Unemployment Insurance - Worker Classification

Part 1: Direction and Control - Indian Tribal Government

Factor Three - Personally Perform Services (Case Studies)

Whether the individual is required to personally perform the services.

Case Studies relevant to Factor Three

Thomson Newspapers (Wisconsin), Inc. v. LIRC and DILHR, No. 95-1355 (Wis. Ct. App. District 4 November 14, 1996)

Thomson Newspapers is a company engaged in the newspaper business. Thomson retained the services of bundle haulers as part of its distribution system. Bundle haulers distribute newspapers to various points, such street drops for foot and motor carriers, the residences of foot carriers, vending boxes, and commercial outlets. Bundle haulers pick up the newspapers at the employer's dock and then distribute them using their own vehicles. The bundle haulers can set their own order of distribution. They are expected to deliver the newspapers in good condition and on a timely basis. They are free to perform other delivery work, even for competitors. Bundle haulers were able to retain helpers or substitutes to render the services.

The Labor and Industry Review Commission found that the bundle haulers performed their services for Thomson Newspapers free from the direction and control of the employer. The Dane County Circuit Court reversed LIRC and LIRC appealed to the Court of Appeals. The Court of Appeals reversed the circuit court and affirmed the LIRC decision that found the employer had satisfied its burden of establishing that the bundle haulers performed services for the employer free from the employer's direction and control or the right to direct and control those services. No direction and control was exercised or reserved other than general parameters, such as pick up times and delivery times, which insured the result for which the bundle haulers' services were retained.

The bundle haulers had the right to hire helpers or substitutes to deliver the newspapers. How and in what manner the papers were delivered was up to the bundle haulers. The bundle haulers were free to use any vehicle they wished. They were free to control how the papers were delivered, only subject to pickup and delivery times.

Wis. LIRC UC Decision: Prissel, Thomas - February 24, 1998

An administrative law judge (ALJ) issued a decision that Mr. Gruhlke was an employee of Thomas E. Prissel. The Labor and Industrial Review Commission (LIRC) reviewed the decision of the administrative law judge and adopted the findings and conclusions of the ALJ.

The ALJ and LIRC found that Gruhlke was not free of the direction and control of Prissel. By Prissel's own testimony, Gruhlke did not meet this criterion. Prissel conceded that he had the right to "say what way things should be done." In addition, Gruhlke could not subcontract the work himself without the appellant's consent. Prissel also conceded that he criticized the individuals' work occasionally and would tell them if they were putting something in wrong. With regard to Gruhlke specifically, Prissel conceded that he had had to give him some instructions on what and how to do things. Based upon these factors, it was evident that Gruhlke did not meet the freedom from direction and control portion of the independent contractor test.

The direct testimony of the employer demonstrated that the worker did not have the ability to subcontract out his own work without the consent of the employer and both the ALJ and LIRC cited this as evidence that Gruhlke was an employee and not an independent contractor.

Further Reading and Research

Read and research further LIRC, circuit court and court of appeals cases on Factor Three:

  • EE 411 s.108.02 (12) (c) direction and control/ independently established tests, generally
  • EE 412 - Employee - s.108.02 (12) (c) 1. - "direction and control"
  • EE 413 - Employee - s.108.02 (12) (c) 2. - "independently established"

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