Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Local No. 695 v. Labor and Industry Review Com'n, 88-1259

CourtUnited States State Supreme Court of Wisconsin
Citation452 N.W.2d 368,154 Wis.2d 75
Docket NumberNo. 88-1259,88-1259
Decision Date14 March 1990

David Leo Uelmen, Scott D. Soldon (argued), William S. Kowalski and Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman, S.C., Milwaukee, for plaintiff-respondent-petitioner.

Peter W. Zeeh, Dept. of Labor and Industry Review Commission, for defendant-appellant.

HEFFERNAN, Chief Justice.

This is a review of a decision of the court of appeals, 147 Wis.2d 640, 433 N.W.2d 638 (Ct.App.1988), which held that dues refunds to stewards of Local No. 695 of the Drivers, Salesmen, Warehousemen, Milk Processors, Cannery, Dairy Employees and Helpers Union constituted wages paid by the Union to those stewards and, consequently, were assessable to the Union for contribution under the provisions of the Wisconsin Unemployment Compensation Law (ch. 108, Stats.1985). We conclude that the refunds were not remuneration for services as made a prerequisite under sec. 108.02(26), Stats., and, therefore, are not "wages" for this purpose. 1 We reverse the court of appeals.

The history of this litigation demonstrates that the problem presented, although simple to state, has been one of substantial difficulty to those who have reviewed it administratively and judicially. First, we note that, although the law, in the respect pertinent here, has existed without material change since 1931, and the union refund procedure under consideration has long existed, it was not until 1985 that the Unemployment Compensation Division of the Department of Industry, Labor and Human Relations (DILHR) attempted to treat as wages the refunds made to union stewards. The hearing examiner concluded that dues refunds to stewards were not wages subject to contribution by the employer (Union) within the provisions of sec. 108.02(26) and secs. 108.17 and 108.18, Stats. These latter two provisions provide for the mechanics of assessing an employer's contributions for wages paid to the employees. The examiner found there was no connection between the refund of dues to stewards and the performance of personal services. 2

The appeal tribunal's decision, i.e., the decision by the department's hearing examiner, pursuant to sec. 108.09(3), (4), and (5), Stats., was then reviewed by the Labor and Industry Review Commission, pursuant to sec. 108.09(6). 3 It affirmed the appeal tribunal in respect to lost-time payments and reversed in respect to dues refunds, holding the latter were wages paid by the Union. On judicial review, pursuant to sec. 108.09(7), the circuit court for Dane county reversed the Review Commission, holding that the refunds were not to be treated as wages under ch. 108, Stats. The court of appeals disagreed, concluding that the refunds were wages for services. We, in turn, reverse the court of appeals. Hence, this administrative determination has gone through six layers of decisions, and each has disagreed with the one preceding it.

We put the case in the factual posture as determined by the Labor and Industry Review Commission and the hearing examiner for the department.

The petitioner in this court is Local No. 695 of what is commonly referred to as the Teamsters Union, with jurisdiction over approximately the southern one-third of the State of Wisconsin. Local No. 695 collects dues each month from its members. These dues are set by the International Union constitution at approximately twice the average hourly wage in the bargaining unit. Generally, these dues are collected by a wage check-off implemented by the employer and sent to the local union once a month in a single check.

Local No. 695 has stewards in most of the bargaining units it represents. They are usually selected by the membership of the bargaining unit, although some are selected by the Union's business representatives. Stewards are always working members of the bargaining unit and are employees in the ordinary course of their employment with the employer--not the Union.

