The Wisconsin Supreme Court heard arguments Tuesday in a case that could hold broad implications for the state’s “gig economy” and how companies like Amazon pay into a fund for unemployed workers.
At issue in the case is precisely how the term “employee” is defined when it comes to gig workers, and who gets to define it.
After DWD initially found that Amazon Logistics owed the backpay, the agency’s decision was upheld twice — first by an administrative law judge, then later by Wisconsin’s Labor Industry Review Commission, or LIRC.
Amazon Logistics challenged those decisions in court, with mixed results. In 2021, Waukesha County Circuit Court Judge Michael Boren ruled that the company had proven that its workers were not “employees” under the law. Then in April, a state appeals court overturned Bohren, ruling against Amazon and in favor of the state.
Further muddying the waters is how lower courts, and LIRC, arrived at their decisions.
Under Wisconsin law, a company can demonstrate its workers are independent contractors, and not employees, if they satisfy six of nine factors. For example, if a person has multiple contracts, they satisfy one of those criteria. If they are not “economically dependent” on a single employer, they satisfy another.
LIRC found that the workers in question satisfied only one of the nine criteria, meaning Amazon should have paid unemployment taxes to the state. Judge Bohren ruled that the workers satisfied all nine criteria, meaning the company was exempt. The Court of Appeals put the number at five.
When DWD initially argued its complaint against Amazon Logistics, it called some of the delivery service’s workers to testify. Amazon did not, though company attorney Michael Kenneally told justices it wasn’t necessary.
“Our position is that there is no representative Amazon Flex driver,” Kenneally said. “The purpose of the whole program is to be flexible. That’s why it’s called what it is.”
The case could prove significant because the court would be ruling on how Wisconsin’s independent contractor law applies to gig workers for the first time. Kenneally described it as a clear-cut interpretation of the law, though some justices hinted at a willingness to defer to the DWD and LIRC, given their subject matter expertise on unemployment law.