In the 1946 case Bartels et al., Doing Business as Crystal Ballroom, v. Birmingham, Collector of Internal Revenue, et al., the U.S. Supreme Court ruled on whether band leaders or dance hall operators were responsible for paying social security taxes for musicians they hired to perform at their venues. The court held that under the Social Security Act's definition of "employee," it was not enough to simply have control over a worker's services; there also had to be an employment relationship present in order for someone to be considered an employer and thus liable for these taxes. In this instance, since band leaders only provided musical services and did not employ musicians directly (they were instead employed by booking agents), they could not be considered employers under this act. Therefore, dance hall operators like Bartels who contracted with these bandleaders weren't required to pay social security taxes on behalf of the musicians.

The dissenting opinion in the Bartels v. Birmingham case argued that musicians hired by a dance hall should be considered employees of the band leader, not independent contractors or employees of the dance hall. The dissenters believed that because the band leaders had control over hiring and firing musicians, setting their wages, and directing their work during performances, they were effectively acting as employers. They also pointed out that under common law principles of agency, an employer is generally someone who has control over how work is performed. Therefore, according to this view, it was incorrect for tax liability to fall on the dance halls rather than on either individual musicians or band leaders.