Sean Roulo, Relator,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0067

Sean Roulo,
Relator,

vs.

Key Lakes, Inc., et al.,
Respondents,

Department of Employment and Economic Development,
Respondent.

Filed September 5, 2017
Affirmed
Halbrooks, Judge

Department of Employment and Economic Development
File Nos. 34665377, 34665533, 34665536, 34665924, 34665925, 34665929

Sean Roulo, Duluth, Minnesota (pro se relator)

Marilyn Clark, Jillian Kornblatt, Dorsey & Whitney LLP, Minneapolis, Minnesota (for
respondents Key Lakes, Inc., et al.)

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

Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Smith,
Tracy M., Judge.

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U N P U B L I S H E D O P I N I O N
HALBROOKS, Judge
Relator challenges the decision of an unemployment -law judge (ULJ) that he is
ineligible for unemployment benefits because he was an independent contractor and not an
employee. He contends that the ULJ made legal errors, ignored the allegedly inconsistent
testimony of respondent -employer’s witnesses, and unfairly conducted the evidentiary
hearing. We affirm.
FACTS
In 2004, relator Sean Roulo agreed to provid e IT services to the Key Lakes
companies1 at an hourly rate. They agreed that either party could terminate the relationship
without incurring any liability, except that the Key Lakes companies must pay Roulo for
any owed services. The Key Lakes companies provide services to Canadian National
Railway (CNR), which owns nine vessels that operate on the Great Lakes. Key Lakes
companies conduct repairs, maintenance, and upgrades to these vessels, which dock at
various ports throughout the Great Lakes during the winter months. As an IT consultant,
Roulo provided several different services, including creating software to facilitate
computer systems and networks on the vessels.
For several years, Roulo’s services typically followed the same procedure. When
he received a request for services from the end -users on the vessels, Roulo would seek

1 Respondent employer and subsidiaries include: Key Lakes Inc.; Key Lakes I, Inc.; Key
Lakes II, Inc.; Key Lakes III, Inc.; Key Lakes IV, Inc.; and Keystone Tankship, Corp.
(collectively, the Key Lakes companies).

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approval from the Key Lakes companies ’ management before starting a project. Roulo
also needed approval from mana gement before purchasing equipment for the project.
Management did not provide Roulo with detailed instruction regarding how he was to
perform each project, instead de ferring to Roulo’s expertise. After Roulo completed a
project, he created an invoice that stated the hours worked and work performed. He then
submitted the invoice to management. The Key Lakes companies paid Roulo by check
with no deductions and reimbursed him for any travel expenses. Management did not
provide him with feedback and did not evaluate his work performance.
During his last year of providing services to the Key Lakes companies , Roulo
estimated that he worked 45% of the time at his home, 45% on the vessels themselves, and
10% at the office. He did not reject any projects, believing that the Key Lakes companies
would hire a different contractor were he to do so. But Roulo also occasionally worked on
other small projects for different companies. In May 2015, he negotiated a pay raise with
the Key Lakes companies that increased his hourly rate by 44%.
Around the same time, the Key Lakes companies underwent changes in
management. The new management implemented a new purchase -order system and also
hired another IT company to assist in providing services to some of the vessels. Roulo
became frustrated with the new management and proposed a new contract with several
requirements. The Key Lakes companies did not agree to his proposal. Roulo
subsequently stopped providing services for the Key Lakes companies in March 2016.
In May 2016, a field auditor for respondent Minnesota Department of Employment
and Economic Development (DEED) determined that the Key Lakes companies had an

