UI Court decision summary -- Rice Health Care v. LIRC and UHC (Wis. Cir. Ct., Outagamie Co., November 1, 2000) - ER 470.01 - Successorship; generally; ER 470.02 - Successorship; assets transferred; ER 470.05 - Successorship; business transferred - assets and business activity not "transferred" to plaintiff corporation where its employes have control of assets and operate business only because they are "leased" to another corporation which has control of and right to operate the business

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

Subject: Rice Health Care Facilities of Wisconsin, Inc. v. LIRC and UHC, Case 99 CV 1100 (Wis. Cir. Ct., Outagamie Co., November 1, 2000)

Digest Codes: ER 470.01, ER 470.02, ER 470.05

UHC, Inc. sold the Parkview Care Center to St. Francis Home, Inc. (SFH). SFH entered into a “Management Contract” with Rice Management, Inc. (RM) to provide management and administrative services necessary for the operation of Parkview. SFH also entered into a Personnel Services Agreement with Rice Health Care Facilities, Inc. (RHCF), a corporation also owned and controlled by the same persons who owned and controlled RM, to provide professional staff and other management and administrative personnel to work at Parkview as leased employees. RHCF hired almost all of UHC’s former Parkview employees and “leased” them to RM. RHCF sought optional successorship status as to the UI account of UHC; the department determined that RHCF was not a successor, and the Appeal Tribunal affirmed. RHCF appealed, arguing that assets and business activities of Parkview were transferred to it, and that it engaged in the business activity of operating Parkview. LIRC affirmed the decision that there was no transfer to RHCF, concluding that while employees of RHCF had possession and control of the assets of Parkview and engaged in the activity of operating Parkview, this was only because RM had the legal right and obligation (under the Management Contract) to operate Parkview, and it gave the leased RHCF access to the facility to operate it. LIRC held that RHCF itself had no right to possession or control of the assets and did not operate the business. RHCF appealed.

Held: Affirmed. LIRC’s findings of fact are supported and its interpretation and application of the law is entitled to great weight. LIRC reasonably concluded that RHCF did not obtain possession or use of the assets of Parkview and did not engage in the business activity of operating Parkview.

[LIRC Decision]

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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