STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

BRENDA FRANK, Applicant

LAUERS FOOD MART INC, Employer

UNITED WISCONSIN, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1997-055862

The applicant filed an application for hearing seeking benefits from an injury on October 2, 1997 in which she was burned by hot grease while working. At issue now is the applicant's claim for compensation for disfigurement under Wis. Stat. § 102.56.

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development held a hearing in this matter on September 11, 2000. On October 2, 2000, the ALJ issued his decision dismissing the application without prejudice. The applicant filed a timely petition for review, asking the commission to award compensation for disfigurement. (1)   The employer and the insurer (collectively, the respondent) have filed a cross-appeal seeking a final order.

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 makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant was born in December 1975, and graduated from high school in 1994. While in high school, she worked part-time at a Shopko store, earning the minimum wage. Upon graduation from high school, the applicant attended three semesters of college at UW-Eau Claire (UWEC). She worked part-time at a Shopko store, apparently in Eau Claire, while in college.

During her last semester, the applicant would drive back to Fond du Lac to work as a waitress on weekends, earning $2.33 plus tips for ten hours work. She left college in December 1995 after three semesters, having decided that her field of study, science, was not for her. She had 1.18 grade point average at UWEC.

After leaving UWEC, the applicant worked for a while at a Country Kitchen restaurant as a waitress in late 1995 or early 1996. She again made $2.33 per hour, plus tips, working 30-40 hours per week. The applicant then tried management at Country Kitchen, which paid $5.50 per hour (actually a pay cut from the applicant's earnings with tips as a waitress.) She worked more than full-time hours in this capacity. All in all, the applicant worked six months as a waitress, and two months as a manager at Country Kitchen.

In August or September 1996, the applicant entered Moraine Park Technical College (MPTC) where she again took science classes to pursue a degree related to wastewater treatment. She was in school two or three weeks before she again decided the field was not for her. She tried to withdraw, but it was after the deadline for a refund, for so she just stopped going to classes.

Shortly thereafter, the applicant got another waitressing job at Blancks Supper Club, making $2.50 plus tips. She worked 25-30 hours per week, and estimated that with tips she made maybe $7.00 to $8.00 per hour.

While working at Blancks the applicant started working part-time for the employer, Lauers Food Mart. She started working at the store's delicatessen for $5.15 per hour, initially part-time. By the summer of 1997, the applicant had quit Blancks and was working at Lauers exclusively.

On October 2, 1997, the applicant was working as a cook at Lauers. Her injury occurred when she opened a broaster and was sprayed with hot grease. She was seriously burned, and taken to a local hospital where she was cleaned up and given morphine for pain. She was transferred by ambulance to the St. Mary's Burn Unit in Milwaukee, where she treated for two weeks.

Skin grafting to the left hand, arm, right upper arm and right flank were required as part of the applicant's treatment. See note dated October 31, 1997, from William DiGilio, M.D. Approximately one year after the injury, on October 12, 1998, Dr. DiGilio pronounced an end of healing with no functional impairment. The doctor did describe moderate, permanent disfigurement from the scarring especially to her left hand and left forearm.

Following her injury, the applicant was off work until she began waitressing at Faros Restaurant in May of 1998. The applicant worked at Faros from May 1998 to July 2000, full time or nearly full time initially. Her daughter was born in December 1998, but she returned to work and from February to July 2000 worked 25 to 30 hours per week. At Faros, the applicant was required to wear a "waitress dress," and a white shirt with short sleeves that exposed her scars. She earned $2.33 plus tips.

In July 2000, shortly before the hearing, the applicant began working as a waitress at Theo's. She now works a reduced schedule, approximately six hours per week, so she can care for her young daughter. The applicant is thinking about increasing her hours.

The applicant testified that she is still a little self-conscious about her appearance when she works as a waitress. For example, people will ask what happened, and commiserate. Sometimes customers stare at her scars. Transcript, page 23. She feels, from the way people treated her and talked to her at work, that some people did not tip as much because of her scars. Transcript, page 24. However, she admitted that some people may tip her more because they feel sorry for her, and that it evens out. Transcript, page 40.

