DATED AND RELEASED
MAY 20, 1997
A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See § 808.10 and rule 809.62, Stats.
This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.
No. 96-3515
DISTRICT III
William J. Rhode,
d/b/a Beansnappers Country Rose Bar,
Plaintiff-Appellant,
v.
Labor and Industrial Review
Commission and Department of
industry, Labor and Human Relations,
Defendants-Respondents.
APPEAL from an order of the circuit court for Outagamie County:
JOHN A. DES JARDINS, Judge. Affirmed.
Before Cane, P.J. and LaRocque and Myse, J.J.
LaROCQUE, J. William J. Rhode, d/b/a Beansnappers Country Rose
Bar, appeals an order affirming a Labor and Industry Review Commission's
determination that Beansnappers owes unemployment compensation contributions for
exotic dancers who entertained customers at Beansnappers. LIRC determined that the
dancers were subject to Beansnapper's direction and control and were therefore
employes within the meaning of § 108.02(12), Stats. We affirm.
Beansnappers is a tavern in Outagamie County featuring nude
entertainment. Beansnappers utilizes five nude dancers each night, with each dancer
performing three to five sets lasting approximately twenty minutes each. The dancers
are paid $400 per week if the dancer is from Wisconsin and $450 per week if the
dancer is from out of state. The weekly payment is set by Beansnappers and is
ordinarily not negotiable.
If a dancer accepts work at Beansnappers, she is given an entertainer
registration form, which must be filled out. The registration form details
Beansnappers' "rules and regulations" as follows:
1. No soliciting of drinks or table dances.
2. No table dances will be given on stage for tips, this
means while you are on stage there will be no rubbing
parts of your body in customers face for tips. Keep
both feet on stage at all times. No exceptions!
3. Dancers are allowed only 10 minutes in the
dressing room after each set, fines will be issued after
the first warning.
4. All dancers must be at the club and ready to go on
stage at their designated starting time, if you are
late, 1st offense $25.00 fine, 2nd offense -
$25.00 fine
and $25.00 each time after.
5. All sets are 20 minutes in duration. Unless
otherwise ok'd by management.
6. Oil or paint may be used, but you must use a blanket
and stay on the blanket.
7. All disagreements between dancers and employees
will be reported to Bob or Bill only. Fighting will
result in dismissal without pay.
9. If you are sick, you must call in by noon that day.
10. Respect other dancers by not talking about them
or distracting from the stage while others are
performing.
11. Discussion of pay is limited between management
and dancers, dancers will not discuss pay with
other dancers.
12. Absolutely no drugs of any kind allowed on the
property or in the dance club. Violators will be
dismissed immediately without pay and banned
from the club and authorities may be notified.
13. Dancers will not fraternize with management
or employees of the club during working hours.
You are here to entertain our customers only.
Fines will result.
14. No boyfriends or husbands in club during working
hours.
15. Limit 2 phone calls per night with 2 minute time
limit. Emergencies are an exception. Fines will be
issued without warning.
16. Costumes will remain on for 1st song.
17. Do not take customers abuse into your own hands.
Consult management, otherwise fines will result.
(Emphasis in original.)
Prior to signing the registration form, the bartender on duty explains
these rules to the dancer. The rules state that violations will result in warnings, fines
or dismissal. Beansnappers monitored the dancers' conduct to ensure they conformed
to these rules. Although not included on the registration form, Beansnappers also
requires each dancer to remove all clothing and dance fully nude. Beansnappers also
establishes the dancers' rotation each night.
In 1994 the Wisconsin Department of Industry, Labor and Human
Relations issued an initial determination assessing Beansnappers for additional
unemployment compensation taxes for the last three quarters of 1993 and the first
quarter of 1994. This ruling was premised upon DILHR's belief that the dancers
featured by Beansnappers were employees within the meaning of § 108.02(12),
Stats. Beansnappers filed a timely appeal, and a hearing was held before an
administrative law judge who issued a decision affirming the initial determination.
That decision was appealed to LIRC, which affirmed DILHR. Finally, Beansnappers
brought an action for judicial review of the LIRC decision. The court affirmed LIRC,
and this appeal ensued.
We review LIRC's decision rather than that of the circuit court.
Stafford Trucking, Inc. v. DILHR, 102 Wis.2d 256,
260, 306 N.W.2d 79, 82 (Ct.
App. 1981). Whether a dancer is an employee within the meaning of
§ 108.02(12)(a),
Stats., is a mixed question of fact and law, requiring the application of a statutory
standard to findings of fact. See Larson v. LIRC, 184
Wis.2d 378, 385-86, 516
N.W.2d 456, 459 (Ct. App. 1994). We will uphold LIRC's findings of fact if they are
supported by credible and substantial evidence in the record. Section 102.23(6),
Stats. Given those facts, however, the determination whether those facts fulfill the
statutory standard is a legal conclusion. Keeler v.
LIRC, 154 Wis.2d 626, 632, 453
N.W.2d 902, 904 (Ct. App. 1990).
A court is not bound by an agency's conclusions of law. UFE,
Inc. v.
