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

PSI IV INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. S0700045AP

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 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 is affirmed. Accordingly, PSI's clients must report their employees under their own unemployment account numbers.

Dated and mailed July 11, 2008
psiiv . usd : 105 : 8 : ER 453

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner


MEMORANDUM OPINION


The appellant seeks professional employer organization status under Wis. Stat. § 108.02(21e). At hearing, the appellant and department stipulated to the appellant's having met criteria (c), (e), and (g) of the statute. As to the remaining criteria, the commission fully agrees with the appeal tribunal's analyses thereof. Specifically, while the appellant met the remaining criteria in fact, it did not do so (save with regard to criterion (f)) under contract.

The first criterion at issue is whether the appellant has the right under contract to hire and terminate the employees who perform services for the client and to reassign employees to other clients. No clause in the contract gives the appellant that right.

Criterion (b) is that the appellant set, under contract, the rate of pay of the employees, which responsibility may include negotiations with the client and even shared responsibility. Again, the contract contains no clause allowing the appellant this right or responsibility.

The third criterion at issue, paragraph (d), is that the appellant have a general right of direction and control over the employees, including corporate officers and, again, this right may be shared with the client to the degree necessary to allow the client to conduct its business and comply with regulations and statutes. The contract provides the appellant no such general direction and control, however. The most the contract provides is reservation to the appellant of direction in the areas of safety and hazard control. This is a specific area of direction and control, and not the general direction and control required by this criterion.

The appellant nonetheless argues that, based upon guidelines for interpreting contracts, the contract at issue would be read as containing the criteria at issue. In doing so, though, the appellant ignores the distinction the courts have drawn between contracts containing ambiguous language that must be resolved and contracts that are simply silent as to the issue. No one disputes that, in the former instance, contractual interpretation is both necessary and appropriate. The courts are clear, however, that in the latter situation the parties are simply bound by the contract itself: "In construing a contract, 'courts cannot insert what has been omitted or rewrite a contract made by the parties'." Columbia Propane, L.P. v. Wisconsin Gas Co., 2003 WI 38, 12, 261 Wis. 2d 70, 661 N.W.2d 776 (quoting In re Marriage of Levy v. Levy, 130 Wis. 2d 523, 533, 388 N.W.2d 170 (1986)). With regard to the above-discussed criteria, it is the case that the contract omits them and not the case that the contract addresses them in an ambiguous manner that would allow the construction the appellant seeks.

The commission agrees with the appellant, however, that the contract meets criterion (f), that the appellant have the obligation to establish, fund, and administer employee benefit plans for the employees. Paragraphs 6 and 7 and Schedule B of the contract address various employee benefit plans and require appellant establishment and administration thereof. In response, the department points to a contract provision requiring the client to be responsible for administering, funding, and accurately determining eligibility for certain paid perquisites including certain employee benefit plans. The commission reads this provision to go more to the client's responsibility to keep track of employees' use of vacation and sick leave, for example. As such, that provision is not inconsistent with other contractual provisions obliging the appellant to establish, fund, and administer employee benefit plans.

cc: Attorney Kristi Nelson-Foy Attorney Peter W. Zeeh

 

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