PAUL P RISTAU, Employee
FOX VALLEY SYMPHONY ORCHESTRA ASSOCIATION INC, Employer
An administrative law judge (ALJ) for the Division of Unemployment Insurance 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 makes the following:
The claimant worked under annual contracts as the principal tympanist and as the personnel manager for the putative employer (employer), a symphony orchestra. He filed a claim for unemployment benefits in week 9 of 2006.
The issue is whether he performed these services as an employee or an independent contractor.
The claimant also performed as a percussionist for the Fox Cities Performing Arts Center, the Green Bay Symphony, and the Oshkosh Symphony. As a musician, the claimant, under the terms of his contract with the employer, was to abide by the terms of the orchestra's member handbook, which required attendance at rehearsals and performances, prohibited disruptive behavior, and stated a consequence for violating these requirements.
The claimant did not perform personnel management services for any other entity. The claimant's personnel management duties and responsibilities were set forth in a detailed position description, and governed as well by the member handbook.
A two-step analysis is used to determine whether an individual is an employee. Goldberg v. DILHR, 168 Wis. 2d 621, 625 (Ct. App. 1992). The first step is to determine whether the individual has been performing services for an employing unit, in an employment. Wisconsin Stat. § 108.02(12)(a). An "employment" is "any service . . . performed . . . for pay." Wisconsin Stat. § 108.02(15)(a). There is no dispute that the claimant performed services for the employer for pay. A presumption therefore arises that such services were performed as an employee. Wisconsin Stat. § 108.02(12)(a). The burden then shifts to the employer to establish that the claimant is excepted from employee status by some statutory provision. The employer is a nonprofit organization. Accordingly, the applicable statutory provision is Wis. Stat. § 108.02(12)(c) which provides:
Paragraph (a) does not apply to an individual performing services for a government unit or nonprofit organization, or for any other employing unit in a capacity as a logger or trucker if the employing unit satisfies the department:
1. That such individual has been and will continue to be free from the employing unit's control or direction over the performance of his or her services both under his or her contract and in fact; and
2. That such services have been performed in an independently established trade, business or profession in which the individual is customarily engaged.
Musician
The first issue is whether the claimant performed services free from the employer's direction and control in regard to his musician position.
In Seftar v. Waukesha Symphony, Inc., UI Hearing No. 01609181WK (LIRC April 25, 2002), the commission held that a bassoonist was free from the direction and control of the orchestra for which he performed. Although there are certain distinctions between the fact situation in Seftar and that here, e.g., the claimant in Seftar was selected to play for only certain concerts rather than for the entire season, the essential nature of the positions and their relationships to the orchestras for which they performed is the same. Both musicians played for several orchestras, owned their own instruments, and prepared independently for rehearsals and performances. Both musicians were free to accept or decline an offer to play in a particular concert.
Much of a performer's work is done outside rehearsals and performances: familiarizing themselves with a piece of music, learning to understand its proper interpretation, and practicing. This preparation work was done independently by the claimant. The employer's stated attendance and behavior expectations, and consequences for not meeting them, whether stated or implicit, would be typical for those performing as a member of a group and in public, whether the performer was an employee or an independent contractor; e.g., orchestral musicians, whether employees or independent contractors, would be expected to show up on time for mandatory rehearsals and performances, to be familiar with the music to be performed and to demonstrate proficiency in performing it, to be dressed properly for performances, and, if they weren't, to be subject to warning, exclusion from a concert, or termination of their services.
As a result, here, as in Seftar, the claimant is free from the direction and control of the employer in his role as a musician.
The second issue then is whether the claimant's services were performed in an independently established trade, business or profession in which the claimant was customarily engaged. This condition is properly analyzed in light of the five interrelated factors set forth in Keeler v. LIRC, 154 Wis. 2d 626 (Ct. of App. 1990):
1. Integration -- whether the services performed directly relate to the activities conducted by the company retaining those services.
2. Advertising or holding out -- whether the alleged employee advertises or holds out to the public or a certain class of customers the existence of its independent business.
3. Entrepreneurial risk -- whether the alleged employee has assumed the financial risk of the business undertaking.
4. Economic dependence -- whether the alleged employee is independent of the alleged employer, performs services and then moves on to perform similar services for another.
