WILLIAM STIER, Applicant
SORCE SERVICES LLC, Employer
EMPLOYERS ASSURANCE CORP, Insurer
In October 2010, the applicant filed a hearing application seeking compensation 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 December 22, 2010 and April 18, 2011. Prior to the hearing, the employer conceded jurisdictional facts, that the applicant suffered a conceded injury on or about September 2, 2009, for which disability compensation was paid, and an average weekly wage at the time of the injury of $864.78. The sole issue was the employer's liability under Wis. Stat. § 102.35(3).
On April 21, 2011, the ALJ issued a decision dismissing the hearing application. The applicant filed a timely petition for review.
The commission has considered the petition and the positions of the parties, consulted with the presiding ALJ concerning witness credibility and demeanor, and reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:
The applicant was born in 1969. He worked for the employer, a company that recycles construction materials, as a truck driver for six to seven years. The employer is owned by Daniel and Annette Sorce, who are husband and wife.
On September 2, 2009, the applicant was injured when the truck that he was driving was struck by another truck owned by a different business, Waste Management. Following the work injury, the applicant was released to light duty work. A nurse contacted the employer with the applicant's restrictions and was told there was no light duty work available. Subsequently, the applicant was released to work without restrictions as of November 9, 2009.
Upon receiving the release, the applicant contacted Annette Sorce and told her he was ready to return to work. Ms. Sorce told him she needed to talk to her husband and would call him back. She later called back and told the applicant that he was laid off and could go collect unemployment. The applicant asked if he could work enough to keep his insurance and she said she would get back to him. Thereafter, Ms. Sorce would not return his phone calls.
The employer never contacted the employee about returning to work. In March 2010, the applicant began working for another employer, Mill Valley Recycling.(1) He started at $15.00 per hour and by May 2010 was earning $18.00 per hour. He worked some overtime for Mill Valley. Exhibit F indicates that he earned $5,304 in the seven weeks from March 28, 2010 through May 15, 2010.
In the past, the employer has rehired, or returned to work, a number of workers following work injuries. According to Daniel Sorce, the employer's owner, what made the applicant different from those other workers was simply the economy and lack of work. April 2011 transcript, page 35. While Mr. Sorce characterized the applicant's layoff as permanent (April 2011 transcript, page 65:16-23), he did testify that he intended to recall the applicant to work when business picked up in the spring. He did not, however, when he learned he was working for another employer.
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.
Recently, the supreme court noted, but did not resolve, a potential inconsistency in the case law with regard to the third element of the prima facie case-that the employer refused to rehire the employee. Some cases require as part of this element, a showing that the employer refused to rehire the employee because of the work-related injury. Other cases, however, do not require the employee to show why the employer refused to rehire the employee, only that the employee show that the employer refused to rehire him or her. deBoer Transp, Inc., v. Swenson, 2011 WI 64, 40-42, 335 Wis. 2d 599. The commission itself has consistently taken the later view, Cunningham v. Ernie's Riverdale Inn, WC claim no. 2008-022784 (LIRC Nov. 30, 2011),(2) often noting the supreme court's holding that if there is suitable employment available, an employer can only refuse to rehire "for a cause or reason that is fair, just, or fit under the circumstances." West Allis School Dist. v. DILHR, 116 Wis. 2d 410, 426 (1984).
In L&H Wrecking Co. Inc., v. LIRC, 114 Wis. 2d 504, 510 (Ct. App. 1983), the court held that, when the employee's employment is terminated by an employer before the employee receives medical permission to return to work and is released, it is an unreasonable construction of Wis. Stat. § 102.35(3) to require an employee to report to work in order to recover under the statute. 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).
Finally under Great Northern Corp. v. LIRC, 189 Wis. 2d 313, 319 (Ct. App. 1994), an employer may be held liable for an unreasonable refusal to rehire even if the worker's discharge is due only in part to a work injury.
Here, the applicant has made his prima facie case by showing he was an employee of the employer's who sustained a compensable injury, but was not returned to work when he was released without restriction. The burden thus shifts to the employer to show reasonable cause for not rehiring him when he recovered from his work injury.
