## Facts

- H.A. Powell and Florence L. Powell operated H.A. Powell Studios in Detroit, taking photographs and developing, retouching, and printing portrait negatives.
- Retouching involved work such as softening highlights, brightening shadows, removing facial blemishes, and spotting negatives; the studio lacked space to do all retouching on-site.
- During busy seasons, the studio used “outside” or free-lance retouchers who picked up negatives, did the work at home or elsewhere, and returned finished negatives to the studio.
- Rebecca Cohen obtained negatives from the studio, retouched them at home using her own materials and methods, and returned the completed work.
- Cohen was paid $1 per negative retouched, not by the hour; the studio’s involvement centered on whether the finished negatives were acceptable rather than on directing how Cohen performed the retouching.
- After Cohen was terminated, she sought unemployment-compensation benefits; a referee and the Commission’s Appeal Board treated her as an employee under the Michigan Employment Security Act.
- The Wayne County Circuit Court affirmed the agency decision on certiorari, and the studio owners appealed to the Michigan Supreme Court.

## Issues

1. Whether Rebecca Cohen, a home-based, piece-rate retoucher, performed “employment” as an employee of Powell Studios under the Michigan Employment Security Act (former Unemployment Compensation Act), or instead worked as an independent contractor.

## Decision

- The Michigan Supreme Court reversed the circuit court’s judgment that had affirmed the Appeal Board.
- The Court held that Cohen was an independent contractor, not an employee, under the Michigan Employment Security Act.
- The Court set aside the administrative determination that Cohen’s services constituted covered employment for unemployment-compensation purposes.

## Legal Principles

- Worker status under the Michigan Employment Security Act was determined primarily by the common-law “right to control” test: whether the putative employer had the right to control the manner and means of the work, not merely to require an acceptable end product.
- Control limited to quality review or acceptance/rejection of the finished work does not, standing alone, establish an employment (master–servant) relationship.
- Factors supporting independent-contractor status include performing the work off the employer’s premises, using one’s own tools and methods, lacking set hours, and being paid by the piece rather than by time.
- When the underlying facts are not disputed, classification of the relationship under the Act presents a legal question for judicial determination, and an agency’s label is not conclusive.
- The Court treated the case as governed by its prior analysis applying the control test in comparable home-work/piece-rate arrangements.

## Conclusion

Powell v. Michigan Employment Security Commission held that a freelance retoucher who picked up negatives, performed retouching at home for a per-negative fee, and was subject mainly to acceptance of the finished work was an independent contractor rather than an employee under the Michigan Employment Security Act; therefore, the agency and circuit court erred in treating her services as covered employment for unemployment-compensation purposes.


Powell v. Michigan Employment Security Commission, 75 N.W.2d 874, 345 Mich. 455 (1956)