P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


LAND O LAKES, Employer


Claim No. 92001626

The administrative law judge issued his Findings of Fact and Interlocutory Order in this case on December 14, 1994, following a hearing on October 5, 1994. The self-insured employer (hereafter, the employer) submitted a petition for commission review of the administrative law judge's Findings and Order. Thereafter, both the employer and the applicant submitted briefs.

Prior to the hearing, the employer conceded jurisdictional facts. The issue is whether a compromise agreement on the applicant's worker's compensation claim should be set aside, and the applicant's claim reopened, under sec. 102.16 (1), Stats., and sec. Ind 80.03 (3), Wis. Adm. Code.

The commission has carefully reviewed the entire record in this case, including the briefs submitted by the parties. Having done so, the commission hereby sets aside the administrative law judge's Findings of Fact and Order, and substitutes the following therefor:


The applicant filed an application for hearing on a worker's compensation claim arising from an alleged back injury at work. The injury was treated by a laminectomy and discectomy surgery in November 1991. On March 24, 1992, the applicant was released to work by his treating physician, William T. Schneider, M.D., subject to restrictions set out in a functional capacities evaluation done on March 11 and 12, and dated March 18, 1992. Thereafter, in March and April of 1992, the applicant contacted the employer about returning to work. He was informed there was no work available within his physical restrictions.

The parties entered into a compromise agreement on the claim in October 1992, which was approved by the department by order dated October 29, 1992. Among other claims, the compromise agreement specifically compromised the applicant's claim for wilful refusal to rehire and the employer's liability under sec. 102.35 (3), Stats. It also stated that the agreement compromised claims for benefits under the worker's compensation act alone.

The compromise agreement recited that it was based in part on the opinion of treating physician William T. Schneider, M.D., that the applicant had successfully recovered from surgery and was subject to certain permanent restrictions based on a functional capacities evaluation. Dr. Schneider had set the permanent restrictions on July 28, 1992, based on the March 1992 functional capacity report. Exhibit B. Dr. Schneider admitted during a deposition that he did not examine the applicant after March 24, 1992, so he was in effect estimating the applicant's condition in July. Exhibit 15, page 10.

In November 1992, shortly after the compromise was reached and the applicant exhausted his unemployment compensation claim, he began a grievance to get his job with the employer back. In June 1993, an arbitrator found that the applicant would have to be reinstated if his condition improved. In August 1993, following another functional capacities evaluation, Dr. Schneider issued new, less limiting work restrictions. Exhibit 11.

On October 26, 1993, the employer filed an application for review of compromise, alleging mutual mistake, fraud and deceit by the applicant, new evidence, a material change in circumstance, and gross inequity. In its petition, the employer stated that the arbitrator ignored the applicant's compromise of his worker's compensation claim for an unreasonable refusal to rehire under sec. 102.35 (3), Stats. The employer further stated that the applicant had been returned to his former position, without income reduction, based on the August 1993 functional capacities report.

The department has the authority set aside a previously-approved compromise agreement, upon application by either party made within one year from the date of approval. Section 102.16 (1), Stats. The commission has consistently held that compromises should not be reopened absent gross inequity, important newly-discovered evidence, fraud, duress, or mutual mistake. Michael Blenke v. American Can Company, claim no. 87-037750 (LIRC, September 9, 1992); Julie Stuart-Giese v. Schoeneck Containers, Inc., claim no. 85-060165 (LIRC, February 5, 1990). Compromises are not lightly set aside because a compromise of a worker's compensation claim under sec. 102.16 (1), Stats., encompasses qualities of comprehensiveness, finality and risk. Indeed, the supreme court has stated that "[b]y using the word 'compromise' we usually mean that we assume the risk of a mistake for which otherwise one would be entitled to a different result." C.F. Trantow v. Industrial Commission, 262 Wis. 586, 589 (1952).

While this case was pending, the supreme court issued its decision in County of La Crosse v. WERC, 182 Wis. 2d 15 (1994). In that case, the supreme court concluded that:

"the exclusive remedy provision of the Worker's Compensation Act, viewed in conjunction with the provision on unreasonable refusal to rehire, does not bar an employe who has suffered a work- related injury from seeking arbitration under a collective bargaining agreement to determine whether termination or layoff following a work-related injury violated the agreement. We also conclude that the legislature did not intend sec. 102.35 (3), establishing a remedy for an employer's refusal to rehire, to bar an employe who has suffered a work-related injury from seeking arbitration under a collective bargaining agreement to determine whether termination or layoff following a work-related injury violated the agreement."

County of La Crosse, at 182 Wis. 2d 25.