4
employer-employee relationship with Roulo and that Roulo could establish an
unemployment-benefits account. The Key Lakes companies appealed this determination
to the ULJ. The ULJ held an evidentiary hearing in which several witnesses, including
Roulo, testified. The ULJ determined that the Key Lakes companies had an independent-
contractor arrangement with Roulo, and therefore Roulo was not an employee who could
be eligible for unemployment benefits. Roulo requested reconsideration of the ULJ’s
decision, and the ULJ affirmed. This certiorari appeal follows.
D E C I S I O N
Roulo raises several contentions alleging that the ULJ erred in deciding that he was
not entitled to unemployment benefits. We may reverse, remand, or modify the ULJ’s
decision if the decision was affected by an error of law, unsupported by substantial
evidence, or was arbitrary or capricious. Minn. Stat. § 268.105, subd. 7(d) (2016).
I.
Roulo argues that the ULJ erred in determining that he was an independent
contractor and asks us to modify several of the ULJ’s findings. For unemployment -
insurance purposes, “employment” is defined as services performed by “an individual who
is considered an employee under the common law of employer -employee and not
considered an independent contractor.” Minn. Stat. § 268.035, subd. 15(a)(1) (2016).
“Whether an individual i s 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). In unemployment-benefits cases, we review factual findings in a
light most favorable to the decision and shall not disturb those findings if the evidence in

5
the record supports them. Stagg v. Vintage Place Inc., 796 N.W.2d 312, 315 (Minn. 2011).
And if the relevant facts are determined, the question of whether an employment
relationship existed presents a question of law that we review de novo. Nelson v. Levy ,
796 N.W.2d 336, 339 (Minn. App. 2011).
There is no general rule that covers every situation in employment-status cases, and
each case depends significantly on its own facts. St. Croix Sensory, 785 N.W.2d at 800.
We utilize five factors in determining whether a worker is an employee or an independent
contractor: “(1) The right to control the means and manner of performance; (2) the mode
of payment; (3) the furnishing of mater ials or tools; (4) the control of the premises where
the work is done; and (5) the right of the employer to discharge.” Id. (quoting Guhlke v.
Roberts Truck Lines, 268 Minn. 141, 143, 128 N.W.2d 324, 326 (1964)); see also Minn.
R. 3315.0555, subp. 1 (2015) (listing the five factors). The employer’s right to control the
means and manner of performance and the employer’s right to discharge are considered
the most important factors. Minn. R. 3315.0555, subp. 1; St. Croix Sensory, 785 N.W.2d
at 800.
A. Right to Control
Roulo contends that the ULJ relied too heavily on the control factor in determining
that he was an independent contractor. He also asserts that there is no caselaw that states
that the control factor is weighed more heavily than the right -to-discharge factor. But
control is “the most important factor” in deciding whether a worker is an employee or an
independent contractor. St. Croix Sensory, 785 N.W.2d at 800. Control is the “power to
instruct, direct, or regulate the activities of an indivi dual whether or not the power is

6
exercised.” Minn. R. 3315.0501, subp. 2 (2015). “The determinative right of control is
not merely over what is to be done, but primarily over how it is to be done.” Neve v. Austin
Daily Herald, 552 N.W.2d 45, 48 (Minn. App. 1996) (quotation omitted).
The ULJ determined that the Key Lakes companies did not control the means and
manner of Roulo’s performance. Roulo testified that management made the ultimate
decision on “ everything that [Roulo] did.” But members of the Key Lakes companies
management testified that they relied on Roulo’s expertise and did not direct him on how
he should perform the projects. Roulo makes repeated claims that these witnesses lied
during their testimony. But the ULJ explicitly found that the company witnesses were
more credible than Roulo. And we defer to the ULJ’s credibility determinations. See
Skarhus v. Davanni’s Inc., 721 N.W.2d 340, 344 (Minn. App. 2006).
The ULJ found that Roulo conducted 4 5% of his work at his home, 4 5% on the
vessels, and 10% in the office. Management did not provide him with detailed instructions
for his services, but rather Roulo described it as “more of a back and forth kind of
collaboration.” After Roulo completed a project, the only feedback he received came from
end-users who worked on the vessels themselves, not from the Key Lakes companies ’
management staff. His IT manager testified that she did not evaluate Roulo’s work to
ensure that it was done properly. Roulo also testified that he was n ever subject to any
definitive form of discipline from management.2

2 Roulo implies that the hiring of anothe r IT company in November 2015 amount ed to a
form of discipline, but the evidence shows that the Key Lakes companies hired this
company for business-related reasons.

