Appeal of Niadni, Inc. d/b/a Indian Head Resort Motel

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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Department of Employment Security
No. 2013-313

APPEAL OF NIADNI, INC. D/B/A INDIAN HEAD RESORT MOTEL
(New Hampshire Department of Employment Security)

Argued: February 20, 2014
Opinion Issued: May 8, 2014

Sheehan Phinney Bass + Green, P.A., of Manchester (Elizabeth A. Bailey
on the brief and orally), for the petitioner.

New Hampshire Legal Assistance, of Concord (Daniel Feltes and Sarah
Mattson on the brief, and Mr. Feltes orally), for the respondent, Norman
Coulombe.

Vrountas, Ayer & Chandler, P.C., of Manchester (Christopher T.
Vrountas and Adam J. Chandler on the brief, and Mr. Vrountas orally), for the
New Hampshire Lodging & Restaurant Association, as amicus curiae.

HICKS, J. This is an appeal of the New Hampshire Department of
Employment Security (DES) Appellate Board (board) decision that the
respondent, Norman Coulombe, was an employee of the petitioner, Niadni, Inc.
d/b/a Indian Head Resort Motel (the resort), who was entitled to
unemployment compensation benefits under RSA chapter 282-A (2010 & Supp.
2013). We affirm.

The record supports the following facts. The resort is located in Lincoln.
Live entertainment is offered in a function room that features both a stage and
public address system. Peter Spanos, the president and owner of the resort,
testified that his enterprise is a “resort type business” with “a restaurant,
rooms, [and] entertainment,” which offers live entertainment on sixty to seventy
percent of the nights that it is open. He further testified that the resort
advertises upcoming entertainment in local newspapers, online promotions,
and flyers, and explained that the resort spent $120,000 on entertainment in
2009, featuring approximately fifty entertainers during that year. Meals and
optional lodging are provided to entertainers.

Coulombe appeared as a musical entertainer at the resort in both solo
and group performances beginning in approximately 1980. He also performed
at other venues but testified that he performed at the resort nearly three
hundred times in the last two years that he worked there. The resort and
Coulombe negotiated a pay rate for Coulombe’s services, and he was paid
weekly for his performances. He provided his own instruments and selected
the songs he would play in his performances, though the resort asked him to
perform new material prior to the end of his relationship with the resort. He
reported that his last booking with the resort occurred on June 2, 2012, after
which the relationship terminated. He subsequently filed for unemployment
benefits with DES.

On July 19, 2012, DES determined that Coulombe was eligible for
unemployment benefits. The resort appealed this determination to the DES
Appeal Tribunal (tribunal). Following a hearing, the tribunal concluded that
Coulombe “did not provide services in employment” under the exception
contained in RSA 282-A:9, III (2010). Specifically, the tribunal concluded that
the resort is in the business of, among other things, “coordinating”
entertainment, which it distinguished from “the business of singing, playing
instruments, or other forms of entertainment.” Coulombe’s request for
reconsideration was denied.

Coulombe then appealed to the board. The board initially denied the
appeal, but upon reconsideration, ruled that the tribunal’s decision was
erroneous because it drew a “distinction without substance” regarding the
coordination of entertainment services. Accordingly, the board awarded
unemployment benefits to Coulombe. The board denied the resort’s
subsequent motion to reconsider, and this appeal followed.

On appeal, the resort argues that: (1) RSA 282-A:65 (2010) required the
board to affirm the tribunal’s decision; (2) the tribunal’s decision was legally

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and factually correct; and (3) the board’s order is “inconsistent with, and
undermines, the purpose of” RSA chapter 282-A. Coulombe responds that: (1)
the resort failed to prove that entertainment services in general, and
Coulombe’s entertainment services in particular, were outside its usual course
of business under RSA 282-A:9, III(b); and (2) the board’s order is consistent
with RSA chapter 282-A’s remedial purpose to help unemployed workers like
Coulombe.

RSA 282-A:65 permits the board to reverse the tribunal only in certain
circumstances. Appeal of N.H. Sweepstakes Commission, 130 N.H. 659, 662
(1988). The statute provides:

The appellate board shall not substitute its judgment for that of
the commissioner or appeal tribunal as to the weight of the
evidence on questions of fact, or as to the prudence or desirability
of the determination. The appellate board shall reverse or modify
the decision or remand the case for further proceedings only if the
substantial rights of the appellant had been prejudiced because
the findings, inferences, conclusions, or the decision is:

I. In violation of constitutional or statutory provisions; or

II. In excess of the statutory authority of the department of
employment security; or

III. Affected by reversible error of law; or

IV. Affected by fraud; or

V. Affected by the absence of newly discovered evidence,
which was not available to the affected party upon
reasonable search at the time of the first level hearing, in
which case the appeal shall be remanded to the appeal
tribunal.

Otherwise, the appellate board shall affirm the order.

RSA 282-A:65.