Again, Mr. Sorce testified that he laid the applicant off in November 2009 because work was slow. The employer has provided some graphs at Exhibits 4 and 5 which indicate decline in sales, but a total of 950 overtime hours paid in the fourth quarter of 2009. Exhibit J--which is based on information the employer provided--suggests that the employer actually provided somewhat more than that, 1,027.25, in overtime.(3)
The overtime hours provided in the fourth quarter of 2009 may not have all been for workers doing precisely the same job as the applicant, but it does appear there was work of some type available with the employer when it laid him off in early November 2009. It is true, however, the overtime dropped to only about 193 hours in the first quarter of 2010. Indeed, the employer's owner, Mr. Sorce, testified he briefly laid off six or seven other employees in January 2010, a month or so after he laid off the employee. However, these workers were only laid off for a few days, April 2011 transcript, pages 54-55, before the employer called them to come back to work. April 2011 transcript, pages 42-43.
By contrast, Mr. Sorce laid the applicant off permanently. April 2011 transcript, page 65:16-23. Mr. Sorce testified that he did not contact the applicant about returning to work when business picked up in the spring because he knew he had another job. April 2011 transcript, pages 37:5-12 and 41:3-9. However, the applicant did not get the job with Mill Valley until March 2010.
Asked why he laid off the applicant rather than any other employee, Mr. Sorce first testified that he laid the applicant off because the applicant normally went hunting in November. April 2011 transcript, page 92. However, Mr. Sorce later testified that he could not say why he chose to lay off the applicant as opposed to anyone else. April 2011 transcript, pages 94-95.
The applicant and another worker, Charles Duncan, were injured in accidents involving vehicles owned by Waste Management, a company with whom the employer contracts for dumping. Both the applicant and Mr. Duncan have brought lawsuits against Waste Management, and these suits have delayed reimbursement to the employer's worker's compensation insurer. Mr. Sorce believes he will have an increased premium as a result of the delay, though he expects he will be reimbursed by Waste Management's insurer. April 2011 transcript, page 79 et seq.
Mr. Sorce acknowledges that he also gave Mr. Duncan a long term lay off. April 2011 transcript, page 81 et seq. Mr. Sorce acknowledged he did not rehire Mr. Duncan when Duncan was released to work with no restrictions in July 2010 even though business had begun to pick up. April 2011 transcript, page 82. See also December 2010 transcript, page 15. Mr. Sorce did testify that he had considered returning Mr. Duncan to work about a month before the hearing in April 2011, but did not, adding:
I was going to bring him back, and I was told I probably should not, being involved in a lawsuit.
Transcript, pages 81-82.
As noted above, an employer may be held liable for an unreasonable discharge even if the worker's discharge is due only in part to a work injury. Great Northern Corp. v. LIRC, 189 Wis. 2d 313, 319 (Ct. App. 1994). In this case, Mr. Sorce laid the applicant off on a long-term basis in November 2009 while the employer was still paying considerable amounts of overtime to other workers. Even when business (and overtime hours) slacked in the first quarter of 2010, other workers were laid off only for a few days, not months, as the applicant was. On this basis, the commission cannot credit Mr. Sorce's testimony that he laid the applicant off only because of the economy.
Mr. Sorce also could provide no reason why he chose to the lay off the applicant, as opposed to some other worker, on a permanent basis. He admitted that he never contacted the applicant about returning to work when business picked up. He also admitted, or at least seemed to admit, that he had decided against returning another worker (Duncan), who, like the applicant, was injured in a work-related accident involving Waste Management, because Duncan, again like the applicant, had a pending lawsuit against that company. This undercuts the credibility of Mr. Sorce's testimony that the decision to provide the applicant with a long term layoff, instead of returning him to work when the applicant was released following his injury, was based solely on the economy and lack of hours.