If the County of La Crosse decision had expressly over-ruled established precedent, the employer here might persuasively argue mutual mistake by the parties in entering into the compromise agreement. However, as far as the commission is aware, the specific legal questions at issue were not finally resolved in a reported decision from a court of last resort until the supreme court's decision in County of La Crosse. Further, Administrative Law Judge Schaeve's decision in this case, after citing to County of La Crosse, states that the parties agreed that by compromising his claim the applicant was not prohibited from filing a grievance as another collectively-bargained remedy available to him.

Indeed, the employer does not argue mutual mistake on this basis in its petition to the commission. Rather, the employer contends that the applicant knew at the time he compromised his case in October 1992 that he could work within the restrictions later set in August 1993, but fraudulently concealed it. The employer asserts alternatively that the applicant must have recovered to the August 1993 level by October 1992 even if he did not know it, so that the employer has a "newly-discovered evidence" claim if it does not have a fraud claim. The employer states in its brief:

"The petitioner seeks to have the compromise reopened on the basis of fraud or newly discovered evidence. It is not claiming a post-compromise change in the applicant's medical condition. Petitioner agrees that a change in medical condition after the compromise is not a basis for reopening the compromise because each party takes part of the risk of that occurring in agreeing to a compromise. Rather, the petitioner argues that the applicant either concealed his true condition, or his true condition was not accurately depicted by Dr. Schneider in his opinions, such that the change in his restrictions in 1993 also describes his condition in 1992 and constitutes newly- discovered evidence."

Employer's brief dated March 10, 1995, page 9.

The newly-discovered evidence claim is grounded in the inference that the restrictions set in Dr. Schneider's July 28, 1992 report now appear wrong, based on the applicant's improved functional capacity reported in August 1993. However, even if Dr. Schneider's report were premature, this type of mistake is a risk of settlement. The employer could have minimized the risk of relying on premature restrictions in this case by demanding a new functional capacity report closer in time to the compromise or by having its independent medical examiner personally examine the applicant.

Further, the employer offers no evidence that the applicant did not give his best effort in either of the functional capacity evaluations he underwent. Thus the March 1992 evaluation presented the best evidence of the applicant's condition at the time. Moreover, the record contains little or no evidence to support the employer's contention that the applicant had already returned to the level shown in the August 1993 report by October 1992. The employer asks the commission to infer that fact based on the timing of the applicant's actions. However, in part because of the limited amount of functional difference between the two functional evaluations (discussed below), the commission is unwilling to draw that inference.

The employer's next argument is that the applicant knew his capacity had improved beyond the level indicated in the March 1992 evaluation when he agreed to the compromise in October 1992, but fraudulently concealed the improvement. The employer asserts that the applicant with-held that information from the employer so he could both compromise the worker's compensation claim and then turn around and force re-employment under the grievance procedure.

The commission resolves this issue by comparing the restrictions set out in the applicant's March 1992 and August 1993 functional capacity evaluations. According to the employer's timeline, the March 1992 functional capacity evaluation assessed a 25-pound weight restriction, together with bending restrictions. In fact, the 25-pound restriction applied to continuous lifting. The March 1992 report allowed floor-to-waist lifting of up to 100 pounds for one to five percent of an eight-hour day, and up to 75 pounds for six to 33 percent of an eight-hour day. The report also allowed a maximum waist-to-overhead lift of 70 pounds and a maximum horizontal lift of 105 pounds. Forward bending was limited to six to 33 percent of an eight-hour day, but the applicant could rotate, crawl, kneel and crouch 34 to 66 percent of an eight-hour day and squat repetitively for 67 to 100 percent of an eight-hour day. Exhibit 4.

True, there is some improvement shown in the August 1993 functional capacity report. By this time, the applicant could bend and crawl 67 to 100 percent of an eight-hour work day. He could also lift up to 45 pounds continuously, up to 100 pounds frequently, and up to 110 pounds occasionally.

However, the fact remains that the applicant's initial March 1992 restrictions were relatively unrestrictive. The employer would have a more persuasive argument if the applicant's permanent maximum lifting restriction were 25 pounds before the compromise, and he were subsequently released to 100 or 110 pounds while pursuing a return- to-work grievance. But the increased functional capacity between the two reports in this case is not anywhere near that great. The record also indicates that the applicant was willing to return to work from March 1992 onward. Under these facts, the commission cannot conclude that the applicant fraudulently concealed his increased strength from the employer, regardless of what other employment proceedings he had pending.

NOW, THEREFORE, the Labor and Industry Review Commission makes this


The decision of the administrative law judge is modified to conform to the foregoing and, as modified is affirmed. Accordingly, Land O Lakes' October 25, 1993, application for review of compromise is denied.

Dated and mailed May 25, 1995
ND 10.5

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

James R. Meier, Commissioner



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