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Roulo asserts that the Key Lakes companies required him to be on-call each hour of
each day. But the evidence in the record indicates otherwise. Representatives from
management testifi ed that Roulo did not need to be available 24/7 . And Roulo’s own
testimony suggest s that he was not required to be on -call but rather he wanted to be
available out of a concern that the Key Lakes companies would hire another contractor.
During Roulo’s time providing services to the Key Lakes companies , he also performed
services for other businesses unrelated to the Key Lakes companies. We conclude that the
evidence demonstrates that the Key Lakes companies did not control how Roulo performed
his services. The ULJ did not err by determining that the right-to-control factor weighed
in favor of an independent-contractor arrangement.
B. Right to Discharge
Minnesota caselaw and agency rules establish that the right to discharge is the other
important factor i n the analysis. Minn. R. 3315.0555, subp. 1; St. Croix Sensory , 785
N.W.2d at 800. Generally, an employer-employee relationship is at-will, meaning that the
employer may terminate the employee for any reason or no reason at all. Kratzer v. Welsh
Cos., 771 N.W.2d 14, 19 n.7 (Minn. 2009). An independent contractor, however, cannot
typically be terminated without the hiring party being liable for damages if the contractor
is fulfilling the terms of the contract. St. Croix Sensory, 785 N.W.2d at 803.
The ULJ determined that this factor weighed in favor of finding an employer -
employee relationship between the Key Lakes companies and Roulo. This finding is
consistent with the evidence in the record. The fact that the Key Lakes companies could

8
end its rel ationship with Roulo without incurring liability supports a decision that Roulo
was an employee.
Roulo contends that the ULJ failed to properly apply the relevant rules, specifically
that the right -to-control and the right -to-discharge factors are the two most important
factors in the analysis. The ULJ expressly recognized the importance of these two factors
and acknowledged that the right -to-discharge factor weighed in favor of an employment
relationship. We conclude that the ULJ did not err in her application of these two most
important factors.
C. Other Relevant Factors
The Key Lakes companies used a purchase -order system and invoice process to
determine how much to pay Roulo. The ULJ determined that this system of payment on a
per-job basis reflected Roulo’s status as an independent contractor. See id. at 804. The
Key Lakes companies paid Roulo by check and issued him a 1099 tax-form each year. The
Key Lakes companies did not take any deduct ions out of Roulo’s paychecks. “Evidence
that an individual is responsible for his own tax obligations is indicative of independent -
contractor status.” Id. And the former general manager testified that he explained to Roulo
that Roulo could receive health insurance through the Key Lakes companies if R oulo
became an employee. But Roulo declined and instead chose to maintain an arrangement
that gave him more flexibility. We agree with the ULJ that the mode -of-payment factor
weighs in favor of an independent-contractor arrangement.
The ULJ determined that the factor regarding furnishing tools and materials
indicated an employer-employee relationship because the Key Lakes companies provided

9
Roulo with all the necessary tools for his projects. Roulo often worked on his projects
while using a personal computer, which the Key Lakes companies gave him money to
purchase. Members of management testified that Roulo had “great latitude” in selecting
the equipment he needed to perform his projects on the vessels. But Roulo asserted that
management reserved the right to approve all IT equipment he used and would purchase
the equipment through its vendor. There is some evidence that suggests that this factor
supports finding an independent-contractor status. For instance, Roulo’s primary form of
communication with management was his personal e -mail account. And the ULJ found
that when Roulo worked from his home, he used his own internet service. But ultimately,
the evidence supports the ULJ’s decision that this factor weighs in favor of an employment
relationship.
The final factor focuses on whether Roulo had control of the premises where he
performed the services. The ULJ found that Roulo conducted 45% of his work at his home,
45% on the vessels, and 10% at the office. The Key Lakes companies controlled the
premises at the office, but the vessels were owned by CNR. And Roulo clearly had control
over the premises while working at his home. Indeed, when management suggested that
Roulo become an employee with benefits, he rejected that arrangement because he did not
want to be restricted to working at the office. Because nearly one -half of Roulo’s work
was conducted at his own home and he had at least some flexibility in choosing where to
perform the services, we conclude that this factor is indicative of an independent-contractor
relationship.

