MICHAEL KINLOW, Applicant

ACRO METAL STAMPING, Employer

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own.

The findings and order of the administrative law judge are affirmed.

Dated and mailed August 31, 2006
kinlomi . wsd : 101 : 4   ND § 7.33

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

The applicant began working for the employer on April 12, 2004. He worked in the job shop metal stamping business. He passed a 90-day probation period. In February 2005, he received a raise in pay from $8.00 to 9.50.

On March 3, 2005, he suffered a conceded back injury. The applicant sought medical treatment and was taken off of work.

The applicant returned to full-duty work on June 1, 2005. That day, the applicant and the employer's owner, James Wolfenberg, met at lunchtime. Wolfenberg told the applicant he was being laid off.

The applicant testified he could not recall the reason he was given for the layoff. He later testified that he was not told it was for financial reasons. He did testify that the employer told him "if they could they would call me back."

Owner Wolfenberg testified he had decided to lay the applicant off before the applicant returned to work on June 1. He explained that the applicant did "secondary operations" but that the employer had lost business that adversely affected its secondary operations. About a month earlier, Wolfenberg had laid off another worker who was a deburrer in the secondary operations. Wolfenberg testified that the applicant was laid off solely for financial reasons, not because of his injury or job performance.

In their testimony at the hearing, the parties distinguish between primary operations and secondary operations. Primary operation involves setting up and operating dies and drills, which requires using computers and tonnage monitors. Primary operation is a more complicated process than secondary operation. Thus, while the employer has work in primary operations, and in fact has hired a worker to do "primary operations" since laying off the applicant, Mr. Wolfenberg testified that it has not hired anyone in secondary operations since laying the applicant off.

Wolfenberg also testified that earlier attempts to teach the applicant primary operations failed and that the applicant could not learn it. The applicant testified he was "in the process" of being trained for set up, and that he could operate a machine operated by a less senior coworker, Joel, who was not laid off.

Wisconsin Stat. § 102.35(3), provides:

102.35(3) Any employer who without reasonable cause refuses to rehire an employee who is injured in the course of employment, where suitable employment is available within the employee's physical and mental limitations, upon order of the department and in addition to other benefits, has exclusive liability to pay to the employee the wages lost during the period of such refusal, not exceeding one year's wages....

As stated in Dielectric Corp. v. LIRC, 111 Wis. 2d 270, 278 (Ct. App. 1983), 111 Wis. 2d at 278:

Under [Wis. Stat. § 102.35(3)], once the employee has suffered a worker's compensation injury, the question initially becomes: does the employer have good cause not to rehire. If the employee is rehired, the rehiring cannot be a pro forma rehiring. Therefore, if there is an eventual discharge, the employer must show that there is no bad faith on its part to evade this statute and that the rehired employee was discharged with good cause.

This "very correct standard" set out by the court in Dielectric was adopted by the supreme court in West Bend v. LIRC, 149 Wis. 2d 110, 121 (1989). In that case, the supreme court stated that "after an employee shows that she has been injured in the course of employment and subsequently is denied rehire, it becomes the burden of the employer to show reasonable cause for not rehiring the employee." West Bend, at 149 Wis. 2d 123.

The commission has previously held that an employer is under no duty to keep a job open for an injured worker indefinitely, but if it has suitable work when he or she ends healing, that work should be provided to him or her. Snyder v. Lakeshore Marine, WC Claim No. 95004097 (LIRC, January 30, 1998). See also Fruth v. Town of Wheatland, WC Claim No. 2003-033619 (LIRC, June 2, 2006). In other words, Wis. Stat. § 102.35(3) does not guarantee reemployment in every case. The statute itself uses a "reasonable cause" language, as reflected in the court of appeals holding in Ray Hutson Chevrolet, Inc., v. LIRC, 186 Wis. 2d 118, 123 (Ct. App. 1994) that:

A business decision to reduce costs can, by itself, establish the reasonableness of the decision. Reducing costs is a form of efficiency. Inefficient businesses risk their very survival and the jobs of all their employees. Nothing in § 102.35(3), STATS., reflects a legislative intent that an employer must perpetuate an unnecessary expense by rehiring an injured employee to fill a position the employer eliminated to save costs. We conclude that if an employer shows that it refused to rehire an injured employee because the employee's position has been eliminated to reduce costs and therefore to increase efficiency, the employer has shown reasonable cause under § 102.35(3).

The applicant, an employee who was injured at work and laid off upon his return to full duty, has made his prima facie case. The issue here is whether the employer met its burden of showing reasonable cause for the discharge.

The employer's asserted reasonable cause is that due to a business slow down, it no longer has work for the applicant. It needs workers to set up and operate its primary, or automated, machines, and the applicant cannot do that relatively complicated, technical work. The applicant contends he can do at least some of that work, or at least was in the process of being trained to do more.

The commission conferred with the presiding ALJ concerning witness credibility and demeanor. The ALJ informed the commission that she regarded the employer's owner, Wolfenberg, as highly credible. He answered the questions put to him in a straightforward, nondefensive manner. In contrast, the applicant's responses to questioning and general demeanor at the hearing were less persuasive. The ALJ told the commission specifically that she believed Wolfenberg's testimony that the attempts to train the applicant on primary operations had not been successful, that the employer had to lay the applicant off for financial reasons due to a loss of business, and that the employer would rehire the applicant if it had work he could do. After carefully reviewing the record and the witness testimony, the commission agrees with and adopts the ALJ's credibility impression.

cc:
Attorney Steven G. Kmiec
Attorney Paul R. Riegel

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