RONALD D OLSON, Applicant

BLUE RIBBON MEATS, 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 December 18, 2008
olsonro . wsd : 101 : 1 ND §§ 2.2, 7.26, 7.27, 7.37

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

This case arises on the applicant's amended hearing application raising an unreasonable refusal to rehire claim under Wis. Stat. § 102.35(3). The attorney representing the worker's compensation insurer answered with a denial of the unreasonable refusal to rehire claim. Later, however, the worker's compensation insurer sent the department a letter saying he did not represent the insured employer in the unreasonable refusal to rehire matter.(1)

The applicant was not represented by an attorney in his unreasonable refusal to rehire claim. Accordingly, the department, pursuant to its standard practice, scheduled a prehearing conference. The applicant appeared at the prehearing, but the employer did not.

Although no formal hearing was held, the ALJ states in his decision that he was made aware at the prehearing that the employer had fired the applicant on August 18, 2006. The ALJ went on in his decision to hold the employer liable on the applicant's unreasonable refusal to rehire claim. In support of his default order, the ALJ cited the employer's failure to appear at the prehearing hearing, and its failure to file an answer.(2)

The employer has filed a petition for review asking the commission to dismiss the unreasonable refusal to rehire claim for two reasons:

(1) the employer, a limited liability company, dissolved in April 2007, which would be after the date of discharge found by the ALJ, but before he issued his decision.

(2) the employer prevailed in an initial determination finding no probable cause made by an office of the state equal rights division, which found a legitimate business reason for the applicant's discharge.

Administrative law judges hearing worker's compensation claims have the authority to issue decisions on default without hearing. Wisconsin Stat. § 102.18(1)(a). In this case, the employer does not dispute that it failed to appear at the prehearing conference or that the ALJ had the authority to issue a default order. Nor does it seek further hearing. Rather, the employer asks the commission to review the ALJ's decision, then reverse it in the employer's favor on two grounds which simply cannot be sustained.

First, a limited liability company's liability on pending and future claims does not simply disappear when the company dissolves. Wisconsin Stat. § 183.0901 et seq. sets out a formal process for the dissolution of limited liability companies, including what must be done with respect to both known and unknown (or contingent) claims against the dissolving limited liability company. See, particularly, Wis. Stat. § 183.0907 to 183.0909. There is no evidence that that process has been followed here, much less that the applicant's claim has been extinguished or barred by the statutory process.

Second, an initial determination of a DWD equal rights officer provides no basis for reversing the ALJ's decision on the unreasonable refusal to rehire claim under Wis. Stat. § 102.35(3) at issue here. The commission may not consider the initial determination on the equal rights claim--or the record underlying that determination--since it was not presented in evidence to the ALJ. Amsoil, Inc. v. LIRC, 173 Wis. 2d 154, 166 (Ct. App. 1992). Even if the commission could consider the initial determination, the equal rights officer made the finding using the different legal standards of the fair employment laws, Wis. Stat. § 111.31 et seq., without a formal hearing. See Wis. Admin. Code § DWD 218.07. That determination would not support the application of the doctrine of issue preclusion (formerly known as collateral estoppel) to the applicant's worker's compensation claim under Wis. Stat. § 102.35(3).(3)

cc: Attorney Troy Ron Schneider

Appealed to Circuit Court.

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(1)( Back ) Because this is an unreasonable refusal to rehire claim, the employer (not the worker's compensation insurer) is exclusively liable. See Wis. Stat.  102.31(1)(c) and 102.35(3).

(2)( Back ) Because the worker's compensation insurer's attorney later informed the department that he did not represent the employer, the ALJ evidently did not consider the attorney's answer denying the claim to have been submitted on behalf of the employer.

(3)( Back ) Wisconsin law on the doctrine of issue preclusion was summarized in Teriaca v. Milwaukee Employee's Retirement System, 2003 WI App 145, 265 Wis. 2d 829, 841-42:

¶12. "Issue preclusion refers to the effect of a judgment in foreclosing relitigation in a subsequent action of an issue of law or fact that has been actually litigated and decided in the prior action." Northern States Power Co. v. Bugher, 189 Wis. 2d 541, 550, 525 N.W.2d 723 (1995). The general rule on issue preclusion is: "When an issue of fact or law is actually litigated and determined by a valid judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action . . . whether on the same or a different claim." Precision Erecting, Inc. v. M&I Marshall & Ilsley Bank, 224 Wis. 2d 288, 301, 592 N.W.2d 5 (Ct. App. 1998) (quoting Restatement (Second) of Judgments § 27 (1982)).

Here, of course, the issue was not actually litigated and there is no "judgment" or "deci[sion] in a prior action."

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