                         This opinion will be unpublished and
                         may not be cited except as provided by
                         Minn. Stat. § 480A.08, subd. 3 (2014).

                              STATE OF MINNESOTA
                              IN COURT OF APPEALS
                                    A14-2162

                                 Susanne M. Glasser,
                                    Respondent,

                                          vs.

                               Butler Liberty Law, LLC,
                                        Relator,

                 Department of Employment and Economic Development,
                                     Respondent.

                                Filed August 24, 2015
                                      Affirmed
                                    Hooten, Judge

                 Department of Employment and Economic Development
                                 File No. 32408823-5

Susanne M. Glasser, Minnetonka, Minnesota (pro se respondent)

William B. Butler, Butler Liberty Law, LLC, Minneapolis, Minnesota (for relator)

Lee B. Nelson, Department of Employment and Economic Development, St. Paul,
Minnesota (for respondent department)

      Considered and decided by Reilly, Presiding Judge; Halbrooks, Judge; and

Hooten, Judge.
                         UNPUBLISHED OPINION

HOOTEN, Judge

       Relator law firm challenges an unemployment law judge’s decision that

respondent attorney was an employee of relator rather than an independent contractor.

We affirm.

                                           FACTS

       In February 2011, relator Butler Liberty Law, LLC (BLL), a law firm owned by

William Butler, hired respondent Susanne Glasser, an attorney, to “essentially do all of

[the firm’s] legal writing.” Butler would assign Glasser cases for which he needed

writing done, which Glasser would either handle herself or assign to a staff member at

BLL. Glasser had some autonomy in drafting these documents and would occasionally

dispute the viability of particular legal arguments with Butler, but Butler testified that if a

disagreement arose, he “would ultimately have the final say.” Glasser would typically

draft these documents for signature by Butler, but she would sometimes sign with her

own name on behalf of BLL. In addition to drafting court documents, Glasser would

draft correspondence to clients and make court appearances on behalf of BLL. Glasser

worked full-time for as many as 50 hours per week and was initially paid $1,000 per

week. There was no written contract between the parties, nor was Glasser required to

keep track of her hours for BLL. Glasser did not receive a benefits package from BLL,

and she was unsure whether BLL covered her malpractice insurance.

       On June 2, 2011, Glasser formed Glasser Law, LLC, and soon thereafter directed a

paralegal at BLL to begin depositing her paychecks into a bank account under that name.


                                              2
Butler testified that he “ceded” to this change in payment methodology. On June 6, 2011,

a creditor obtained a judgment against Glasser personally for at least $23,667.56. In

December 2011, this judgment creditor obtained a garnishment summons against Glasser

and BLL, but did not name Glasser Law, LLC. When served with the garnishment

summons, BLL represented that it did not owe Glasser earnings that would be subject to

garnishment. Glasser continued to receive her payments from BLL at her LLC’s bank

account for the rest of her tenure at BLL, although Glasser testified that she never

renewed her LLC’s registration.

      For most of 2011, Glasser worked from home in completing the assignments given

to her by Butler, although she attended a weekly staff meeting at the BLL offices.

Toward the end of 2011, Glasser was given additional duties by Butler, including review

of incoming mail and managing the firm’s calendar. Butler requested that Glasser work

at the firm’s office space to better handle these duties, and provided her with her own

office and parking space. BLL still allowed Glasser some flexibility by allowing her to

work from home when needed. Glasser was expected to inform Butler when she would

be working from home or if she needed time off for illness, and BLL gave Glasser at least

two weeks of paid leave during her time there.

      In September 2012, Butler informed the firm that Glasser would “be our legal

[chief operations officer] going forward,” and later that year Glasser requested and

received a pay raise to $1,450 per week. While at the office, BLL provided its office

supplies for Glasser’s use, and also provided Glasser with business cards indicating that

Glasser was an attorney with BLL. Glasser had a Westlaw account through her work for


                                           3
the University of Minnesota Law School, and initially used her own laptop when doing

work for BLL. But, in early 2013, Glasser gave her laptop to another worker at BLL, and

BLL gave her a new computer. Glasser also used a BLL e-mail address while at the firm.

       In 2013, Glasser performed work on one divorce case for another law firm, which

was unrelated to her work at BLL. She performed this legal work as Glasser Law, using

letterhead and signing pleadings to that effect. She also worked as a legal writing

instructor at the University of Minnesota Law School during her tenure at BLL and

deposited her paycheck from that job into the same LLC account as her BLL paycheck.

