Varsity Tutors LLC v. Labor & Indus. Review Comm'n

• Decision Date: 15 October 2019
• Docket Number: Appeal No. 2018AP1951
• Parties: VARSITY TUTORS LLC, Plaintiff-Respondent, v. LABOR & INDUSTRY REVIEW COMMISSION, Defendant-Appellant, Department of Workforce Development and Holland Galante, Defendants.
• Court: Wisconsin Court of Appeals

389 Wis.2d 377

936 N.W.2d 418 (Table)

2019 WI App 65

VARSITY TUTORS LLC, Plaintiff-Respondent,

v.LABOR & INDUSTRY REVIEW COMMISSION, Defendant-Appellant,Department of Workforce Development and Holland Galante, Defendants.

Appeal No. 2018AP1951

Court of Appeals of Wisconsin.

DATED AND FILED October 15, 2019

DUGAN, J.

¶1 The Wisconsin Labor and Industry Review Commission (LIRC) appeals the trial court’s order reversing LIRC’s determination that Holland Galante was an employee of Varsity Tutors LLC (Varsity), an online business that connects tutors with students.¹ The trial court concluded that Varsity proved the minimum six out of the nine statutory conditions necessary to establish that Galante was an independent contractor—not an employee—pursuant to WIS. STAT. § 108.02(12)(bm)2.

¶2 On appeal, LIRC argues that Varsity failed to prove that Galante was an independent contractor because Varsity only proved two of the statutory conditions. Therefore, LIRC asserts we should affirm its determination that Galante is an employee of Varsity. We are not persuaded. We agree with the trial court’s conclusion that Varsity proved at least six out of the nine statutory conditions necessary to establish that Galante was an independent contractor.² Therefore, we affirm the trial court’s decision.

BACKGROUND

¶3 Varsity utilizes a website to connect students with academic tutors in a variety of subjects. In 2014, although Galante’s primary employment was as a research technologist, she entered into a contract with Varsity to tutor students as a "side job."

¶4 As a part of its standard vetting process, Varsity required that Galante take tests in the subjects for which she intended to provide tutoring services. The tests confirmed that Galante was eligible to tutor in the chemical and biological sciences. After Galante passed the exams, Varsity interviewed her online. After the interview process was completed, Galante signed her contract with Varsity.

¶5 Pursuant to her contract with Varsity, Galante created an online profile with Varsity that included (1) her first name; (2) her test scores for the subjects in which she intended to provide tutoring services; (3) a personal statement; and (4) her photograph. Varsity paid Galante $15.00 per hour for tutoring. She used her own computer, materials, vehicle, equipment, and internet connection to provide tutoring services. Varsity requires that tutors maintain a minimum level of automobile insurance if the tutor wants to drive to and from tutoring sessions.

¶6 Any student who wants tutoring services through Varsity purchases tutoring hours through Varsity’s online platform. Each time a student receives a tutoring session, Varsity charges the student’s account.

¶7 Interested students browse tutor profiles on Varsity’s website to aid them in selecting a tutor. When a student was interested in being tutored by Galante, Varsity notified her electronically. She then decided whether to accept, deny, or ignore the request. If Galante accepted a tutoring request, then she and the student entered into a customized contract. Each contract specified session dates and locations, materials that would be used, billing rates, and any additional billable activities outside of tutoring. Tutors are not required to work a certain number of hours or maintain a minimum number of tutoring sessions.

¶8 Varsity does not provide any instructional content to tutors and does not assess the quality of the tutoring sessions. Varsity also does not provide any instructional training to tutors. Tutors are responsible for creating their own individualized lesson plans for each student and are not required to be licensed as teachers.

¶9 Varsity never provided Galante with a critique of her work performance. Although Varsity encouraged tutors to complete "session notes" about the tutoring sessions, it only retained the notes for advertising or marketing purposes. Although students were given the opportunity to rate their tutor after completing a session, Varsity did not use those ratings for any type of performance review. Further, Varsity did not assess any student’s post-tutoring results.

¶10 Galante listed that she tutored for Varsity on her LinkedIn business profile.

¶11 In 2016, Galante applied for unemployment benefits. The Department of Workforce Development (DWD) determined that she was an employee of Varsity for purposes of unemployment benefits. LIRC affirmed DWD’s findings with some modifications, and concluded that Galante performed services for Varsity as an employee and did not meet the relevant statutory criteria for an independent contractor.

¶12 Varsity filed an action seeking judicial review of LIRC’s decision. In a written opinion, the trial court affirmed LIRC’s decision in part, reversed in part, and remanded for further proceedings. The trial court found that Galante provided services to Varsity. However, it further found that Varsity proved that Galante was an independent contractor within the meaning of the applicable statute. This appeal followed.

