The Following Wisconsin workers compensation cases were presented before the (LIRC) Labor & Industry Review Commission (LIRC)
Statute of Limitations – Tolling – Schmidt v. Superior Die Set Corp. (WC Claim No. 1979-037984, LIRC June 25, 2015)
The applicant filed a hearing application to toll the statute of limitations and asked the Department to keep it in “not ready for hearing” status until he needed to
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claim additional benefits. The respondents sought a decision from an ALJ, and then from the Commission, that the practice of filing hearing applications to toll the statute of limitations and then letting them sit at the Department without immediately prosecuting them is unlawful. Specifically, the respondents argued that the practice was an unconstitutional taking of property. Because the right to property is constitutionally protected, such a right cannot be altered by judicial construction. Further, the respondents asserted that the applicant did not commence an action or “proceed” as that term is defined in Chapter 102 because he failed to state the general nature of his claims or identify a dispute. The Commission rejected all of the respondents’ arguments, and affirmed the Department’s policy of allowing an applicant to file hearing applications to toll the statute of limitations and then putting them in “not ready for hearing” status until the applicant is ready for a hearing. This case was appealed to the circuit court which affirmed the Commission on March 8, 2016.
Jurisdiction – Reservation of Jurisdiction – Rogers v. Meyers Electric (WC Claim No. 2013-025125, LIRC June 9, 2015)
The applicant claimed a traumatic knee injury which precipitated, aggravated and accelerated his pre-existing degenerative condition beyond normal progression. He did not allege, nor did any of his doctors opine, that he had an occupational knee injury due to his 20 years of work as an electrician. The ALJ agreed with the IME that the traumatic injury caused a sprain/strain which resolved within a few weeks of the injury, and did not cause any permanent disability or material acceleration of the underlying condition. However, the ALJ reserved jurisdiction for an occupational injury. The applicant and respondent both appealed, with the respondent arguing that it is improper for an ALJ to reserve jurisdiction on a theory of recovery which has not yet been alleged and for which there is no medical support. The Commission affirmed the ALJ, holding that the Department has wide latitude to reserve jurisdiction in situations like this, particularly because there was no finding that the applicant did, or did not, have an occupational injury.
Course and Scope of Employment – Employer – Independent Contractor – Injury Occurring After End of Shift – Gomez v. Schwietz (WC Claim No. 2013-007185, LIRC June 18, 2015)
An individual, Terry Schwietz, hired the applicant and another person to do demolition work on an apartment building he owned. Schwietz characterized the applicant and his co-worker as independent contractors. The applicant injured himself while removing a refrigerator from one of the apartment units after the end of the workday for his own personal use. Thus, there are three issues: 1) Whether Schwietz is a statutory employer; 2) Whether the applicant is an independent contractor; and 3) Whether the applicant was in the course and scope of employment at the time of the injury.
As to the first issue, Schwietz paid the applicant $912.50 for services rendered between April to June 2012. He was therefore required to have worker’s compensation insurance in place as of July 10, 2012. The injury occurred on September 6, 2012. The ALJ, and Commission, found that Schwietz was a statutory employer. As to the second issue, Schwietz directed the applicant’s work hours and the performance of his work duties, and the applicant was paid an hourly rate, not on a commission or per-job basis. The ALJ, and Commission, found that the applicant was an employee and not an independent contractor.
As to the third issue, the ALJ found that the applicant was in the course and scope of his employment because the work project was to entirely gut the apartment building and the refrigerator needed to be removed as part of that. The Commission reversed, finding that the applicant was not in the course and scope of employment. The Commission likened the facts of this case to Ide v. LIRC, 224 Wis. 2d 159 (1999), in which the injured worker hurt himself on the employer’s premises after his work shift while changing a tire on the employer’s vehicle he was planning on borrowing. Here, the applicant was removing the refrigerator for his personal use after the end of his shift, despite Schwietz asking him to wait until the weekend instead of after his shift on a weekday, so he was not in the course and scope of employment.