       On June 5, 2013, the Minnesota Supreme Court suspended Glasser from practicing

law in connection with her conviction of two counts of misdemeanor theft by swindle. In

re Glasser, 831 N.W.2d 644, 645, 650–51 (Minn. 2013). Glasser’s law license was

suspended starting June 19, id. at 650, and conditionally reinstated on September 11, In

re Glasser, 837 N.W.2d 39, 39–40 (Minn. 2013) (order op.). Glasser continued to work

for BLL and receive her $1,450 weekly paycheck throughout her suspension. Glasser’s

pay was reduced to $1,250 per week in December 2013, and remained at that level until

she separated from BLL.

       In December 2013, Butler was suspended from practicing in the Eighth Circuit

and the Minnesota federal district court due to his failure to pay sanctions that the federal

district court had assessed against him. After Butler’s suspension, Butler and Glasser

discussed whether Glasser would be willing to appear as Glasser Law on behalf of

Butler’s clients who still had pending matters before these federal courts.          Glasser

proceeded to file notices of appearance for several of these cases, and Butler testified that


                                             4
he intended to have Glasser simply appear on his clients’ behalf while his clients retained

their contractual arrangement with BLL. But, Glasser withdrew from her representation

of these clients after contacting the Minnesota Lawyers Professional Responsibility

Board (LPRB) and learning that these actions could violate the professional responsibility

rules.   In connection with her withdrawal from one of these cases, Glasser filed a

February 20, 2014 affidavit in federal court attesting that “Glasser Law, LLC has a

contract relationship with Butler Liberty Law, LLC to provide various legal services for

Butler Liberty Law, LLC clients.” On March 2, 2014, Butler informed Glasser that he

could not “keep [Glasser’s] firm on the regular weekly pay setup any longer,” based on

the advice Glasser had received from the LPRB and Butler’s suspension from practice in

federal court.

         Glasser filed an application for unemployment benefits that same day.

Respondent Department of Employment and Economic Development (DEED) initially

determined that Glasser was eligible for benefits based on her employment with BLL.

BLL appealed, and an unemployment law judge (ULJ) held an evidentiary hearing on

September 9, 2014. Based on the testimony received and documents produced at that

hearing, the ULJ concluded that “[t]he totality of circumstances indicates that Glasser

was performing services in covered employment as an employee of BLL,” and affirmed

her eligibility for unemployment benefits. BLL filed a request for reconsideration, which

was summarily denied by the ULJ because BLL did “not provide any new facts or

arguments” indicating any error in the ULJ’s previous decision. The matter comes before

this court on a writ of certiorari.


                                            5
                                    DECISION

      BLL appeals the ULJ’s determination that Glasser was an “employee” entitled to

receive unemployment benefits. Chapter 268 is remedial in nature and must be applied in

favor of awarding benefits, and any provision precluding receipt of benefits must be

narrowly construed. Minn. Stat. § 268.031, subd. 2 (2014). We review a ULJ’s decision

to determine whether a relator’s substantial rights have been prejudiced by legal errors,

findings and conclusions not supported by substantial evidence, or a decision that is

arbitrary and capricious. 2015 Minn. Laws 1st Spec. Sess. ch. 1, art. 6, § 12 (to be

codified at Minn. Stat. § 268.105, subd. 7(d)(4)–(6) (Supp. 2015)).1       “Whether an

individual is an employee or an independent contractor is a mixed question of law and

fact.” St. Croix Sensory Inc. v. Dep’t of Emp’t & Econ. Dev., 785 N.W.2d 796, 799

(Minn. App. 2010). We review the ULJ’s findings of fact in the light most favorable to

the decision and give deference to its credibility decisions, Skarhus v. Davanni’s Inc.,

721 N.W.2d 340, 344 (Minn. App. 2006), but “the determination of whether an

employment relationship exists is purely a legal question,” Neve v. Austin Daily Herald,

552 N.W.2d 45, 48 (Minn. App. 1996).

      A. Credibility Determination

      In its order, the ULJ found Glasser more credible than Butler because her

testimony was “more detailed, specific, followed a more logical chain of events and

seemed more reasonable under the circumstances,” whereas Butler “appeared evasive and

1
 The 2015 amendment affected only subdivision 7(a). We apply the amended version of
subdivision 7(d) because the amendment did not make any substantive changes to that
subsection. Braylock v. Jesson, 819 N.W.2d 585, 588 (Minn. 2012).

