RANDY L EICHMAN, Employee
WISCONSIN TECHNICAL COLLEGE SYSTEM FOUNDATION, 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 issue under consideration here relates to the claimant's eligibility for benefits, not the putative employer's liability for contributions.
The Wisconsin Technical College System Foundation (WTCS Foundation), a nonprofit 501(c)(3) organization, in serial contracts with the claimant, each covering a period of months, utilized his services to present emergency preparedness workshops to students and staff in public school districts. The claimant provided these services on an ad hoc basis during each contract period. During 2006, the time period relevant here, the claimant had contracts with entities other than the WTCS Foundation, including Rock, Dane, and Green Counties and the City of Whitewater, to provide emergency preparedness training.
The claimant is well known within the emergency preparedness community and is highly regarded in this community as a trainer.
The issue is whether the claimant performed the subject instructional services for the WTCS Foundation as an employee or as an independent contractor.
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. Wis. Stat. § 108.02 (12)(a). An "employment" is "any service . . . performed . . . for pay." Wis. Stat. § 108.02 (15)(a). There is no dispute that the claimant performed services for the foundation for pay. A presumption therefore arises that such services were performed as an employee. Wis. Stat. § 108.02(12)(a).
The burden then shifts to the foundation to establish that the claimant is excepted from employee status by some statutory provision. The foundation 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.
The record shows that the claimant, in performing instructional services under contract with the WTCS Foundation, was not subject to the foundation's control or direction within the meaning of Wis. Stat. § 108.12(c)1. Once the foundation, after granting a school district's request, determined the date and location of the requested emergency preparedness workshop and made the related logistical arrangements, it offered the opportunity to present the workshop to qualified individuals, including the claimant. The claimant was free to accept or decline this opportunity; had input into the instructional curriculum, which was established by an entity other than the foundation, and had unfettered discretion to use whatever teaching methods he chose to present it; and the standards of behavior with which he was required to comply would be typical, whether stated or implicit, for those providing unsupervised classroom instruction to others whether as an employee or as an independent contractor. See, Ristau v. Fox Valley Symphony, UI Hearing No. 06401057AP (LIRC Aug. 23, 2006).
The next question 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); Ristau, supra.
In the commission's opinion, it is a close question whether the claimant's services are integrated into the foundation's business. The foundation's primary charges are to develop curricula for technical colleges in the state of Wisconsin, and to assist state agencies and other units of government in developing training curricula for a variety of programs, including emergency preparedness. Although both the foundation's charges, and the claimant's services, relate broadly to education, the services the claimant performs for the foundation do not include curriculum development, and, in fact, in rendering these services, the claimant utilizes a curriculum developed by an entity other than the foundation.
Although the evidence does not establish that the claimant advertised his services, it does establish that he was well known within the emergency preparedness community and highly regarded there as a trainer, and that he held himself out to this community as a professional instructor. See, Ristau, supra. (second Keeler factor met where claimant held himself out to orchestral community as a percussionist).
Although the entrepreneurial financial risk required of the claimant was small given the nature of the services he was providing, the record shows that he did assume this risk, i.e., he possessed a vehicle to transport himself to the instruction locations, and a home computer on which he communicated with the foundation and other entities for which he performed instructional services.
As noted by the court in Larson, supra., 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 foundation ceased to exist, his business would continue. Likewise, the ability of the claimant to work for others, as well as the fact that he did work for others, further establishes the separateness of his business from the foundation'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, supra., 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 upon his particular knowledge and talents as an instructor, not upon a personnel pool or equipment inventory, and satisfied this factor.
Considering the Keeler factors set forth above, on balance, the claimant's services were performed in an independently established business in which the claimant was customarily engaged.
As a result, the services the claimant performed for the foundation during the relevant time period were performed as an independent contractor, not as an employee.
The amounts earned by the claimant for these services may not be included in the computation of his benefit entitlement.
The decision of the administrative law judge is reversed. Accordingly, amounts earned by the claimant for his performance of services for the putative employer during the base period at issue may not be used in calculating the claimant's benefit entitlement. This matter is remanded to the department for action in accordance with this decision.
Dated and mailed January 18, 2007
eichmra . urr : 115 : 1 EE 413
/s/ James T. Flynn, Chairman
/s/ David B. Falstad, Commissioner
/s/ Robert Glaser, Commissioner
NOTE: The commission did not confer with the administrative law judge before reversing his decision, because its reversal was not based upon a differing view as to the credibility of witnesses, but instead upon a differing interpretation of the relevant law.
cc: Attorney Alexis L. Pheiffer
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