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

CROSSROADS EXPRESS INC, Employer

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Account No. 339403, Hearing No. S0800185WR, S0800019WR


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 by Crossroads Express Inc.

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:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

During the periods of time at issue herein (1), petitioner Crossroads Express Inc. (hereinafter, "Crossroads") was a motor carrier conducting long-haul trucking operations under the operating authority issued to it by the Federal Motor Carrier Safety Administration.

Raymond and Janice Behling (hereinafter, collectively, "the Behlings") are president and vice-president, respectively, of Crossroads.

During the 2005 calendar year, Jack Alexander, Gregory Bushor, Robert Cole, Bryan Drinkman, Peter Eckes, Sr., Richard Kern, Duane Klepac, Aimee-Je Konkol, Brian Lea, Tom Leszczynsk, William Marquardt, Dennis Nowland, Edward Pooler, John Powers, Richard Slozes, Larue Smith, Wilson Stoskopf, Christia Sveum, Walter Swonger, Earl Wallace and Jonathan Wrezinski were paid by Crossroads for services performed as truck drivers.

During the 2006 calendar year, Donald Babcock, Jason Best, Paul Campton, Bryan Drinkman, Peter Eckes, Sr., Todd Frankiewic, J. James Hoffman, Benjamin Huber, Gabriell Jabez, Richard Kern, Duane Klepac, Aimee-Je Konkol, Jeremy Konkol, Richard Konkol, Brian Lea, Ryan Lenzner, Robert Mack, Sr., William Marquardt, Athony Menting, Sandra Meyer, Jonathan Peche, Jack Pichette, John Powers, Richard Slozes, Larue Smith, Walter Swonger, Andrew Ugoretz, J. Earl Wallace, Michael Woitczak and Jonathan Wrezinski were paid by Crossroads for services performed as truck drivers.

For the first two quarters of 2007, Roger Colgrove, Todd Frankiewic, Kenneth Hart, Richard Kern, William Marquardt, Athony Menting, Connor Nieman, Edward Pooler, John Powers, Brad Schultz, Brian Shaurette, Andrew Ugoretz and Michael Woitczak were paid by Crossroads for services performed as truck drivers. (2)

The issue to be determined is whether the above-named individuals performed these services as "employees" of Crossroads, within the meaning of Wis. Stat. § 108.02(12), during the periods of time at issue.

The Behlings, personally, owned a number of truck tractors. The individual drivers whose status is at issue here entered into written truck leases (entitled "Vehicle Lease Agreement") with the Behlings, by which the drivers leased tractors from the Behlings. These lease agreements were in effect "lease-to-buy" arrangements, providing that the driver would own the tractor after a certain number of monthly payments. The drivers then also entered into written agreements (entitled "Motor Vehicle Lease Agreement") with Crossroads, by which the drivers leased the tractors which they held under the lease agreements with the Behlings, to Crossroads. The drivers also executed and provided to Crossroads separate documents, entitled "Crossroads Express, Inc. Independent Contractor Certification." All of the drivers at issue herein had executed and were party to similar "Vehicle Lease Agreements" with the Behlings and similar "Motor Vehicle Lease Agreements" and "Crossroads Express, Inc. Independent Contractor Certifications" with Crossroads. (3)

The "Motor Vehicle Lease Agreements" between the drivers and Crossroads contained provisions stating the conditions (including compensation) under which the drivers would provide truck driving services for Crossroads. Those agreements provided that drivers would be paid 70% of the gross outbound and 80% of the gross inbound. That percentage would increase for each driver at one-year intervals, and was not negotiable. Drivers would be paid once a week (on Fridays), based on completed trips, and if Crossroads did not receive payment, the driver's pay would be reduced accordingly. A driver was permitted to refuse any load offered, but agreed that "he/she will not refuse any load after having made him/herself available for dispatch except for good cause beyond [his/her] control". Crossroads' United States Department of Transportation ("DOT") authorization numbers and logo were to be displayed on the truck, and Crossroads' witness testified that this requirement came from either DOT or the state transportation agency. The driver was required to maintain liability insurance on the tractor, and to provide various reports, including fuel and maintenance, to Crossroads. All of those drivers were provided with one or more handbooks that contained Crossroads' rules and policies, as well as the requirements of the DOT.

