BEFORE THE
STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

RICHARD I. GIESE, Applicant

ASSOCIATED CONTRACTORS CORPORATION, Employer

AMERICAN STATES INSURANCE COMPANY, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 89-075597

Pursuant to the timely petition filed by the employer-respondent in the above-captioned matter, the Commission has considered the petition and all relief requested. The Commission has reviewed the applicable records and evidence and finds that the Administrative Law Judge's Findings of Fact and Interlocutory Order are supported thereby. The Commission therefore adopts the Findings and Interlocutory Order of the Administrative Law Judge as its own, except as herewith modified:

MODIFIED FINDINGS OF FACT

On the second line of the last paragraph commencing on page two of the Administrative Law Judge's decision delete the phrase "After about four weeks" and substitute therefore the phrase "After a period of at least four weeks."

In the partial paragraph on the top of page three of the Administrative Law Judge's decision, after the first complete sentence ending "March 12, 1990" interject the following sentences:

"A WC-13 filed by the insurer shows that a first temporary total disability (TTD) payment by the insurer was made on or about December 14, 1989 (covering through December 16, 1989) in the amount of $4,235. According to this statement this payment was for dates September 9, 1989, inclusive, through October 28, 1989, inclusive, and November 16, 1989, inclusive, through December 16, 1989, inclusive. These calculations do not include additional payments for the three week period (actually two and one-half week period -- August 23, 1989 through September 8, 1989) that employer continued to pay applicant his wages after the injury, or the three week period (actually two and one-half week period -- October 30, 1989 through November 15, 1989) when applicant attempted to return to work and received wages. These TTD dates are also consistent with those given by the applicant when he applied for unemployment compensation (U.C.) benefits."

In the third line of the first full paragraph on page four of the Administrative Law Judge's decision delete the word "Such" and include at that point the following:

"The record fails to reveal any reasonable basis for the employer's refusing and failing to report applicant's injury to its insurance company and its actions also show its knowledge of, or at least a reckless disregard of knowledge of, a lack of a reasonable basis for failing to report such injury. In addition, such."

In the second line of the second full paragraph on page four of the Administrative Law Judge's decision interject between the word "of" and "four" the words "at least." After the last sentence of said paragraph add the following:

"Nothing on the record would indicate, and there is no allegation that, applicant failed to fulfill in any way his obligations under the Worker's Compensation Act or to the employer. In fact the contrary has been established."

Delete the first full sentence in the third full paragraph on page four of the Administrative Law Judge's decision and substitute therefor the following:

"Given such conduct it is found that an award of 100 percent of the $4,235 in TTD received by applicant on or about December 18, 1989 from American States Insurance Co., such being the total compensation due to that date, is a just penalty for the bad faith found against Associated Contractors given its disregard in failing to report applicant's injury and applicant's additional suffering as a result thereof. A percentage of less than 200% was assessed when the fact that employer continued to pay applicant's wages (at a weekly rate higher than that applicable to TTD) for a period when he was off injured, and paid some medical bills, was considered."

On the fourth line of said same paragraph delete "$8,591" and substitute therefor "$4,235."

On the second line of the third full paragraph on page six of the Administrative Law Judge's decision delete "$8,591 plus $25,815.93, yielding $34,406.93." and substitute therefor "$4,235 plus $25,815.93, yielding $30,050.93."

On the second line of the fourth full paragraph on page six of the Administrative Law Judge's decision delete "$34,403.93, yielding $6,881.39." and substitute therefor "$30,050.93, yielding $6,010.19."

MODIFIED INTERLOCUTORY ORDER

In the third and fourth lines of the Administrative Law Judge's Interlocutory Order delete "Twenty seven thousand four hundred and eighty dollars and fifty four cents ($27,480.54)." and substitute therefor "Twenty-four thousand and forty dollars and seventy-four cents ($24,040.74)."

