RANDALL CERNY, Applicant
OPEN HEARTH HOMES, Employer
The applicant filed an application for hearing in March 2005, which included a claim for an unreasonable refusal to rehire under Wis. Stat. § 102.35(3). An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development heard the matter on November 13, 2008. Prior to the hearing, the employer conceded jurisdictional facts, the occurrence of a compensable injury on August 17, 2004, and an average weekly wage at the time of injury of $600.00. At issue was the employer's liability under Wis. Stat. § 102.35(3).
On December 15, 2008, the ALJ issued his decision dismissing the application for hearing as it pertained to the applicant's claim for benefits under Wis. Stat. § 102.35(3). The applicant filed a timely petition for commission review.
The commission has considered the petition and the positions of the parties, reviewed the evidence submitted to the ALJ, and consulted with the ALJ concerning witness credibility and demeanor. Based on its review, the commission makes the following:
The applicant was born in 1972. The applicant has worked doing some kind of carpentry since graduating from high school. He began working for the employer as a rough carpenter in January 2004. The employer is a sole proprietorship owned by Richard M. Mueller.
On August 17, 2004, the applicant injured his left ankle in a 9-foot fall at work. ALJ Nancy Schneiders, who heard the applicant's disability claim, concluded the August 17, 2004 work injury caused disability in the nature of posterior tibial tendinitis, an ankle or foot sprain, and aggravation of the applicant's pre-existing left flat foot condition. She awarded permanent partial disability at 5 percent compared to a loss at the ankle. She concluded, too, that the work injury of August 17, 2004, necessitated the surgery done by Dr. Armagan on February 2, 2005.
ALJ Schneiders' decision went unappealed and is final. At issue now is the applicant's unreasonable refusal to rehire claim, which was heard by ALJ Randy Kaiser.
Following his August 17, 2004 injury, the applicant was off work until October 6, 2004 when he returned to light duty and later full duty. However, his foot was still painful. He saw Dr. Armagan on Monday, January 24, 2005, and the doctor recommended surgery. The applicant then called the employer on January 24, 2005 to inform it that he was going to undergo the surgery recommended by Dr. Armagan. The applicant spoke to the employer's owner, Dick Mueller.
The parties agree that Mr. Mueller fired the applicant in the January 24, 2005 phone call. The applicant recalled that when he told Mr. Mueller he would need a couple of weeks off for the surgery, Mr. Mueller responded: "Go ahead. Get the operation. Just don't come back to work." Transcript, page 10.
Mr. Mueller testified that he did not know in advance that the applicant had a doctor's appointment on January 24, 2005. However, he wasn't particularly concerned as "I have a lot of guys that don't show up." According to Mr. Mueller, the applicant
...called to tell me he hadn't been to work because he had a doctor's appointment, and I told him that is fine because, you know, 'I was going to give you your walking papers anyway.'"
Transcript, page 36. Mr. Mueller did not tell the applicant why he was firing him, nor did he have any further conversation with him.
Describing why he fired the applicant, Mr. Mueller stated "I just had enough of him, I guess" and "It was time for him to go." Transcript, page 37. He indicated he had thought about the situation over the prior weekend (January 25, 2005 was a Tuesday) and had decided to fire him then. On examination by the ALJ, Mr. Mueller testified that the reason for the discharge was applicant's slow work ethic and his poor work performance.
Mr. Mueller also testified that he did not know that the applicant had a surgery scheduled before the phone call on January 25, 2005. Indeed, he testified he did not know the applicant was going to have the February 2 foot surgery until shortly after he fired the applicant, when the applicant's girlfriend called to complain about the discharge. Transcript, page 39.
Mr. Mueller also testified that before the August 2004 work injury, he had concerns about the applicant's job performance. Mr. Mueller testified he had the sense the applicant did not actually know as much about rough carpentry, or have as much experience doing rough carpentry, as he had implied to Mr. Mueller, and that the applicant spent more time hanging around and talking to coworkers than actually working. Mr. Mueller testified he would let his frustration with the applicant's performance build up, and then periodically yelled at him to "do something, be productive."
On cross-examination, Mr. Mueller acknowledged he was, or should have been, aware that the applicant was not as skilled as he had represented to Mr. Mueller within a month of when the applicant started work. Yet the applicant worked for Mr. Mueller for 8 months before injury, and for a while after the injury, before he was discharged. Mr. Mueller admitted the applicant was dependable in the sense that he showed up for work. Further, Mr. Mueller acknowledged he did not give the applicant any written warnings, nor did he record in writing any of the times he disciplined the applicant.
The applicant testified on rebuttal that Mr. Mueller never told him he had a slow work ethic. Asked if Mr. Mueller ever yelled at him about standing around, the applicant testified:
He may have yelled, but he yelled at everybody. It wasn't just that. That was just his personality. It wasn't just me.
Transcript, page 54.
