¶ 1 This is a "loaned employee" case under the Worker's Compensation Act. The Labor and Industry Review Commission (LIRC) found that a company in the business of loaning employees was nevertheless not a "temporary help agency" under the facts of the case and thus not liable for worker's compensation to an injured employee. The basis of this finding
¶ 2 The facts as LIRC found them are as follows. On May 22, 1995, Crews (now deceased) fell from a roof he was working on and became quadriplegic. The question for LIRC was: Who was his employer for worker's compensation purposes? The circumstances of Crews's employment leading up to his accident are complicated. From at least April 3, 1995, to April 29, 1995, Crews was employed by M.M. Schranz Roofing, Inc. and assigned to work at Thoreau School. He had also worked for Schranz on an intermittent basis for "several" years before that. Because Schranz's contract with Milwaukee Public Schools required minority subcontractors to receive a certain percentage of the work, Schranz contacted P.L. Freeman Roofing to satisfy the requirement. Freeman was a one-man show and did not want the responsibility of having his own employees, so he agreed with Schranz that he would arrange to obtain workers from First Choice Temporary, which was in the business of providing temporary help to other businesses. So, presumably because Schranz wanted Crews on the job, Crews was sent to First Choice. First Choice then loaned him to Freeman. Then, unbeknownst to First Choice, Freeman loaned Crews to Schranz. Crews resumed doing roofing work at Thoreau under the supervision of Schranz employees, but Schranz paid Freeman, who took a cut and then paid First Choice. Crews received a paycheck from First Choice. Crews worked for First Choice until the May 22, 1995 workplace accident.
¶ 3 In 1998, Crews filed a civil lawsuit against Schranz, Freeman and their insurers for negligence. See Crews v. Freeman Roofing, Inc., No. 2000AP423, unpublished slip op. ¶ 1, 2001 WL 290521 (WI App Mar. 27, 2001) (Crews I). The trial court in that case granted summary judgment to Schranz,
¶ 4 After Crews I, First Choice filed a reverse application against Schranz for reimbursement of Crews's worker's compensation payments, arguing that Schranz was responsible for the payments because Crews was the loaned employee of Schranz
¶ 5 To decide whether Schranz may be held liable for Crews's worker's compensation claim, we must resolve two issues. First, Schranz contends that Crews was not its employee for worker's compensation purposes. See Wis. Stat. § 102.07(4). Second, Schranz contends that regardless of any employer-employee relationship between it and Crews, First Choice is statutorily liable based on its status as a temporary help agency, placing Crews with another employer at the time of his accident. See Wis. Stat. § 102.04(2m).
Standard of Review
¶ 6 Because this is an appeal following an administrative agency decision, we review LIRC's decision, not the decision of the trial court. See American Mfrs. Mut. Ins. Co. v. Hernandez, 2002 WI App 76, ¶11, 252 Wis.2d 155, 642 N.W.2d 584. We will uphold LIRC's findings of fact so long as they are supported by credible and substantial evidence in the record. Id. The parties do not argue that the facts found by LIRC are unsupported in the record, so we must apply Wis. Stat. ch. 102 to those facts, which is a question of law.
¶ 7 When reviewing an agency's conclusions of law, we "apply a sliding scale of deference that is contingent upon the level of [LIRC's] experience, technical competence, and specialized knowledge." Epic Staff Mgmt., Inc. v. LIRC, 2003 WI App 143, ¶15, 266 Wis.2d 369, 667 N.W.2d 765 (citation omitted). We have explained the various levels of deference as follows:
¶ 8 Not surprisingly, the parties disagree as to the level of deference that should be given to LIRC's decision in this case. First Choice and LIRC assert that great weight deference is appropriate here, while Schranz asserts that the applicable standard is de novo.
¶ 9 We agree with First Choice that the LIRC decision is entitled to great weight deference on both issues. We note that LIRC has been specifically held entitled to weight and deference on the determination of whether an employee is a "loaned employee," and it has also been held entitled to great weight deference on other Wis. Stat. ch. 102 issues. See Kaelber Plumbing & Heating v. LIRC, 160 Wis.2d 342, 347-48, 465 N.W.2d 829 (Ct. App.1991); CBS, Inc. v. LIRC, 219 Wis.2d 564, 572-73, 579 N.W.2d 668 (1998). The great weight test is met here for the following reasons. First, LIRC has been charged with administering ch. 102, see Wis. Stat. § 102.14(1), and LIRC's interpretation of worker's compensation statutes is longstanding. See Begel v. LIRC, 2001 WI App 134, ¶8, 246 Wis.2d 345, 631 N.W.2d 220. In addition, LIRC employed its special knowledge in deciding how ch. 102 should be applied to the unique facts of this case and allowing it to interpret such cases helps to provide uniformity and consistency in the application of ch. 102. See generally id.; CBS, 219 Wis.2d at 573, 579 N.W.2d 668.
¶ 10 Schranz argues that great weight deference is not appropriate in this case because "the issue that was before the agency was an issue of first impression." See American Mfrs., 252 Wis.2d 155, ¶ 14, 642 N.W.2d 584. However, as we have explained in the past, the "issue of first impression" test is not limited to whether the commission has ruled on the exact or substantially similar facts in prior cases. Telemark Dev., Inc. v. DOR, 218 Wis.2d 809, 820, 581 N.W.2d 585 (Ct.App.1998). Rather the agency's experience in administering a particular statutory scheme is important as well. Id. Thus, while LIRC may not have addressed this same, quirky fact situation in the past, it is quite experienced at determining employer liability, see Pick 'n Save Roundy's v. LIRC, 2010 WI App 130, ¶15, 329 Wis.2d 674, 791 N.W.2d 216, so great deference is still appropriate.
