California Employment Stabilization Commission v. Norins Realty Co.

EDMONDS, J. Substantially the same question as was decided in California Employment Stabilisation Commission v. Morris, 28 Cal.2d 812 [172 P.2d 497], is again presented for determination. In considering the status of certain salesmen and brokers associated with Norms Realty Company, Inc., in the sale of real estate, contrary to the contentions of the commission, the superior court held that these persons were independent contractors and not employees. The commission’s appeal is from the judgment entered accordingly.

The action was brought under the Unemployment Insurance Act (Stats. 1935, p. 1226, as amended; 3 Deering’s Gen. Laws, Act 8780d) for the collection of contributions and interest alleged to be due from the realty company for the calendar years 1936 and 1937. It appears without question that the corporation engaged the services of 67 persons, all of whom were either salesmen or brokers licensed by the California Real Estate Commission, to sell real property owned by it. This property consisted principally of lots in subdivisions which the company had placed on the market.

The president of the corporation, who had been connected with it since 1925 and, during the taxable period for which contributions are claimed was its secretary and treasurer, stated in detail the circumstances under which the services of the salesmen and brokers were engaged and the manner in which they conducted their operations. No distinction was [421]made between, a broker and a salesman in the functioning of the sales organization. There was no written or oral contract with any member of the sales force except as to the amount of the commission he would receive and the time of its payment. An employment card offered in evidence was identified by this witness as a form which had been used for a short time in 1929 or 1930 and was then discontinued.

The corporation did not bear any part of the expense incurred by the salesmen in their work, compensation being entirely on a commission basis. It did not furnish them with transportation, office facilities, desk space, telephone service, or business cards. However, there were available to either customers or salesmen maps and a pamphlet which contained pictures of the lake and cottages on one of the subdivisions and of a clubhouse proposed to be built. The salesmen were also furnished with a price list.

There were no rules or regulations with regard to the activities of the salesmen, and they were not instructed as to the manner in which the sales were to be made. But, according to the witness, “They were told that we did not expect them to make misrepresentations.” They were not required to attend sales meetings but some such meetings, characterized as impromptu “get-togethers” were held. No one was given an exclusive sales right in any particular territory, nor were restrictions imposed as to canvassing a stated territory at a particular time or with certain frequency. On the contrary, the company made no demand upon a salesman to devote a stated time to the business or that he produce a minimum volume of sales, and there were no fixed hours of employment.