Wis.LIRC ER Decision: Berglund - January 31, 2001 - Coverage of the FEA - employe or independent contractor - newspaper delivery; Procedure - Witness and Exhibit List (DWD 218.17 Exchange of names of witnesses and copies of exhibits) - failure to comply can result in exclusion but it is not required, purpose is to prevent prejudice due to surprise; Procedure - ALJs have authority to order sequestration of witnesses; Procedure - evidence - UI determination not admissible in ER hearing

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

KARALEE BERGLUND, Complainant

THE POST CRESCENT COMPANY, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 199900817, EEOC Case No. 26G990909

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge (copy attached) is affirmed.

Dated and mailed January 31, 2001
berglka.rsd : 125 : 9

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The complainant, who delivered newspapers for the respondent, alleges that she was discriminated against "because of my age when I was terminated and my contract broken and I was replaced by three younger people."

The ALJ identifies the issue in this case as whether the complainant's relationship with the respondent was that of an employee-employer (in which case her claim of age discrimination was covered under the Act), or whether her relationship with the respondent was that of an independent contractor (in which case her claim was not covered under the Act). The ALJ concludes that the complainant was not an employee of the respondent (and that the respondent was not the employer of the complainant), but does not specifically hold that the complainant's complaint of age discrimination against the respondent was therefore not covered under the Act. Instead, the ALJ makes a conclusion that the complainant "failed to prove by a preponderance of the evidence that the Respondent considered the Complainant's age when the Respondent decided to terminate her independent carrier agreement with the Respondent."

Moore v. LIRC, 175 Wis. 2d 561, 499 N.W.2d 289 (Ct. App. 1993), effectively holds that the protections afforded individuals against prohibited discrimination under the Wisconsin Fair Employment Act covers employees, not independent contractors. In Moore, the Wisconsin Court of Appeals adopted the test set forth in Spirides v. Reinhardt, 613 F.2d 826 (D.C. Cir. 1979), that federal courts have utilized to determine whether one seeking the protections afforded under Title VII is an employee or an independent contractor. Moore quoted the test as set forth in Spirides as follows:

"[D]etermination of whether an individual is an employee or an independent contractor for purposes of [Title VII] involves . analysis of the `economic realities' of the work relationship.. Consideration of all of the circumstances surrounding the work relationship is essential, and no one factor is determinative. Nevertheless, the extent of the employer's right to control the `means and manner' of the worker's performance is the most important factor to review here ..

Additional matters of fact that an agency or reviewing court must consider include, among others, (1) the kind of occupation, with reference to whether the work usually is done under the direction of a supervisor or is done by a specialist without supervision; (2) the skill required in the particular occupation; (3) whether the `employer' or the individual in question furnishes the equipment used and the place of work; (4) the length of time during which the individual has worked; (5) the method of payment, whether by time or by the job; (6) the manner in which the work relationship is terminated .; (7) whether annual leave is afforded; (8) whether the work is an integral part of the business of the `employer' ; (9) whether the worker accumulates retirement benefits; (10) whether the `employer' pays social security taxes; and (11) the intention of the parties."

Moore, 175 Wis. 2d at 569.

The complainant was 48 years old when she entered into an "Independent Carrier Agreement" with the respondent on December 31, 1988, to deliver its newspapers. She continued to deliver newspapers under this same agreement until February 7, 1999. Under the terms of the agreement, the complainant, designated as the "carrier," agreed that she was not an employee of the respondent and that she would be acting as an independent contractor. She agreed to deliver newspapers to all points on the delivery schedule and customer list provided by the respondent, and to maintain and keep current said customer list. The agreement further provided that the complainant agreed to purchase at a wholesale rate sufficient quantities of newspapers to cover her delivery schedule. The complainant would then be billed for the newspaper charges. (Though not specifically stated in the agreement, the complainant's remuneration for performing these services was determined by deducting the wholesale rate for the newspapers from the retail rate customers paid for the newspapers.) Additionally, the agreement provided that the complainant was to be paid a rate of 21 cents per mile for each mile driven in the course of delivering the newspapers (1 ), a specified rate for "bundle deliveries," and $3.30 per day of delivery during the months of December through April as a special winter season territory adjustment (to compensate for the loss of customers who went south during the winter months). (2 ) The agreement also provided that the complainant agreed to carry out the agreement at her own expense and risk, furnishing whatever vehicles or equipment necessary to fulfill the terms of the agreement, and that she agreed to pay all taxes and comply with all requirements of the law in connection with operating her business at her own expense. Per the agreement the complainant also agreed to provide a specified amount of bodily injury liability insurance at her own expense. Finally, the agreement provided that either party could terminate the agreement upon written notice to be given four weeks prior to the last Friday of the month in which the termination is to occur, or such shorter time as may be mutually agreed upon.

