Employment: 2018 Yearly Update

A. Cases

In all three of the cases discussed below, the issue was whether the licensee was an employee or independent contractor of the broker or real estate company. The key factor in this determination is the extent to which the broker or real estate company controls the actions of the licensee. To make this assessment, the courts and administrative bodies carefully examine the details of the working relationship, including which party sets work hours, limits on the licensee’s ability to do outside work, and the materials and equipment provided to the licensee.

1. In the Matter of Slater, No. 524647, 2017 WL 6612615 (N.Y. App. Div. Nov. 15, 2017)

Real estate salesperson was an employee of commercial real estate brokerage.

In this unemployment insurance case, the claimant worked as a leasing broker for a commercial real estate brokerage. After the licensee was terminated, the administrative law judge determined the licensee was eligible for unemployment insurance benefits because there was an employer-employee relationship between the claimant and the real estate brokerage. The brokerage appealed that decision, arguing that the salesperson was not an employee.

Although the licensee signed an independent contractor agreement, the licensee completed an extensive training program and received a mentor from the brokerage, received payment during the probationary/training program, and was expected to maintain regular office hours and to keep a supervisor informed of his whereabouts during the day. The brokerage provided the licensee with an office, office equipment, supplies, a work email address, and reimbursement for some professional expenses. The brokerage also set the commission rates, could request monthly reports from the licensee, provided health insurance, and prohibited the licensee from performing similar services outside the company. In light of this evidence, the court affirmed the determination that the salesperson was an employee for unemployment compensation purposes eligible for unemployment insurance benefits.

2. In re Link, 2017 NY Slip Op 06118, 2017 WL 3426858 (N.Y. App. Div. Aug. 10, 2017)

Real estate salesperson was employee of real estate company for purposes of unemployment insurance.

Licensee worked for real estate broker that provided sales and rental services for property developers with multiple unit apartment buildings. The licensee showed apartment units to prospective tenants and solicited offers. The Unemployment Insurance Appeal Board concluded that an employment relationship existed between the licensee and the broker, such that the licensee was entitled to unemployment insurance benefits.

The broker appealed the decision in state court. The court found that the Unemployment Insurance Appeal Board’s decision was supported by evidence in the record. The licensee was not allowed to choose his own work hours, there were limits on the licensee’s ability to do outside work, the broker set the rate of compensation and required the licensee to submit weekly statistical reports, and provided the licensee with contacts for potential customers. The court affirmed the decision of the Unemployment Insurance Appeal Board.

3. Lee v. www.urban, Inc., et al., No. H-16-1841, 2017 WL 3620591 (S.D. Tex. Aug. 23, 2017)

Evidence showed that licensees could be considered employees, rather than independent contractors, of real estate company.

Licensees sued the real estate company they worked for, claiming they were entitled to unpaid minimum wage and overtime compensation. The real estate company argued the licensees were independent contractors who were not entitled to the additional compensation. The real estate company moved for summary judgment.

Although the real estate company presented evidence that the licensees made their own decisions regarding which properties to show customers and were allowed to represent customers who purchased from a seller other than Urban Living, the licensees also presented evidence that the real estate company maintained substantial control over the manner in which they performed their work. According to the court, there was a genuine issue of material fact regarding whether the licensees were employees of the real estate company or worked as independent contractors. The court denied the real estate company’s motion for summary judgment.

B. Statutes and Regulations

No employment-related statutes or regulations were retrieved this quarter.

C. Volume of Materials Retrieved

Employment issues were identified 4 times in 3 cases over the past twelve months (see Table 4). No statutes or regulations regarding Employment issues were retrieved this quarter, but 4 statutes and 5 regulations regarding Employment issues were retrieved in the past twelve months (see Table 4).

Table 4

Volume of Employment Items Retrieved in Past Twelve Months (April 2017-March 2018)