Once a driver accepted a load, the driver would communicate with Crossroads' dispatcher who would provide the necessary load information to the driver. The driver would be able to choose the route driven, but would be expected to maintain the schedule detailed by Crossroads. Once underway on a scheduled trip, the driver would be free to accept or to refuse any additional loads that might be offered by Crossroads. The driver would be responsible for fuel and maintenance expenses for the tractor, as well as tolls and other travel expenses. Crossroads provided and maintained the trailers for all drivers.

The "Motor Vehicle Lease Agreements" between the drivers and Crossroads provided that Crossroads would have "exclusive control, possession and use" of the vehicle during the term of the lease, and that the vehicle would not be operated for any purpose other than the business of Crossroads.

The "Vehicle Lease Agreements" between the individual drivers and the Behlings provided that the lessee (truck driver) would be the "only driver" of the vehicle during the entire duration of the lease agreement. However, neither the "Motor Vehicle Lease Agreements" between the drivers and Crossroads, nor the "Crossroads Express, Inc. Independent Contractor Certification" documents executed by the drivers, contained any provision prohibiting the drivers from having other persons drive the truck. On the contrary, the "Motor Vehicle Lease Agreements" between the drivers and Crossroads contained provisions reflecting that it was contemplated that the driver could employ other individuals to drive the truck for him or her, subject only to requirements of state or federal laws or regulations regarding driver qualifications. 
  

Applicable law -- Wisconsin's Unemployment Insurance Law defines who is an employee and who is an independent contractor for purposes of unemployment insurance. There is a presumption in the law that an individual who is performing services for an employing unit is an employee. Wis. Stat. § lO8.02(12)(a) provides:

(a) "Employee" means "any individual who is or has been performing services for pay for an employing unit, whether or not the individual is paid directly by such employing unit; except as provided in par. (b), (bm), (c), (d), (dm) or (dn)".

Once it is determined that individuals have performed services for pay for an employing unit, the burden of proof shifts to that employing unit to establish that the individuals are not employees due to one of the exceptions provided in unemployment insurance law.

One of the statutory exceptions to the presumption of employee status is contained in Wis. Stat. § 108.02(12)(c), which provides:

(c) 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.

Therefore, it is necessary to determine whether the individuals at issue in this case are "truckers", within the meaning of the unemployment insurance law.

Wis. Stat. § l08.02(25e) defines a "trucker" as "a contract operator with a trucking carrier". The term "contract operator" is defined in the Wisconsin Administrative Code, at DWD 100.02(12) as "an individual who contracts to lease a motor vehicle to a carrier for use in the carrier's business". "Carrier" is defined in the Wisconsin Administrative Code, at DWD 100.02(8) as:

a person engaged in the hauling of passengers or freight by motor vehicle and includes a person engaged as a "common motor carrier", under s. 194.01 (1), Stats., as a "contract motor carrier", under s. 194.01 (2), Stats., or as a "private motor carrier", under s. 194.01 (11), Stats.

It is clear that the individual drivers at issue were "truckers" and "contract operators" as defined above, so the statutory provisions related to truckers are applicable and it must be determined whether the drivers performed their services free from Crossroads' control and direction, and performed these services in an independently established trade, business or profession in which they were customarily engaged.

The Department of Workforce Development has adopted administrative rules which govern the analysis of whether a contract operator performs services free from a putative employer's control and direction, and performs these services in an independently established trade, business or profession in which they were customarily engaged, within the meaning of Wis. Stat. § 108.02(12)(c).