There are some facets of the relationship between the complainant and the respondent that might tend to suggest that the relationship was one of employee-employer. For example, there is the fact that the complainant has continuously performed the service of delivering the respondent's newspapers under the same agreement for some 10 years, and the fact that the service she performed does not require any particular specialized skill. Further, it would appear that the service performed by the complainant could be considered an integral part of the respondent's business, since "delivery of the news" is what the respondent is all about. On balance, however, considering the total circumstances surrounding the working relationship, it appears that the relationship here must be considered that of an independent contractor relationship and therefore not covered under the Fair Employment Act.

The complainant asserts that the respondent controlled the performance of her work because she had to deliver papers by the times the respondent wanted them delivered, she had to wait at designated posts to receive the papers for delivery, that she received instructions to put up tubes as receptacles for the subscriber's newspapers, and because she received instruction sheets attached to her newspapers that informed her to store the newspaper inserts in a dry place, to count the product samples to be included with the newspapers and that reminded her on holidays to deliver to weekend customers. Most of the things cited by the complainant, however, pertain to efforts by the respondent to achieve the results it desired, i.e., timely and complete delivery of its newspaper, not an effort to control the means and manner by which the complainant would complete delivery of its newspapers. Indeed, the complainant could organize her delivery route in any manner she chose, and she could use any means she desired to make delivery of the newspapers (although the fact that she had a rural delivery route meant that it would have to be by automobile). Also, contrary to assertion by the complainant, she could and has determined her newspaper drop-off cites. Furthermore, she was not given any company work rules nor required to attend any company meetings, and the complainant's services were not performed under the direction of a supervisor.

The following factors also indicate that the complainant's relationship was that of an independent contractor: The complainant used her own vehicle to deliver the newspapers and was required to carry automobile insurance at her own expense; her compensation was determined not based on the time it took to perform her newspaper duties but by the difference between the wholesale rate for newspapers the respondent charged her and the retail rate subscribers were charged plus an agreed upon flat mileage rate and any tips provided by subscribers; she did not accumulate retirement benefits or any other employee benefits; the respondent made no deductions in her check for social security or federal and state taxes; at the end of the year she received a 1099 form; the independent contractor agreement signed by the complainant specifically acknowledged that she was not an employee but would be acting as an independent contractor; and either party could terminate the agreement upon written notice given four weeks prior to the last Friday of the month in which the termination was to occur.

But even were the commission to conclude that an employment relationship existed between the complainant and the respondent, the record does not support a showing that the respondent terminated this employment relationship because of the complainant's age.

Prior to discussing the specifics of the termination, however, the complainant's criticism of the ALJ's handling of this case, both before and during the hearing, must be addressed. The complainant has requested that another hearing be held in this matter based upon her criticism of the ALJ.

One criticism made is that the ALJ "repeatedly ignored rules set forth by the department in the `pre-discovery' between Complainant and Respondent." Based upon a letter (dated February 10, 2000) attached to her brief that the complainant had written to the ALJ noting that she had not received any witness or exhibit list from the respondent for the February 16, 2000, scheduled hearing, and because the complainant had objected at the hearing about not knowing who was appearing for the respondent and not having received copies of any exhibits that the respondent intended to use at the hearing, one such rule apparently being referenced pertains to Wisconsin Administrative Code DWD � 218.17. That rule pertains to the exchange of names of witnesses and copies of exhibits. Section DWD 218.17 provides as follows:

"By no later than the tenth day prior to the day of hearing, the parties shall file with the division and file upon all other parties a written list of names of witnesses and copies of exhibits which the parties intend to use at the hearing. The administrative law judge may exclude witnesses and exhibits not identified in a timely fashion pursuant to this section. This section does not apply to witnesses and exhibits offered in rebuttal which the party could not have reasonably anticipated using prior to the hearing."

At the hearing, the administrative law judge stated that even though the respondent had not supplied a witness and exhibit list, she usually allows the respondent to put on one witness, and that if the respondent wanted to use an exhibit the complainant would be allowed to object to its use on the basis that she was unaware of it and had not been properly able to be prepared for it. While under certain circumstances it may not be appropriate to allow a respondent who has not submitted a witness list in accordance with DWD � 218.17 to even put on one witness due to the prejudicial harm that would result to the complainant, in this case there was no prejudice to the complainant. The witness the ALJ allowed to testify for the respondent was Bruce Tischer, the individual who made the decision to terminate the independent carrier agreement. Furthermore, the complainant's own proposed exhibits showed that Tischer was the individual that she had been communicating with with respect to the termination of the independent carrier agreement. As previously noted by the commission, the rule concerning pre-hearing disclosure of witnesses and exhibits provides that the failure to make the necessary exchange "may" result in exclusion of the witnesses or exhibits. The paramount consideration in applying the rule must be its purpose to protect parties from surprise and to protect the fairness and the due process of the proceedings, so that in a case in which a party would not have been surprised or prejudiced by allowing testimony, it should be allowed. Hansen v. Airborne Freight Corp. (LIRC, 05/21/87). See, also, Scott v. Sno Bird Trailer Co. (LIRC, 12/19/90).

