Appeal from an order of the Circuit Court for Waukesha County: John P. Buckley, Judge.
Scott, C.j., Voss, P.j., and Brown, J.
The opinion of the court was delivered by: Voss
On July 1, 1980, the Labor and Industry Review Commission issued a decision assessing Amtronix Industries for additional unemployment compensation taxes. On July 31, 1980, the Labor and Industry Review Commission also issued a decision holding that Dorothy Hill had been an Amtronix employee and, therefore, was eligible for unemployment compensation benefits from Amtronix' reserve account. Subsequently, by an order dated March 9, 1982, the circuit court considered and reversed both of the Commission's decisions. It is from this order that the Labor and Industry Review Commission appeals.
The dispositive issue raised on appeal is whether the Department of Industry, Labor and Human Relations (DILHR) is barred by collateral estoppel or otherwise from collecting the delinquent unemployment compensation taxes from Amtronix or paying Dorothy Hill unemployment compensation benefits from Amtronix' unemployment compensation reserve fund based on unemployment with Amtronix. After reviewing the record, we conclude that DILHR is barred from collecting the delinquent unemployment compensation taxes from Amtronix prior to August 23, 1978. *fn1 However, effective August 23, 1978, we find that DILHR is not barred from collecting unemployment compensation taxes from Amtronix or paying Dorothy Hill unemployment compensation benefits from Amtronix' unemployment compensation reserve fund. Accordingly, we reverse in part and affirm in part the trial court's decision finding that DILHR is barred from collecting unemployment compensation taxes and from paying Dorothy Hill unemployment compensation benefits.
This case is a consolidation of actions brought pursuant to secs. 108.09(7), 108.10(4) and 102.23, Stats., to review decisions of the Labor and Industry Review Commission which held that certain home workers for Amtronix were employees of Amtronix for purposes of the Wisconsin Unemployment Compensation Act. Amtronix Industries, Ltd. is the corporate successor to Lumicel Company, a proprietorship of George Vischulis who is now the sole shareholder of Amtronix. Amtronix is engaged in the manufacture of electronic circuit boards and employs approximately fifty people. In employing these people, Amtronix is subject to the usual regulations and requirements of the Worker's Compensation Act.
In addition to its workers and its shop, Amtronix has engaged the services of women claimed by Amtronix to be subcontractors. These subcontractors assembled electronic circuit boards and wire harnesses in their homes. When completed, the work was returned to Amtronix' shop, and approximately thirty days later, the workers were paid for their work. Usually, the subcontractors heard about these jobs from friends and then applied at Amtronix. After being interviewed, they typically were given an orientation and training period at Amtronix. At these sessions, the subcontractors were shown how to complete their work and the quality of work expected of them. After the instructional session, the job applicants were given a piece of work to do so that Amtronix could determine if their work was satisfactory.
The subcontractors were supervised by Amtronix' inhouse foremen. If the work did not meet certain quality standards, Amtronix rejected the work, and the subcontractors were expected to rectify the problems and to meet the required standard. When the subcontractors picked up the work to be done, it was generally accompanied by written specifications and instructions. In addition, directions as to when the work was to be completed and delivered were also given. Also, on occasion, Amtronix specified the order in which work assignments should be completed. The subcontractors were instructed that they were to complete their work on time and also were informed that Amtronix could terminate the relationship at will. If a subcontractor was repeatedly late with work or repeatedly handed in inferior work, Amtronix would terminate the relationship.
All of the raw materials for the assembly of the electronic components were supplied either by Amtronix or its customers. Amtronix also furnished specialized tools needed for specific jobs and several other types of supplies to the subcontractors. For the most part, however, the subcontractors provided their own tables, lighting and tools, such as vises, pliers and sandpaper. None of the expenses incurred for tools and utilities by the subcontractors were reimbursed by Amtronix.
The amount of compensation that the subcontractors were to receive was usually predetermined in the purchase order. Occasionally, a subcontractor could negotiate with Amtronix to receive more money for her work.
Amtronix did work for a number of companies and advertised itself in the yellow pages for the purpose of obtaining additional customers. However, none of the subcontractors worked for any other company or anyone else during the period they performed services for Amtronix. The subcontractors also did not advertise or hold themselves out as available to customers for this type of work.
Dorothy Hill, the claimant in this benefits case, was one of Amtronix' subcontractors. Hill, after the 1978 audit, performed services for Amtronix from June 5, 1979 to October 18, 1979 as a subcontractor.
In 1974, DILHR, the state regulatory agency charged with administrating the Unemployment Compensation Act, conducted an audit of Amtronix. Subsequently, the Department issued a compliance report stating that the records and procedures of Lumicel, Amtronix' predecessor, were adequate to meet the unemployment compensation law requirements. The determination meant that any subcontractors of Amtronix' predecessor were considered by the Department as legitimate independent subcontractors under sec. 108.02(3) (b), Stats. After the 1974 audit had been completed, the Department issued a determination informing Amtronix' predecessor that "to the extent of our examination we find that you have properly reported your Wisconsin employment and wages and paid contributions thereon as required by the Act."
In 1978, another audit of Amtronix was conducted by DILHR. This audit covered a subsequent period from that of the 1974 audit. On August 23, 1978, the Department issued a determination finding that the subcontractors were "employees" subject to the Unemployment Compensation Act. Because of this determination, the Department assessed Amtronix additional unemployment compensation taxes for 1976, 1977 and the first calendar quarter of 1978.
Amtronix appealed that determination through the appellate framework of DILHR. Subsequently, Amtronix commenced suit for judicial ...