2019s assertion that the installers work for Cohen on a job-by-job basis is contradicted by the evidence. Cohen furnished the contract which established an ongoing relationship between Cohen and an installer; some installers work under contracts that were signed in 1992. See Bennett, 175 Ill. App. 3d at 797, 530 N.E.2d at 544 (the court noted as evidence of control that the employer provided the contract and the workers were not required to execute a contract for every job they did for the employer). Furthermore, Cohen retains the right to terminate the employment of any installer. See 56 Ill. Adm. Code \u00a7 2732.200(g)(21) (1991).\nCohen also furnishes the workers with materials and reimburses them for expenses incurred while performing the service. See 56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(8), (g)(14) (1991). Although the installers use their own tools and standard installation materials (such as carpet tape, tacks, glue, and seam sealer), the primary materials (carpet and padding) are provided by Cohen and the payment to the installers is intended to include reimbursement for all expenses incurred during installation.\nCohen exercises control with respect to quality standards for the installation work, as well. Installers guarantee their work to Cohen for one year, and Cohen handles customer complaints. If a customer complains about an installer\u2019s workmanship, Cohen decides if the problem will be remedied by repair or reinstallation and if the original installer will be obligated to pay for the corrections. See 56 Ill. Adm. Code \u00a7 2732.200(g)(25) (1991).\nCohen also exercises control over all matters of pricing and payment with respect to the installation services. 56 Ill. Adm. Code \u00a7 27.32.200(g)(19) (1991). The installers are compensated by Cohen, not the customers. In most instances, the installers are paid according to a fixed rate schedule set by Cohen. When larger installation projects come in, the installers submit bids or confer with Cohen about pricing. However, Cohen is in exclusive control of all customer contracts, decides what orders will be accepted and decides what prices the customers will be charged. 56 Ill. Adm. Code \u00a7 2732.200(g)(20) (1991).\nBased upon our careful review, we determine that the Department\u2019s finding that Cohen failed to establish pursuant to section 212(A) that the carpet installers were free from Cohen\u2019s control or direction was supported by the evidence and cannot be considered clearly erroneous. Because of this decision, we need not address the arguments raised regarding sections 212(B) and (C). Therefore, we determine that the trial court erred when it reversed the Department\u2019s decision in this case.\nWe acknowledge that the decision in United Delivery Service, Ltd., relied upon by the trial court, is similar to the instant case; however, factual distinctions make it impossible to simply refer to that ruling as a \u201csummary justification\u201d for reversing the well-reasoned decision of the Department.\nCONCLUSION\nFor the forgoing reasons, the judgment of the circuit court of Peoria County is reversed.\nJudgment reversed.\nBRESLIN, J., concurs.\nBecause this appeal involves only the issue of unpaid contributions for the carpet installers, we will not discuss the Department\u2019s decision regarding the other workers.", "type": "majority", "author": "JUSTICE HOMER" }, { "text": "JUSTICE SLATER,\ndissenting:\nIn reaching its decision, the majority applies a list of factors found in regulations (56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(1) through (g)(25) (1991)) adopted by the Department as a guide to determining whether an \u201cemploying unit\u201d enjoys the right of \u201ccontrol or direction over the performance of such services\u201d (820 ILCS 405/212(A) (West 1996)) for which the employing unit claims exemption under the Unemployment Insurance Act (the Act) (820 ILCS 405/100 et seq. (West 1996)). The regulations caution that no one factor or combination of factors should determine whether the employing unit has the right to control or direct. 56 Ill. Adm. Code \u00a7 2732.200(g) (1991). Rather, this determination should be made according to \u201cthe business reality or totality of the circumstances.\u201d 56 Ill. Adm. Code \u00a7 2732.200(g) (1991). Because I believe that the majority\u2019s decision ignores the foregoing admonition, I must dissent.\nThe case at bar involves a business (Cohen) that engages a service provider (the carpet installers) to provide a service incidental to the business\u2019s enterprise (the sale of furnishings and carpet) but which the business has, nevertheless, promised to a third party (Cohen\u2019s customers). Such a triangular business arrangement does not by itself place the provided services outside of the section 212 exemption. See Jack Bradley, Inc. v. Department of Employment Security, 146 Ill. 2d 61, 585 N.E.2d 123 (1991). It is still necessary to examine the economic relationship between the business and the service provider as a whole in order to determine the applicability of the section 212 exemption.\nMost of the subsection 2732.200(g) factors that the majority cites fail to provide any guidance as to the substantive economic relationship between Cohen and the carpet installers. See 56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(1), (g)(3), (g)(8), (g)(14), (g)(19), (g)(20) (1991). Instead, these factors apply almost anytime a business compensates another party for providing a service to its customers which is only ancillary to its business but which it has promised to arrange for its customers\u2019 convenience, regardless of whether the service provider is an employee or an independent contractor. These factors naturally attend such a tripartite business arrangement where the business seeks to maximize its customers\u2019 convenience and reduce transaction costs by acting as the intermediary between the customers and a service provider. Accordingly, I believe the majority is mistaken in its reliance on these factors.\nOther factors upon which the majority relies (56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(7), (g)(21), (g)(25) (1991)), although marginally probative, do not show that Cohen enjoys a right of control or direction over the services provided by the installers. Furthermore, I believe the majority fails to take into account several subsection 2732.200(g) factors favoring the conclusion that Cohen lacks the right of control or direction. See 56 Ill. Adm. Code \u00a7\u00a7 2732.200(g)(4) through (g)(6), (g)(9) through (g)(13), (g)(15) through (g)(18), (g)(22) through (g)(24) (1991). Therefore, I would find that Cohen met its burden of proof as to subsection 212(A) of the Act (820 ILCS 405/212(A) (West 1996)).\nI would also find that Cohen met its burden of proof with respect to subsections 212(B) and 212(C) of the Act (820 ILCS 405/212(B), (C) (West 1996)). Subsection 212(B) is satisfied because the service provided by the carpet installers is performed in the homes and businesses of Cohen\u2019s customers, and, therefore, outside of any of Cohen\u2019s places of business. See United Delivery Service, Ltd. v. Didrickson, 276 Ill. App. 3d 584, 659 N.E.2d 82 (1995). Moreover, subsection 212(C) is satisfied because the carpet installers can engage in their trade independent of Cohen. See United Delivery Service, Ltd., 276 Ill. App. 3d 584, 659 N.E.2d 82. Thus, I would hold that the Department\u2019s decision is clearly erroneous and affirm the judgment of the circuit court.\nAccordingly, I dissent.", "type": "dissent", "author": "JUSTICE SLATER," } ], "attorneys": [ "James E. Ryan, Attorney General, of Chicago (Darryl B. Simko (argued), Assistant Attorney General, of counsel), for appellants.", "David J. Dubicki and Beth Wellenraiter (argued), both of Kavanagh, Scully, Sudow, White & Frederick, P.C., of Feoria, for appellee." ], "corrections": "", "head_matter": "COHEN FURNITURE COMPANY, Plaintiff-Appellee, v. THE DEPARTMENT OF EMPLOYMENT SECURITY et al., Defendants-Appellants.\nThird District\nNo. 3\u201498\u20140648\nOpinion filed October 1, 1999.\nSLATER, J., dissenting.\nJames E. Ryan, Attorney General, of Chicago (Darryl B. Simko (argued), Assistant Attorney General, of counsel), for appellants.\nDavid J. Dubicki and Beth Wellenraiter (argued), both of Kavanagh, Scully, Sudow, White & Frederick, P.C., of Feoria, for appellee." }, "file_name": "0978-01", "first_page_order": 996, "last_page_order": 1003 }