Court Opinion

ID: 4010995
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:13:32.262647+00
Date Added: 2024-06-11T12:10:36.958227
License: Public Domain

I am unable to agree with the construction placed upon certain provisions of ch. 108, Stats. 1937, by the court, and shall state the reasons for my disagreement.
The statement of facts made in the opinion of the court is referred to and made a part of this dissenting opinion and will not be repeated here.
In my opinion the controversy is to be determined by the provisions of ch. 108, Stats. 1937.  Ch. 343, Laws of 1937, was published July 3, 1937, and became effective as of that day.  Drews never had an employee before July 1, 1937. For that reason ch. 108, Stats. 1935, could not have applied to him.
The question is, How shall the provisions of sec. 108.02, (3); (4), and (5), Stats. 1937, be interpreted?  In the opinion of the court it is held that the statutory definitions contained in the chapter do not apply in determining whether *Page 482 
Drews was an employee of the plaintiff company.  A determination of that question becomes material because if the claimants were hired by Drews, an employee, they are entitled to compensation under the act.  If they were hired by Drews as an employee and the plaintiff has offered evidence which should satisfy the commission that Drews has been and will continue to be free from the employer's control or direction over the performance of his work both under his contract of service and in fact and that such work is either outside the usual course of the employer's enterprise or performed outside of all the employer's places of business and that Drews is customarily engaged in an independent business or occupation, then the claimants will not be entitled to compensation under the act as plaintiff's employees.  No one contends that the claimants were independent contractors.
Ch. 108, Stats., was created by ch. 20, Laws of Sp. Sess. 1931-32, and has been amended from time to time.  The terms "employee," "employer," and "employment" have been redefined from time to time.  In the 1937 statutes they were defined as follows:
Sec. 108.02(3), Stats., was amended to read as follows:
"`Employe' means any individual employed by an `employer' and in an `employment' both subject to this chapter."
Sec. 108.02(d), Stats., was renumbered and appears as sec. 108.02(4), which is as follows:
"(a) `Employer,' except where the term by its context clearly applies to each employer of one or more individuals in Wisconsin, means any person, . . . including this state and any municipal corporation or other political subdivision thereof, and any fraternal benefit society as defined in section 208.01, who is subject to this chapter under the statutes of 1935, or who becomes subject hereto under the provisions of this section. . . ."
Sec. 108.02(5), Stats., was amended to read as follows:
"(a) `Employment,' subject to the other provisions of this subsection, means any service performed by an individual for *Page 483 
pay, including service in interstate commerce, under any contract of service for pay or contract of hire, written or oral, express or implied, whether such individual's contract was directly made with and paid by the employer or through a person in his employ, provided the employer had actual or constructive knowledge of such contract; and each individual thus engaged by any employer to perform services for pay shall for the purposes of this chapter be treated as in an `employment,' unless and until the employer has satisfied the commission that such individual has been and will continue to be free from the employer's control or direction over the performance of his work both under his contract of service and in fact, and that such work is either outside the usual course of the employer's enterprise or performed outside of all the employer's places of business, and that such individual is customarily engaged in an independently established trade, business, profession or occupation. . . ."  (Exceptions.)
Sec. 108.02, Stats., specifically provides that the terms "employee," "employer," and "employment," as used in the chapter mean the things stated in the definitions.  The difficulties of construction arise very largely from the fact that the terms "employee," "employer," and "employment" are defined almost entirely in terms of the other two.  These terms being cognates, the result is that in practical effect the term defined is partially used in the definition and one must consider the three "definitions" as found in each of the several acts together in order to arrive at the meaning of any one of them.  The act contains in sec. 108.01 an extensive declaration of the public policy to be achieved by the creation of the chapter.  From 1931 on, it has been the evident purpose of the legislature to make the act apply to as large a unit of employees as was consistent with the other provisions of the act.  Thus, in 1931 it provided that an independent contractor shall be an employer, but that all persons employed under him by subcontractors shall be deemed to be his employees for the purposes of the chapter.
In 1933, it was provided that all persons employed by a contractor or subcontractor under an "employer" subject to *Page 484 
this chapter shall be deemed the employer's employees under the conditions there stated.
In 1935, it was provided that in determining whether an employer employs enough persons to be an "employer" he shall whenever he contracts with or has under him any contractor or subcontractor be deemed to employ all such persons and he alone is made liable for contributions.
And in 1935, in sec. 108.02(c), Stats., it was expressly provided that all persons employed by a contractor or subcontractor under an employer shall be deemed the employer's employees unless the contractor or subcontractor was himself an employer subject to the chapter.
There is no doubt that the claimants (defendants) in these cases were employees.  The question is, Were they employees of Drews or employees of the plaintiff?  If they were free from the control or direction of the plaintiff, and if the work they performed was outside of the usual course of the plaintiff's business, etc., and if they were customarily engaged in an independently established trade, business, or occupation as the court holds, it was solely because they were the employees of Drews.  It is clear that they were engaged in performing a service which the plaintiff was under a contract duty to perform.  "Any service performed by an individual for pay, under a contract of hire" is a very broad and comprehensive classification.  It includes service performed by an employee, by a subcontractor, a contractor, and an independent contractor.  According to the construction placed upon the statute by the court these three conditions apply only to claimants.  In my opinion they apply to everyone performing service under a contract.  Let us suppose Drews were also making a claim under the act.  Would his status as claimant be determined under the provisions of the act? Clearly so.  The plaintiff is concededly an "employer." Drews is under an express contract to perform services for the plaintiff.  He is therefore in an "employment" unless the *Page 485 
plaintiff satisfies the commission with respect to the three conditions.  The court says it is a question for the commission to determine the facts.  It would seem clear under the law that it is the duty of the commission to determine those facts in accordance with the statutory definitions.  If the commission finds that the plaintiff (employer) has not established the three conditions, we are left with the absurd result that Drews is a "person in the employ" of the plaintiff for all purposes except that when he hires men to do work which the plaintiff has contracted to do he is a contractor and not a "person in the employ" of plaintiff.