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Employer – Identity of Employer – Liability for Bad Faith Failure to Pay 102.35(3) Penalty – Adkins v. Master Plumbers Inc. (WC Claim No. 2009-028108, LIRC June 30, 2015)
The applicant was employed by Master Plumbers Inc. He was terminated after a work injury. He filed a 102.35(3) penalty claim against Master Plumbers and was awarded $52,000 which Master Plumbers failed to pay. He then filed a bad faith claim against Master Plumbers and an associated business, Master Services, for failure to pay the 102.35(3) penalty. The two businesses were owned by the same person, had the same FEIN, had the same business address, and the owner had testified during the hearing on the 102.35(3) penalty that he saw Master Plumbers and Master Services as the same entity. A hearing was held on the issues of: 1) bad faith; 2) whether an employer (Master Services) who did not employ the applicant can be liable for a bad faith penalty for failure to pay a 102.35(3) penalty which had been assessed against a different business; and 3) whether Master Plumbers and Master Services were functionally the same entity.
The ALJ and Commission found bad faith and awarded a $30,000 penalty against “Master Plumbers Inc., and/or Master Services Inc.” The Department has the authority to determine which entities are “employers” under Chapter 102, including whether two separately incorporated entities should be treated as the same legal employer. Here, the evidence was sufficient to show that Master Plumbers and Master Services were one and the same. With regard to the liability of Master Services, the owner asserted that Master Services “merely bought the assets of Master Plumbers.” However, the Commission applied the standard set forth in Fish v. Amsted Industries Inc., 126 Wis. 2d 293 (1985), whereby a corporation that purchases the assets of another corporation can also inherit the liabilities of the selling corporation when the purchaser corporation is merely a continuation of the selling corporation. Here, the owner referred to his businesses as “Master Services, formerly Master Plumbers.”
Wagner-Butler Doctrine – Midthun v. Solution Staffing (WC Claim No. 2012-000899, LIRC June 9, 2013)
The applicant allegedly developed occupational contact dermatitis as a result of his employment at Village Hearth Bakery and Clack Corporation while working for a temporary staffing agency. At Village Hearth Bakery he was required to hand-mix dough and came into contact with gluten, flour, corn oil, spices, and cleaning solutions. He developed dry, flakey and cracking skin which cleared after his employment ended there. At Clack Corporation he was required to make “birm powder,” which is used in water softeners. He was exposed to silica dust, latex, aluminum, “metal dust,” and other substances. His hand dermatitis re-flared during his employment at Clack Corporation and required significant treatment, then subsided again after he left that employment. After a hearing, the ALJ found in his favor on causation and loss of earning capacity on the basis of Wagner-Butler permanent sensitization.
The Commission affirmed causation but reversed the loss of earning capacity award, finding that the applicant was not permanently sensitized to any particular substance. Specifically, the Commission noted that the applicant had contact dermatitis which was aggravated by any number of substances – baking materials and cleaning substances at Village Hearth, and nickel, cobalt, and other metals at Clack Corporation. Thus, with only general dermatitis and not permanent sensitization to particular substances, and especially the substances at the final place of employment Clack Corporation, the Wagner-Butler doctrine did not apply and the applicant was entitled to only TTD and medical expense. This case was appealed to the circuit court which affirmed the Commission.
Course and Scope of Employment – Collecting Paycheck – Andreoni v. Petroleum Equipment Inc. (WC Claim No. 2013-010297, LIRC July 30, 2015)
The applicant finished her shift and went home, then returned to her workplace to pick up her paycheck and was injured on the premises. Her supervisor had advised her to return the following day, as the business was going to close early due to a snowstorm, but she nevertheless went back to the workplace that day. The respondents disputed liability, noting the principle established in case law that if collecting the paycheck is done for the applicant’s personal convenience, the injury is not in the course and scope of employment. The ALJ and Commission disagreed that this was a case of “personal convenience” for the applicant – despite the supervisor’s instructions – and found that the applicant was in the course and scope of employment. Under Secor v. LIRC 2000 WI App 11, 232 Wis. 2d 519, collecting a paycheck is in the course and scope of employment if doing so is part of “the established custom of the parties (or workplace custom).” Here, it was the workplace custom for some employees to pick up their paycheck at the workplace. The Commission declined to hold that violating a supervisor’s instructions as to the timing of collecting the paycheck constituted “personal convenience.”
102.35(3) Penalty – Undocumented Workers – Gomez-Sandoval v. Amalga Composites (WC Claim No. 2009-022418, LIRC October 29, 2015)
The applicant sustained a work injury and, subsequently, was released to return to work without restrictions on December 12, 2012. She was not brought back to work until July 28, 2013. She brought a penalty claim for unreasonable refusal to rehire. Among other arguments, the employer asserted that the applicant cannot be entitled to a penalty because she is an undocumented migrant worker. Specifically, the employer argued that the federal Immigration Reform and Control Act of 1986, and cases interpreting it, preempted Wis. Stat. § 102.35(3). The ALJ and Commission disagreed and awarded the applicant a penalty, holding that the language of Wis. Stat. § 102.35(3) is mandatory, not discretionary, in awarding a penalty after a finding that the employer unreasonably refused to rehire. This case was appealed to the circuit court which affirmed the Commission, and is now on appeal at the court of appeals.