Wis. Admin. Code DWD 105.03 provides:

DWD 105.03 Contract operators; direction and control. (1) The department shall examine the factors enumerated in this section to determine, both under contract and in fact, whether the contract operator is free from a carrier's direction or control, while the contract operator performs services for the carrier. The department shall determine whether:

(a) The contract operator owns the motor vehicle or holds the vehicle under a bona fide lease arrangement with any person other than the carrier;

(b) The contract operator is responsible for the maintenance of the motor vehicle;

(c) The contract operator bears the principal burden of the motor vehicle operating costs including such items as fuel, repairs, supplies, insurance and personal expenses while on the road;

(d) The contract operator supplies, or is responsible for supplying, the necessary personal services to operate the motor vehicle;

(e) The contract operator determines the details and means of performance, namely, the type of equipment, assignment of driver, loading, routes and number of stops to be made during the haul, as well as starting, completion and elapsed times;

(f) The contract operator may refuse to make a haul when requested by the carrier;

(g) The contract operator may terminate the lease at any time after reasonable notice; and

(h) The contract operator is compensated on a division of the gross revenue or by a fee based upon the distance of the haul, the weight of the goods, the number of deliveries, or any combination of these factors.

(2) If the department determines that all of the factors under sub. (1)(a) to (h) are present in the relationship between the contract operator and the carrier, the contract operator shall be deemed to be free from the carrier's direction and control in the performance of services under s. 108.02(12)(c)l., Stats. If one or more of the factors under sub. (l)(a) to (h) are not present in the relationship between the contract operator and the carrier, the department shall consider additional factors of the relationship, both under contract and in fact, including whether:

(a) The contract operator may negotiate with the carrier to determine the method, frequency and regularity of payments made to the contract operator;

(b) The contract operator has the authority to discharge any driver whom he or she employs;

(c) The carrier requires decals, lettering, signs, emblems or other markings on the contract operator's motor vehicle for the purpose of advertising the carrier's name or business;

(d) The carrier requires the contract operator to submit reports;

(e) The carrier requires the contract operator to obey any work rules or policies; and

(f) The carrier requires any deductions from payments owing to the contract operator for federal or state income taxes or taxes under the federal insurance contributions act.

(3) If the contract operator is found to be under the carrier's direction or control under subs. (1) and (2), the contract operator shall be deemed to be an employee of the carrier under s. 108.02(12)(c)1., Stats.

Wis. Admin. Code DWD 105.04 provides:

DWD 105.04 Contract operators; independently established business; customarily engaged. (1) If the department determines that a contract operator is free from a carrier's direction or control in the performance of services under s. DWD 105.03, the department shall examine the following factors to determine whether a contract operator who performs services for a carrier is performing these services in an independently established business in which the contract operator is customarily engaged. The department shall determine whether:

(a) The contract operator owns the motor vehicle or holds the vehicle under a bona fide lease arrangement with any person other than the carrier;

(b) The contract operator is free to hire another person as a driver in the performance of services for the carrier; and

(c) The contract operator is free to reject hauling a load offered by the carrier.

(2) If the department determines that all of the factors under sub. (1)(a) to (c) are present in the relationship between the contract operator and the carrier, the contract operator shall be deemed to be performing services in an independently established business in which the contract operator is customarily engaged under s. 108.02(12)(c)2., Stats. If one or more of the factors under sub. (1)(a) to (c) are not present in the relationship between the contract operator and the carrier, the department shall consider additional factors including whether:

(a) The contract operator's business may provide a means of livelihood that is separate and apart from the livelihood gained from services performed for a particular carrier;

(b) The business would continue if the relationship with the carrier were terminated; and

(c) The contract operator has an ownership interest in a business that the contract operator alone may sell or give away without restriction from the carrier.

(3) If the contract operator is found to be free from the carrier's direction or control but not engaged in an independently established business under subs. (1) and (2), the contract operator shall be deemed to be an employee of the carrier under s. 108.02(12)(c)l. and 2., Stats. If the contract operator is found to be free from the carrier's direction or control and engaged in an independently established business, the contract operator shall be deemed to be an independent contractor and not an employee of the carrier under s. 108.02(12)(c)l. and 2., Stats.