Judicial review of tribunal decisions, as reversed, modified, or affirmed
by the board, is confined to the record, and we cannot substitute our judgment
as to the weight of the evidence on questions of fact for that of the tribunal.
Appeal of N.H. Sweepstakes Commission, 130 N.H. at 662; see RSA 282-A:67,
II (2010). We may reverse or modify the tribunal’s decision only in limited
circumstances.

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 The court shall reverse or modify the decision of the appeal
tribunal, or remand the case for further proceedings, as
determined by the court, only if the substantial rights of the
appellant had been prejudiced because the administrative findings,
inferences, or conclusions are:

(a) In violation of constitutional or statutory provisions;

(b) In excess of statutory authority;

(c) Made upon unlawful procedures;

(d) Clearly erroneous in view of the substantial evidence on the
whole record; or

(e) Affected by other error of law.

Otherwise, the court shall affirm the appeal tribunal’s decision.

RSA 282-A:67, V.

The resort challenges Coulombe’s employment status based upon the
exemption provided in RSA 282-A:9, III, which excludes certain workers from
the definition of “employment.” See Appeal of Aspen Contracting NE, 164 N.H.
88, 89 (2012). Under RSA 282-A:9, III:

Services performed by an individual for wages shall be deemed to
be employment subject to this chapter unless and until it is shown
to the satisfaction of the commissioner of the department of
employment security that:

(a) Such individual has been and will continue to be free from
control or direction over the performance of such services, both
under his contract of service and in fact; and

(b) Such service is either outside the usual course of the
business for which such service is performed or that such
service is performed outside of all the places of business of the
enterprise for which such service is performed; and

(c) Such individual is customarily engaged in an independently
established trade, occupation, profession, or business.

“The burden is on the party challenging an ‘employment’ determination to
establish that all three requirements for exclusion have been satisfied; failure

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to establish any of them is conclusive proof of employment for purposes of RSA
chapter 282-A.” Appeal of Aspen Contracting NE, 164 N.H. at 91 (quotation
omitted).

This appeal hinges upon the meaning of RSA 282-A:9, III(b).

Statutory interpretation is a question of law that we review de
novo. We are the final arbiter of the intent of the legislature as
expressed in the words of a statute considered as a whole. In
interpreting a statute, we first look to the language of the statute
itself, and, if possible, construe that language according to its plain
and ordinary meaning. Unless we find that the statutory language
is ambiguous, we need not look to legislative intent. Furthermore,
we interpret statutes in the context of the overall statutory scheme
and not in isolation.

Appeal of Stewart, 164 N.H. 772, 775 (2013) (quotation omitted). RSA 282-A:9,
III(b) sets forth two circumstances under which a service will not be considered
employment: when a service is “outside the usual course of the business for
which such service is performed” or when a service is “performed outside of all
the places of business of the enterprise for which such service is performed.”
RSA 282-A:9, III(b). The provision is “disjunctive, meaning that the employer
needs to show only one of the two alternatives.” Sinclair Builders v.
Unemployment Ins., 73 A.3d 1061, 1067 (Me. 2013) (interpreting identical
Maine statutory provision). Neither party argues that Coulombe provided
entertainment “outside of all the places of business of the enterprise for which
such service is performed.” RSA 282-A:9, III(b). Therefore, we focus on
whether Coulombe’s services were outside the resort’s usual course of
business.

“Outside the usual course of the business” can be an elusive concept.
See Carpet Remnant Warehouse v. Dept of Labor, 593 A.2d 1177, 1186 (N.J.
1991) (interpreting similar provision in New Jersey statute). We have not
adopted a general standard as to the meaning of this phrase, but several other
courts have done so with regard to statutory provisions analogous to RSA 282-
A:9, III(b). See, e.g., Mattatuck Museum v. Unemployment Comp., 679 A.2d
347, 351 (Conn. 1996); Yurs v. Director of Labor, Dep’t of Labor, Div. of U.C.,
235 N.E.2d 871, 875 (Ill. App. Ct. 1968); Sinclair Builders, 73 A.3d at 1067;
Bigfoot’s, Inc. v. Bd. of Rev. of Indus. Com’n, 710 P.2d 180, 181 (Utah 1985).

We find the Supreme Court of Connecticut’s approach most useful. In
Mattatuck Museum, the court examined a statutory provision similar to RSA
282-A:9, III(b), and held that “[i]f . . . an enterprise undertakes an activity, not
as an isolated instance but as a regular or continuous practice, the activity will
constitute part of the enterprise’s usual course of business irrespective of its

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substantiality in relation to the other activities engaged in by the enterprise.”
Mattatuck Museum, 679 A.2d at 351. We adopt this standard and conclude
that Coulombe’s services – and, more generally, live entertainment – were
within the resort’s usual course of business because they were regularly and
continuously provided at the resort. See id.

