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

Subject: Universal Strap  v. Karen Y. Stange-Crass and LIRC, Case No. 99-CV-0137 (Wis. Cir. Ct., Washington Co., September 23, 1999)

Digest Codes: EE 410

The claimant performed services as a power sewing machine operator for the respondent, a manufacturer of webbing and straps used in sporting events. She was paid on a piece work basis. Claimant was one of 50 to 60 independent contractors engaged by the respondent, which solicited for them using ads in a newspaper. She rented a sewing machine from the respondent, which also provided her with slides, threads, and bands. She had a federal employer identification number. The respondent showed the claimant how to do the job. The claimant was allowed to determine the manner in which she completed the job and the order in which she completed projects. She only had to complete straps to the respondent's satisfaction. The respondent could reject straps that it found unsatisfactory and the claimant would not be paid for those straps. If the claimant discontinued doing work for the respondent, as she did, she would not be liable to the respondent for any sort of breach of contract action. If the claimant did not perform work in a month, she would still be charged the $10 machine rental. The respondent was not aware of whether the claimant did the same type of work for anyone else.  

Reversing an appeal tribunal, the commission's decision concluded that only 4 of the relevant tests under § 108.02(12)(b) --  b., d., e. and f. -- were met and that on that basis the claimant would have to be considered an employee.

Held: In a bench decision, the circuit court reversed the commission's decision.

"I think this is a case in which only lawyers could understand why we are here. This is a relatively new statute. I don’t believe that this Court has the usual standard of review because there has not been sufficient precedent by LIRC or the Department in construing the statute and there’s been very little guidance in -- the statute is pretty clear. It gives criteria whereby the employment relationship can be established or not when the services are rendered. In the simple facts of this case this person was on a piece-work basis. She was paid for a finished product, not for all products, not for all production, not for all work. She was paid to produce something for Universal Strap that met their criteria and met their acceptable standards. She provided her labor, she provided her equipment. Whether it’s leased -- it doesn’t have to be owned, it could be leased, whether its from Universal Strap or from anybody else. She paid. for lighting, she paid for her supplies. She was without question in this Court’s mind an independent contractor. Not only were six of eight met, I believe eight of eight were met. But there were sufficient facts before the Administrative Law Judge who found she was not an employee, and I believe that the employer is correct, that “G’ is not an issue because it was not an issue before LIRC. It was conceded."

"This Court can apply the facts that have been set forth and are relatively undisputed. What conclusions you make from them is a different thing and the Commission, I think, went out of its way to try and find -- to reach a conclusion that she was an employee and not to meet a burden of proof. I find that their decision is without basis and it is reversed."

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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