In addition to the foregoing, Wis. Admin. Code DWD 105.02 provides:

DWD 105.02 Requirements of shipper or law; department policy. In determining whether the carrier exercises direction or control and whether the contract operator is engaged in an independently established business, the department may not use as evidence any factor to the extent that it is specified by the shipper or required by state or federal laws or regulations. The department believes it is unreasonable to consider mandates of law or specifications of shippers as evidence because they have not been imposed on the relationship between the contract operator and the carrier by those parties of their own volition. 
 

Discussion - Because of the structure and contents of the Department's administrative rules in DWD 105.03 and 105.04, there are (at least potentially) a large number of factors that may need to be analyzed to make a decision in a case such as this. However, the analysis of the ALJ in her decision, and the arguments of the parties, serve to narrow the issues presented.

In regard to the "direction and control" issue, the ALJ rested her decision that the eight factors in DWD 105.03(1) were not all satisfied, solely on her conclusion that factor (e) was not satisfied. With regard to the "independently established" issue, the ALJ rested her decision that the three factors in DWD 105.04(1) were not all satisfied, solely on her conclusion that factor (b) was not satisfied. It could be considered implicit from this, that the ALJ found that the "direction and control" conditions described in DWD 105.03(1) subs. (a) through (d), and (f) through (h), were met, and also that the "independently established business" conditions described in Wis. Admin. Code DWD 105.04(1) (a) and (c) were met. It certainly appears, that the parties considered this implicit in the ALJ's decision. In the argument submitted with its petition for commission review, Crossroads asserted that it was conceded that all of the conditions of DWD 105.03(1) except for sub. (e), were proven Thereafter, in its brief in chief to LIRC, Crossroads again expressly argued that it was conceded that all of the conditions in DWD 105.03(1) except for sub. (e), were met. (Brief of Appellant Crossroads Express, p. 13). In its subsequent responsive brief, the Department conspicuously failed to dispute these contentions that DWD 105.03(1)(a)-(d) and (f)-(h) had been conceded. The Department also failed to include any argument touching on those conditions; like the ALJ, it rested exclusively on an argument that DWD 105.03(1) was not satisfied because sub. (e) was not met. A respondent's failure to counter an appellant's argument is generally taken as a concession on the point. See, State ex rel. Sahagian v. Young, 141 Wis. 2d 495, 500, 415 N.W.2d 568, 570 (Ct. App. 1987), Charolais Breeding Ranches v. FPC Securities, 90 Wis. 2d 97, 109, 279 N.W.2d 493 (Ct. App. 1979).

In any event, the commission is satisfied that the record supports the finding that DWD 105.03(1) subs. (a) through (d), and (f) through (h), were met. The drivers held their trucks under lease arrangements with the Behlings, who were persons other than the carrier, Crossroads, which as a corporation constitutes a separate entity.

The Department has not argued that the Behlings' connection to Crossroads means that the lease agreements between the drivers and the Behlings were not "bona fide lease arrangement[s] with any person other than the carrier" within the meaning of Wis. Admin. Code § DWD 105.03(1)(a). In Slozes v. Crossroads Express, Inc. (LIRC, October 17, 2007), a decision which the Department has argued may be considered "instructive", the commission held that simply because a driver leased the vehicle he used to perform services for Crossroads, from the president of Crossroads (Behling), this did not necessarily establish that the lease agreement between the driver and Behling was not bona fide.

 The record also established that under the terms of the relationship between the drivers and Crossroads, as evidenced by the "Motor Vehicle Lease Agreements," the drivers were responsible for the maintenance of the truck, bore the principal burden of the truck's operating costs, and supplied or were responsible for supplying the necessary personal services to operate the truck, thus satisfying conditions (a) through (d). Furthermore, the record established that under the terms of the relationship between the drivers and Crossroads, the drivers were free to refuse loads, could terminate the lease at any time after reasonable notice; and were compensated on the basis of a division of the gross revenue, thus satisfying conditions (f) through (h). The foregoing also establishes that the conditions in DWD 105.04(1) (a) and (c) were met, since those two conditions are substantively the same as DWD 105.03(1)(a) and (f), respectively.