In the fifth and sixth lines of the Administrative Law Judge's Interlocutory Order delete "Six thousand eight hundred eighty one dollars and thirty nine cents ($6,881.39)." and substitute therefor "Six thousand and ten dollars and nineteen cents ($6,010.19)."

NOW, THEREFORE, the Labor and Industry Review Commission does issue this

INTERLOCUTORY ORDER

It is ordered that the findings of fact and interlocutory order of the Administrative Law Judge are modified to conform to the foregoing, and, as modified, said findings and interlocutory order of the Administrative Law Judge are hereby affirmed.

Dated and mailed March 4, 1992.
ND § 7.34    § 7.35

/s/ Pamela I. Anderson, Chairman

/s/ Richard T. Kreul, Commissioner

/s/ James R. Meier, Commissioner

MEMORANDUM OPINION

The employer contends that the decision of the Administrative Law Judge (ALJ) finding a violation of section 102.18(1)(bp) and Wis. Admin. Code sec. Ind 80.70(1) is incorrect because the injury was questionable, was assumed by the employer to be minor or inconsequential, once lost time commenced the employer paid applicant's regular wage and medical expenses, and the employer reported the injury to its insurer "at a point in time when they thought it was appropriate to do so." The employer also challenges the calculation of the penalty assessed against it. The Commission has reviewed the record and finds each of the above points (except the calculation of the penalty amount) to be without merit.

The essential purpose of worker's compensation is to assure prompt payment of compensation when due. Allegedly injured workers have a right to be notified of their rights, including the right to apply for hearing when there is a disagreement about whether compensation is due or an injury has occurred. Until accidents or alleged injuries are reported to the Department, and to the insurer, as is required under the conditions of section 102.38, Stats. and Wis. Admin. Code sections Ind 80.02(1) and (2) the financial and medical status of an injured worker is determined entirely by the good graces and/or legal opinion of his employer, rather than placed in the legal parameters of the Worker's Compensation Act. To say that an employer has a right to wait to report an injury until "a point in time when they thought it was appropriate to do so" belies an essential element of worker's compensation law. Here the additional facts that the employer (who was not self-insured) continued to pay applicant's wages for a short period even though he was off injured and paid some medical bills, while considered in determining that a penalty of less than 200% should be assessed, have the effect of contradicting the additional assertion in the employer's brief that the injury was questionable, and infers knowledge of a lack of a reasonable basis for failing/refusing to report the injury.

The Commission did agree that an improper determination of the "total compensation due" under sec. 102.18 (1)(bp), Stats., was made and modified the ALJ's decision accordingly. The best evidence of TTD paid belatedly is the insurer's WC-13 form referenced in the body of this Order.

Except as modified the ALJ's decision on section 102.18(1)(bp) issue was adopted and affirmed.

The employer also challenges the ALJ's finding that the employer unreasonably refused to rehire applicant and the calculation of lost wages payable therefor under section 102.35 (3), Stats., alleging that applicant was not terminated in January of 1990, that applicant did not establish that he was ready, willing and able to return to employment, that U.C. benefits paid to applicant should be deducted from lost wages awarded to him, that there is no proof that any work was available with employer during the periods for which the lost wages were awarded, and that a gross wage, rather than a net wage, should be used to calculate wages lost under section 102.35 (3), Stats.

Many of the contentions made by the employer are essentially allegations that the ALJ should not have made findings that he did. However, the ALJ's findings are supported by the record. The ALJ sat through the hearing and observed all the witnesses on direct and cross-examination. Whether applicant was effectively terminated in January before he had reached a healing plateau or whether he was not called back in May when other co-workers were in fact called to work, it is clear that applicant has not been rehired. However, it is noted that in this regard the ALJ did not began to calculate applicant's lost wages until May. It is the employer's burden to demonstrate reasonable cause for failing to rehire the applicant and/or that suitable employment was not available for the applicant. The employe has failed in its burden. George Seater testified that the employer wanted applicant to collect U.C. (he began collecting in May of 1990) so that when he got better he could return to work. This simply is not convincing. Despite the fact that there is no requirement under the law that applicant go to his employer and reapply for work in order to establish a claim under section 102.35 (3), Stats., applicant returned to his employer in March, two months before he began to collect U.C., and gave them a release showing that he could return to work without any limitations. Contrary to Seater's testimony applicant need not get any "better" than this to return to work. Despite this effort by the applicant hewas never contacted and no employment followed even though other individuals were recalled. With reference to the availability of suitable employment the employer presented no evidence that written rules pertaining to seniority or provisions of a collective bargaining argeement or jeopardization of continuation of its business prevented applicant from being employed.