Accordingly, the commission concludes the employer has not met its burden of showing reasonable cause for not rehiring the applicant. It therefore concludes that the employer unreasonably refused to rehire the applicant as of November 9. 2009, when he was released to work without restrictions.
The maximum award for a refusal to rehire--one year's lost wages--sets a monetary limit not a temporal one. Porter v. Hickman's Academy of Excellence, WC Claim no. 2003-000042 (LIRC May 5, 2006); Hill v. Chili's Inc, WC Claim no. 2001-017165 (LIRC Nov. 21, 2002); Muhammed v. Maple Leaf Farms, WC Claim no. 95002415 (LIRC May 8, 1997); Neal & Danas, Worker's Compensation Handbook § 8.34 (6th ed., 2011). Here the applicant's average weekly wage was $864.78, so one year's lost wages equal $44,968.56. That is the most the applicant may receive in lost wages as a result of this decision.
However, the applicant still must prove an actual amount of lost wages. The applicant seeks an award set at $864.78 per week (his stipulated average weekly wage) for the period from November 9, 2009 through March 29, 2010, before he started working for Mill Valley. He also seeks $500 for a bonus he says he normally would have received during this period.
The commission cannot conclude that the applicant actually lost his full average weekly wage for the period from November 9, 2009 through March 29, 2010. The record does establish that the first quarter of 2010 was a slow time for the employer. While the commission generally bases its calculation of the award under Wis. Stat. § 102.35 on a worker's average weekly wage at the time of injury, some circumstances--particularly adverse economic conditions--may justify consideration of the lower wages the applicant would have earned had he remained employed. In other words, while the employer has failed to prove that economic conditions and lack of hours were the reason the employer refused to allow the applicant to return to work after his injury, the economy and the nature of the employer's business support a calculation of his lost wages for the period at issue based on his straight time wage.
The applicant testified his hourly rate for the employer was $18.80. At 40 hours a week, the amount the commission concludes he would have worked from November 9, 2009 through March 28, 2010, that comes to $752 per week. For that 20-week period, then, his lost wages are $15,040.
In addition, the applicant lost a $500 bonus that the employer paid other workers in December 2009. April 2011 transcript, page 65:7-9. The commission has considered bonuses in calculated awards under Wis. Stat. § 102.35(3). See Poetz v. Marshland Industries, WC claim no. 96038910 (LIRC Jan. 15, 1998); Gutkowski v. Bell Laboratories, WC claim no. 85-01922 (LIRC Oct. 30, 1987). Finally, in his first week at Mill Valley from March 28 to April 3, 2010, the applicant earned only $427.50. He is entitled to $324.50 in lost wages for that week as well.(4)
In sum the applicant is entitled to $15,864.50 under Wis. Stat. § 102.35(3). He agreed to the direct payment of a twenty percent fee set on that amount under Wis. Stat. § 102.26. The fee is thus $3,172.90 (0.20 times $15,364.50) and that amount, plus costs (per a post-hearing submission) of $727.07, shall be deducted from the applicant's award and paid to his attorney within 30 days. The remainder, $11,964.53, shall be paid to the applicant within 30 days.
Because the maximum award under Wis. Stat. § 102.35(3) is a temporal award rather than a monetary one, this order shall be left interlocutory to permit future awards for lost wages up to the $44,968.56 if proven and warranted.
NOW, THEREFORE, the Labor and Industry Commission makes this
The findings and order of the administrative law judge are reversed.
Within 30 days, the employer shall pay all of the following:
1. To the applicant, Eleven thousand nine hundred sixty-four dollars and fifty-three cents ($11,964.53) in lost wages under Wis. 102.35(3).
2. To the applicant's attorney, the sum of Three thousand one hundred seventy-two dollars and ninety cents ($3,172.90) in fees and Seven hundred twenty-seven dollars and seven cents ($727.07) in costs.
Jurisdiction is reserved for further orders and awards as are warranted and consistent with this decision.
