An Illinois appeals panel has said the Illinois Department
of Employment Security was right to order a Skokie furniture moving business to
contribute to the unemployment insurance of more than 90 company workers,
because the workers are employees, not “independent contractors” as the company
tried to classify them.
The June 28 decision was delivered in First District
Appellate Court of Illinois by Justice John Simon, with concurrence from
Justices Daniel Pierce and P. Scott Neville. The ruling favored the Illinois
Department of Employment Security in its dispute with E-Z Movers.
The case stems from 2009 when a onetime E-Z worker sought
unemployment insurance benefits and the Department of Employment Security saw
E-Z had not reported the worker’s wages. The department then looked deeper and
found 92 drivers and helpers should have been listed as employees in 2008, but
were not; in 2007 the figure was 89. The department told E-Z to pay $25,014 in
unemployment insurance contributions for these employees.
The company contended at an administrative hearing there
were several reasons why the workers should be considered independent
contractors, not employees. Overall, E-Z claimed the company and the workers
were separate entities, but in the same line of business, with E-Z obtaining
customers and providing jobs to the movers, and the movers transporting items
from A to B.
The department was not persuaded, concluding in July 2012
the workers qualified as employees, because they were under E-Z’s “control or
direction,” as defined by the Illinois Unemployment Insurance Act. In support
of this conclusion, the department said E-Z hired and fired movers, scheduled
jobs, provided trucks, limited drivers’ use of trucks and prohibited movers
from assigning their jobs to anyone else without E-Z’s permission.
The company then went to court in August 2012 to have a
judge overturn the department’s decision, which Cook County Circuit Judge
Robert Cepero did in January 2015. The department, in turn, appealed shortly
afterward. In looking at the case, the appellate court noted it was reviewing
the department’s finding, not that of Cepero.
Justice Simon affirmed the department’s decision, saying it
was “not clearly erroneous.”
Simon pointed out E-Z failed to satisfy any of the three
conditions set forth by the Employment Security Act for designating a worker a
contractor, as opposed to an employee.
The criteria are that the worker be “free from control or
direction” of the business, is “independently established” and does work for
the company that falls outside the work usually engaged in by the company.
Simon noted the department correctly ascertained E-Z
exercised a number of controls over workers, drawing attention to the fact
company workers wear E-Z uniforms and drive trucks marked with the E-Z logo.
Simon also put the brakes on E-Z’s contention it was
separate from its drivers – E-Z having said it was on the marketing side of the
moving industry, with workers on the blue-collar end.
“A moving company would not exist without its workers to
physically haul the items,” Simon observed.
E-Z Movers was represented by the firm of Wessels Sherman
Joerg Liszka Laverty Seneczko P.C., which is based in suburban St. Charles,
with offices in Chicago, as well as Wisconsin, Iowa and Minnesota. The Illinois
Attorney General’s Office represented the Illinois Department of Employment