Non-compete, Employment Contract, and Unemployment Benefits

Noncompete, Employment Contract, and Unemployment Benefits: Appellate Court of Connecticut.



ADMINISTRATOR, Unemployment Compensation Act, et al.

Submitted on briefs Dec. 7, 2010.

Decided April 12, 2011.

Facts: The plaintiff, Jason Roberts, who works at Jason Roberts, Inc, a concrete business, employed Michael Derose for the years of 1998, 1999 and 2000 as a concrete artisan. Derose asked for a raise in salary, but instead, his boss suggested he set up his own business and enter into an agreement with the plaintiff as a licensed dealer. In 2001, Derose set up his business and on May 4, 2001, Derose signed the agreement. Derose had agreed to wear the plaintiff's uniforms, report to Roberts on a daily basis, not to engage in drugs or alcohol during the workday, always contact him one hour before scheduled arrival time if he was to be absent and not to compete with the plaintiff directly or indirectly for a period of two years thereafter. After two years of the agreement, Derose terminated the agreement since it was unprofitable and filed for benefits under the Unemployment Compensation Act, General Statutes s 31-222 st seq. (act). On September 12, 2007, after having made extensive findings of fact, the appeals referee affirmed the determination. In its decision, the appeals referee applied s 31 222(a)(1)(B)(ii), FN2 more commonly known as the "ABC test," to its extensive factual findings and concluded that Derose was an employee of the plaintiff. The referee reached this conclusion after having determined that the plaintiff failed to satisfy any of the
three prongs of the ABC test. The court affirmed the board's decision and rendered judgment dismissing the plaintiff's appeal on June 17, 2009. This appeal followed.

Issues: Did the court apply the incorrect legal standard to the facts found? Should the court have applied s 42-133e (b) rather than the ABC test to the facts found?

Decision: Judgment affirmed

Reasons: The main question that had to be reviewed was whether or not Derose was an employee of the plaintiff and eligible for benefits under the Unemployment Compensation Act.

"An individual may receive unemployment compensation benefits if
he or she was an employee within the meaning of the act. In addition to defining
the employer-employee relationship pursuant to the common law, s 31-222(a)(1)(B)
provides that individuals who perform services for others are presumed to be
employees, unless the recipient of the services (enterprise) satisfies ... the ABC
Under the ABC test, an individual will not be considered an employee if: [A] such individual has been and will continue to be free from control and direction in connection
with the performance of such service, both under his contract for the performance of service and in fact; and [B] such service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed; and [C] such individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed...."

The ABC test was applied to the facts presented and concluded that Derose was an employee and eligible for benefits. The plaintiff failed to satisfy all the elements under the ABC test.

Dissenting opinion: None.