Court Opinion

ID: 9575423
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:13:38.551776+00
Date Added: 2024-06-11T12:48:11.104429
License: Public Domain

STEINMETZ, J.
(dissenting). As we held in Foerster, Inc. v. Atlas Metal Parts Co., 105 Wis. 2d 17, 23, 313 N.W.2d 60 (1981), sec. 135.02, Stats., the Wisconsin Fair Dealership Law is ambiguous. The definition of dealership at "Definitions,” subsec. (2) is vague and ambiguous. Whether there is a dealership by that section depends principally on whether "there is a community of interest in the business_” Nothing could be more uncertain than whether a community of interest exists.
I do not believe the decision by the majority assists in clearing up the ambiguity of the statute and may even add to the confusion and uncertainty in the law.
*659Whether Bush made a substantial financial investment in the relationship with National is uncertain. He did agree to pay his father $150,000 for rights to the territory, but this was not a substantial investment going to the benefit of National, but rather to the son’s benefit directly for his father’s goodwill and assistance. Bush’s father had some duties to National or his son as a consultant. While National arranged how both Bush and his father would be paid, the company did not directly benefit from Bush’s payments to his father. Since Bush was on commission, his father’s expertise would help to increase his sales and thereby his commissions. While this inferentially helped National, it was not the same type of "investment” as an investment in buildings, advertising, inventory and the like.
Also, the money was to be paid "in 10 equal installments of $15,000 each derived only out of commissions in excess of Bush’s annual draw and expenses." Majority opinion at 638. Therefore, the money was not a substantial investment flowing to National’s benefit, but rather was the payout through National to Bush’s father for the territory rights. Any failure to make the payments as required under the agreement constituted a "material breach” of Bush’s employment contract with National. The agreement was required to have Bush’s father continue to transfer his "bookings” which represented National’s goodwill and existing agreements with schools in the territory and to provide "continuing consulting services” by him. It is not explained in the record why those bookings did not belong to National instead of Bush’s father unless he had been working as an independent contractor with National. This is not a situation where Bush took a risk of losing everything. *660His agreement left him risk free; if he did not make more than the required percentage of profits, National and his father would not make or get payments.
The most important issue in the case, however, is whether Bush was actually an employee under an employment contract and not a dealer. Under the employment contract, he was to work exclusively for National as "primary or sole representative” in its ten county northern Wisconsin territory. The contract required Bush to actively solicit new and repeat business for National, purchase all film and merchandise necessary to carry on the business from National, and promote the business by assuming one-half of advertising costs. The contract provided that Bush would receive a commission equal to 40 percent of National’s net sales receipts in his assigned territory. The employment contract further provided that either party could terminate the agreement upon 30 days written notice to the other party. It also allowed National to terminate the agreement for cause upon ten days written notice to Bush.
Consistent with it being an employment relationship and not a dealership, National withheld federal and state income taxes from Bush’s weekly draw and deducted amounts for health and life insurance. Bush received a W-2 form each year from National and described himself as its employee on his tax returns. In addition, each summer when schools were in recess, Bush applied for and received unemployment compensation. With all of these indicia of being an employee, the majority confuses the law by labeling his relationship with National as a dealership.
The majority relies on Moore v. Tandy Corp., Radio Shack Div., 631 F. Supp. 1037, 1045 (W.D. Wis. 1986) for the proposition that these indicia do not *661control the relationship. However, Moore only dealt with the terms "employer” and "employee” included within the contract. Actions consistent with an employer-employee relationship are certainly a different matter. If Bush had a dealership for the company, he would not be entitled to apply for unemployment benefits. If the sole product of a dealer is seasonal, so is his income. But if an employee cannot sell the product his company offers, he may be eligible for unemployment. Since Bush took the benefits of being an employee, he should not be considered a dealer.
Certainly Bush’s livelihood was vulnerable as an employee who could be terminated so that such vulnerability does make him a dealer. His livelihood was dependent on National whether he was a dealer or employee. He had no substantial economic investment that would be in jeopardy or lost once his relationship with National was terminated. His commitment with his father was contingent upon continuing his relationship with National, for without that he would not be receiving commission out of which his father could be paid.
The majority at page 653 of the opinion states: "We are convinced by the facts that Bush is far from a conventional employee.” That language evidences doubt and confusion since he is found to be an employee even though not a "conventional” one. This is not a "cleverly drafted” manager incentive agreement entered into as an attempt to insulate National from liability under the Wisconsin Fair Dealership Law. Only an appellate court not subject to further review can label a zebra with all of its stripes a camel; nor should we label an employment contract a dealership.
*662Other than the alleged substantial interest of Bush found by the majority, there are no additional indicia of the community interest requirement, and, therefore, footnote 9 at page 655 of the opinion is a gratuitous statement in this case.
I dissent and would reverse the court of appeals.