If the plaintiff in these cases had satisfied the commission that Drews was free from the plaintiff's control and direction, etc., the commission would then have been satisfied that claimants were free from the plaintiff's control and direction because they would then be employees of a person who was free from the plaintiff's control and direction.
So in my view of the cases it becomes necessary to determine the status of Drews, the status of the three claimants being dependent upon his status.  If Drews was a person in the employ of the plaintiff, and nothing else, then under the statute the claimants were clearly in an "employment" of the plaintiff.  The language "each individual thus engaged by any employer to perform services," etc., is clearly applicable to Drews because the plaintiff made a contract directly with Drews to perform services.  The statute says that Drews is to be treated as in an "employment" unless and until the employer has satisfied the commission with reference to the three things specified.  When Drews' status is established, the status of the persons working under him is likewise established.  The only difference between Drews and the claimants is that Drews' contract was made directly with the plaintiff, while the contract of the claimants was made through another.  Each of them is an "individual thus engaged by" an "employer" to perform services. *Page 486 
If the statute is not to be applied to a person in the situation that Drews was in under the facts of these cases, then it seems to me it can never have any application for the reason that the status of a person employed under a contract such as that made by Drews with claimants is, the court holds, to be determined in accordance with the rules of the common law and not according to the statute.  Under the rules of the common law he is a subcontractor and claimants are out.  The three conditions apply to no one.  In my judgment it was the legislative intention to rearrange, reclassify, and redefine the common-law relationships of employee, employer, and employment for the express purpose of making the chapter applicable to as large a unit as was consistent with the purposes of the act.  All persons performing services under a contract for an employer were to be considered employees if they were in an "employment."  All such persons are in an employment unless the employer, in these cases the plaintiff, satisfies the commission of the three things specified in the statute.  The plaintiff in these cases not having satisfied the commission that Drews was free from control, etc., Drews was an employee and clearly a person in the employ of the plaintiff, and the claimants were employees.
Whether the plaintiff in this case satisfied the commission with respect to these three matters presents a question of fact.  Upon this branch of the case the commission found:
"The superintendent [Drews] was performing services for pay under a contract of service made directly with the employer.  The statutory presumption that he was an employee is therefore created.  The employer has failed to satisfy the commission that the superintendent was.  `. . . free from the employer's control or direction over the performance of his work both under his contract of service and in fact, and that such work is either outside the usual course of the employer's enterprise or performed outside of all the employer's places of business, and that such individual *Page 487 
[Drews] is customarily engaged in an independently established trade, business, profession or occupation.'"
For the reasons stated, the commission concluded that the superintendent was an employee as defined by the statute. In my opinion, under all the facts and circumstances of this case, Drews' status was equivocal and the determination of what his status was depended upon inferences of fact to be drawn from the undisputed evidence.
It clearly appears both from the record and the statement of facts contained in the opinion that the service to be rendered by Drews under the contract was one customarily performed by the company itself.  The reason it did not perform it in this case was that it could not procure the necessary union labor.  As a consequence of that, and at the suggestion of the union authorities, the so-called under-cover contract was entered into.
As appears from the statement of facts, Drews was customarily in the employ of the plaintiff company.  Before the work at Wisconsin Rapids was completed he re-entered its employ.  From all the evidence offered and received in the case conflicting inferences of fact may be drawn depending upon the view which the trier of the fact takes of the entire situation.  Under the well-established law of this state, where different inferences may be drawn from the facts, the inferences drawn by the commission are as conclusive as its so-called findings of fact.  Indrebo v. Industrial Comm. (1932)209 Wis. 272, 243 N.W. 464.
The history of the statute as well as the language of the statutes of 1937 convinces me that the legislature of 1937 dropped out references to contractor and subcontractor in the definition of "employee" as found in the statutes of 1935 as well as the clause in the definition of "employer" relating to contractor and subcontractor, and that by so doing, they made the question of who were entitled to benefits under the act depend on whether the persons claiming such benefits *Page 488 
were in an employment and all persons performing service for the employer were deemed to be in that employer's employment unless and until the employer satisfied the commission with reference to the three things specified as already set out.  The legislature did not thereby intend to diminish the size of the unit to which the act should be applicable.  As now construed, units may be broken up by letting out parts of the work to contractors.  In my judgment the legislature intended to enlarge the units.  If the employer satisfies the commission with respect to the three things, as to any person under a contract to perform service, that individual becomes an independent contractor of a class less inclusive under the statutory definition than under the common-law definition. The application of the statute creates a restricted class of independent contractors.  If a person in the employ of the plaintiff in these cases possesses the three statutory requirements, the statute does not apply, and if he employs individuals they are his employees and not the employees of the person for whom he performs service.  That the statutory definitions should be applied in the construction of a statute of which they are a part, see Rossmiller v. State (1902),114 Wis. 169, 89 N.W. 839; Fox v. Standard Oil Co.
(1935) 294 U.S. 87, 55 Sup. Ct. 333, 79 L. Ed. 780.
In view of the declared policy of the act, and of the uniform intention of the legislature to increase the size of the units to which the act is applicable and the definitions contained in the statute, I am of the opinion that the statute should be applied in determining the status of Drews; that under the statute Drews was a person in the employ of the plaintiff; that the plaintiff did not satisfy the commission with respect to the three things specified; that persons employed by Drews were employees of the plaintiff and therefore qualified claimants, and that the judgment of the circuit court should be affirmed. *Page 489