Matter of County of Monroe, 57 N.Y.2d 660 (1982)

The determination of whether an employer-employee relationship exists, as opposed to an independent contractor relationship, hinges primarily on the degree of supervision and control exercised by the purported employer.

Summary

This case concerns whether a security services contract between Monroe County and a private company, Star, created an employer-employee relationship or an independent contractor relationship. The Court of Appeals held that Star was an independent contractor, focusing on the lack of supervision and control by the county over Star’s employees. The court emphasized that the performance of similar duties and the possibility of contract termination were not determinative factors, and the county demonstrated good faith through significant cost savings.

Facts

Monroe County contracted with Star to provide security guard services, replacing its own guard employees. Star’s employees performed duties similar to those of the former county employees. The contract allowed the county to terminate the agreement with notice. The County’s buildings were protected by a monitoring and communications system, requiring interrelation between Star guards and county employees. The County saved in excess of $100,000 a year using Star personnel.

Procedural History

The Special Term initially held that an employer-employee relationship existed. The Appellate Division reversed, finding that Star was an independent contractor. The Court of Appeals affirmed the Appellate Division’s order.

Issue(s)

Whether the contract between Monroe County and Star created an employer-employee relationship, thereby requiring the county to adhere to civil service regulations, or whether Star operated as an independent contractor.

Holding

No, because the weight of the evidence supports the conclusion that Star acted as an independent contractor due to the lack of supervision and control exercised by Monroe County over Star’s employees.

Court’s Reasoning

The Court of Appeals emphasized that supervision and control are the key factors in determining whether an employer-employee relationship exists. While the same duties were performed and the contract was terminable, these factors were not determinative. The court found that the county’s employees did not supervise or control Star’s guards. Communication between the county and Star’s employees was merely the passing of information, not the giving of orders. The actions taken by Star’s employees were pursuant to the contract. The court noted the good faith of the district demonstrated by significant cost savings. The court stated, “Although because of the monitoring and communications system that protected the district’s buildings there was a necessary interrelationship between work of Star’s guards and that of the district’s employees, the latter neither supervised nor controlled the former.” The court also noted that Star guards directed traffic and delivered mail because the contract called for them to do so and used district equipment because it was more cost-effective. The checking in and out of Star employees with the district served only as a means of tracking hours worked for billing purposes, not as an exercise of control.