                                           6
. . . focused on irrelevant issues that made Glasser appear in a negative light.” BLL

argues that the ULJ wrongly credited Glasser’s testimony over that of Butler because,

after Glasser was reinstated to practice law, she sought to enter representation agreements

with clients even though she had failed to take the Multistate Professional Responsibility

Examination (MPRE) and faced revocation of her attorney license under the probationary

terms of her reinstatement.

       First, BLL raises this argument in its reply brief for the first time. While DEED

notes in its brief that the ULJ found Glasser’s testimony credible, this reply argument is

outside the scope of DEED’s brief. Accordingly, BLL has forfeited this argument. See

Wood v. Diamonds Sports Bar & Grill, Inc., 654 N.W.2d 704, 707 (Minn. App. 2002)

(“If an argument is raised in a reply brief but not raised in an appellant’s main brief, and

it exceeds the scope of the respondent’s brief, it is not properly before this court and may

be stricken from the reply brief.”), review denied (Minn. Feb. 26, 2003).

       This argument must fail even if we did reach its merits. We defer to a ULJ’s

credibility determinations, if they are supported by substantial evidence and the ULJ sets

forth valid reasons for crediting or discrediting testimony that may significantly affect the

ultimate decision. Minn. Stat. § 268.105, subd. 1a(a) (2014); see also Ywswf v. Teleplan

Wireless Servs., Inc., 726 N.W.2d 525, 533 (Minn. App. 2007). BLL does not propose

that the ULJ’s credibility determination is based on invalid reasoning or is unsupported

by the record. Rather, it argues that Glasser’s credibility is impugned because she was

suspended from practicing law. However, such an argument does not show how the ULJ

erred in assessing Glasser’s credibility based on the testimony she gave at the hearing.


                                             7
Moreover, Glasser’s suspension order indicated that her failure to submit proof of

completion of the MPRE would not trigger automatic suspension until June 1, 2014. See

In re Glasser, 831 N.W.2d at 651. At the time she offered to take on clients in lieu of

their representation through BLL, she was authorized to practice law. Thus, we reject

BLL’s argument and defer to the ULJ’s decision to credit Glasser over Butler.

       B. Employee vs. Independent Contractor

       Independent contractors are not covered by unemployment-insurance law. See

Minn. Stat. § 268.035, subd. 15(a)(1) (2014) (defining “employment” as services

performed by “an individual who is considered an employee under the common law of

employer-employee and not considered an independent contractor”); see also Nicollet

Hotel Co. v. Christgau, 230 Minn. 67, 68, 40 N.W.2d 622, 623 (1950). Common law

prescribes five factors to be applied in determining whether a worker is an employee or

an independent contractor for purposes of determining eligibility for unemployment

benefits: “(1) The right to control the means and manner of performance; (2) the mode of

payment; (3) the furnishing of material or tools; (4) the control of the premises where the

work is done; and (5) the right of the employer to discharge.” Speaks, Inc. v. Jensen, 309

Minn. 48, 50–51, 243 N.W.2d 142, 144 (1976) (quotation omitted). These factors have

been codified by DEED in its agency rules. Minn. R. 3315.0555, subp. 1 (Supp. 2014).

The degree of control exercised by the principal over the means and manner of the

applicant’s performance and the principal’s ability to discharge without liability are

considered the most important factors under these rules. Id. This is a fact-intensive

inquiry without a “general rule that covers all situations”; as such, “it is well settled that


                                              8
the nature of the relationship of the parties is to be determined from the consequences

which the law attaches to their arrangements and conduct rather than the label they might

place upon it.” St. Croix Sensory, 785 N.W.2d at 800 (quotation omitted).

       BLL claims that the ULJ made both legal and factual errors in determining that

Glasser was its employee. BLL asserts that the ULJ erred because this case is analogous

to Boily v. Comm’r of Econ. Sec., in which the supreme court held that dentists at a dental

clinic were independent contractors of the clinic’s owner. 544 N.W.2d 295, 296–97

(Minn. 1996). BLL further contends that the record supports the conclusion that Glasser

was an independent contractor under the five-factor analysis. We examine each of these

factors below.

