Utah Court of Appeals
Can contractual language override actual control in employment classification? Deseret Book Company v. Department of Workforce Services Explained
Summary
Deseret Book hired actress Katherine Thompson to perform in “The Forgotten Carols” theatrical production under a contract stating she was an independent contractor but also that she would perform “under the direction of” Deseret Book. The Department of Workforce Services determined Thompson was an employee for unemployment insurance purposes, which the Board upheld after analyzing statutory factors.
Analysis
The Utah Court of Appeals recently addressed a critical issue in employment classification: whether contractual language declaring someone an independent contractor can overcome evidence of actual employer control. In Deseret Book Company v. Department of Workforce Services, the court examined the employment status of an actress hired for a theatrical production.
Background and Facts
Deseret Book hired experienced actress Katherine Thompson to play “Connie Lou” in their annual Christmas production “The Forgotten Carols.” The parties executed a “Work for Hire Agreement” stating Thompson “is an independent contractor” but also requiring her to perform “under the direction of” Deseret Book’s authorized representative. Thompson was required to follow a script, attend scheduled rehearsals and performances, and abide by Deseret Book’s tour schedule. After the production ended, the Department of Workforce Services determined Thompson was an employee for unemployment insurance contribution purposes.
Key Legal Issues
The central issue was whether Thompson satisfied Utah’s two-part independent contractor test under Utah Code § 35A-4-204(3): (1) being customarily engaged in an independently established business of the same nature, and (2) being free from control or direction over performance means. The Department of Workforce Services Board analyzed eight regulatory factors to determine whether Deseret Book had the right to control Thompson’s performance.
Court’s Analysis and Holding
The court affirmed the Board’s employee determination, applying substantial evidence review to the Board’s factual findings and factor-weighing. The court found four factors supported employee status: (1) Deseret Book’s contractual right to require compliance with instructions, (2) Thompson’s requirement to perform at a particular pace and sequence following the script, (3) Thompson providing personal service as a specifically-hired lead actress, and (4) set work hours for rehearsals and performances. Crucially, the court emphasized that “it is the right of control” rather than actual exercise of control that determines employment status.
Practice Implications
This decision demonstrates that contractual labels cannot overcome substantive evidence of control relationships. The court rejected Deseret Book’s argument that the contract’s “independent contractor” designation was dispositive, instead focusing on the practical realities of the working relationship. For practitioners drafting independent contractor agreements, consistency between contractual terms and actual working arrangements is essential. The decision also shows courts will consider industry-specific factors but will not excuse control relationships simply because they are common in particular industries like entertainment.
Case Details
Case Name
Deseret Book Company v. Department of Workforce Services
Citation
2018 UT App 50
Court
Utah Court of Appeals
Case Number
No. 20170269-CA
Date Decided
March 29, 2018
Outcome
Affirmed
Holding
An actress hired under a contract specifying she would perform “under the direction of” the employer was properly classified as an employee rather than an independent contractor despite contractual language stating she was an independent contractor.
Standard of Review
Substantial evidence for factual determinations; clear error standard for Board’s weighing of factors
Practice Tip
When drafting independent contractor agreements, ensure contract terms consistently reflect the intended relationship and avoid language granting control or direction over performance methods.
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