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




Claim No. 2002-036643

The applicant submitted a petition for commission review alleging error in the administrative law judge's Findings and Interlocutory Order issued in this matter on January 29, 2007. Schreiber Foods and Zurich American Insurance Company (respondents) submitted an answer to the petition, and briefs were submitted by the parties. At issue is the validity of the administrative law judge's order allowing respondents to indefinitely stop payment to the applicant of permanent partial disability for loss of earning capacity, effective January 9, 2006.

The commission has carefully reviewed the entire record in this matter, and hereby reverses the administrative law judge's Findings and Interlocutory Order. The commission makes the following:


On August 25, 2004, an administrative law judge issued an order finding that the applicant had sustained a compensable low back injury on August 21, 2002, that had resulted in 10 percent permanent functional disability and 65 percent loss of earning capacity (LOEC). One of the considerations in assessing LOEC was the fact that the employer had indicated it had no work available for the applicant within his physical restrictions. The order was left interlocutory "on all issues."

On February 3, 2005, the commission issued an order modifying and affirming the ALJ's order. The commission's modification found that vocational retraining was not a realistic possibility, and therefore the order would not be interlocutory with respect to vocational retraining. The commission's decision also specifically stated that it was ". . . interlocutory with respect to additional disability and treatment expense that may arise in the future." The "interlocutory on all issues" language of the August 2004 order was eliminated. The commission's order was not appealed and respondents began paying the permanent partial disability for LOEC.

On January 9, 2006, the employer rehired the applicant into a permanent, full-time job within his physical restrictions that pays over 85 percent of his pre-injury wage. After the rehiring, respondents filed an application requesting that they be allowed to stop paying the permanent partial disability because the applicant had been rehired at a wage greater than 85 percent of his pre-injury wage. Respondents cited Wis. Stat. § 102.44(6)(a), which provides:

"(6) (a) Where an injured employee claiming compensation for disability under sub. (2) or (3) has returned to work for the employer for whom he or she worked at the time of the injury, the permanent disability award shall be based upon the physical limitations resulting from the injury without regard to loss of earning capacity unless the actual wage loss in comparison with earnings at the time of injury equals or exceeds 15%."

In the order currently petitioned to the commission by the applicant, the administrative law judge agreed with respondents and ordered a halt to the permanent partial disability -payments as of January 9, 2006, subject to the employer continuing the applicant's employment. The ALJ reasoned that there is no language in the Act limiting the 85 percent rule of 102.44(6)(a), to hires made before LOEC is awarded.

However, Wis. Stat. § 102.44(6)(f), provides in relevant part:

"Percentage of wage loss shall be calculated on the basis of actual average wages over a period of at least 13 weeks."

In the past, the commission has found that any time there has been a wage loss equaling or exceeding 85 percent for a period of 13 weeks or more, the applicant is entitled to a LOEC assessment and award. See Kowalchuk v. Sunny Slope Grading, Inc., WC Claim No. 93053333 (LIRC July 29, 1998). See also, Gerald Faul v. LIRC, et. al., No. 96CV487 (Wis. Cir. Ct. Sauk County October 10, 1997). In Faul, the court noted that the commission had not been consistent in determining which wages over which periods of time would be used to determine whether or not the 85 percent threshold had been reached. Looking to Wis. Stat. § 102.44(6)(f), the court held that if there had been an 85 percent loss "for any period of at least 13 weeks," a LOEC assessment was necessary.

The Kowalchuk and Faul cases do not directly address the question at hand, which is whether or not Wis. Stat. § 102.44(6)(a), can be interpreted to allow reopening of a LOEC award. However, these cases indirectly address the question by holding that once an applicant has a 13-week period of an 85 percent loss, he/she is entitled to LOEC.

It was stated in Pfister and Vogel Tanning Co., v. DILHR, 86 Wis. 2d 522, 528, 273 N.W.2d 293 (1978):

"...Any award for permanent partial disability must be based upon some kind of prediction as to the impairment of earning capacity." (Citations omitted).

It was also stated in Kurschner v. ILHR Dept., 40 Wis. 2d 10, 18, 161 N.W.2d 213 (1968):

"...since an award for permanent disability is to be made for all time at the end of this period it must be based upon some sort of prediction as to impairment of earning capacity. It appears to us that the legislature has specifically chosen in the case of nonscheduled permanent partial disabilities the method of comparing the severity of the injuries causing such a disability with those causing permanent total disability." (Citing Northern States Power Co. v. Industrial Comm., 252 Wis. 70 (1947)).

