MADISON, Wis. (CN) — The Wisconsin Supreme Court on Tuesday dismissed an appeal from Amazon in a case involving whether the e-commerce giant can classify its delivery drivers as independent contractors, leaving in place a lower court order finding it could not.
The high court’s ruling stems from Amazon’s appeal of a Wisconsin Court of Appeals decision from this past April, in which the appellate court agreed with the state Labor and Industry Review Commission that, for purposes of unemployment insurance taxation, Amazon’s drivers did not fit the definition of independent contractors laid out by Wisconsin law.
Under the statutory scheme, Amazon’s drivers — the company calls them “delivery partners” — would qualify as independent contractors and not employees only if they met six of nine factors, including whether the individual works in a location of their own choosing with their own equipment and incurs the main expenses related to the services performed under their contract.
The commission felt only one of the nine factors was satisfied and agreed with the Department of Workforce Development that nearly all of Amazon’s drivers qualified as employees and that Amazon was on the hook for more than $200,000 in delinquent unemployment insurance taxes. The appellate court found Amazon had proven five factors, still short of the six required.
Amazon appealed, and the state Supreme Court heard arguments in the case in December that touched on how much weight the justices needed to give agency decisions in light of the court’s precedent, the completeness of the record from the commission’s proceedings, and how or whether the statutory factors could apply to delivery drivers whose work practices might greatly differ.
Amazon attorney Michael Kenneally with the Washington office of Morgan Lewis noted at arguments that the case was the first of its kind involving workers, the gig economy and unemployment taxes to reach any appellate court in the state.
But the court’s unanimous decision Tuesday will likely leave all the parties wanting for resolution on important issues. The high court dismissed Amazon’s appeal as “improvidently granted” — essentially saying the justices never should have heard the case in the first place without explaining why they feel that way.
The dismissal leaves in place the appellate court’s decision in favor of the commission, so for now Amazon’s delivery drivers must be classified as employees and Amazon still owes unemployment insurance taxes.
Kenneally and Emily Stedman, a lawyer from the Milwaukee-based Husch Blackwell firm who also represented Amazon, could not be immediately reached for comment on Tuesday’s decision. Attorneys for the commission did not respond to a request for comment by press time.
Janine Geske, formerly a justice of the Wisconsin Supreme Court and now a retired distinguished professor at Marquette University Law School, said dismissals as improvidently granted — legal experts often use the acronym “DIG” — are not unheard of, including for the state Supreme Court and the U.S. Supreme Court.
“These kinds of decisions occur when a court takes a close look at the briefs that have been filed and realizes that the issues that they took the case for are not going to be adequately answered by the questions,” Geske said.
Problems with factual development or who a case applies to, for example, could cause a court to dismiss a case that it initially took on appeal. It still can be “very frustrating for the parties” because of all the work and resources that have been dedicated to the case, the former justice said.
Parties’ potential frustrations were on the mind of at least one of the high court’s jurists. Justice Ann Walsh Bradley filed a concurrence Tuesday, joined by Justices Rebecca Dallet and Janet Protasiewicz, saying that although she agrees with the dismissal she “[believes] that this court should explain to the litigants and the public the reason for its dismissal.”
Walsh Bradley, who has harped on this issue in opinions before, called the practice “an effective negation of the numerous hours of work and sums of money spent seeking a decision on the merits.” Interests of public policy and avoiding confusing litigants compel the court to better explain itself, she said.
Justice Rebecca Grassl Bradley responded to Walsh Bradley in another concurrence, arguing the latter’s opinion “does not grapple with the countervailing reasons to withhold an explanation and exemplifies why changing this practice would result in more confusion for litigants.”
Grassl Bradley called dismissing cases as improvidently granted without explanation “standard practice” and disagreed with her colleague that it showed inconsistency from the court. While it might make some justices feel better, explanations for such dismissals are unnecessary and go against the status quo, she said.
“A shallow explanation of the court’s reason for dismissing a case as improvidently granted amounts to nothing more than a hollow victory for one party and provides nothing for future litigants,” Grassl Bradley wrote.
Having taken its appeal to the state’s court of last resort, Geske noted that the only thing Amazon could do at this point is file a motion for reconsideration. She also said another case could come along under different circumstances and the issues Amazon brought to the court could be decided later.
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