Amazon Logistics, Inc. v. Labor & Indus. Review Comm'n
| Decision Date | 06 April 2023 |
| Docket Number | 2022AP13 |
| Parties | AMAZON LOGISTICS, INC., PLAINTIFF-RESPONDENT, v. LABOR AND INDUSTRY REVIEW COMMISSION, DEFENDANT-APPELLANT, DEPARTMENT OF WORKFORCE DEVELOPMENT UI DIV. BUREAU OF LEGAL AFFAIRS, DEFENDANT-CO-APPELLANT. |
| Court | Wisconsin Court of Appeals |
1
AMAZON LOGISTICS, INC., PLAINTIFF-RESPONDENT,
v.
LABOR AND INDUSTRY REVIEW COMMISSION, DEFENDANT-APPELLANT,
DEPARTMENT OF WORKFORCE DEVELOPMENT UI DIV. BUREAU OF LEGAL AFFAIRS, DEFENDANT-CO-APPELLANT.
No. 2022AP13
Court of Appeals of Wisconsin, District IV
April 6, 2023
Appeal from an order of the circuit court for Waukesha County: No. 2020CV579 Michael O. Bohren, Judge. Reversed and cause remanded with directions.
Before Kloppenburg, Fitzpatrick, and Nashold, JJ.
FITZPATRICK, J.
¶1 This appeal concerns whether individuals who performed package delivery services for Amazon Logistics, Inc. ("Amazon Logistics") qualify as "employees" under Wis.Stat. § 108.02(12) (2021-22)[1] for unemployment insurance taxation purposes. Pursuant to that statutory subpart, these individuals-referred to by Amazon Logistics as "delivery partners"- qualify as employees unless Amazon Logistics proved, as pertinent here, that the delivery partners met at least six of nine factors. See § 108.02(12)(bm)2.a.-i.
¶2 The Department of Workforce Development ("the Department") conducted an audit of the services performed by more than 1,000 Amazon Logistics delivery partners during portions of 2016, 2017, and 2018. The Department determined that nearly all of these delivery partners qualified as employees under Wis.Stat. § 108.02(12) during that time although Amazon Logistics did not consider those persons to be its employees. As a result, the Department assessed Amazon Logistics over $200,000 in delinquent unemployment insurance taxes, with related penalties and interest.
¶3 The Labor and Industry Review Commission ("LIRC") upheld the Department's determination and concluded that Amazon Logistics proved only one of the nine factors under Wis.Stat. § 108.02(12)(bm)2. Amazon Logistics appealed LIRC's decision to the Waukesha County Circuit Court. That court set aside LIRC's decision and concluded that Amazon Logistics proved all nine statutory factors. The Department and LIRC each appeal the circuit court's order.
¶4 We conclude that Amazon Logistics has satisfied its burden as to five of the nine factors under Wis.Stat. § 108.02(12)(bm)2. Accordingly, we also conclude that LIRC correctly determined that these delivery partners qualified as employees for unemployment insurance taxation purposes. Therefore, we reverse the order of the circuit court and remand to the court with directions to enter an order consistent with this opinion confirming LIRC's decision.[2]
BACKGROUND
¶5 The following facts are largely taken from LIRC's findings of fact, which we generally accept as conclusive. See Wis. Stat. § 108.09(7)(c)1.[3]
¶6 Amazon Logistics coordinates the delivery of products purchased by customers of Amazon.com. Amazon Logistics contracts with entities to move and deliver packages, including UPS, the United States Postal Service, and FedEx.
¶7 In addition, Amazon Logistics created a program called "Amazon Flex" that utilized a smartphone application to coordinate package deliveries made
by individual drivers. An individual interested in participating in this program was required to download the Amazon Flex software application (the "Flex app") from Amazon Logistics' website and apply to perform delivery services for Amazon Logistics as a delivery partner. As part of the application process, the delivery partners were required to agree to the "Amazon Flex Independent Contractor Terms of Service" ("the Agreement").
¶8 Once an individual was approved for the Amazon Flex program, the individual could view available "delivery blocks" in the Flex app. A delivery block is a period of time-usually two to four hours-that was based on Amazon Logistics' estimate of the amount of time that a delivery partner would need to deliver a certain collection of packages. Amazon Logistics paid the delivery partners what it referred to as a "service fee" to complete a delivery block.
¶9 After a delivery partner selected an available delivery block, the Flex app directed the delivery partner to Amazon Logistics' warehouse in Milwaukee. At the warehouse, the delivery partner drove their vehicle into the warehouse and was directed to an open parking spot next to a rack containing packages. The delivery partner scanned the packages on the rack using the Flex app on their smartphone and then loaded those packages into their vehicle. The delivery partners were not able to choose from among the available racks to obtain a particular geographical delivery area and were not able to negotiate the geographical area associated with a delivery block.