¶ 11 We also note that deference is appropriate where, as here, a legal question is "intertwined with factual determinations or with value or policy determinations" and LIRC "has primary responsibility for determination of fact and policy." Id. (citation omitted). In this case, LIRC's interpretation of Wis. Stat. ch. 102 is inextricably tied to the unique facts of this case—the details of Crews's complex employment situation at the time of his accident. For all of the foregoing reasons, we give great deference to LIRC's application of ch. 102 in this context.
Crews as the "Loaned Employee" of Schranz
¶ 12 As we already stated, Crews I based its finding that Schranz was immune from tort liability on Crews's status as a loaned employee of Schranz under the
¶ 13 As Schranz accurately points out, under Wis. Stat. § 102.07(4), nearly every person under a contract for hire is an employee. What Schranz does not acknowledge is that the plain language of § 102.07(4) does not limit the definition of "employee" to those who have a formal contract for hire:
Thus, § 102.07(4) contains a broad definition of employee that does not preclude Crews being an employee of Schranz (under an implied contract for hire) at the time of the accident.
¶ 14 In addition to being consistent with Wis. Stat. § 102.07(4), it is also the law of the case that Crews was the loaned employee of Schranz under Seaman since that was the core finding in Crews I.
First Choice as a "Temporary Help Agency"
¶ 15 Having concluded that there was a special employer-loaned employee relationship between Schranz and Crews, we now turn to whether First Choice is nonetheless statutorily liable for Crews's worker's compensation claim because it was acting as a temporary help agency at the time of the accident. Wisconsin Stat. § 102.04(2m) makes temporary help agencies, defined in Wis. Stat. § 102.01(2)(f),
¶ 16 Schranz first attempts to place First Choice in the category of a Wis. Stat. § 102.01(2)(f) employer by repeating its argument that the single sentence in Crews I—the one that says "[Crews] knew he was not a Schranz employee and that he was an employee of a temporary help agency," Crews I, unpublished slip op. ¶ 15—binds us to the view that First Choice was his employer. But for the same reasons we have already stated in footnote 4, that sentence is taken out of context. Moreover, Crew's state of mind at the time has absolutely nothing to do with whether First Choice fit the definition of a § 102.01(2)(f) employer as a matter of applying the undisputed facts to the statute.
¶ 17 Having dispensed with Schranz's misreading of Crews I for the second time, we can now turn our attention to the meat of the issue. Wisconsin Stat. § 102.01(2)(f) defines a "temporary help agency":
Now, we will break that down in relation to the facts. For First Choice to have met the definition of a temporary help agency so as to be responsible for worker's compensation benefits instead of Schranz, First Choice would have had to "place" Crews with Schranz. Schranz would control the employee's work activities and compensate First Choice for Crews's services.
¶ 18 But what actually happened here? First Choice placed Crews with Freeman. Freeman, in turn, compensated First Choice. So, as LIRC found, First Choice was not a temporary help agency according to Wis. Stat. § 102.01(2)(f) because First Choice "did not place Crews with Schranz or lease him to Schranz." Rather, it was "Freeman [who] loaned Crews to Schranz."
¶ 19 The long and the short of it is that Schranz did not obtain Crews's services through the auspices of First Choice. First Choice did not place Crews with or lease Crews to "another employer who controls the employee's work activities and compensates the first employer for the employee's services." Rather, in order to satisfy minority hiring requirements, Crews was placed with Freeman,
¶ 20 Sure, First Choice was compensated for placing Crews and First Choice used part of that compensation to pay worker's compensation premiums for Crews. And sure—generally speaking, a temporary help agency that places an employee and gets compensated for it should run the risk of having to pay worker's compensation if its employee gets injured on the job. See Wis. Stat. § 102.04(2m). But the worker's compensation act also requires that the employee is placed by that agency to the employer who will supervise that work. See § 102.01(2)(f). We think that this is because the legislature wanted temporary help agencies to be able to depend upon and trust the second employer, who would be the entity actually in control of its employee. This did not occur
¶ 21 Schranz relies heavily on a Department of Workforce Development (DWD) commentary footnote to Wis. Stat. § 102.01(2)(f). DWD footnote 3 to § 102.01(2)(f) states:
Schranz argues that because First Choice retained the right to terminate Crews and the obligation to pay Crews's wages, it remained Crews's employer for the purpose of determining worker's compensation liability. LIRC counters that the footnote does not and could not eliminate the need to fulfill the statutory requirements. We agree. DWD cannot change the plain meaning of the legislature's words in a footnote. We also note that nothing in the footnote indicates DWD's contemplation of a scenario like this one where the loaning employer does not know that its employee has been reassigned to an unknown worksite employer.
Laches, Waiver, and Estoppel
¶ 22 Finally, Schranz argues that the equitable doctrines of laches, waiver, and estoppel bar First Choice's reverse application. It acknowledges, however, that it did not raise these issues to LIRC. Nonetheless, Schranz urges us to use our "general equity powers" to address the issues and find in its favor. We decline to do so.
¶ 23 Generally speaking, "an appellate court will not consider issues beyond those properly raised before the administrative agency, and a failure to raise an issue generally constitutes a waiver of the right to raise the issue before a reviewing court." State v. Outagamie Cnty. Bd. of Adjustment, 2001 WI 78, ¶ 55, 244 Wis.2d 613, 628 N.W.2d 376. Of course, there are exceptions, and we may, in some cases, choose to address issues not properly raised to the agency. See, e.g., id., ¶ 56. But we will not do so here. As LIRC
¶ 24 Because Crews was a loaned employee of Schranz at the time of the accident, and because First Choice was not his temporary help agency employer according to Wis. Stat. § 102.01(2)(f), we uphold LIRC's finding that Schranz must reimburse First Choice for the worker's compensation claim payments it made to Crews.