The complainant also criticizes the ALJ for not conducting the hearing with all witnesses present in the hearing room during the hearing, and she complains that a long wait in the hallway caused some of her witnesses to become disgruntled and to leave without testifying. Although not expressly stated by the ALJ on the record, it may be that the ALJ wanted to insure that when witnesses did testify that they were testifying based on their own personal knowledge and not what they had heard while at the hearing. Chapter 227 � 227.46 provides that hearing examiners (i.e., ALJs) are authorized to "Regulate the course of the hearing," and sequestering witnesses to insure that they were testifying from personal knowledge would fall under the ALJ's authority to regulate the course of the hearing. While it was unfortunate that some of the complainant's witnesses became disgruntled and left without testifying due to the length of time in which they were required to wait, there is no basis to support finding any fault on the part of the ALJ for this. The ALJ advised the witnesses where they could find benches to sit, and otherwise tried to accommodate the witnesses, at one point by stating that they could go get lunch, and by taking the testimony of witnesses for the complainant immediately after the complainant's direct examination before beginning the respondent's cross-examination of the complainant.

The complainant also contends that the ALJ "concealed" important correspondence received from the respondent dated February 8, 2000, which affected the complainant's testimony on the employee/independent contractor issue. The particular correspondence in question was a "resubmission" by the respondent of its earlier motion for dismissal of the case on the ground that the department had no jurisdiction over the matter because the complainant was an independent contractor and not an employee. Apparently the correspondence was sent to the ALJ as a reply to the complainant's December 30, 1999 correspondence opposing the respondent's December 6, 1999 motion to dismiss. The respondent's February 8 correspondence essentially set forth two propositions: 1) That pursuant to Wis. Stat. � 108.101, the complainant's reliance on an Unemployment Insurance Division determination regarding her status was neither admissible nor binding in the matter before the Equal Rights Division; and 2) Under the test outlined for determining employee/independent contractor status in Moore, the complainant was an independent contractor. Regardless, there is no reason to believe that the ALJ had attempted to conceal anything from the complainant, nor is there any reason to believe that the complainant's failure to be presented with a copy of this correspondence in any way adversely affected her testimony on the employee/independent contractor issue.

By way of letter dated January 5, 2000, the ALJ had already notified the complainant and respondent, among other things, that she could not determine whether or not the complainant was an employee or independent contractor based upon what the parties had submitted, that this determination would therefore have to be made after the parties had presented their evidence at the hearing on February 16, 2000, and that the parties should be aware that the test that she would be using to determine employee/independent contractor status was the test outlined in Moore v. LIRC. Further, by way of letter to the parties dated February 9, 2000, after receipt of the respondent's February 8 correspondence, the ALJ notified the parties that she had received a second motion to dismiss from the respondent, that it was denied, and again stated that a hearing would be necessary to determine the exact nature of the complainant's affiliation with the respondent. The ALJ's actions do not suggest any attempt to conceal anything from the complainant. At worst what is most likely to have occurred was that through oversight the ALJ failed to note that the respondent's February 8 correspondence did not show the complainant as having been cc'ed on the correspondence. Nevertheless, this presented no hindrance to the complainant's presentation of testimony on the employee/independent contractor issue. Back on January 5, 2000, the ALJ had advised the complainant that the test that would be used to determine the complainant's status with the respondent was the test outlined in the Moore case, even though the complainant's December 30 correspondence opposing the motion to dismiss had referenced the Unemployment Insurance Division determination finding her to be an employee based on Wis. Stat. � 108.02(12)(a) and (b). Furthermore, the case file shows that on January 21, 2000, the Equal Rights Division mailed to the complainant a copy of the Moore case per her request.

In a further argument relating to Wis. Stat. � 108.02(12)(a) and (b), the complainant notes that a determination was made finding her to be an employee of the respondent under that statute, and asks why this law was "suppressed" during the hearing. The answer, of course, is provided under Wis. Stat. � 108.101(1), which reads as follows:

"No finding of fact or law, determination, decision or judgment made with respect to rights or liabilities under this chapter (Ch. 108 Unemployment Insurance) is admissible or binding in any action or administrative or judicial proceeding in law or equity not arising under this chapter, unless the department is a party or has an interest in the action or proceeding because of the discharge of its duties under this chapter."

The complainant's remaining arguments, apparently also presented as a basis for her request for another hearing, havr also been considered, but the commission finds that they, too, fail to establish any basis for allowing another hearing. Accordingly, the complainant's request for another hearing is hereby denied.