Dated and mailed
February 28, 2012
stierwi . wrr : 101 : 9 ND6 8.26, 8.32, 8.34
BY THE COMMISSION:
/s/ Robert Glaser, Chairperson
/s/ Ann L. Crump, Commissioner
/s/ Laurie R. McCallum, Commissioner
The commission conferred with the presiding ALJ concerning witness credibility and demeanor. He described the applicant's testimony as hesitant. He stated the applicant seemed coached, and looked at his attorney when he testified on cross examination.
However, the commission concludes that Mr. Sorce's credibility, rather than the applicant's, is the key issue. While the ALJ found Mr. Sorce credible, the fact is that the numbers do not support Mr. Sorce's assertion that a decline in business and work hours for his employees supported his decision to lay the applicant off on a long term basis in November 2009 when he was released to full duty following his work injury. As set out above, Mr. Sorce provided 11 workers with over 1,000 overtime hours in the fourth quarter of 2009 when he laid the applicant off. Mr. Sorce also testified that he chose to lay the applicant off because he went deer hunting, but the later could not remember why he laid the applicant--as opposed to another worker--off. His testimony suggests he declined to bring another worker back to work after a work injury because he--like the applicant--had a pending third-party claim arising from the injury.
The commission realizes that the applicant and Ms. Sorce differed in their testimony about whether the applicant kept in contact with the employer after his layoff in November 2009. The applicant testified, and the commission finds, that the applicant called Ms. Sorce but she stopped taking his calls. For her part, Ms. Sorce denied that the applicant ever contacted her about returning to work after she told him her husband had decided to lay him off in November 2009, though she did acknowledge that he brought in a check at some point, apparently in October or November 2009, to cover his portion of his insurance payments.
However, as discussed above, Mr. Sorce did not intend to lay the applicant off for only a few days, unlike other workers who the employer laid off for short periods of time in early 2010, then contacted about returning to work. Rather, Mr. Sorce characterized the layoff as permanent. April 2011 transcript, page 65:16-23. Consequently, the applicant's efforts to contact the employer about returning to work in November 2009 are not dispositive. Given Mr. Sorce's intent not to return the applicant to work, expecting the applicant to continue to call the employer would have been an exercise in futility. See L&H Wrecking, Inc., v. LIRC, 114 Wis. 2d at 504.
The employer cites Hill v. LIRC, 184 Wis. 2d 101, 112 (Ct. App. 1994) for the proposition that Wisconsin law does not require an employer to automatically rehire an injured worker into a different position, adding that an employee is required to communicate to the employer an interest in returning to work in a different position. However, the employer somewhat overstates the court of appeals holding in that case. In Hill, the court of appeals noted the commission's statements that:
...no affirmative reapplication would be necessary when the employee is released by a physician to return to the same position without restrictions; informing the employer of the physician's release would be sufficient.
ibid, and that
expressing to the employer the extent to which an employee is interested in working in a different capacity is necessary when the employee is precluded from returning to his or her previous job.
Ibid. The court went on to state that "as a matter of common sense and logic, when an employee who cannot resume his previous position applies for rehire, he at the very least implies a willingness to accept work of a different nature." Further, the commission notes, as stated above, the supreme court's holding that
Accordingly, an employer, if there is suitable employment available, can only refuse to rehire for a cause or reason that is fair, just, or fit under the circumstances.
West Allis School Dist. v. DILHR, 116 Wis. 2d at 426.
In this case, the employee did not have work permanent restrictions which prevented him from returning to his former job. Rather, after the applicant told Ms. Sorce he had been released without restriction in November 2009, she told him he was laid off and should collect unemployment, beginning a long term layoff that Mr. Sorce characterized as permanent. The applicant cannot reasonably be viewed to have failed in any duty to notify the employer of his desire to return to work under the facts or caselaw. For the similar reasons, his decision to begin work with Mill Valley in March 2010 neither provides the employer with a defense to its failure to rehire him in November 2009, nor works some type of abandonment of the applicant's Wis. Stat. § 102.35(3) claim.
cc:
Attorney Steven G. Kmiec
Attorney Noah D. Fiedler
Appealed to Circuit Court. Affirmed September 26, 2012.
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