The issues which remain are whether the condition in DWD 105.03(1)(e) was met, and, if so, whether the condition in DWD 105.04(1)(b) was met. As to both of those issues, the ALJ's rationale was the same: she concluded that the conditions were not satisfied because the drivers could not have someone else drive the trucks for them. Thus, as to DWD 105.03(1)(e), which states:

(e) The contract operator determines the details and means of performance, namely, the type of equipment, assignment of driver, loading, routes and number of stops to be made during the haul, as well as starting, completion and elapsed times.

the ALJ reasoned that the factor was not met because

[t]he individual drivers are not free to assign other drivers to drive their trucks. They are the only persons permitted by Crossroads to drive the trucks.

As to 105.04(1)(b), which states:

(b) The contract operator is free to hire another person as a driver in the performance of services for the carrier.

the ALJ reasoned that the factor was not met because

...the drivers were not free to hire another person as a driver in the performance of services for Crossroads.

Apart from requirements reflecting applicable laws or customer requirements, which pursuant to Wis. Admin. Code DWD 105.02 cannot be considered, the relationship between Crossroads and the drivers left the determination of the types of "details and means of performance" addressed by sub. (e), to the drivers. The "Motor Vehicle Lease Agreements" between the drivers and Crossroads expressly preserve the drivers' right to direct in all respects the operations and maintenance of the equipment used and to select drivers or helpers, select routes, places of repair, stopping, parking, maintenance and purchase of fuel.

Crossroads makes two arguments in regard to the issue of the drivers' freedom to assign or hire other drivers to drive the trucks.

One argument is, that any restrictions Crossroads might impose in respect to details and means of performance were a result of federal law requirements imposed on Crossroads as a carrier, which should not be taken into consideration because of DWD 105.02. Thus, it argues that "Crossroads is required [by federal regulations] to go through an elaborate driver qualification process before anyone can operate any vehicle in its fleet, including leased vehicles" (Brief of Appellant Crossroads Express, p. 11), and that the ALJ erred in attributing "direction and control" activities to Crossroads in cases where it is doing nothing more than fulfilling its obligations under federal regulations.

This argument is beside the point. The ALJ did not find, and the Department does not argue, that there were any limitations on the drivers' abilities to determine details and means of performance, such as limitations in regard to "type of equipment, . . . loading, routes and number of stops to be made during the haul, as well as starting, completion and elapsed times," other than a limitation on the right to hire other drivers. The ALJ's reasoning as to DWD 105.03(1)(e) rested entirely on her finding that the drivers could not assign other drivers to drive their trucks. But, as the Department argued in its brief, there is no federal or state regulation which requires that the driver be the only driver of the truck. The ALJ's decision in this respect thus did not turn on imputing a state or federal legal requirement to the putative employer.

Crossroads' other argument, is that the ALJ erred in finding that the contracted drivers are the only persons permitted "by Crossroads" to drive the trucks, since it was the Behlings who had the restriction on other drivers in their "Vehicle Lease Agreements" with the drivers, rather than Crossroads, which had no such restriction in its contracts with the drivers, the "Motor Vehicle Lease Agreements".

The commission has carefully considered the arguments which were made by Crossroads on this point  (4), a s well as the administrative code provisions which bear on it. Having done so, it finds itself in agreement with the position argued by Crossroads.

It is true that the "Vehicle Lease Agreements" between the Behlings and the drivers, by which the Behlings lease truck tractors to the drivers, contain restrictions on the right of the drivers to have anyone else drive the trucks. However, because of the structure of the administrative rules applicable here, those restriction are not relevant.

DWD 105.03(1), and DWD 105.04(1), both provide generally that the Department shall examine and make a determination with regard to certain factors. However, the specific nature of the examination required by these sections, and of the consequences which follow from whatever determination is made, is stated in other sections of the rules, specifically, DWD 105.03(2) and DWD 105.04(2).