LIRC, 201 Wis.2d 274, 284, 548 N.W.2d 57, 61 (1996). However, in
some
circumstances an agency's legal conclusions are entitled to deference. We will
accord "great weight" deference only when all four of the following requirements are
met:
(1) the agency was charged by the legislature with the duty of
administering the statute; (2) that the interpretation of the
agency is one of long-standing; (3) that the agency employed
its expertise or specialized knowledge in forming the
interpretation; and (4); that the agency's interpretation will
provide uniformity and consistency in the application of the
statute.
Id. at 284, 548 N.W.2d at 61 (quoting
Harnischfeger Corp. v. LIRC, 196 Wis.2d
650, 660, 539 N.W.2d 98, 102 (1995)). We will review the agency's legal
conclusions de novo when the issue is clearly one of first impression or when the
agency's position has been so inconsistent so as to provide no real guidance.
Id. at
285, 548 N.W.2d at 62. The final level of deference, the due weight standard, is
appropriate when the agency has some experience in an area, but has not developed
the expertise that necessarily places it in a better position to make judgments
regarding the interpretation of a statute than a court. Id.
at 286, 548 N.W.2d at 62.
Applying the four factors discussed in UFE,
we conclude that the
agency's legal conclusions in this case are entitled to great weight. First, the
legislature has charged LIRC with administration of the worker's compensation
statute. Second, the record reveals that in five decisions spanning eleven years LIRC
has consistently determined that exotic dancers are employees for unemployment
compensation purposes. We conclude that this interpretation of the statute is
sufficiently long-standing to warrant great weight deference. Third, LIRC applied its
extensive expertise in reaching its conclusion in this case. This court has previously
held that LIRC has "extensive experience" in interpreting § 108.02(12), Stats.
Lifedata Medical Servs. v. LIRC, 192 Wis.2d 663,
671-72, 531 N.W.2d 451, 455 (Ct.
App. 1995). Finally, LIRC's interpretation in this case will provide uniformity and
consistency in the application of the unemployment compensation statute to exotic
dancers.
An individual is not an employee under § 108.02(12)(b), Stats., if the
employer lacked control and direction over the individual and if the individual is
engaged in an independently established trade, business or profession.
Keeler, 154
Wis.2d at 631, 453 N.W.2d at 904. In this case, LIRC determined that Beansnappers
failed to meet its burden of proving that it lacked direction and control over the
dancers. See id. (Once LIRC
establishes that the individual in question performed
services to the employer for pay, the burden shifts to the employer to establish that
the individual is nevertheless not an employee.). LIRC's findings on whether
Beansnappers possessed sufficient control over the dancers are findings of fact that
are controlling on this court if supported by credible and substantial evidence.
See
§ 102.23(6), Stats. There is substantial credible evidence to support LIRC's
findings.
The registration form details numerous rules and regulations designed
to control the conduct and performance of the dancers. These rules control the
performance of the dancers in significant ways: Dancers are not allowed to solicit
drinks or table dances, they must remain on stage for their entire set, which must last
twenty minutes, they may not touch customers during their set, they must use blankets
if their set includes oils or paints, they must leave costumes on for the first song, and
ultimately they must remove all clothing and dance fully nude.
Other conduct of the dancers is also strictly controlled by the rules.
Dancers are only allowed ten minutes in the dressing room after a set. Boyfriends
and husbands are not allowed in the club during working hours. Dancers must arrive
at a certain time, which was set by the club, and if sick must notify Beansnappers by
noon. Dancers may not discuss their pay with other dancers, may not fraternize with
other employees, and may make only limited phone calls each night. Finally,
disagreements with customers, employees or other dancers must be redressed only
through Beansnappers' management.
A dancer at Beansnappers must agree to follow these rules, or the
dancer will not be employed. These rules were carefully explained to each dancer
before accepting employment with Beansnappers. In addition, Beansnappers
monitors the conduct and performances of the dancers to ensure compliance.
Violations may result in warnings, fines or even dismissal. We conclude that these
rules significantly control not only the dancers' performance but also their overall
conduct while at Beansnappers. We therefore conclude that there is sufficient and
credible evidence from which LIRC could find that Beansnappers possessed
significant control and direction over the dancers.
Giving great weight to LIRC's legal conclusions and deference to its
findings means that the dancers were Beansnappers' employees under the plain
language of § 108.02(12)(a), Stats. Because we conclude that Beansnappers
exercised sufficient control and direction over the dancers, we need not address
whether the dancers were engaged in an independently established trade or
profession. See Keeler, 154 Wis.2d at 631, 453
N.W.2d at 904 (If employer fails to
meet the burden of proof on either the control test or the independently established
business test, the employer/employee relationship is established.).
Beansnappers recites many other facts and circumstances they argue
tend to show that the dancers were not controlled by Beansnappers. However, our
task is not to look for evidence to support a decision LIRC could have, but did not,
make. William Wrigley, Jr. Co. v. DOR, 153
Wis.2d 559, 576, 451 N.W.2d 444, 451
(Ct. App. 1989). Beansnappers also attempts to analogize the facts of this case to
facts present in other cases interpreting § 108.02(12), Stats. Because we have
already determined that LIRC's findings of fact are supported by substantial and
credible evidence, it is not necessary to address how the facts of other cases are
similar or different from the facts of this case.
By the Court.--Order affirmed.
Not recommended for publication in the official reports.
STATE OF WISCONSIN
IN COURT OF APPEALS