Stewards are assessed dues on the same basis as other union members. However, once a year, usually in December, the dues checked off during the year are refunded to the stewards. At one time, the local unions waived dues for stewards, but, at the insistence of the International Union, put stewards on the check-off-and-refund procedure. 4 In the event a steward leaves employment before the end of a calendar year, he is given a refund on a pro-rata basis. In some units of Local No. 695, however, where there are less than 15 members in the bargaining unit, it is economically unfeasible to refund dues and no dues are refunded. In some large units, a committee acts instead of stewards and those committee members receive no dues refund. The record does not indicate that those committee members receive any emoluments of office. Stewards act as go-betweens in respect to the Union and the employer, conveying information from the Union to the employer and vice versa. They assist union members in pursuing grievances and also explain employer's problems to the Union's membership. The Union customarily conducts a school to educate stewards. The undisputed evidence elicited by the hearing examiner demonstrated that 75 percent of the stewards in Local No. 695 do nothing whatsoever in their position as stewards, but all are given the refund of dues. While the witness--the office manager for the local--gave as his opinion that a steward could be removed for failure to perform duties, he testified that no steward had ever been denied a refund nor has any steward been removed for failing to perform properly.

Stewards, however, received a type of payment from the Union. In the event it becomes necessary for a steward to take off time from work to act on behalf of the Union, pay is lost that would otherwise be received from the employer, but the Union compensates the steward "dollar for dollar" to reimburse the wage loss.

On the basis of the transcript, the Commission made findings of fact set forth as follows:

The second form of payment made to union stewards consists of a refund of their union dues. The individual employer deducts union dues from all union members, including stewards, and forwards this money to the union. Each December, the union refunds to each steward the amount of dues which has been deducted from his check. The purpose of the refund is not clearly defined by the union, but there is no question that it is a monetary reward for acting as a union steward. Union stewards act as representatives of the union in the everyday affairs of the workplace. The position they hold and the services they perform as stewards are clearly for the benefit of the union. There is no question that the dues refund that they receive is a form of remuneration paid to them by the union for their services.

The Commission then concluded that the union dues refunds to stewards were "wages subject to the contribution requirements of the unemployment compensation law, within the meaning of sections 108.02(26), 108.17 and 108.18 of the statutes."

Although the above conclusion is denominated as a conclusion of law, it is noteworthy that no legal authority is cited in the opinion of the Commission. That, of course, is not objectionable, but it highlights the fact that the conclusion of law reached by the Commission is one of first impression--a conclusion for which it neither relied on, nor referred to, any precedents or any prior decision in its own proceedings.

The court of appeals correctly stated:

Whether on these facts union dues [refunds] are remuneration payable for a given period for an individual's services and are therefore wages as defined in sec. 108.02(26), Stats., is a question of law.

147 Wis.2d at 642, 433 N.W.2d 638.

While the court of appeals correctly stated that the Commission's decisions on a question of law are not conclusive on a court, it then went on, incorrectly in these circumstances, to state that, because the Commission administers the unemployment compensation law, therefore, all of its legal decisions under the aegis of the unemployment compensation law are entitled to "great weight" on judicial review. We think not.

Section 108.09(7)(b), Stats., provides in part that:

Any judicial review under this chapter shall be confined to questions of law, and the provisions of ch. 102 with respect to judicial review of orders and awards shall likewise apply to any decision of the commission reviewed under this section.

Section 102.23(1)(e), Stats., permits an award or decision to be set aside only if (1) the commission acts without or in excess of its powers, (2) if the order or award is procured by fraud, or (3) if the findings of fact do not support the order or award.

In the instant case, there is no dispute in respect to the facts. The question is one of law: Do the admitted refunds under the unquestioned circumstances constitute "wages" as defined in the unemployment compensation law?

Whether or not the dues refunds constitute "wages" under sec. 108.02(26), Stats., requires the application of facts to a statute. That is a question of law. "The black-letter rule is that a court is not bound by an agency's conclusions of law." West Bend Education Ass'n v. WERC, 121 Wis.2d 1, 11, 357 N.W.2d 534 (1984). However, West Bend points out that, in some cases, it is appropriate for a court to give deference to an agency's interpretation of a statute.

The general rule is stated in Beloit Education Asso. v. WERC, 73 Wis.2d 43, 67, 242 N.W.2d 231 (1976):

[T]he general rule in this state is that "... the construction and interpretation of a statute adopted by the administrative agency charged by the legislature with the duty of applying it is entitled to great weight."

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