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

DONNA WINKLER, Applicant

VIVIAN H SMITH, Employer

WIS WC UEF, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1998059089

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 makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Vivian Smith is afflicted with Alzheimer's disease and unable to care for herself. Her daughter, Evelyn Price, who worked for a local school district, ran an ad in the newspaper in September 1997 seeking a companion for her mother. In October 1997, Ms. Price hired various individuals, including the applicant, to work as companions. Ms. Price testified she tried to have two regular companions-one doing a regular morning shift and the other an afternoon shift-and a third worker to fill in. Ms. Price testified also that she hired a third worker named Judy to work one or two weekends when Mrs. Smith's family was unavailable. Another daughter also involved in the hiring process, Elizabeth Peterson, recalled employing three individuals in shifts to care for Mrs. Smith.

When she hired the companions, Ms. Price told them her mother was at times belligerent and needed encouragement to get up in morning, eat her meals, and take her medication. Mrs. Smith could feed herself, but could not prepare her own meals. The companions prepared the meals, washed dishes, made the bed, and persuaded Ms. Smith to take her medication. The applicant testified she would also attempt to calm Ms. Smith down when she became agitated, with activities like reading, playing games, or doing puzzles. The applicant also helped Ms. Smith with her personal hygiene. The applicant testified that she did not consider herself a housekeeper.

The applicant was paid $8.50 per hour from a checking account held jointly between Mrs. Smith and Ms. Price; Ms. Price also held a power of attorney over her mother's financial affairs. Between October 1 and December 31, 1997, Ms. Price paid the companions over $500.

On January 8, 1998, the applicant hurt herself when she slipped on the porch while leaving Ms. Smith's house. She sustained a fracture, requiring medical treatment and resulting in disability.

The main issue here is whether Ms. Price, Mrs. Smith, or both were the applicant's employer and whether the applicant was their employe. Because Ms. Price and Mrs. Smith do not carry workers compensation insurance, their liability implicates the Uninsured Employers Fund (UEF).

In order for an "employer" to be liable for worker's compensation, an "employe" must sustain an injury, and both the employe and the employer must be subject to the worker's compensation statutes. Wis. Stat. § 102.03(1)(intro.), (a) and (b). An "employer" subject to the worker's compensation law is someone who usually employs three or more employes, or who pays $500 or more to fewer than three employes in a calendar quarter. Wis. Stat. § 102.04(1)(b).

In this case, Ms. Price paid more than $500 in wages to the companions in the last calendar quarter of 1998. However, an employer of fewer than three employes becomes liable only on the tenth day after the quarter in which $500 or more is first paid. In this case, that day would be January 10, 1998; but the date of injury was January 8.

The ALJ nonetheless concluded that Ms. Price and Mrs. Smith were covered employers because they usually employed at least three people to care for Mrs. Smith. However, the commission concludes that the dispositive issue in this case is the question of whether the applicant is an "employe" as that term is defined under the worker's compensation law. The commission therefore does not reach the related question of whether the Ms. Price and Mrs. Smith were "covered employers."

Under Wis. Stat. § 102.07(4)(a), the term "employe" is defined to include every person in the service of another under any contract of hire, express or implied, is an employe with two exceptions: 1. domestic servants, and 2. persons whose employment is not in the trade, business, profession or occupation of the employer, unless the employer nonetheless opts to cover them. If the person is in the trade, business, profession or occupation of the employer, he is an employe, no matter how casual or isolated the employer's trade, business, occupation, or profession may be. Wis. Stat. § 102.07(4)(b).

The commission, like the ALJ, concludes the applicant and other companions were in the service of another under a contract of hire. Under the Kress (1) test, the primary test for determining the existence of an employer-employe relationship is whether the alleged employer has a right to control the details of the work; among the secondary tests are: (1) direct evidence of the exercise of the right of control, (2) method of payment of compensation, (3) furnishing of equipment or tools for the performance of the work, and (4) right to fire or terminate the employment relationship. Kress, at 61 Wis. 2d 182. Under the facts set out above, the ALJ quite properly concluded that the Kress standard has been met, and consequently that the companions were providing services under a contract of hire. Thus, the applicant and companions would be "employes," assuming neither of the exceptions under Wis. Stat. § 102.07(4)(a) apply.

On the question of whether the statutory exception under Wis. Stat. § 102.07(4)(a)1 applies, the ALJ concluded that the applicant was not a domestic servant. The commission agrees. Indeed, the commission has twice indicated, albeit in dicta, that a person providing personal care to an invalid is not a domestic servant. Joyce Ambrose v. Harley Vandeveer Family Trust, WC claim no. 86- 39393 (LIRC, February 28, 1989); and Shirley A. Nickell v. County Kewaunee Other, WC Claim no. 94064155 (LIRC, September 24, 1996).

In the briefs supporting UEF's petition for commission review, however, the respondents raise an issue not raised below before the ALJ: Was the applicant providing service in the course of Mrs. Smith's or Ms. Price's trade, business, occupation or profession? In other words, does the applicant fall under the second exception to the statutory definition of "employe" under Wis. Stat. § 102.07(4)(a)2?