Employer – Dual Employment – Course and Scope of Employment – Traveling Employee – Hoffmann v. Boyland Honda (WC Claim No. 2012-015645, LIRC December 22, 2015)
The applicant was employed as the general manager of four separately incorporated auto dealerships: Boyland Honda-Greenfield; Boyland Acura-Appleton; Boyland Nissan-Detroit; Boyland Acura-Cleveland. He was injured while working at the Cleveland, Ohio dealership. He frequently traveled to each of the four dealerships for work, was simultaneously employed by all four, and lived in Illinois. The Commission found that when he was injured in Ohio he was not performing work for the benefit of the Wisconsin dealerships, he was not in Ohio on the direction of the Wisconsin dealerships, and there was no evidence to suggest that the four dealerships should be seen as one entity. He was therefore not in the course and scope of employment, and was not a traveling employee, of the Wisconsin dealerships at the time of the injury.
The applicant also alleged that he was a dual employee, and that the Wisconsin dealerships should be partly liable for his worker’s compensation benefits, at least to the extent not covered by benefits in Ohio. In some other states, and in Larson’s treatise, if an employee is jointly employed by two or more entities and is injured while performing work for one employer, “the employers may be liable for worker’s compensation separately or jointly, depending on the severability of the employee’s activity at the time of injury.” The Commission declined to extend such a doctrine in Wisconsin. The law in Wisconsin is that if a worker is employed by two employers, the employer for whom the work was being performed at the time of injury is entirely liable. Here, the applicant was employed by the Ohio dealership and was performing its work at the time of the injury, and the Ohio dealership should therefore be liable for worker’s compensation benefits in Ohio. As the Commission stated: “The applicant’s injury occurred while he was performing work that was not in any sense the work of the Greenfield dealership, while he was on a premises for which the Greenfield dealership had no responsibility.”
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The Following Wisconsin workers compensation cases were presented before Court of Appeals
Loss of Earning Capacity – Undocumented Workers – Zaldivar v. LIRC, 2015 AP 1086, June 16, 2016 (not recommended for publication)
The applicant, an undocumented immigrant, injured his low back while working as a drywaller. His vocational expert assessed 45% to 50% loss of earning capacity assuming the permanent restrictions of his treating physician. The respondents’ vocational expert agreed that the applicant had a 50% to 55% loss of earning capacity, but only if he could obtain legal resident status. The respondents’ vocational expert also said the applicant could earn 80 pesos a day in Mexico, and if he did not obtain legal resident status in the United States he would have “no earning capacity whatsoever.” The Commission found in the applicant’s favor on causation and adopted his physician’s restrictions, but only awarded 20% loss of earning capacity. It reserved jurisdiction for a new determination if and when the applicant obtained legal resident status. The applicant appealed to the circuit court which affirmed the Commission.
The court of appeals reversed. It found the Commission’s award of 20% loss of earning capacity to be unsupported by credible and substantial evidence in the record. Specifically, it pointed out the inconsistency of saying that the applicant only had a LOEC of 20%, i.e. that he could earn $800/wk as compared to his pre-injury $1,000/wk, as an undocumented immigrant but that his earning capacity would be $525/wk if he gains legal resident status. It also pointed out that if the applicant could obtain no legal employment in the United States he may be permanently totally disabled because of his inability to perform undocumented heavy labor, as opposed to having “no earning capacity whatsoever.” Further, it noted that the Commission seemed to be making a public policy determination by awarding a lower loss of earning capacity based on documentation status rather than the factors listed in Wis. Admin. Code DWD 80.34.
102.42(1m) – Flug v. LIRC, 2015 AP 1989, June 21, 2016 (not recommended for publication)
The applicant allegedly sustained a neck injury on February 14, 2013, while working as a department manager at a Wal Mart store. She underwent a surgical procedure on June 4, 2013. Wal Mart’s third party administrator initially paid some benefits before obtaining a medical record review dated June 18, 2013, by Dr. Morris Soriano, who opined that the applicant sustained a minor neck strain which resolved by May 9, 2013. After a hearing, the ALJ agreed with Dr. Soriano that the applicant sustained a minor strain which resolved prior to the surgery, and awarded no further benefits. On review, the Commission found that there was legitimate doubt as to whether there was any injury at all. The applicant appealed to the circuit court which affirmed the Commission.