Returning now to the termination of the independent carrier agreement with the view that the complainant was an employee, Tischer testified that he terminated the agreement because of the behavior the complainant exhibited in connection with the calls she made to the respondent to complain about the late arrival of her weekend newspapers. Sometime around the summer of 1997 the complainant's weekend newspapers started to arrive an hour and a half or so later than they had in the past. This caused the complainant concern because it meant that subscribers would therefore receive their weekend newspapers later. It is not disclosed in the record why this occurred. In any event, the complainant began calling to complain about the late delivery of her newspapers.

Bruce Tischer, who began employment with the respondent in January 1998, testified that during the summer of 1998 the complainant called him to discuss her frustration over her inability to get her newspapers earlier. Tischer testified that during this call there was discussion regarding the complainant's ability to complete the route by the delivery time deadline, and reducing the size of the complainant's route if she could not make the deadline because this likely meant that her route was too large. Tischer testified that the complainant told him she would quit if the respondent reduced the size of her route.

Tischer testified that after the complainant's call during the summer that he had numerous conversations with a succession of individuals who were district managers for the complainant's area, the circulation director and a number of customer representatives who complained about the calls the complainant was making regarding the delivery time of her newspapers. Tischer testified that the complaints he received from the customer service department were that the complainant's communications were unprofessional, irrational, at times offensive and a nuisance. Tischer testified that he learned from the distribution center that the complainant's calls were numerous, abusive, demanding and repetitive.

Tischer testified that he made the decision to terminate the complainant's carrier agreement on January 9 or 10, 1999, after learning that the complainant had left voice mail messages on every district manager's phone stating that she would call everyone until she got what she wanted. In a letter to the complainant dated January 11, 1999, Tischer advised the complainant that the respondent was exercising its right to terminate the carrier agreement. In this letter, Tischer stated, "The manner in which you have conducted yourself and communicated with representatives of Post-Crescent has resulted in a determination that continuation of this relationship is not beneficial to Post-Crescent and it (sic) representatives." Tischer testified that he was not aware of the complainant's age at the time he made the decision to terminate the complainant's relationship with the respondent.

In contrast to the testimony by Tischer, the complainant testified that she was "shocked" by Tischer's decision to terminate the agreement, and that she did not know what prompted Tischer's decision. The complainant asserted that she found the reasons stated for termination of the agreement to be vague, which indicated to her that it was done because of her age. Further, the complainant asserts that Tischer lied about having talked to her during the summer of 1998, and she denied using abusive language when talking to the company's representatives.

However, the evidence contradicts the complainant's assertions about her lack of knowledge as to why Tischer terminated the carrier agreement and about the legitimacy of that decision, thereby raising serious doubts as to her credibility. For example, as noted by the ALJ:

".the Complainant insisted that the Respondent had never given her any reasons for the termination of the independent carrier agreement. The Complainant insisted that the discussions with her were vague and that she could not follow what the reasons for her termination were. However, Exhibit 7, the Complainant's (January 21, 1999) letter to Tischer following the (January 15, 1999) meeting she had with Tischer and (Gary) Fuerst, shows that the Complainant was aware of the reasons for the termination of her independent carrier agreement. Specifically, the Complainant refers to her `zealous action in [her] quest for help to please and satisfy [her] customers.' In the letter, the Complainant also offered to reduce the zeal of her activities on behalf of her customers in order to continue her relationship with the Post Crescent. These statements by the Complainant belie her direct testimony that she was unaware of any reasons for the termination of her independent carrier agreement with the Post Crescent. The Complainant's statements in Exhibit 7 are consistent with the testimony of Tischer that he terminated the Complainant's independent carrier agreement with the Post Crescent because of her excessive and unprofessional complaints regarding the delivery time of her weekend newspapers."

(ALJ mem. op. at p. 6). (Emphasis in bold text added).

Furthermore, the complainant admitted at the hearing that she had not heard any comments or statements by the respondent's management or employees that indicated that her carrier agreement was terminated because of her age. Additionally, evidence was introduced showing that 18 out of the 32 carriers working in the complainant's district were age 40 or older. Nine of the 18 were age 50 or above (including carriers aged 60, 61, 70 and two that were 75).

The commission thus concludes that even assuming the existence of an employment relationship between the complainant and the respondent, the preponderance of the evidence fails to establish that the respondent terminated that employment relationship because of the complainant's age.

For all of the above-stated reasons, the commission has affirmed the ALJ's dismissal of the complainant's complaint of alleged age discrimination.

cc: Steven F. Hannigan

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Footnotes:

(1)( Back ) At the hearing the complainant testified that she was paid 23 cents per mile.

(2)( Back ) The complainant testified that she was also paid 5 to 6 cents for each newspaper insert, and an amount (not disclosed) for product samples that were included with the newspapers.

uploaded 2001/01/31