UI Court decision summary -- Bruce Hendricks v. DILHR and LIRC (Wis. Cir. Ct., Polk Co., August 28, 1995) - EE 411 - Independent Contractor or Employe; PC 770 - Procedure - Miscellaneous, PC 749 LIRC Review, Miscellaneous - issue preclusion ('collateral estoppel') - Previous decision has collateral estoppel effect on issue of whether carpenters performed services as employees; hearing record in any events supports employee conclusion; procedural objections re alleged ex parte contacts, sequestration order violation, were waived when not raised before LIRC

Wisconsin Labor and Industry Review Commission --
Summary of Wisconsin Court Decision relating to Unemployment Insurance

Subject: Bruce Hendricks v. DILHR and LIRC, Case No. 93 CV 300 (Wis. Cir. Ct., Polk Co., August 28, 1995)

Digest Codes: EE 411 PC 770 PC 749

An appeal tribunal found that certain carpenters worked in an employment relationship for petitioner, a construction company for whom they worked, rather than for individual customers. The appeal tribunal reached this decision by giving collateral estoppel effect to a 1985 decision of the commission involving the petitioner, which was eventually affirmed by the Court of Appeals in an unpublished per curiam decision. The appeal tribunal found that no evidence presented at the hearing established that the employment relationship between the carpenters and the appellant had changed since the earlier decision. Consequently, the appeal tribunal concluded that that the earlier decision precluded the parties from relitigating that issue.

LIRC's decision accepted the appeal tribunal's application of doctrine of collateral estoppel. It also concluded that the record supported a finding that the carpenters worked for the construction company, independent of any reliance on the decision issued in the earlier case affirmed by the Court of Appeals.

On appeal to the circuit court, the petitioner argued that LIRC's decision was not supported by substantial and credible evidence in the record, and also that its business had been transferred to Maple Trust. In addition, the petitioner complained for the first time of certain “irregularities” not complained of during the LIRC proceedings, including one or more alleged ex parte communications between Attorney Zeeh and Administrative Law Judge Schaefer, one or more alleged violations of a sequestration order based on alleged conversations between Attorney Zeeh and Auditor Williams C. Lippitt (a witness in the proceedings before ALJ Schaefer), and lack of notice and/or ability to participate in a June 12, 1992 hearing at which testimony was taken from Dennis Carlson and Todd Engstrand.

Held: There is substantial and credible evidence in the record on which LIRC based its decision and findings, to support and uphold said findings and decision. LIRC accepted the appeal tribunal’s application of the doctrine of collateral estoppel based on the previous proceedings involving these same parties which ultimately resulted in the District III Court of Appeals decision in case no. 88-0582. Petitioner apparently does not significantly contend that the doctrine of collateral estoppel is not applicable. The court finds that the facts, circumstances and parties in the previous litigation show compellingly substantial similarity, if not complete similarity, and therefore the doctrine of collateral estoppel should apply.

However, even if the doctrine of collateral estoppel is not applicable, the record in this case supports LIRC finding that each of the workers was an “employe” as that term is defined in �108.02(12)(b) Wis. Stats. LIRC correctly considered and applied all of the appropriate “tests” including the “economic independence test”, the “integration test”, the “proprietary interest test”, the “advertising or holding out test”, and the “entrepreneurial risk test”. The claim of a purported transfer of the appellant’s (petitioner’s) construction business to Maple Trust is unsupported by the evidence.

By failing to allege the violation of sequestration order arid/or ex parte communication with the ALJ in the proceedings before the LIRC, the petitioner waived said alleged errors for purposes of this judicial review.

Even if petitioner’s failure to raise said alleged errors at the LIRC review level does not constitute a waiver for purposes of judicial review, this court finds that petitioner has failed to show that a violation of the sequestration order actually occurred and/or that if such violation did occur it was prejudicial, or that any improper ex parte communication occurred between Attorney Zeeh and the AU, that any ex parte communication was about the merits of this case, and/or that petitioner was in any way prejudiced by improper ex parte communications if in fact such occurred.

On the issue of petitioner’s advance knowledge of and ability to participate in the June 12, 1992 proceeding, the record is clear that petitioner did have advance knowledge, did have the ability to participate if he chose to do so, and for whatever reason petitioner decided not to avail himself of the opportunity to do so.

Based on the foregoing the court affirms the LIRC's decision in all respects.

Please note that this is a summary prepared by staff of the commission, not a verbatim reproduction of the court decision.

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