The court of appeals reversed as to the issue of indemnity arising from the June 4, 2013, surgery. It noted that the applicant underwent the procedure while Wal Mart’s administrator was paying some benefits and may have been under the good faith assumption that it would be covered and paid as part of the worker’s compensation claim. The court emphasized its reading of Wis. Stat. § 102.42(1m) to be that even if no work injury is ultimately found to have occurred, indemnity is still owed if invasive medical treatment was undergone by the applicant in good faith at the time. The court remanded for a determination by LIRC as to whether the applicant acted in good faith in undergoing the surgery.
Temporary Total Disability – Termination for “Substantial Fault” – Operton v. LIRC, 2016 WI App 37, April 14, 2016
In this unemployment insurance case, the court of appeals helped define the meaning of employment termination for “substantial fault,” which is a new basis for denial of both unemployment insurance benefits and temporary total worker’s compensation benefits. The new Wis. Stat. § 102.43(9)(e) states that “substantial fault” for purposes of worker’s compensation shall be “as defined in s. 108.04(5g)(a),” i.e. the unemployment definition.
Ms. Operton worked at Walgreens as a cashier for 20 months. During that time, she processed approximately 80,000 transactions. She was terminated after making 8 “cash handling errors.” Walgreens sought to deny her entitlement to unemployment benefits on the basis that she had been terminated for “violation of a reasonable company policy regarding excessive cash discrepancies” which was a result of her “incapacity to perform.” After a hearing, an unemployment ALJ found that Ms. Operton had committed “substantial fault.” The Commission agreed, and also found – without explanation – that Ms. Operton had committed a “major infraction,” despite Walgreens’ characterization of her actions as “discrepancies,” “mistakes,” and “cash handling errors.”
The court of appeals reversed, noting that “one or more inadvertent errors” are specifically excluded in Wis. Stat. § 108.04(5g)(a) as a basis for “substantial fault.” Here, there was no evidence that Ms. Operton’s actions were intentional, and the ALJ did not find that they were so careless or negligent as to manifest culpability or wrongful intent. Thus, the actions must be characterized as unintentional or inadvertent. Although LIRC and Walgreens argued that “a series of errors… in their cumulative effect… [crosses the line into] disqualifying conduct,” the court of appeals rejected this assertion, holding that “inadvertent errors, warnings or no warnings, never meet the statutory definition of substantial fault.”
Employment Relationship – Coverage of Employments – Noyce v. Aggressive Metals, Inc., 2014 AP 2143, July 28, 2016 (recommended for publication)
The applicant sustained a closed head injury on January 4, 2011, while employed as a laborer for Aggressive Metals, an uninsured employer. In February 2010, Aggressive Metals had been founded by Neil Holland as a sole proprietorship. He began paying himself wages in October 2010. His brother, Nick Holland, had worked with Neil performing metal fabrication throughout 2010 but was not paid wages until December 2010. On December 30, 2010, Aggressive Metals was incorporated with Neil and Nick as co-owners. On the same day, they paid the applicant $590 in anticipation of work he was to perform over the following week. At issue at the hearing was whether Aggressive Metals was an “employer” and therefore required to have worker’s compensation insurance on the date of injury, given the provisions of Wis. Stat. § 102.04(1)(b).
On review, the Commission held that Aggressive Metals was not an “employer” required to have insurance on the date of injury. Firstly, having paid more than $500 in wages in the last calendar quarter of 2010, Aggressive Metals would have been subject to Chapter 102 on January 10, 2011, because that was “the 10th day of the month next succeeding such quarter,” under Wis. Stat. § 102.04(1)(b)2. No worker’s compensation insurance coverage was required on January 4, 2011, when the injury occurred. Secondly, the Commission found that although Aggressive Metals had 3 employees on the date of injury, it did not “usually employ 3 or more employees for services rendered in this state,” which would have required them to immediately have insurance under Wis. Stat. § 102.04(1)(b)1. In its decision, LIRC overturned two prior LIRC decisions, Olson v. Todd Cassiani and Curtis v. R&M Decorating, both of which held that an employer becomes subject to the Act at the moment it hires three or more employees. The applicant appealed to the circuit court which affirmed LIRC, and the court of appeals has now affirmed the circuit court.
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