Wisconsin Stat. § 102.35(3), provides as follows:
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 statute applies to unreasonable discharges after a return to work following a work injury, as well as simple failures to rehire; an employer cannot evade liability by showing a short-term pro forma rehire. Dielectric Corp. v. LIRC, at 111 Wis. 2d 278.
However, Wis. Stat. § 102.35(3) does not guarantee reemployment in every case. Dielectric, at 111 Wis. 2d 278, footnote 6 (stating the court "d[id] not believe the legislature intended lifetime job protection.") The statute itself uses "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. 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).
However, under Great Northern Corp. v. LIRC, 189 Wis. 2d 313, 319 (Ct. App. 1994), an employer may be held liable even if the worker's discharge is due only in part to a work injury.
In this case, the commission concludes that Mr. Mueller discharged the applicant at least in part because of the work injury, rather than solely because of his job performance. Mr. Mueller admits firing the applicant when he told him he missed work for a doctor's appointment. There were no written warnings concerning the applicant's job performance, and the commission credits the applicant's testimony that Mr. Mueller yelled at other workers on his worksites as well. Mr. Mueller admitted that he should have been aware of the applicant's job performance well before the August 2004 work injury and well before the January 2005 discharge. However, Mr. Mueller he did not discharge the applicant until after his injury, and then did so in a phone conversation in which the men discussed missed work time due to the work injury. Moreover, at the time of his discharge, the applicant was not under work restrictions, and the employer offered no medical evidence to establish he was physically unable to do his job.
The commission therefore concludes that the employer unreasonably discharged the applicant within the meaning of Wis. Stat. § 102.35(3). It is therefore liable for wages lost after the discharge not exceeding one year's wages. The employer conceded an average weekly wage of $600 per week on which the applicant's award shall be based.
At the hearing, the applicant testified about his employment with other employers following his discharge by Mr. Mueller. His testimony supports his claim for compensation under Wis. Stat. § 102.35(3) for
In all, the employer is liable for $14,700. The applicant agreed to the direct payment of an attorney fee, set under Wis. Stat. § 102.26 at twenty percent of the amounts awarded, or $2,940. That amount shall be deducted from the award and paid to the applicant's attorney in 30 days. The remainder, $ 11,760, shall be paid to the applicant in 30 days.
The one year's lost wages provision under Wis. Stat. § 102.35(3) sets a monetary, not a temporal, limit. Porter v. Hickmans Academy of Excellence, WC Claim No. 2003-000042 (LIRC, May 5, 2006); Hill v. Chili's Inc, WC Claim No. 2001-017165 (LIRC, November 21, 2002); Muhammed v. Maple Leaf Farms, WC Claim No. 95002415 (LIRC, May 8, 1997); Neal & Danas, Worker's Compensation Handbook § 7.34 (5th ed., 2007). Consequently, jurisdiction is retained to permit further orders regarding the employer's potential liability under that statute in the event the applicant loses additional wages in the future.
NOW, THEREFORE, the Labor and Industry Review Commission makes this
The findings and order of the administrative law judge are reversed. Within 30 days from the date of this Order the employer shall pay all of the following:
1. To the applicant, Randall Cerny, Eleven thousand seven hundred sixty dollars and no cents ($11,760.00) in compensation under Wis. Stat. § 102.35(3).
2. To the applicant's attorney, Daniel Schoshinski, Two thousand nine hundred forty dollars and no cents ($2,940.00) in fees.
Jurisdiction is reserved for further orders and awards as are appropriate and warranted under this decision.
Dated and mailed November 9, 2009
cernyra . wrr : 101 : 5 ND ??
7.26, 7.32, 7.34
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
Ann L. Crump, Commissioner
The commission conferred with ALJ Kaiser, the ALJ who presided at the hearing on the issue of the unreasonable refusal to rehire under Wis. Stat. § 102.35, about witness credibility and demeanor. See Transamerica Ins. Co. v. ILHR Department, 54 Wis. 2d 272, 283-84 (1972). During the conference, ALJ Kaiser told the commission he regarded Mr. Mueller as a credible witness, explaining that as a small employer he was unlikely to document job performance concerns in writing. ALJ Kaiser also noted that Mr. Mueller took the applicant back to work on light duty for a period after the injury.
The commission does not share ALJ Kaiser's credibility impressions. The applicant was discharged in a phone conversation involving lost work time due to the work injury. As explained above, the timing of the discharge is particularly significant, as Mr. Mueller acknowledged he would have been aware of the applicant's poor performance months earlier, well before the work injury. The commission appreciates that Mr. Mueller re-employed the applicant for a while after his injury, but it is reasonable to infer that he changed his mind when confronted with additional lost work time and the applicant's potential need for more treatment. Further, an employer cannot evade liability by showing a short-term pro forma rehire. Dielectric Corp. v. LIRC, at 111 Wis. 2d 278.
cc:
Attorney Daniel R. Schoshinski
Attorney Robert B. Moodie
Appealed to circuit court. Reversed April 15, 2010. Appealed to the court of appeals. Reversed and remanded to the commission with directions, May 11, 2011.
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