Reference no: EM131473338

Question: IN RE FRANCIS, 668 N.Y.S.2D 55 (N.Y. APP. DIV. 3D DEP'T 1998)

FACTS West Sanitation Services, Inc., provides restroom sanitizing services to commercial customers. Glenroy Francis was hired in 1986 as a serviceperson for specified routes. In 1987, West began a franchise program. Francis signed a 23-page franchise agreement. As a franchisee, he performed the same functions that he had as an employee. In 1992, West terminated Francis' franchise for cause. Francis then applied for unemployment insurance benefits. Employees are entitled to such benefits, but franchisees are not. DECISION The New York Unemployment Insurance Appeal Board determined that West "exercised a sufficient degree of direction and control over [Francis] to establish an employment relationship."

Among the factors cited by the Board were West's assignment of a territory and/or customers to Francis; retention of active client control, including billing; establishing weekly schedules for customer service; "paying" Francis; specification of products that could be used; provision of new customer accounts; inspection and evaluation of Francis' performance; requirement that Francis use West's logo; requirement that Francis submit reports; and restrictions on Francis' right to transfer his interest in the customer accounts. Thus, the Board ruled that West was liable for unemployment insurance contributions for Francis and other similarly-situated individuals. The Appellate Division of the New York Supreme Court upheld the Board upon appeal.