       (1) Right to Control the Means and Manner of Performance

       This is the most important factor in determining whether a worker is an employee.

St. Croix Sensory, 785 N.W.2d at 800. “The determinative right of control is not merely

over [w]hat is to be done, but primarily over [h]ow it is to be done.” Frankle v. Twedt,

234 Minn. 42, 47, 47 N.W.2d 482, 487 (1951).

       The ULJ found that throughout Glasser’s relationship with BLL, Butler controlled

what work assignments Glasser would complete for BLL clients, and while Glasser had

“some autonomy to draft documents and present arguments,” Butler and BLL retained

“the ultimate authority over what arguments Glasser should use when performing

services for a BLL client.”     Based on this finding, the ULJ concluded that “[t]he

preponderance of the evidence shows that BLL and Butler had the right to control the

entire means and manner of performance.”


                                            9
       BLL asserts that the record actually shows that it did not have control over

Glasser’s performance, because Glasser used her own laptop and Westlaw subscription,

had a flexible work schedule, and was not restricted in pursuing work outside of BLL.

BLL claims that its relationship with Glasser was similar to the parties in Boily, wherein

the clinic director allowed the dentists to control their own practice by giving them

control over scheduling, treatment, and referrals of clients. 544 N.W.2d at 296.

       The instant case is readily distinguished from Boily. While Butler allowed Glasser

to have some input regarding potential lines of argument in her brief drafting, by Butler’s

own admission he directed Glasser to make certain arguments against her judgment and

retained “ultimate authority” over the finished product. “The retained right to instruct or

direct the method of work, even if not exercised, is a factor indicating control.” St. Croix

Sensory, 785 N.W.2d at 801. While Glasser was given some autonomy by Butler in her

writing, Glasser performed work assigned by Butler, for BLL clients, with Butler

ultimately controlling the content of the finished product.

       Further, by pointing to facts in the record showing Glasser’s independence, BLL

ignores other facts in the record that indicate BLL’s control over Glasser’s performance.

Butler himself indicated that Glasser was the firm’s chief operations officer, thereby

implying his control over Glasser in his role as the sole owner of BLL. The record shows

that Glasser was paid a weekly salary, given an office at the firm, expected to be at the

office every day, and delegated work to other employees of the firm in executing her job

duties. Substantial evidence supports the ULJ’s conclusion that BLL exercised control

over the means and manner of Glasser’s performance.


                                             10
       (2) Right of Discharge

       DEED agency rules provide that this is the other important factor in this analysis.

Minn. R. 3315.0555, subp. 1. The ULJ found that “BLL could discharge Glasser without

incurring any liability. This shows an employer and employee relationship.” BLL argues

that its ability to freely discharge Glasser actually shows an independent contractor

relationship. This is incorrect. Independent contractors typically cannot have their

services terminated without liability if they are fulfilling the terms of their contract with

the hiring party. St. Croix Sensory, 785 N.W.2d at 803. On the other hand, “[g]enerally,

in Minnesota, the employer-employee relationship is at-will, which means that an

employer may terminate an employee for any reason or for no reason.” Kratzer v. Welsh

Cos., 771 N.W.2d 14, 19 n.7 (Minn. 2009). That BLL was able to end its relationship

with Glasser without incurring liability indicates that Glasser was an employee of BLL.

       (3) Mode of Payment

       Under this factor, the ULJ found that “Glasser was essentially paid a salary which

shows an employer and employee relationship.” BLL does not dispute the payment

scheme itself, as the record shows that BLL made weekly payments without regard to the

amount of hours worked or number of projects completed by Glasser. Glasser was given

paid time off as sick leave or vacation leave on at least two occasions. This situation is

distinguishable from the dentists in Boily, who were compensated with a percentage of

their client billings as opposed to a fixed salary. 544 N.W.2d at 296–97.

       BLL instead argues that this payment scheme was indicative of an independent

contractor relationship, because it believed it was contracting with Glasser’s LLC due to


                                             11
the fact that it sent paychecks to the LLC’s bank account as opposed to Glasser’s

personal account. In support of its argument, BLL points to its response to the December

2011 garnishment summons stating that it did not owe Glasser earnings and to Glasser’s

February 2014 federal court affidavit, which provided that “Glasser Law, LLC has a

contract relationship with [BLL].”

