Mark Hopkins Inc. v. California Employment Stabilization Commission

NOURSE, P. J.

Appellant, Mark Hopkins, Incorporated, appeals from an adverse judgment in an action brought against the California Employment Stabilization Commission to recover $4,061.59 paid under protest, in accordance with section 45.10 of the California Unemployment Insurance Act [Stats. 1935, p. 1226 as amended; 3 Deering’s Gen. Laws, Act 8780d], which sum represented contributions, interest and penalties alleged by the commission to be due under the act with respect to compensation paid to musicians of bands playing at the hotel.

Plaintiff in its complaint stated that the collection of contributions, penalties and interest with respect to payments made to Joe Reichman, Ernie Heekscher, Herbie Holmes and Henry King was illegal, as set forth in its protest, and that the relationship existing between plaintiff and said persons did not constitute “employment,” as defined in section 6.5 of the California Unemployment Insurance Act and that no “wages” as defined in section 11 of the act were paid to said persons.

Defendants cross-complained bringing in the above-mentioned band leaders as new parties, asking for judgment against each one of them in certain specified amounts as contributions owing under the California Unemployment Insurance Act (3 Deering’s Gen. Laws, Act 8780d); stating that the commission was uncertain whether the band leader or the hotel was “the employer” within the meaning of section 9 of the- act and praying for judgment against the individual band leaders or in the alternative the Mark Hopkins Hotel. The trial judge dismissed the cross-complaint as to the named band leaders and held the Mark Hopkins liable for the contributions.

The question presented in this case is whether an employer-employee relationship existed between the hotel and musicians or whether the leaders of the “name bands” were independent contractors.

[17]

Testimony was given to the effect that the hotel negotiated for the bands through the Music Corporation of America and another regular booking agency and did not deal directly with the band leaders or with the musicians in obtaining their services. It also appears that from 1941 on, covering the period of time involved in this action, in order to obtain one of these bands the hotel was obliged to sign contract Form B, a contract devised by the American Federation of Musicians. It was stipulated that the contract was prescribed by the rules of the American Federation of Musicians and was the only contract under which musicians would work in bands for hotels.