Chris Vrountas and Adam Chandler appeared before the New Hampshire Supreme Court last week on behalf of the New Hampshire Restaurant and Lodging Association. The firm filed an amicus curiae brief on behalf of the NHLRA in a case concerning the interpretation of New Hampshire’s statutory “ABC Test” which must be applied when determining who is an employee and who is an independent contractor in the context of determining unemployment benefits and taxes.
The case involved a resort who had ceased using the services of an independent musician. The Appellate Board for the Department of Employment and Security ruled that the musician was an “employee” of the resort, notwithstanding his admitted independence as a business person, because the resort regularly provided “entertainment” in its lounge.
On appeal, the resort as well as the NHLRA argued that the resort, indeed any bar or restaurant in general, is not in the “entertainment” or “performing arts” business merely because independent musical acts regularly perform at their venues. Such a rule of law would threaten the market for musical acts across the state and would render all musicians who regularly play at various bars, lounges, restaurants, cafes or resorts employees of their venues. Importantly, such a rule would require bars and lounges to pay unemployment taxes on the invoices they pay to the musical acts that come perform for their customers. Taken to the theory’s logical extent, any regular service vendor, whether the landscaper, florist, or cleaning service, would become the employee or employees of their customers, even when the vendors are admittedly independent business people as the musician was in this case.
The Court actively posed questions and at one point Justice Lynn queried whether adopting the approach of the Appellate Board would have rendered “the Beatles employees of Ed Sullivan,” identifying the absurd result the proposed rule would require. The case remains under advisement.