National Maintenance Contractors v. Employment Dept.

Under the test provided in Avanti, if a franchisor retains direction and control over the means (i.e. tools of the trade) and manner (i.e. the method) that a franchisee utilizes in its operations, the franchisee is not an independent contractor. Avanti Press v. Employment Dept. Tax Section, 248 OR App 450, 463 (2012).

National Maintenance Contractors, (NMC), sought judicial review of a final order. NMC assigned error to an Administrative Law Judge's, (ALJ), upholding of the Employment Department’s imposition of unemployment insurance taxes. On appeal, NMC argued that it was exempt from unemployment insurance taxation because its franchisees were independent contractors. Under the test provided in Avanti, if a franchisor retains direction and control over the means (i.e. tools of the trade) and manner (i.e. the method) that a franchisee utilizes in its operations, the franchisee is not an independent contractor. Avanti Press v. Employment Dept. Tax Section, 248 OR App 450, 463 (2012). The Court of Appeals found that NMC specified which brands of tools could be used by franchisees, specified which franchisees were to be assigned client accounts, and dictated how the service was to be conducted via mandatory trainings. Accordingly, the Court held that ALJ did not err in ruling that the franchisees were not independent contractors. Affirmed.