In its brief, the Department states that

DWD 105.03(2) provides that if one of the factors in (1)(a)-(h) are not present then it has to determine the factors under DWD 105.03(2)...

(Brief of the Department of Workforce Development, p. 13). It also states that

If the requirements of DWD 105.04(1) are not all met . . . the department shall consider the factors under DWD 105.04(2).

(Brief of the Department of Workforce Development, p. 16).  However, that does not fully describe what those rules actually state.  DWD 105.03(2) provides:

If the department determines that all of the factors under sub. (1) (a) to (h) are present in the relationship between the contract operator and the carrier, the contract operator shall be deemed to be free from the carrier's direction and control in the performance of services under s. 108.02 (12) (c) 1., Stats...

Similarly, DWD 105.04(2) provides:

If the department determines that all of the factors under sub. (1) (a) to (c) are present in the relationship between the contract operator and the carrier, the contract operator shall be deemed to be performing services in an independently established business in which the contract operator is customarily engaged under s. 108.02 (12) (c) 2., Stats...

If the language emphasized above were not included in these rules, it would be possible to argue that the source of a restriction on a driver's freedom of direction and control, or on a driver's independence, was irrelevant. If that emphasized language was not present in these rules, a restriction such as that found in the Behlings' contracts with the drivers would arguably be sufficient to justify finding that all of the factors were "not present." However, because that language was used in the rules, the source of a restriction is important. The question is whether the factors are "present in the relationship between the contract operator and the carrier."

This interpretation is consistent with the approach reflected in DWD 105.02. While that section is directly applicable only to things that are specified by a shipper or required by law, it also contains an explanation of its underlying purpose and rationale. It explains:

. . . The department believes it is unreasonable to consider mandates of law or specifications of shippers as evidence because they have not been imposed on the relationship between the contract operator and the carrier by those parties of their own volition.

This reflects a rationale that in looking for evidence bearing on the question of whether a contract operator is an independent contractor or an employee of a carrier, what is relevant is "the relationship between the contract operator and the carrier", and that it is not reasonable to consider mandates which have not been imposed on that relationship "by those parties". The same rationale appears in the limitations found in DWD 105.03(2) and DWD 105.04(2) by which the focus is put on factors present "in the relationship between the contract operator and the carrier." The explanation in DWD 105.02 as to why it is unreasonable to consider mandates of law or specifications of shippers, is equally applicable to the situation here, where what is involved is a provision in an agreement between the driver and a third party (i.e., the lessor of the truck). Such a provision is similarly "not...imposed on the relationship between the contract operator and the carrier by those parties of their own volition".

In this case, "the relationship between the contract operator [i.e., the individuals at issue] and the carrier [i.e., Crossroads]" is defined by the "Motor Vehicle Lease Agreements." Under those agreements, there is no restriction on having other persons drive the trucks, as there is under the "Vehicle Lease Agreement" contracts between the drivers and the Behlings. On the contrary, there are a number of references in the "Motor Vehicle Lease Agreements" showing that it is contemplated, at least by that agreement, that the drivers may have employees who operate the vehicles.

Thus, all of the elements described in DWD 105.03(1)(e), including the ability to determine the assignment of the driver, are clearly "present in the relationship between the contract operator and the carrier". Similarly, the element described in DWD 105.04(1)(b), the freedom to hire another person as the driver, is clearly "present in the relationship between the contract operator and the carrier". That is all the rules require.

Because all of the conditions described in DWD 105.03(1) are "present in the relationship between the contract operator and the carrier," the contract operator must be deemed to be free from the carrier's direction and control in the performance of services within the meaning of Wis. Stat. § 108.02(12)(c)l., and it is not necessary to inquire into the conditions noted in DWD 105.03(2). Similarly, because all of the conditions described in DWD 105.04(1) are "present in the relationship between the contract operator and the carrier," the contract operator must be deemed to be performing services in an independently established business in which the contract operator is customarily engaged within the meaning of Wis. Stat. § 108.02(12)(c)2., and it is not necessary to inquire into the conditions noted in DWD 105.04(2). The individuals at issue are not "employees."