With reference to unemployment compensation there is no authority in section 102.35 (3), Stats. or anywhere else in Chapter 102 of the Statutes to order the offset of unemployment compensation against an award for refusal to rehire. Section 108.05 (6), Stats., together with section 108.22 (8)(a), Stats., authorizes repayment of unemployment benefits, under certain conditions, when an individual receives payment "in the nature of back pay" for the same weeks in which he/she received the unemployment benefits. The Commission does not consider an award made under section 102.35 (3), Stats., to be in the nature of back pay. An award for unreasonable refusal to rehire is a worker's compensation award.

This same point is relevant to the employer's contention that payroll deductions should be made before the award is calculated. Consistent with the purposes of the Worker's Compensation Act the award for lost wages is intended to be in a limited but certain amount. The provision does not pretend to compensate the injured worker for all of the effects, or even all wages lost, as a result of having not been rehired. It is limited to one year's wages. On the other hand, complementing this limitation, the award is certain. As with other compensation received under the Worker's Compensation Act this amount is not taxable and should be received as promptly as possible by the injured worker. To entangle and delay the calculation and payment of this award with the deduction and calculation of withholding taxes (even though the worker pays no taxes on this amount) and a myraid of other potential deductions which may or may not have tax implications (e.g. health insurance premiums, retirement - note the statute doesn't even make the worker whole for any lost fringe benefits) would destroy the certainty of the award, would inevitably delay payment of the correct amount and would frustrate the purposes of the act. Nowhere in the Worker's Compensation Act does the term "wages" encompass such a calculation and such will not be included under sec. 102.35(3), Stats.

While "wages lost" may properly be interpreted as referring to wage loss attributable to the refusal to rehire, as opposed to some other intervening factor, the employer has not established that any of the periods awarded by the ALJ are attributable to anything else. It is first noted that the ALJ commenced calculation of the award under section 102.35 (3) with the date of May 13, 1990, during which subsequent week the employer hired four additional laborers, i.e., he did not commence the calculation or award of benefits from either January of 1990 or March of 1990, dates, respectively, upon which applicant was allegedly fired and was able to return to work without any medical restrictions. A review of the unemployment compensation records, submitted by the employer, through the week ending September 15, 1990, would indicate that other laborers, who had been laid off prior to May of 1990, stopped receiving unemployment compensation and/or received only partial unemployment compensation from the employer after May until September, inferring that they were performing (suitable) work with employer. After the date of September 15, 1990 there is no other information in the file to indicate that suitable work was not available for the applicant, a burden which as in the first instance rests squarely on the employer's shoulders. The employer is entitled to, and may show that notwithstanding his unreasonable refusal to rehire the applicant, any wages that applicant loses are not attributable to the failure to rehire because suitable work was not available. However on the facts of record, for the periods awarded by the ALJ, the employer has not made this showing.

For all of the above reasons the ALJ's findings and interlocutory order on the sec. 102.35 (3) issue was adopted and affirmed.

cc: Attorney Michael W. Fleming
Raasch, Fleming and Reidenbach, S.C.

Attorney Philip Lehner
Otjen, Van Ert, Stangle, Lieb and Weir, S.C.

Attorney Clayton R. Hahn
Borgelt, Powell, Peterson and Frauen, S.C.

199 : CD0781

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