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D. Balancing the Factors
In reviewing the factors together, the ULJ concluded that Roulo was an independent
contractor and not an employee. The ULJ determined that the circumstances of the
relationship between the Key Lakes companies and Roulo emphasized the significance of
the right -to-control factor. The ULJ found no compelling examples of management
directing Roulo concerning how to perform the IT projects. And Roulo was able to and
did negotiate his hourly rate and other terms of the arrangement. For example, he initiated
a pay raise that increased his hourly rate by 44%. We conclude that substantial evidence
in the record supports the ULJ’s findings that the relevant factors indicate an independent-
contractor arrangement. Therefore, the ULJ did not err by determining that Roulo worked
as an independent contractor for the Key Lakes companies.
II.
Roulo also contends that the ULJ did not conduct a fair hearing, claiming that he
was not allowed to fully present his testimony, introduce evidence, or rebut opposing
witnesses’ allegedly false testimony. Minnesota rules require the ULJ to “assist all parties
in the presentation of evidence” and “ensure t hat all relevant facts are clearly and fully
developed.” Minn. R. 3310.2921 (2015). Generally, a hearing is fair if the parties are
given the opportunity to make statements, cross -examine witnesses, and offer and object
to exhibits. See Ywswf v. Teleplan Wireless Servs., Inc., 726 N.W.2d 525, 529-30 (Minn.
App. 2007).
The record of the hearing does not offer any indication that the ULJ improperly
favored the Key Lakes companies over Roulo. The hearing lasted about eight hours with

11
several agreed-upon breaks. All parties were eager to finish the hearing within one day.
Roulo provided testimony for approximately three hours of the hearing.3 The ULJ did not
restrict his testimony, asking him open-ended questions, such as “anything else you’d like
to ad d,” throughout the hearing. When the witnesses for the Key Lakes companies
testified, the ULJ permitted Roulo to ask questions of each witness. The ULJ also allowed
Roulo to submit additional documents during the hearing and considered each of Roulo’s
objections to exhibits and testimony. We conclude that the evidence does not support
Roulo’s contention that he received an unfair hearing.
III.
In addition to asking us to reverse the ULJ’s decision on the independent-contractor
issue, Roulo makes several other requests for relief. He asks that we determine that he was
justified in his separation from employment at the Key Lakes companies. While the issue
of separation was addressed in the hearing, the ULJ did not reach this issue because she
determined that Roulo was an independent contractor. Because we conclude that the ULJ
did not err by determining that Roulo was an independent contractor, there is no basis to
remand the case for the ULJ to decide whether Roulo is eligible for unemployment benefits
based on a separation from employment.

3 Roulo asserts that he was not able to present his case until late in the hearing and that the
ULJ allowed the Key Lakes companies’ attorney to interrupt him. This assertion does not
accurately reflect the record of the hearing. After the ULJ received basic information about
the Key Lake companies’ business structure, Roulo was the first witness to testify. He was
rarely interrupted during his testimony and none of the interruptions prevented him from
presenting his case to the ULJ.

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Roulo also requests that we (1) hold five of the witnesses for the Key Lakes
companies in contempt of court for “obvious perjury”; (2) refer the Key Lakes companies
to the Minnesota Commissioner of Labor and Industry , pursuant to Minn. Stat. § 181.722
(2016); (3) refer the ULJ and the Key Lakes companies’ attorney to the Minnesota Lawyers
Professional Responsibility Board; and (4) award him with punitive damages. But Roulo
does not provide any authority to support these requests for relief. As previously stated,
we defer to the ULJ on determinations regarding credibility , and the ULJ found the
testimony of the Key Lakes companies’ witnesses to be credible. See Skarhus, 721 N.W.2d
at 344. Minn. Stat. § 181.722 prohib its an employer from misrepresenting the nature of
the employment relationship, but the statute is not applicable in an unemployment-benefits
proceeding. See Minn. Stat. § 268.069, subd. 3 (2016) (“There is no equitable or common
law denial or allowance o f unemployment benefits.”). Indeed, there is evidence in the
record that suggests that Roulo understood his role as an independent contractor and not
an employee. Roulo’s requests that we refer the ULJ and the Key Lakes companies ’
attorney to the Minnesota Lawyers Professional Responsibility Board are unfounded and
without merit; he provides no evidence of ethical misconduct. And a person is not entitled
to unemployment benefits on the basis of punitive damages. See id. Roulo is not entitled
to any of the relief that he requests.
Affirmed.