The resort emphasizes its other amenities – including lodging, outdoor
sporting activities, and scenic locations – to argue that the lounge and its
related live entertainment are not essential to its business. The availability of
these other amenities and services, however, does not negate the regular and
continuous presence of live entertainment and, more specifically, Coulombe’s
performances at the resort. See id. Spanos testified that the resort offers live
entertainment on sixty to seventy percent of the nights that it is open.
Moreover, Coulombe’s particular services were provided on a regular and
frequent basis. He appeared at the resort for approximately thirty years and
had nearly three hundred bookings in the last two years that he performed at
the resort.

The resort also argues that Coulombe’s services are not within its usual
course of business because it “does not itself provide live music and it is not a
band or a group of musicians or singers,” and, “at most, [the resort]
coordinates scheduling independent musicians such as Coulombe to play in
the [resort] lounge.” We agree with the board that this is a “distinction without
substance” in this case. The resort does not merely coordinate live
entertainment. In addition to the regularity of live entertainment noted above,
the resort maintains various amenities, including a stage and public address
system, to facilitate live entertainment, and advertises upcoming performances
to attract patrons to the resort. Cf. Bigfoot’s, Inc., 710 P.2d at 181 (“Since it
was usual and customary for the hotel to furnish entertainment in connection
with its operations, the employment of musicians . . . was within the ‘usual
course of the business.’”).*

Nor are we persuaded by the resort’s suggestion that the board erred by
failing to appreciate that Coulombe’s services merely contributed to the resort’s
“ambience.” The resort relies upon Unemployment Compensation Commission
v. Mathews, 111 P.2d 111, 119 (Wyo. 1941). In that case, the Supreme Court
of Wyoming assessed the employment status of musicians performing in a
restaurant and reasoned:

*
The resort further argues that Bigfoot’s, Inc. is distinguishable because “[t]he employer in
Bigfoot’s, Inc. operated a beer bar and not a diverse family-oriented resort such as [the resort’s]
facility” and “[t]here was no evidence referenced in the Bigfoot’s, Inc. case that the beer hall owner
also featured scenic attractions, dining and other family-friendly activities as part of its business
and as part of its allure to guests.” We are not persuaded by this distinction, for our analysis does
not turn on whether the business enterprises are identical or analogous.

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 If a restaurant owner contracts with a florist to supply flowers for
his tables, is that a service within the “usual course” of the owner's
business? Flowers on the restaurant tables give pleasure to the
owner’s guests as does music played by those who can be hired to
supply it in the restaurant rooms. Are the florist and those
employed by him employees of the owner? We are inclined to think
not.

Id. The resort cites this language in its brief and, at oral argument, analogized
Coulombe’s performances to these decorative “floral arrangements” to argue
that live entertainment is not in the resort’s usual course of business but
rather a part of the resort’s “ambience.”

This argument ignores the significance of Coulombe’s services to the
resort’s business. Rather than creating mere “ambience,” Coulombe’s services
were used to attract new business to the resort, whose president and owner
testified that the business provides “entertainment.” The record includes
several advertisements featuring Coulombe’s likeness and the name of his
musical acts. Under these circumstances, we conclude that Coulombe’s
services were not incidental to, but rather were an integral part of, the resort’s
business. Cf. Sinclair Builders, 73 A.3d at 1067 (“In order to demonstrate that
an individual’s services are not within the employer’s usual course of business,
the employer must show that the service is not an integral part of the
employer’s business, but is rather merely incidental to it.” (quotations
omitted)).

Finally, the resort contends that the board’s order undermines the
purpose of RSA chapter 282-A. Specifically, the resort argues that Coulombe is
an independent contractor who was free to perform, and did perform, for other
entities, and that the unemployment compensation statute was not designed to
offer assistance to such individuals. The resort further asserts that the
“mischaracterization” of singers and musicians as employees could encourage
New Hampshire businesses to refrain from hiring those individuals and thus
jeopardize the employment prospects of independent musical artists.

“The purpose of our unemployment compensation statute, RSA chapter
282-A, is to prevent the spread of unemployment and to lighten the burden on
those workers who are involuntarily unemployed through no fault of their
own.” Appeal of Aspen Contracting NE, 164 N.H. at 90 (quotation and brackets
omitted). Because we have determined that Coulombe was an employee for the
purposes of RSA chapter 282-A, our conclusion is not contrary to the statute’s
purpose. The resort’s argument that such a decision will impose “significant
legal restrictions and financial obligations” on businesses and thus “place a
whole group of independent musical artists out of work” is equally

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unpersuasive because the determination of whether a particular entertainer is
an employee under RSA chapter 282-A turns upon the unique facts of each
case.

Because the resort has failed to demonstrate that it meets the test of RSA
282-A:9, III(b), we need not consider whether it satisfied the two remaining
requirements set forth in RSA 282-A:9, III(a) and (c). See id.; cf. Appeal of
Work-a-Day of Nashua, 132 N.H. 289, 293 (1989).

Affirmed.

DALIANIS, C.J., and CONBOY, LYNN and BASSETT, JJ., concurred.

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