Wis.LIRC WC Decision: Weaver - December 6, 1996 - ND � 2.16 - Loaned Employes - "special employer"; � 3.5 - Jurisdiction Over Claim - is applicant's employment "principally localized" in Wisconsin

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

GEORGE WEAVER, Applicant

OPTIMUM STAFFING INC, Employer

NATIONAL UNION FIRE INS CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 95041067

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development (Department of Industry, Labor and Human Relations prior to July 1, 1996) 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.

ORDER

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

Dated and mailed December 6, 1996
weavege.wsd : 101 : 7 ND � 2.16 � 3.5

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

MEMORANDUM OPINION

In the brief supporting its petition for commission review of the ALJ's decision, the insurer and the employer (collectively, the respondent) raises two issues. First, the respondent asserts the department and the commission lack jurisdiction under sec. 102.03 (5), Stats., because the applicant's employment was not "principally localized" in Wisconsin. Alternatively, the respondent asserts that it is not liable to the applicant because of the "special employment" situation arising among the applicant, the employer, and Apollo Transit. After giving careful consideration to both of these arguments, the commission affirms the ALJ's decision.

1. Jurisdiction.

The applicant claims an occupational disease type of injury arising from a material period of workplace exposure, rather than an accidental injury arising from a traumatic event occurring in Wisconsin. Consequently, the ALJ noted the probable application of sec. 102.03 (5), Stats. That section provides:

"102.03 (5) If an employe, while working outside the territorial limits of this state, suffers an injury on account of which the employe. . . would have been entitle to the benefits provided by this chapter had such injury occurred within this state, such employe . . . shall be entitled to benefits provided by this chapter, if at the time of such injury any of the following applies:

"(a) His or her employment is principally localized in this state.

"(b) He or she is working under a contract of hire made in this state in employment not principally localized in any state.

"(c) He or she is working under a contract of hire made in this state for employment outside of this state.

"(d) He or she is a Wisconsin law enforcement officer . . .

Paragraphs (c) and (d) obviously do not apply. The closer question is whether paragraph (a) or (b), or both, apply. The commission, then, must decide whether the applicant's employment was principally localized in Wisconsin. If not, the commission must decide whether the applicant's employment was principally localized in some other state, and whether he was working under a contract of hire made in Wisconsin.

The ALJ, of course, concluded that the applicant's employment was principally localized in Wisconsin. While the respondent's attorney suggests that an over-the-road trucker's job is not principally localized in any state, he cites no authority for that proposition. In fact, what authority there is indicates exactly the opposite.

Professor Larson discusses the meaning of the term "principally localized" in his treatise on worker's compensation. (1 ) The treatise cites a case decided under an Illinois statute using substantially the same "principally localized" language as used in sec. 102.03 (5), Wis. Stats. The Illinois court held that the employment of a truck driver who worked from Missouri was principally localized there, even though he drove only 1.5 percent of his miles in that state. In its decision , the Illinois court referred to a national commission's model act which defined "principally localized" to mean that "a person's employment is principally localized in [a state] when his employer has a place of business in the [the state] and he regularly works at or from such place of business." (2 ) The treatise cites another case where an injured worker's employment was found to be "principally localized" in Pennsylvania where the employer had a business location in that state, the injured worker worked in or from a Pennsylvania city, and a substantial part of the worker's work time was spent in Pennsylvania. (3 )

In this case, the both Transport Drivers and Optimum Staffing maintained a place of business, a terminal, in Madison. The applicant started each run from Madison (when he had to pick up the tractor) or Dodgeville (when he did not.) Thus, the applicant's employer had a place of business in Wisconsin, and the applicant regularly worked at or from either that place of business or another location in Wisconsin. In short, the applicant's employment was principally localized in Wisconsin. (4 )

Assuming for the sake of argument that the applicant's employment were not principally localized in Wisconsin, the commission would agree with the respondent's position that it is not principally localized in any (other) state. Although the applicant started each run in Wisconsin, his endpoint could be in any number of states. Further, simply because the applicant estimated he may have spent more time on the road in Ohio than any other state, does not mean his employment was principally localized in that geographically-central state. As discussed above, principal localization is not established by the gross number of miles done in any state.

