Opinion ID: 1576594
Heading Depth: 1
Heading Rank: 2

Heading: Exclusive Possession Control

Text: As required by Wisconsin Administrative Code Section PSC 60.03 and the Interstant [sic] Commerce Commission, the CARRIER [Star Line] and CONTRACTOR [owner-driver] agree that the motor vehicle equipment described in this `Equipment Agreement' when operated in connection with transportation under the CARRIERS license as a contract or common motor carrier shall be in the exclusive possession, control and use of the CARRIER during the term of this Agreement and the CARRIER hereby assumes full responsibility to the public, the shippers and all regulatory agencies having jurisdiction, for the operation of said motor vehicle equipment during the entire period of the Agreement. The majority concludes that this provision of the contract, which is mandated by PSC [3] and ICC [4] regulations, does not give Star Line power to control or direct the performance of the services of the owner-driver. The majority reasons that the contractual provision does not mean what it says, that is, that the PSC and the ICC regulations do not intend Star Line to have exclusive control over the motor vehicle. The majority then shifts its position and seems to say that although the contract gives Star Line control, control over the motor vehicle does not mean control over the owner-driver. The majority appears to nullify the contract's grant to Star Line of exclusive possession, control and use of the motor vehicle by interpreting the intent behind the mandated provision as an intent to impose financial responsibility, that is, to impose liability, on Star Line for truck-related losses. The unstated assumption in the majority's interpretation is that because the administrative agency's reason for requiring the clause is to impose financial responsibility, the clause does not require or permit Star Line to have actual control over the operation of the motor vehicle. The majority explains the contract as follows: [These] types of clauses are intended solely to promote the safe operations of trucks and to ensure continuous financial responsibility so that truck-related losses do not go uncompensated. The clause protects both the highway-traveling public and the segment of the public directly using trucking services. See N.L.R.B. v. Deaton, Inc., 502 F.2d 1221, 1224-25 (5th Cir. 1974), cert. den., 422 U.S. 1047 (1975). . . . Since the PSC clause is required solely to promote safety and financial responsibility among carriers, we find that DILHR's interpretation of the clause establishing employer control is not an available one. . . . The result of the exclusive possession, control and use of the motor vehicle is for the carrier to assume complete responsibility to and for the protected classes, i.e., public, shippers and all regulatory agencies having jurisdiction. Supra at 277, 278. Neither the PSC rule, nor the ICC rule, nor the Deaton case (upon which the majority relies) supports the majority's interpretation of the mandated contractual provision, and neither the majority, nor the parties, nor I have found any authority for the majority's view. The PSC and ICC regulations clearly show that the regulations concern more than allocation of financial responsibility. The regulations also mandate control. The regulations require contracts like the one in issue in the instant case to cover two points: first, the contract must provide that Star Line has exclusive possession, use and control of the motor vehicles, and second, the contract must provide that Star Line is financially responsible to the highway users and the shippers. In Deaton the court recognized that the regulations have at least two interrelated objectives: to promote safe operations of the trucks and to ensure that truck-related losses will not go uncompensated. The first objective, safety, is fostered by both clauses that the regulations require to be in the contract. Star Line is required to have control over the motor vehicles to enable it to ensure safe operations. In addition, Star Line is given the incentive to exercise control over the motor vehicles to ensure safe operations by being financially responsible, under the regulations, for truck-related losses incurred by the highway users and the shippers. The second objective, financial responsibility, is fostered by the regulations making Star Line financially responsible for truck-related losses. The Deaton court concluded, contrary to what the majority implies, that the ICC regulations have the effect of requiring carriers (such as Star Line) to possess and exercise considerable control over all trucks operated under the certificate. 502 F.2d at 1227. [5] In its final analysis, the majority appears to concede that the contract does give Star Line control, but intimates that Star Line's control under the mandated contractual provision is over the motor vehicle, not over the owner-driver. Supra at 278. The Deaton court, taking a common sense approach, makes short shrift of this kind of reasoning, saying, Control over trucks involves control over drivers. Id. at 1227. Sec. 108.02(3) (b) 1 clearly states that if the owner-driver is to be excluded from the classification of employee, the owner-drivers must, under the contract, be free from Star Line's control over the performance of their services. Absent proof by Star Line that the word control in sec. 108.02 (3) (b) 1 is not to be interpreted the same as the word control in the PSC-ICC regulations, [6] and absent any proof by Star Line that the mandated contractual provision provides for control of the owner-driver by the federal and state governments [7] rather than by Star Line, the commission, looking at the 1976 contract, could only conclude that under sec. 108.02(3) (b) 1 the contract authorizes Star Line to exercise control over the performance of the services of the owner-driver. Had the legislature intended to preclude the commission from considering mandated contractual provisions as evidence of control under the contract, it would have so stated. Since Star Line has not shown that owner-drivers are, under the contract, free from Star Line's control over the performance of their services, the commission's conclusion that the owner-driver is an employee within the meaning of sec. 108.02(3) (a) should be affirmed. [5] The following memorandum was filed on January 3, 1983.