STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)
ROBERT J. WALTERS, Applicant
ROBERT WALTERS TRUCKING, Employer
EMPLOYERS INSURANCE OF WAUSAU, Insurer
WORKER'S COMPENSATION DECISION
Claim No. 1999-037586
In July 1999, the applicant filed an application for hearing, seeking compensation for an injury sustained on December 20, 1997. A hearing was held before an administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development on June 13, 2000.
Prior to the hearing, the employer conceded jurisdictional facts. At issue before the ALJ, and now before the commission, was whether the applicant was an employee of the employer, his average weekly wage, the nature and extent of disability from the injury, and the employer's liability for medical expenses.
The ALJ issued his decision in this case on October 23, 2000. The applicant filed a timely petition for commission review.
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
Robert J. Walters, Sr., owns and operates a corporation known as Robert Walters Trucking, Inc. (the employer). The employer's business operation includes hauling logs, hauling hay, and automobile salvage. Under the contracts entered into in the hauling aspect of the business, the employer is required to carry workers compensation coverage.
The applicant is the son of Robert J. Walters, Sr. From time to time, the applicant helped his father do things in the automobile salvage aspect of the employer's business. Transcript, page 11. On one occasion in about November 1996, the father gave the applicant $100 for helping to remove a transmission. The father initially denied making the payment and suggested it was a Christmas gift, but later admitted he could not remember. Transcript, page 14.
On another occasion, the father told the applicant that, if the applicant cut gas tanks from some salvaged cars, the father would take him on a hunting trip to Wyoming and pay the expenses. Transcript, page 15. The value of this trip is not known, but the father apparently provided the hunting licenses, transportation, meals, and the camper were the men slept. The applicant testified his father promised to take him on this trip before he did the work. Transcript, page 19-20. The applicant in fact did the work, and went with his father on an expense-paid trip to Wyoming.
The father also acknowledged he gave the applicant "free rein" to take parts from junked cars and sell them for his own (the applicant's) profit. Transcript, page 15. The applicant, too, testified to this arrangement. Transcript, pages 15-16; 20-21; 45. At one point, the applicant specifically related the removal of parts from the junkyard as compensation for past services. Transcript, page 17. However, the father testified without contradiction that he allowed a number of friends and family to look for parts in his junkyard. Transcript, pages 59-60.
On December 19, 1997, the applicant's father contacted him about picking up a vehicle and bringing it to the junkyard. The applicant complied on December 20, 1997, using a flatbed-type truck owned by his father or the employer. The applicant loaded the salvage vehicle on the truck, drove the truck to the junkyard, and unloaded the salvage vehicle. At this point, the ram or piston on the flatbed truck stopped operating, and the truck bed was stuck in a raised or partially raised position. The applicant drove the truck to the employer's garage to fix it.
While the applicant was fixing the flatbed truck, a hose to the hydraulic mechanism that raises and lowers the flatbed became undone. The hydraulic fluid splashed on the applicant, and the flatbed lowered onto him, trapping him between the bed and the frame. After a half an hour, his father arrived and extricated the applicant. The applicant was hospitalized for four days.
The applicant testified that, when he performed the task on December 20, he expected to be paid in the form of another trip sometime in the future. Transcript, page 17. He did not expect to be paid in cash, or in any manner other than the trip. He testified that he expected to be paid in the form of a trip for the work on December 20, 1997, based on the earlier hunting trip to Wyoming. Transcript, page 17. However, the applicant acknowledged that his father did not mention any future trip when he spoke with him about the job on December 19. Transcript, page 40.
The applicant also testified that he had helped his father for fifteen years because he lived under his father's roof, transcript, page 18. The applicant also testified that when his father asked him to do something, the applicant gave it top priority out of a son's respect for his father. Transcript, page 40.
The threshold issue in this case is the applicant is an employe subject to Wis. Stat. Ch. 102 at the time of his injury. See Wis. Stat. § 102.03(1)(b). The court of appeals has summarized the law in this area in its recent unpublished decision in Nordic Hills, Inc. v. LIRC, case no. 00-2533 (Wis. Ct. App., February 1, 2001):
"Under the Worker's Compensation Act, the status of an employee is defined in Wis. Stat. § 102.07. This case focuses on the definition set out in subsection (4). Section 102.07 states in relevant part:
`Employee' as used in this chapter means:
...
(4) (a) Every person in the service of another under any contract of hire, express or implied, all helpers and assistants of employes, whether paid by the employer or employe, if employed with the knowledge, actual or constructive, of the employer, including minors, who shall have the same power of contracting as adult employes ....
The supreme court has interpreted § 102.07(4) to require a contract of hire, express or implied, as an essential element of the definition of an employee. Lange v. DILHR, 40 Wis.2d 618, 623, 162 N.W.2d 645, 648 (1968). Furthermore, in order to establish a contract to render service for another, the latter must have the right under the contract to control the details of the work. Enderby v. Industrial Comm'n, 12 Wis.2d 91, 93, 106 N.W.2d 315, 316 (1960).
...
