THOMAS L PARKER, Respondent

DeBOER TRANSPORTATION INC, Appellant

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.

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:

The claimant worked as a driver for the appellant, a transportation business. From September of 2005 through December 20, 2005, he worked as a company driver. On January 2, 2006, he entered into an agreement with another business to lease a truck and entered into an agreement with the appellant to work as an independent contractor. Thereafter, the claimant hauled the appellant's trailers and freight. He continued to perform services in accordance with the agreement until April 24, 2006, when the appellant terminated the agreement.

The issue to be decided is whether the claimant was an "employee" of the appellant for purposes of determining unemployment insurance benefit eligibility.

Section 108.02(12) of the Wisconsin statutes defines an "employee" as any individual who is or has been performing services for an employing unit, in an employment, for pay. In this case, the claimant performed services for the appellant and was paid for those services. If the work was performed as a logger or trucker, section 108.02(12)(c) of the statutes provides that an individual is not considered to be an "employee" if that individual meets both prongs of a two-part test. In this case, the claimant was a trucker and the appellant was a motor carrier engaged in hauling freight. The requirements of two-part test are as follows:

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.

The factors to be considered when determining whether a driver is free from the carrier's direction and control are listed in Chapter DWD § 105.03(1) of the Wisconsin Administrative Code. These factors include:

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 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, that is, 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.

The claimant leased a truck from a business other than the appellant. He was responsible for the maintenance of the truck and the principal operating costs. He incurred personal expenses while performing the driving services. He performed the driving duties himself, although he could have hired other individuals to do the work under certain conditions.

The appellant did not dictate the means and method of performing the driving services beyond requiring that he comply with all regulatory requirements. After he became a contract operator, the claimant was free to accept or reject loads offered to him by the appellant's dispatcher. The claimant could determine which route to take for the delivery of the freight. The claimant was free to determine the hours of work, and when to start and stop work, within the mandates of federal regulations. The appellant could terminate the agreement upon five days notice while the claimant was required to provide 30 days notice. The claimant was paid per mile pursuant to a standard set by the appellant.

Because all of the above factors were present, the first prong of the statutory test was met. To determine if a contract operator was customarily engaged in an independently established business, Chapter DWD § 105.04(1) of the Wisconsin Administrative Code provides the following factors to be examined:

a. The contract operator owns the motor vehicle or holds the vehicle under 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 contact operator is free to reject hauling a load offered by the carrier.

The claimant in this case leased the truck from an entity other than the appellant. He was free to refuse any loads offered by the appellant. The lease indicates that the claimant could use other drivers, although the other drivers must be properly licensed and must comply with state and federal requirements, for example, they are not allowed to exceed the hours of driving and work allowed by law. There is no evidence in the record to suggest that the claimant, after his DUI arrest, attempted to hire a replacement that the appellant rejected. Wis. Admin. Code § 105.02 excludes from consideration "any factor to the extent that it is . . . required by state or federal laws or regulations."

Thus, the evidence in the record supports a conclusion that the claimant performed services in an independently established business.

The commission therefore finds that the claimant performed services for the appellant as a contract operator within the meaning of Wis. Admin. Code ch. 105, and was not an employee of the employer under Wis. Stat. § 108.02(12)(c) as of January 2, 2006 (week 1 of 2006).

Dated and mailed February 1, 2007
parketh . urr : 145 : 1   EE 421

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

The commission did not discuss witness credibility and demeanor with the ALJ who held the hearing. The commission did not reverse the ALJ's decision based on a differing assessment of witness credibility. Rather, the commission reverses the ALJ's decision because it reached a different legal conclusion when applying the law to the facts found by the ALJ.

cc: Attorney Mark J. Goldstein Esq

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