Leon v A-3, Inc., 2007 ACO #147
The Plaintiff, Henry Leon testified that A-3 is a distributor or franchisee of Kirby Vacuum Cleaners. He was hired in October 2002 as a dealer to sell Kirby Vacuum Cleaners to residential customers. He also considered himself to be a crew leader whereby he would recruit dealers and obtain Commissions from the dealers’ sales. His income was based directly on sales Commissions.

The Plaintiff’s sole income in 2002 and 2003 was derived from selling Kirby Vacuum Cleaners. He did not advertise in the yellow pages. The Plaintiff was not required to limit his employment to A-3. However, he never set up a d/b/a, corporation, or limited liability company. No tax withholdings were collected by A-3. He filed his taxes as a self-employed person. He did not have any fringe benefits. Trainings or sales meetings were not mandatory. He picked his own sales locations.

The Plaintiff paid $50.00 per week for the use of a van owned by A-3. He would take the van home and was free to use it for his personal use from October 2002 through April 8, 2003.

On April 8, 2003, the Plaintiff started his workday by driving the Chevy Astro Van to the Grand Rapids office of A-3 where he picked up his supplies and vacuums. At some point during the day, he was injured in an automobile accident.

The magistrate held that the Plaintiff was an employee and not an independent contractor for purposes of the Act. The WCAC affirmed the magistrate’s decision based on the fact that the Plaintiff did not maintain a separate legal entity and did not derive income from any other source other than the Defendant, and disregarded all other evidence that the Plaintiff had created an independent contractor relationship between himself and A-3.

Commissioner Przybylo in his dissenting opinion acknowledged the overwhelming evidence that the Plaintiff intentionally created an independent contractor relationship between himself and A-3 and reiterated the following: the Plaintiff controlled his own hours; the Plaintiff established his own sales territory; the Plaintiff could hire salespeople to perform the actual vacuum sales; the Plaintiff leased a van under terms that allowed him to use it as he pleased; and that the Plaintiff’s tax forms declared his independent contractor status.