A permanent partial disability award is then a "prediction" of wage-earning impairment made "for all time." Once that prediction is translated into an award made by the department or the commission, there is only limited provision in the statutes for reopening of that award. Wis. Stat. § 102.18(3), provides that an administrative law judge may, within 21 days from the date of his/her order, set the order aside and modify or reverse it. Wis. Stat. § 102.18(4)(d), provides that within 28 days from its order, the commission may set aside the order for further consideration. Wis. Stat. § 102.18(4)(c), provides that for up to one year from the date of its order, the commission may upon the grounds of mistake or newly discovered evidence, set aside its order and modify, reverse, or reaffirm it. However, these statutes provide discretionary authority that normally is exercised only when there has been a technical error, a mistake, or newly discovered evidence. Were any change in circumstance in a permanently-injured worker's occupational life to be interpreted as constituting such mistake or newly discovered evidence, virtually no order for LOEC could ever be considered final.

Of course, it is not unusual for orders to be left interlocutory with respect to the LOEC issue due to uncertainty at the time of hearing with respect to whether or not the applicant is going to receive vocational retraining. However, this presents a situation in which a possible change in relevant circumstance is raised at the hearing, and determined to merit the postponement of any LOEC assessment.

It is also not unusual for awards that involve LOEC to be made interlocutory when the medical evidence presented at hearing reveals that additional disability may be sustained due to a deteriorating medical condition and/or future surgery. Such circumstance is not analogous to the circumstance of an employer, who after being found liable for a final award of LOEC, rehires the worker and files for what amounts to an indefinite stay in payment of the permanent partial disability award. There is no guarantee that such employer will continue to employ the worker in the future, particularly in a case such as the one at hand, where no offer of rehire was made or even raised as a possibility at the hearing. The employer may argue that there is no risk to the worker, because if the new employment is discontinued the employer or its insurance carrier will restart payment of the permanent partial disability award. Aside from the practical difficulties of monitoring and adjudicating such stops and restarts of payment,   (1)   he fact is that there is no provision in Chapter 102 authorizing such stoppage of payment. The method of payment for permanent partial disability attributable to an unscheduled injury is set forth in Wis. Stat. § 102.44(3):

"(3) For permanent partial disability not covered by ss. 102.52 to 102.56, the aggregate number of weeks of indemnity shall bear such relation to 1,000 weeks as the nature of the injury bears to one causing permanent total disability and shall be payable at the rate of two-thirds of the average weekly earnings of the employee, the earnings to be computed as provided in s. 102.11. The weekly indemnity shall be in addition to compensation for the healing period and shall be for the period that the employee may live, not to exceed 1,000 weeks."

The "weekly indemnity" is to be paid in accordance with the permanent partial disability percentage awarded ". . . for the period that the employee may live, not to exceed 1,000 weeks." There is no provision for interrupting this payment.

Wis. Stat. § 102.44(6)(a), was intended to address the circumstance in which an employer hires an injured worker back at greater than 85% of his/her pre-injury wage, and does so before there has been an assessment of LOEC. Interpreting the statute to allow the reopening of an order that made a final prediction and award of LOEC may have equitable appeal in a particular case, but it was never the intent of the statute. Proof of this is found in the provisions of Wis. Stat. § § 102.44(3) and (6)(f).

Accordingly, the administrative law judges Interlocutory Order will be set aside.

Now, therefore, this


The administrative law judge's Interlocutory Order issued on January 29, 2007, which indefinitely stopped payment of the permanent partial disability the commission awarded for loss of earning capacity in its order dated February 13, 2005, is reversed. Retroactive to January 9, 2006, respondents shall restart payment to the applicant of the permanent partial disability that it stopped in accordance with the administrative law judge's Interlocutory Order.

Jurisdiction is reserved with respect to the possibility of additional disability and/or medical expense, as noted in the administrative law judge's order of August 25, 2004, and as affirmed in the commission's order of February 13, 2005.

Dated and mailed December 6, 2007
skervgr . wrr : 185 : 6  ND 5.23

/s/ James T. Flynn, Chairman

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

Attorney Richard Weymouth
Attorney Jane Cuthbert

Appealed to Circuit Court.  Reversed, July 10, 2008.  Appealed to the Court of Appeals.  Reversed (LIRC affirmed) February 10, 2009, Schreiber Foods, Inc. v. LIRC, 2008 WI App 40, 316 Wis. 2d 516, 765 N.W.2d 850.

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(1)( Back ) One practical difficulty that would arise were stoppage of permanent partial disability payments to be allowed, involves payment of attorney fees. In the administrative law judge's and commission's orders awarding 65% LOEC to the applicant, the present value attorney's fee was calculated and ordered paid to the applicant's attorney. This payment included payment for the future value of the attorney fee, which is a fee computed against full payment of the 650-week award. The department and the commission routinely award present value attorney fees in accordance with authority granted under Wis. Stat.   102.26, and Wis. Admin. Code ch. DWD 80.43. Were the applicant not to receive the full 650 weeks of permanent partial disability, his attorney would have received an incorrect fee amounting to an incorrect percentage of the applicant's recovery.


uploaded 2007/12/10