The commission therefore finds that the individuals named in the two determinations at issue did not perform services for Crossroads as statutory employees, within the meaning of section 108.02(12) of the Wisconsin statutes.

DECISION

The decision of the administrative law judge is reversed. Accordingly, Crossroads Express Inc. is not liable for unemployment insurance contributions and interest based upon the services at issue.

Dated and mailed October 22, 2009
crossro . srr : 110 :   EE 421

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

Ann L. Crump, Commissioner

 

 

NOTE: In Slozes v. Crossroads Express, Inc. (LIRC, Oct. 17, 2007), the commission affirmed an ALJ's holding that a driver who leased a truck from the Behlings and drove it for Crossroads pursuant to agreements similar to those in this case did not meet Wis. Admin. Code DWD 105.03(1)(e) and DWD 105.04(1)(b) because under his agreement with the Behlings he could not hire others to drive his truck.

Although it filed a brief with the commission in Slozes, Crossroads did not raise the argument which it has raised in the present case, that the limitation on the driver's right to have another person drive is not relevant because it is not contained in the agreement between the driver and Crossroads, but is instead contained in the lease from the Behlings to the driver. As a consequence, in arriving at its decision in Slozes, the commission did not consider that issue, and did not consider the significance of the "present in the relationship between the contract operator and the carrier" language which is found in Wis. Admin. Code DWD 105.03(2) and DWD 105.04(2).

The commission here arrives at a different result than in Slozes because, having now considered the additional issue which was not presented to it or considered by it in that case, it concludes that the language of the relevant administrative rules requires it.

---o0o---


There were no significant disputes as to the material facts in this matter, and the commission has no disagreement with the ALJ's findings as to the factual bases for the decision. The commission has reversed the decision of the ALJ solely as a matter of law, based on a different view as to the interpretation and application of the relevant legal tests to the undisputed evidence about the relationship between the drivers and Crossroads.

cc:
Attorney Richard A. Westley
Attorney Jorge L. Fuentes



Ed. Note: This decision is reproduced here as affected by a corrective amendment issued on October 30, 2009.

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Footnotes:

(1)( Back ) Taken together, the Department's two initial determinations in this matter cover 2005, 2006, and the first two calendar quarters of 2007.

(2)( Back ) At the hearing, the parties stipulated that the Department's lists of amounts paid by Crossroads to the individuals described in the audit during 2005, 2006 and the first two quarters of 2007 were correct. The parties also stipulated that Jenna Behling, Tyler Behling and Barbara Dengel were employees of Crossroads during the time periods at issue. In a telephone conference after the hearing, the parties stipulated that Edward Pooler was an employee of Crossroads during 2005 and Andrew Ugoretz was an employee of Crossroads during the first three quarters of 2006. The parties further stipulated that Aimee-Je Konkol (with her husband Richard Konkol) and Larue Smith had vehicle lease agreements with Raymond and Janice Behling (president and vice-president of Crossroads Express Inc., respectively) and with Crossroads during 2005 and 2006 and that Jonathan Peche had a vehicle lease and contract with Crossroads during 2006.

(3)( Back ) After the hearing, the record was kept open to allow Crossroads an opportunity to provide vehicle lease agreements between Raymond and Janice Behling and additional drivers named in the Department's audit. Crossroads sent additional vehicle lease agreements filed by Crossroads after the hearing which have been incorporated into the record as Ex. 11.

(4)( Back ) There were no arguments from the Department to consider on this point. Although Crossroads'  brief to the commission explicitly raised the argument that any restrictions on the drivers' right to use other drivers was not relevant because they were contained in the contracts between the drivers and the Behlings, not in the contract between the drivers and Crossroads (see, Brief of Appellant Crossroads Express Inc., p. 11, 14-15, 17), the Department did not acknowledge or address this argument in its responsive brief.

 


uploaded 2009/12/14