NIKOLA PETROVIC, Applicant

DBG EXPRESS TRUCKING LLC, Employer

WIS WC UEF, Insurer

An administrative law judge (ALJ) for the Worker's Compensation 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 order in that decision as its own.

The findings and order of the administrative law judge are affirmed.

Dated and mailed

May 24, 2011
petrovi . wsd : 101 : 5 ND6 2.14; 2.15

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

The applicant was injured on November 24, 2009 when he fell out of his semi-trailer onto his left hip. At the time, he was hauling freight for DBG Express Trucking (DBG Express). At issue in this case is whether the applicant is an employee of DBG Express, or an independent contractor of the kind excluded from the definition of "employee" under Wis. Stat. 102.07(8)(b).

The ALJ found that the applicant was an independent contractor excluded from the definition of "employee" for the purposes of the worker's compensation act under Wis. Stat. 102.07(8)(b). That section provides:

102.07 Employee defined. "Employee" as used in this chapter means:

(8) (a) Except as provided in par. (b), every independent contractor is, for the purpose of this chapter, an employee of any employer under this chapter for whom he or she is performing service in the course of the trade, business, profession or occupation of such employer at the time of the injury.

(b) An independent contractor is not an employee of an employer for whom the independent contractor performs work or services if the independent contractor meets all of the following conditions:
1. Maintains a separate business with his or her own office, equipment, materials and other facilities.
2. Holds or has applied for a federal employer identification number with the federal internal revenue service or has filed business or self-employment income tax returns with the federal internal revenue service based on that work or service in the previous year.
3. Operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work.
4. Incurs the main expenses related to the service or work that he or she performs under contract.
5. Is responsible for the satisfactory completion of work or services that he or she contracts to perform and is liable for a failure to complete the work or service.
6. Receives compensation for work or service performed under a contract on a commission or per job or competitive bid basis and not on any other basis.
7. May realize a profit or suffer a loss under contracts to perform work or service.
8. Has continuing or recurring business liabilities or obligations.
9. The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures.

If any one of the nine factors under Wis. Stat. § 102.07(8)(b) is not present, the applicant would not be an independent contractor excluded from the definition of "employee" under that statute. Acuity Mutual Insurance v. Olivas, 2007 WI 12, 63, 298 Wis. 2d 640.

The record establishes that the applicant has a federal employer identification number (and has filed a Schedule C with his federal tax return), that he is responsible for the satisfactory completion of the work, that he receives compensation on a per job basis, that he can realize profit or loss under the contracts, that he has recurring business liability or obligations, and that the success or failure of his business depends on the relationship of receipts to expenditures.

The commission is also persuaded that the applicant "maintains a separate business with his own office, equipment, and other facilities." Under the facts of this case, ownership of a semi-tractor provides evidence of a separate business that is not dependent on an employer-employee relationship. Thus, in Floerchinger v. Nestle Transportation, WC Claim No. 2000-017699 (LIRC, Aug. 15, 2001), aff'd per curiam, Appeal No. 02-1013 (Wis. Ct. App. Nov. 7, 2002), the commission noted:

Had Nestle ceased to exist as a business entity, the applicant could have conducted his business with numerous other transportation companies, just as he had in the past.

For this proposition, Floerchinger cited Blose v. Roberts Trucking Inc. and West Bend Mutual Insurance Co., WC Claim No. 1998040771 (LIRC, Dec. 8, 1999), where the commission looked to the "survival of the individual's independently established business if the relationship with the putative employer ceases to exist." The commission further noted in Blose that "the applicant freely chose to continue his business relationship with the carrier, but he was not dependent on it because he could, and actually did, find truck hauling work through other businesses."

The applicant argues that Wis. Stat. 102.07(8)(b)1 requires a separate business with a contractor's "own office, equipment, materials and other facilities." However, in a worker's compensation case specifically involving a trucker, Jarrett v. LIRC, 233 Wis. 2d 174, 18-20, 2000 WI App. 46, the court of appeals upheld the commission's finding that this factor is satisfied if a worker supplies his own truck for which he is responsible for maintenance and upkeep, and keeps his records at his house. In this case, the applicant owns and maintains his own truck, and testified that he keeps copies of his business documents either in his truck or his house. Transcript, p. 59.

The commission is also persuaded that the applicant "operates under contracts to perform specific services or work for a specific amount of money and under which he controls the means of performing the services or work." While there was only one contract presented here, a truck driver may be a non-employee independent contractor even if he drives for only one company, as he has the means to drive for others. See Floerchinger. See also: Jarrett v. B&D Motors, WC Claim No. 96041644 (LIRC, March 12, 1998). That view has been endorsed by the court of appeals. See Jarrett v. LIRC, 233 Wis. 2d 174, 20.

The commission is also persuaded that the applicant controls the means and methods of performing the work. Again, the applicant supplies his own truck, he is free to choose the routes he wishes to take to make certain the loads are delivered, and he may turn down loads if he likes. The fact that DBG Express arranged where he would pick up and deliver the loads does not compel a contrary result. See Jarrett v. LIRC, 233 Wis. 2d 174, 21.

The commission did give careful consideration to Item 12 of lease agreement between the applicant and DBG Express, which contains provisions dealing with driver conduct. The commission notes that the contract between the parties is best evidence of the right of control, Jarrett, 233 Wis. 2d 174, 21, note 9. Here, however, the applicant employed no other drivers. Further, other provisions of the lease agreement make it clear that, if the applicant had employed drivers, they would have been directed and controlled by him as an independent contractor. See Items 1, 4, and 6 of the lease agreement at exhibit H.

Finally, the commission is persuaded that the applicant incurs the main expenses related to the work. He owns his truck, pays for its maintenance, and pays fuel costs, tolls, and licensing fees. DBG Express does buy liability insurance for him, but that expense, too, was deducted from the payments made to the applicant by DBG Express. Transcript, pages 24, 62.

In sum, the commission is persuaded that all nine of the factors set out in Wis. Stat. § 102.07(8)(b) are present here. It therefore affirms the ALJ's decision.

cc: Attorney Angela McKenzie
Attorney Robert Menard

Appealed to Circuit Court.  Affirmed December 23, 2011.  Appealed to the Court of Appeals. December 4, 2012.

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