       However, we look to function, not form, in determining whether an employer-

employee relationship existed between the parties. See Speaks, Inc., 309 Minn. at 51 n.2,

243 N.W.2d at 145 n.2 (“We would not hesitate to look through a device designed to

evade the responsibilities placed upon an employer by workmen’s compensation and

unemployment compensation legislation.”); Moore Assocs. v. Comm’r of Econ. Sec., 545

N.W.2d 389, 393 (Minn. App. 1996) (“The labels that the parties give themselves is not

determinative; the relationship is determined by the law, not the parties.”). Here, the

record indicates that BLL was paying Glasser for her services on behalf of BLL. BLL

hired Glasser, not Glasser Law, LLC, as the LLC did not exist until June 2011, about

three months after Glasser began working for BLL. Furthermore, Glasser testified that

she let the LLC registration lapse, and the record shows that the LLC was

administratively dissolved in February 2013.2 Thus, there no longer existed an LLC with


2
   BLL also argues that this court should disregard Glasser Law, LLC’s February 2013
dissolution, because “this is not an adjudicated fact and is not part of the record” and that
it “has not had an opportunity to cross[-]examine the alleged dissolution.” While the ULJ
did not specifically find this fact, it is in the record. The department submitted a
screenshot of the secretary of state’s website as an exhibit at the hearing, and BLL did not
raise an objection to this evidence at that time.
        In its brief addendum, DEED also includes an official certificate of dissolution
from the secretary of state that is not in the record. BLL asserts that this is an improper

                                             12
which BLL could have had a contract relationship in February 2014, belying BLL’s

reliance on Glasser’s representations to the federal district court that BLL had a “contract

relationship” with her LLC.      Therefore, the ULJ’s conclusion that BLL’s mode of

payment to Glasser indicated an employer-employee relationship is supported by

substantial evidence.

       (4) Furnishing of Tools and Materials

       The ULJ found that this factor showed an employer-employee relationship,

because “[m]any of the tools were provided by BLL,” such as the use of firm staff, firm

business cards, firm letterhead, a firm e-mail address, and a firm laptop that Glasser

received in exchange for her personal laptop. BLL argues that this analysis ignores the

fact that many of these tools were not “necessary” to Glasser’s duties and that Glasser

provided the only needed tools for her work: a laptop computer and access to Westlaw.

BLL again cites to Boily, in which the dental clinic provided “major items of equipment

used in the clinic,” while each dentist was responsible for hand instruments, malpractice

insurance premiums, and continuing education fees. 544 N.W.2d at 297.

       Though this factor is closer than the others, we conclude that BLL’s arguments are

unpersuasive. That Glasser at one point used her own laptop, and used her own Westlaw

account throughout her time at BLL, does indicate that she provided some of the tools


attempt to supplement the record on appeal. But, this court can take judicial notice of
public records within its “inherent power to look beyond the record where the orderly
administration of justice commends it.” Eagan Econ. Dev. Auth. v. U-Haul Co. of Minn.,
787 N.W.2d 523, 530 (Minn. 2010) (quotation omitted). Given the evidence in the
record and our ability to take notice of the certificate of dissolution, we take judicial
notice of Glasser Law, LLC’s administrative dissolution.

                                            13
needed for her work at BLL. However, all of the other tools and materials noted by the

ULJ appear equally necessary to the proper completion of legal work: Glasser relied on

paralegals and legal assistants of the firm to assist her with legal filings, and used BLL

stamps, letterhead, and copy machines to create and send both client correspondence and

court documents. BLL provided her with business cards and an e-mail address, two

additional tools frequently used by attorneys. The ULJ’s conclusion is supported by

substantial evidence in the record.

       (5) Control of Premises Where Work Is Done

       The ULJ found that this factor showed an employer-employee relationship

because, as of 2012, BLL gave Glasser her own office at the firm and began requiring her

to come into the office to better handle incoming mail and calendaring. The ULJ also

found that Butler required Glasser to be at the office so he could more closely supervise

her written work product. BLL does not specifically challenge this factor, and there is

substantial evidence in the record to support these findings.

       Because the ULJ’s findings are supported by the record and each of the common-

law factors indicates that Glasser had an employer-employee relationship with BLL, we

conclude that the ULJ did not err by determining that Glasser was an employee of BLL.

       Affirmed.




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