The next question, then, is whether the applicant was working under a contract of hire made in this state. In their briefs, the parties discuss Horton v. Haddow, 186 Wis. 2d 174 (Ct. App., 1994), a case which appears to be the main reported appellate decision decided under the current version of sec. 102.03 (5), Stats. In Horton, the injured worker was a Mississippi resident who drove a truck for a Wisconsin company. He accepted the job in a telephone call from his Mississippi home. The worker in Horton drove all over the country, although his first run ended in Wisconsin where he underwent orientation and completed a DOT exam. He later was injured, but not in Wisconsin. The worker stipulated that his employment was not principally localized in Wisconsin. The commission concluded, and the court of appeals agreed, that the worker's contract of hire was not made in Wisconsin, because he accepted the contract in Mississippi.

This case is obviously much different. First, the applicant's contract with Transport Drivers was made in Madison, Wisconsin, when he was hired by Mr. Woods after completing the application. True, the applicant was later transferred to Optimum Staffing in what the respondent calls a discharge and rehire. However, the discharge/rehire transaction was done at the behest of Mr. Formento, the owner of Transport Drivers and Optimum Staffing, in a unilateral move for the benefit of the employer. Cutting off the applicant's rights under the Wisconsin contract based on that transaction would elevate form over substance.

In short, the applicant's employment was principally localized in Wisconsin, and his contract of hire was made in this state. No matter how this case is analyzed, Wisconsin has jurisdiction over the applicant's claim.

Finally, the applicant points out that the respondent's Illinois counsel also challenged jurisdiction in Illinois on the grounds "we have been told that the Petitioner ... was hired in Wisconsin and that his employment is principally localized in Wisconsin." Exhibit J, letter from Gary K. Gale to Thomas Greenwald, dated August 14, 1995. While the statements made in the letter are by no means a deciding factor in this case, they do support a finding of jurisdiction under Wisconsin law.

2. Special employment.

The next issue is whether a "special employment" relationship immunizes Optimum Staffing from liability. The respondent's theory is that the applicant was loaned by Transport Drivers/Optimum Staffing to Apollo Express.
The commission is by no means certain that it would be appropriate to characterize the applicant as a leased or loaned employe under the law, given the amount of direction and control retained by Transport Drivers and, later, by Optimum Staffing. Regardless of how that issue would be decided, however, a leasing employer remains liable to the loaned worker under worker's compensation law. The main dispute in "loaned employe" cases is whether the leasing or loaning employing (here, arguably, Optimum Staffing) may get reimbursement from the employer to whom the worker was leased or loaned (Apollo Transit). Stated another way, the "special employment" rule may not be raised by the loaning employer as a shield against a claim by an injured worker, but rather as a sword to use against the "special employer."

In short, the "special employment" reimbursement issue is not yet before the commission, and the potential existence of that issue does not bar the applicant from proceeding against the respondent. The court of appeals addressed this point in C. W. Transport, Inc. v. LIRC, 128 Wis. 2d 520, 528 (Ct. App., 1985), a case cited by the applicant. In C. W. Transport, the court held a loaned employe may claim compensation from either the general employer or the special employer.

The respondent contends changes to the statutes made after C. W. Transport was decided now require a different result. However, the department's footnote 3 to the worker's compensation statutes states that the leasing employer remains liable to an injured worker so long as it retains some rights or obligations as an employer, such as the obligation to pay wages or right to fire a worker. The uncontested evidence in this case indicates that Optimum Staffing retained the rights and obligations of an employer, and in fact paid him and later discharged him. Regardless of how this case is analyzed, the respondent's liability to the applicant is not blocked by the "special employer" doctrine.

cc: ATTORNEY THOMAS E GREENWALD
OLIVER CLOSE WORDEN WINKLER GREENWALD & MAIER

ATTORNEY MICHAEL C FROHMAN
KASDORF LEWIS & SWIETLIK SC

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Footnotes:

(1)( Back ) 4 Larson's Workmen's Compensation Law, sec. 87.42 (a) (1996).

(2)( Back ) Id., citing Patterson v. Industrial Commission, 147 Ill. App. 738, 498 N.E.2d 539 (1986), appeal denied, 106 Ill. Dec. 49, 505 N.E.2d 355 (1987).

(3)( Back ) Id., at sec. 87.41, note 97, citing Robbins v. Workmen's Compensation Bd., 91 Pa Commw. 269, 496 A.2d 1349 (1985).

(4)( Back ) The respondent claims that the ALJ was too focused on the "employer" being localized in Wisconsin, as opposed to the "employment." The validity of this criticism is questionable, given the analysis employed by the cases cited by Larson. At any rate, the commission reaches the same result as the ALJ, albeit on slightly different legal reasoning.