To ask this question is to answer it: the applicant was not performing services as part of the trade, business, occupation or profession of the invalid Mrs. Smith or her daughter Ms. Price. With respect to Mrs. Smith, arranging for one's own personal care ordinarily cannot be viewed as engaging in a trade, business, profession, or occupation. Nor does the commission view Ms. Price's action in arranging for the care of her invalid parent as part of a trade, business, profession, or occupation. If Ms. Price were some kind of health care services broker or provider who offered herself out to the public at large, a different conclusion might be justified. But Ms. Price did not provide such services to the public generally, or even other individuals privately; rather she worked for a local school district.

The applicant asserts that the exception should not apply -- that arranging for health care was part of Mrs. Smith or Ms. Price's trade, business, occupation or profession -- because the applicant and other companions regularly provided the service to Mrs. Smith. That argument might have some force in a case where an ongoing business hired an outsider so frequently that one could infer they would not do so unless the job for which the outsider was hired was a part of the ongoing business. (2) However, under the facts of this case, the commission cannot conclude that Mrs. Smith or her daughter developed or established a "trade, business, occupation or profession" simply by frequently retaining the same individuals to provide in-home health care for Mrs. Smith.

The commission also notes that Cornelius v. Industrial Commission, 242 Wis. 183, 185 (1943) defines a trade or business as an occupation or employment habitually engaged in for livelihood or gain. Setting aside the circular question of whether Ms. Price or Mrs. Smith's arranging for Mrs. Smith's health care was an occupation or employment, there is no evidence that either Smith or Price did it for livelihood or gain, at least as those terms are commonly understood in a business sense. In sum, the commission concludes that the record shows that providing or arranging health care for her mother was not part of even a causal or desultory trade, occupation, business or profession carried on by Ms. Price (who worked for a school district) or Mrs. Smith (who is mentally incapacitated.)

Finally, the applicant raises two procedural arguments. First, the applicant contends that the respondents should be bound by the issues raised in UEF's petition, which did not include a claim of the applicability of Wis. Stat. § 102.07(4)(b)2. Worse, the applicant points out that the specific statutory exception was never raised below, even at the hearing before ALJ Mitchell, so considering it now deprives the applicant of due process.

The commission declines to hold that arguments not specifically delineated in a petition are waived. Neither Wis. Stat. § 102.18(3) or (4) nor Wis. Adm. Code § § LIRC 1 and LIRC 3 support such a conclusion; indeed, it is inconsistent with the simplified procedure the commission normally tries to follow. See DWD Worker's Compensation Act of Wisconsin with Amendments to January 1, 1998 (WKC-1-P(R. 2/99), footnote 92. In short, the commission's duty is to conduct a review on the record, and it strives to accord a full review even when a party files a petition stating simply "I appeal."

The commission is more troubled by the fact that respondents did not raise the "trade, business, profession or occupation" exception before ALJ Mitchell. True, the general question of the applicant's status as an "employe" was contested at the hearing. Nonetheless, the applicant asserts that considering the specific exception under Wis. Stat. § 102.07(4)(a)2 for the first time on review would be grossly unfair and deprive the applicant of due process. However, the applicant has not alleged any specific prejudice -- in terms of evidence she would have presented but did not -- because she was not aware the respondents might raise the exception under Wis. Stat. § 102.07(4)(a)2. In the absence of any specific showing of prejudice, the commission notes that it bears ultimate responsibility for finding facts and determining compensation irrespective of the presentation of the case by counsel, and that positions taken by parties at administrative proceedings do not control the commission's final resolution of a case. UPS v. Lust, 208 Wis. 2d 306, 313-14 (Ct. App., 1997).

The applicant was not an employe of Ms. Price or Mrs. Smith under Wis. Stat. § 102.07(4)(a)2. Consequently, the application must be dismissed.

NOW, THEREFORE, the Labor and Industry Review Commission makes this,

ORDER

The findings and order of the administrative law judge are reversed. The application is dismissed.

Dated and mailed June 29, 2000
winkler.wrr : 101 : 5  ND § 2.10

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

NOTE: Because the commission's resolution of this case does not depend on a different impression of witness credibility or demeanor than held by the ALJ, or involve a disputed question of fact, the commission did not conduct a credibility conference with presiding ALJ Mitchell.

cc:
ATTORNEY JAMES J CONNOLLY
JUDE BOYD CONNOLLY & SIMANEK SC

ATTORNEY KIRT J E LUDWIG

ATTORNEY MICHAEL C FROHMAN
KASDORF LEWIS & SWIETLIK SC

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Footnotes:

(1)( Back ) Kress Packaging Co. v. Kottwitz, 61 Wis. 2d 175, 182 (1973). Under Kress, the primary test for determining the existence of an employer-employe relationship is whether the alleged employer has a right to control the details of the work; among the secondary tests are: (1) direct evidence of the exercise of the right of control, (2) method of payment of compensation, (3) furnishing of equipment or tools for the performance of the work, and (4) right to fire or terminate the employment relationship. Kress, at 61 Wis. 2d 182.

(2)( Back ) Such as where a firm hired the same individual every day to cater lunch to its employes and clients; one could argue that feeding employes and clients had become part of the firm's business and that the caterer was thus providing services as part of the firm's business.