5. Proprietary interest -- whether the alleged employee owns various tools, equipment, or machinery necessary in performing the services involved, but also including whether the alleged employee has proprietary control, such as the ability to sell or give away some part of the business enterprise.
The Keeler factors are not to be mechanically applied. Rather, the weight and importance of each factor varies according to the specific facts of each case. The five factors should be applied in a manner consistent with the purpose of the statute, i.e., "to effect unemployment compensation coverage for workers who are economically dependent on others in respect to their wage-earning status." Larson v. LIRC, 184 Wis.2d 378, 391 (Ct. App. 1994).
Clearly, the claimant's services are integrated into the employer's business. The services of a musician are directly related to the operation of an orchestra.
Although the evidence did not establish that the claimant advertised his services, it did establish that he held himself out to the "orchestral community" as a professional percussionist.
The claimant's entrepreneurial risk consisted of his substantial investment in his instruments, which totaled over $30,000.
As noted by the court in Larson, economic dependence is not a matter of how much money an individual makes from one source or another, but refers to the survival of the individual's independently established business if the relationship with the putative employer ceased to exist. Larson at 392. Here, if the claimant's relationship with the employer ceased to exist, his business would continue. Likewise, the ability of the claimant to work for others and the fact that he did work for others further establishes the separateness of his business from the employer's business.
Finally, as to proprietary interest, the claimant does not in fact have anything he alone could sell or transfer as an ongoing concern, such as goodwill. However, as was noted by the court in Larson, the proprietary interest factor is not the sole test of whether an individual is engaged in an independently established business. The court stated, "we do not read the supreme court to foreclose 'independently established business' status from all individuals whose businesses depend on their own particular talents and not upon an extensive personnel pool or equipment inventory. Business based on the provision of creative services are common in the film industry. [Cite omitted]. Thus, even though the facts do not show that the crew members could sell their businesses, we consider that factor in light of film industry practices." Larson at 395. The claimant's business depended on his particular talents as a percussionist rather than a personnel pool or equipment inventory.
Considering the Keeler factors set forth above, the claimant's services were performed in an independently established business in which the claimant was customarily engaged. See, Seftar, supra.
The services the claimant performed for the employer as a musician were performed as an independent contractor, not as an employee.
Personnel manager
However, the personnel management services the claimant performed for the employer were performed as an employee. His personnel management duties were carefully detailed and the scope of his responsibilities in this area clearly defined, he performed such duties only for the employer and did not make his availability to perform such duties known to any other entity, he incurred no financial risk, and his proprietary interest was minimal, consisting only of office equipment also used for other purposes.
Remedy
The commission finds that amounts earned by the claimant for services he performed as a musician during the time period at issue here may not be included in the computation of his benefit entitlement. The commission further finds that the amounts earned by the claimant for services he performed as a personnel manager during the time period at issue here are to be included in the computation of his benefit entitlement.
The gross amount of quarterly base period earnings paid to the employee by the employer are set forth in the hearing record.(1) However, the amounts attributable in each of these quarters to services performed as a musician and to those performed as a personnel manager are not. As a result, this matter is required to be remanded to the department to determine these amounts.
DECISION
The decision of the administrative law judge is affirmed in part and reversed in part. Accordingly, the claimant is eligible for benefits beginning in week 9 of 2006, if otherwise qualified. Amounts earned by the claimant for his performance of services for the employer as a musician during the base period may not be used in calculating the claimant's benefit entitlement. Amounts earned by the claimant for his performance of services for the employer as a personnel manager during the base period are to be used in calculating the claimant's benefit entitlement. This matter is remanded to the department to determine the amount of gross quarterly base period wages attributable to the claimant's services as a musician and those attributable to his services as a personnel manager, and to take whatever other action necessary to implement this decision.
Dated and mailed August 23, 2006
ristapa . urr : 115 : 4 EE 412 EE 413
/s/ James T. Flynn, Chairman
/s/ David B. Falstad, Commissioner
/s/ Robert Glaser, Commissioner
cc:
Attorney James N. Miron
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