"The principal test for determining whether a ch. 102 employer-employee relationship exists is whether the alleged employer had the right to control the details of the employee's work. Kress Packing Co. v. Kottwitz, 61 Wis.2d 175, 182, 212 N.W.2d 97, 100 (1973). In making this determination, four secondary factors are considered: Whether there is `(1) [t]he direct evidence of the exercise of the right to control; (2) ... payment of compensation; (3) the furnishing of equipment or tools for the performance of the work; and (4) the right to fire or terminate the relationship.' Id. at 182, 212 N.W.2d at 100-01. It is immaterial whether the alleged employer exercised the control as long as it had the right to do so. Village of Prentice, 38 Wis.2d at 223, 156 N.W.2d at 484.
"...To establish a ch. 102 employment relationship, there is no need for direct communication between the prospective employer and the prospective employee. Lange, 40 Wis.2d at 624, 162 N.W.2d at 648. However, a contract of hire cannot exist unless the employer pays the employee for the services performed, but the payment need not be in money. Klusendorf Chevrolet- Buick, Inc. v. LIRC, 110 Wis.2d 328, 335, 328 N.W.2d 890, 894 (Ct. App. 1982)."
Nordic Hills, slip op. at 12, 14, and 16, pages 6-9.
In the case now before the commission, the Klusendorf Chevrolet-Buick, Inc., v. LIRC decision is particularly relevant. That case arose from a fatal accident involving a former employee of Klusendorf Chevrolet (Klosterman). Klosterman volunteered to drive a car to another city for Klusendorf Chevrolet in the hope he would be re-employed. No wages were ever discussed. After he was injured, Klosterman filed for worker's compensation, claiming that his agreement to provide services for Klusendorf created an implied employment relationship. This commission agreed, and awarded compensation. The court of appeals reversed the commission.
In its reversal decision, the court of appeals expressly held that wages are a necessary factor if an employment relationship is to be found, though the wages need not be money. Klusendorf, at 110 Wis. 2d 334-35. The court expressly declined to accept a "benefit conferred" test, and infer wages. The court also concluded as a matter of law that there was no credible and substantial evidence to support the inference that the applicant expected wages. Id., at 110 Wis. 2d 336. The court, writing in reference to Klosterman's hope of re-employment, noted "[u]nfulfilled hope, even if communicated, does not give anything of value to a prospective employe." In other words, the implication of payment for services never arose because the circumstances negate the expectation of payment. Klusendorf, 110 Wis. 2d 336, footnote 2; 3 Larson's Workers Compensation Law, ch. 65.02 (MB 1999).
In the case now before the commission, the key question is whether the applicant was paid for his services, or whether the facts lead to the expectation of payment. The record in this case does not establish that the applicant was paid for his services. Indeed, the facts of the case negate the expectation of payment.
The applicant received no definite promise of payment from his father, either in cash or a promised trip, for the services leading to his injury on December 20, 1997. When the applicant had previously received the Wyoming hunting trip in payment for removing the gas tanks, he was promised that trip before he did the work. In this case, the best that can be said is that the applicant hoped to get another trip for performing services, even though it had not been promised in advance.
The commission also notes that, while the applicant had done jobs at his father's junkyard for 15 years, he could only point to two times, the $100 payment in 1996 and the Wyoming hunting trip, when he was specifically paid for the work. On those occasions, apparently, the applicant provided considerably more service than simply delivering a car to the salvage yard. These facts negate the expectation of payment, as does the applicant's testimony about doing work mainly out of a sense of filial duty.
The commission carefully considered the applicant's testimony that he had previously been paid by being allowed to remove automobile parts from the employer's premises. Under other circumstances, that testimony might have established an ongoing understanding that, if the applicant performed services for the employer he would have the privilege of removing things of value from the premises. As the court of appeals noted in Klusendorf, payment does not need to be in money.
However, the commission cannot follow that course in this case. The applicant did not expressly testify to the type of arrangement outlined in the preceding paragraph. He did not mention the ability to remove things of value from the employer's premises as payment for his services on December 20, but only the future expectation of a trip. The father testified, without contradiction, that various other friends and relative were allowed to go on the premises to look for parts, indicating that the privilege to do so was not really compensation for services.
The commission acknowledges that supreme court held that close cases on the issue of whether there is an employment relationship should be resolved in favor of finding an employment relationship. However, the fact remains that, in order to be providing services as an employee of the employer, there must be at least a reasonable expectation of payment of some sort for the services. Klusendorf Chevrolet-Buick, Inc., supra. The applicant's hope that he might receive a future trip from his father as payment does not satisfy that requirement in this case. Nor does the fact that he had received some type of payment associated with specific prior services in isolated instances in the past.
The commission therefore finds that the applicant was not, at the time of the injury, an employee subject to the provisions of Wis. Stat. Ch. 102, as required under Wis. Stat. § § 102.03(1)(b) and 102.07. Accordingly, the application must be dismissed.
ORDER
The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are affirmed. The application is dismissed.
Dated and mailed March 1, 2001
walters.wrr : 101 : 1 ND § 2.17
/s/ David B. Falstad, Chairman
/s/ Pamela I. Anderson, Commissioner
James A. Rutkowski, Commissioner
cc:
Attorney Thomas M. Domer
Attorney James O. Moermond III
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