¶10 After loading the packages into their vehicle, the delivery partner received from the Flex app a suggested route for the delivery of the packages. The delivery partner was free to follow the suggested route or devise a route of their preference. Upon delivering a package at its destination, the delivery partner
scanned the package using their smartphone and indicated through the Flex app that the delivery was completed. The delivery partner was required to return any undeliverable packages to the warehouse at the end of their route. After the delivery partner completed a delivery block, Amazon Logistics paid the service fee associated with the delivery block even if the delivery partner was unable to deliver all of the packages assigned within the delivery block.
¶11 In 2018, the Department requested a list of individuals who performed services as delivery partners during 2016 and 2017 and to whom Amazon Logistics had issued an Internal Revenue Service form 1099.[4] The Department conducted what was referred to as an "audit" of those delivery partners and concluded that, of the more than 1,000 individuals subject to the audit, all but two of the individuals qualified as "employees" of Amazon Logistics for unemployment insurance taxation purposes. The Department determined that Amazon Logistics owed $205,436.45 in unemployment insurance taxes, penalties, and interest concerning those delivery partners who were not reported by Amazon Logistics as employees to the Department during the pertinent portions of 2016, 2017, and 2018.[5]
¶12 Amazon Logistics appealed the Department's audit determination, and a hearing was held before an Administrative Law Judge in the Department's Unemployment Insurance Division. During this hearing, the Department presented testimony from its auditor and one individual who had previously performed services for Amazon Logistics as a delivery partner. Amazon Logistics presented testimony from two management-level employees. The Administrative Law Judge affirmed the Department's audit determination, concluding that the Department properly classified the delivery partners as employees pursuant to Wis.Stat. § 108.02(12).
¶13 Amazon Logistics petitioned LIRC for review of the Administrative Law Judge's decision. LIRC reviewed the evidence submitted at the hearing, set forth its findings of fact, and, relevant to this appeal, concluded that Amazon Logistics demonstrated that only one of the nine factors of Wis.Stat. § 108.02(12)(bm)2. had been met. As a result, LIRC further concluded that Amazon Logistics failed to meet its burden of proving that the delivery partners did not qualify as employees pursuant to § 108.02(12).
¶14 Amazon Logistics commenced an action against the Department and LIRC in the circuit court for judicial review of LIRC's decision. That court set aside LIRC's decision, concluding that Amazon Logistics had met its burden
because it established that all nine factors of Wis.Stat. § 108.02(12)(bm)2. had been met. The Department and LIRC each appeal the circuit court's order.[6]
¶15 Additional material facts are set forth in the following discussion.
DISCUSSION
¶16 On appeal, the Department and LIRC (collectively, "the Department")[7] argue that LIRC properly concluded that the delivery partners who performed services for Amazon Logistics qualify as employees pursuant to Wis.Stat. § 108.02(12). We begin by setting forth the standard of review and governing principles regarding LIRC's decisions, deference to LIRC's legal conclusions, and construction of the applicable statutes.
I. Standard of Review and Governing Principles Regarding LIRC's Decisions, Deference to LIRC's Legal Conclusions, and Interpretation of Wis.Stat. Ch. 108.
A. Judicial Review of LIRC's Decisions.
¶17 This court reviews LIRC's decisions in unemployment insurance cases pursuant to Wis.Stat. § 108.09(7). See Schiller v. DILHR, 103 Wis.2d 353, 355, 309 N.W.2d 5 (Ct. App. 1981). We review the decision of LIRC, not the order of the circuit court. Gilbert v. LIRC, 2008 WI.App. 173, ¶8, 315 Wis.2d 726, 762 N.W.2d 671. Pertinent here, this court may "set aside" LIRC's decision
only if LIRC acted "without or in excess of its powers," § 108.09(7)(c)6.a., or if LIRC's findings of fact are not supported by the evidence, § 108.09(7)(f).[8]
¶18 LIRC acts "without or in excess of its powers" if it bases an order on an incorrect interpretation of a statute. DWD v. LIRC, 2018 WI 77, ¶12, 382 Wis.2d 611, 914 N.W.2d 625. When interpreting statutes, Wisconsin courts begin "with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry." State ex rel. Kalal v. Circuit Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis.2d 633, 681 N.W.2d 110 (citation omitted). "Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning." Id.; see Wis. Stat. § 990.01(1). As discussed in more detail below, the application of a statute to undisputed facts is a question of law that we review de novo. DOR v. Menasha Corp., 2008 WI 88, ¶44, 311 Wis.2d 579, 754 N.W.2d 95; Tetra Tech EC, Inc. v. DOR, 2018 WI 75, ¶84, 382 Wis.2d 496, 914 N.W.2d 21.
¶19 We may also "set aside the...
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