DANNY T HOOD, Applicant

RACINE IRON & WIRE WORKS, Employer

SENTRY INSURANCE A MUTUAL CO, Insurer

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
September 29, 2011
hooddan : 101 : 5 ND6 8.26; 8.32

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

The applicant sustained a compensable back injury in July 2002. He underwent surgery in early 2003, and was subsequently released to work. He continued to work for the employer thereafter until July 2009. In that month, the applicant underwent a fusion surgery, but was to return to work in October 2009. He contacted the employer about returning to work, but was told in November 2009 that there was no work available for him. His employment was formally terminated in February 2010. He seeks compensation for an unreasonable refusal to rehire under Wis. Stat. § 102.35(3).

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):

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).

Here, the applicant has shown he was an employee who was injured and denied rehire. He has made his prima facie case, and the burden shifts to the employer to show reasonable cause for not returning the applicant to work.

The employer's witnesses testify credibly that the applicant's termination was for business reasons related to the recent economic downturn. Prior to his fusion surgery, the applicant had worked primarily in the employer's forming department. The employer's forming supervisor testified that several other workers had been eliminated from the forming department in 2008 and 2009, and that he was down to two or three workers and there still was not enough work.

The applicant testified he could do welding, as well as work in the forming department, and in fact had done welding work for the employer. However, he turned down welding work at times because he could not do the complex welds needed on certain pieces. Stated another way, while the applicant was able to do welding work, he could only do simple welding work. The employer explained that it now has machines that could do some of the simple welding that the applicant used to do, and that it has no need for an inexperienced welder who cannot perform more complex welds.

In sum, the employer has established that it has had a substantial reduction in business necessitating a reduction in workforce. Other workers, including workers in the forming department where the applicant primarily worked, were laid off. The commission is persuaded that the employer has established reasonable cause for the applicant's discharge based on economic factors. See Ray Hutson Chevrolet v. LIRC, supra.

cc: Attorney Daniel Kelley
Attorney Kris Bartos

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