¶13 Additional relevant facts are included in the discussion section.

DISCUSSION

¶14 The central issue on appeal is whether Varsity met its burden of proving that Galante was an independent contractor for purposes of unemployment compensation. LIRC argues that it correctly interpreted and applied WIS. STAT. § 108.02(12)(bm) when it concluded that Galante provided services for Varsity as its employee and not as an independent contractor.

I. Standard of review and substantive law

¶15 We review 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 LIRC’s decision, not that of the trial court, see Virginia Surety Co., Inc. v. LIRC , 2002 WI App 277, ¶11, 258 Wis. 2d 665, 654 N.W.2d 306, although we may benefit from the trial court’s analysis, see Heritage Mutual Insurance Co. v. Larsen , 2001 WI 30, ¶25 n.13, 242 Wis. 2d 47, 624 N.W.2d 129.

¶16 In reviewing LIRC’s decision, we "may not set aside an order or award unless ‘the findings of fact by [LIRC] do not support the order or award.’ " See id. , ¶24 (citation omitted). Furthermore, "findings of fact made by [LIRC] acting within its powers shall, in the absence of fraud, be conclusive," and this court "shall not substitute its judgment for that of [LIRC] as to the weight or credibility of the evidence on any finding of fact." See id.

¶17 We review LIRC’s "conclusions of law under the same standard [that] we apply to a [trial] court’s conclusion of law—de novo. " See Tetra Tech EC, Inc. v. DOR , 2018 WI 75, ¶84, 382 Wis. 2d 496, 914 N.W.2d 21 (italics added).³ Although we no longer defer to administrative agency decisions, we give those decisions "due weight[.]" See id. , ¶78. "Due weight is a matter of persuasion, [and] not [one of] deference"; it does not "oust the court as the ultimate authority or final arbiter"; and it affords "respectful, appropriate consideration" of LIRC’s determination and also affords us "independent judgment in deciding questions of law." See id. (quotation marks omitted).

¶18 WISCONSIN STAT. § 108.02(11) states that "[a]n employee shall be deemed ‘eligible’ for [unemployment] benefits for any given week of the employee’s unemployment[.]" An employee is defined as "any individual who is or has been performing services for pay for an employing unit[.]" See § 108.02(12)(a). The following exception to the definition of employee is set forth in § 108.02(12)(bm) :

Paragraph (a) does not apply to an individual performing services for an employing unit ... if the employing unit satisfies the department that the individual meets the conditions specified in subds. 1. and 2., by contract and in fact:

1. The services of the individual are performed free from control or direction by the employing unit over the performance of his or her services....^[4]

....

2. The individual meets 6 or more of the following conditions:

a. The individual advertises or otherwise affirmatively holds himself or herself out as being in business.

b. The individual maintains his or her own office or performs most of the services in a facility or location chosen by the individual and uses his or her own equipment or materials in performing the services.

c. The individual operates under multiple contracts with one or more employing units to perform specific services.

d. The individual incurs the main expenses related to the services that he or she performs under contract.

e. The individual is obligated to redo unsatisfactory work for no additional compensation or is subject to a monetary penalty for unsatisfactory work.

f. The services performed by the individual do not directly relate to the employing unit retaining the services.

g. The individual may realize a profit or suffer a loss under contracts to perform such services.

h. The individual has recurring business liabilities or obligations.

i. The individual is not economically dependent upon a particular employing unit with respect to the services being performed.

¶19 Statutory interpretation is a question of law. See Bank Mut. v. S.J. Boyer Constr. Inc. , 2010 WI 74, ¶21, 326 Wis. 2d 521, 785 N.W.2d 462. Courts give effect to the language of a statute when interpreting it. State ex rel. Kalal v. Circuit Ct. of Dane Cty. , 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. Statutory interpretation begins with interpreting the language within the statute and if the meaning is clear, we stop the inquiry. See id. "Statutory language is given its common, ordinary, and accepted meaning[.]" Id.

¶20 This court assumes that the legislature says what it means and means what it says. See Heritage Farms, Inc. v. Markel Ins. Co. , 2009 WI 27, ¶14 n.9, 316 Wis. 2d 47, 762 N.W.2d 652 ; see also Ball v. District No. 4, Area Bd. of Vocational, Tech. & Adult Educ. , 117 Wis. 2d 529, 539, 345 N.W.2d 389 (1984) (stating that "[t]he ... presumption is that the legislature chose its terms carefully...