The applicant is an attractive woman. However, she has scarring on her arms beginning two-thirds of the way down her biceps (upper arm) to her fingers. The left arm is scarred worse than the right. Indeed, the applicant has little apparent scarring on the front of her right arm (as viewed with the palm down.) On the back of the right forearm (viewed with the palm up), there is some faded scarring or burn marks. On the back the applicant's right upper arm between her elbow and armpit, the applicant has a four inch by two-and-a-half inch area of raised and discolored flesh.

On the front of the applicant's left arm, she has considerable scarring, beginning in the vicinity of the elbow, and extending down to the wrist. The ALJ describes "chicken-flesh" in one area, something appearing like a "coffee stain" in another area, and a whitish discoloration elsewhere. On the back of her left arm, the applicant has "mottled skin" covering most of the side of the applicant's hand. On the back of the left arm there is more chicken-flesh, an area of "raised flesh," a continuation of the "coffee-stain" scarring, mottling and discoloration. Finally, the fingers of the applicant's left hand are discolored from scarring.

The record also contains a report from a labor market expert, Cynthia Engebose, retained by the respondent. Ms. Engebose acknowledges the scarring could affect the applicant's employability, admitting:

"[The scars on the applicant's arms and torso] can conceivably impact Ms. Frank's employability in two ways. First, they can potentially impact the kinds of jobs for which she is available and her performance therein (e.g., potential earnings). Second, the scars may exert influence in the interview process."

Exhibit 3, page 14.

Ms. Engebose went on to note the absence of facial scarring. Ms. Engebobse did acknowledged, though, that the applicant's scarring may be visible to the general public, that waitressing puts the applicant in direct visual contact with people, and that her job at the time required her to wear a uniform that exposed her arms. She also recognized that as a waitress, one's earning capacity is dependent on tips.

Ms. Engebose also opined that other factors, beside appearance, bear weight in the success in a particular employment. Ms. Engebose went on to opine that overall presentation, personality, quality of service, motivation and willingness to learn "are probably more heavily weighted" in the interview process and are more significant factors in success as a waitress than the presence or absence of scarring on the arms. Ms. Engebose felt there was no basis in fact to simply conclude that the applicant sustained a future loss of 50 cents per hour as a result of her disfigurement.

In conclusion, Ms. Engebose concluded that there is "no vocational basis for determining that loss of earning capacity exceeding functional permanency ratings has occurred." Exhibit 3, page 17. She did not think the applicant's future employability and vocational direction has been significantly altered as a result of the work injury. She thought the applicant's "uninjured earning capacity" would be $17,000 to $19,000 per year, referring to this range later as the amount she would have been capable of maximizing her earnings at by age 27.

Wis. Stat. § 102.56 governs compensation for disfigurement. The statute provides:

"102.56 Disfigurement. (1) If an employee is so permanently disfigured as to occasion potential wage loss, the department may allow such sum as it deems just as compensation therefor, not exceeding the employee's average annual earnings as defined in s. 102.11. In determining the potential for wage loss and the sum awarded, the department shall take into account the age, education, training and previous experience and earnings of the employee, the employee's present occupation and earnings and likelihood of future suitable occupational change. Consideration for disfigurement allowance is confined to those areas of the body that are exposed in the normal course of employment. The department shall also take into account the appearance of the disfigurement, its location, and the likelihood of its exposure in occupations for which the employee is suited.

"(2) Notwithstanding sub. (1), if an employee who claims compensation under this section returns to work for the employer who employed the employee at the time of the injury at the same or a higher wage, the employee may not be compensated unless the employee shows that he or she probably has lost or will lose wages due to the disfigurement."

The department's accompanying interpretative footnote to Wis. Stat. § 102.56 (found in DWD's Workers Compensation Act of Wisconsin with 1997 Amendments, KC-1-P(R.2/99) provides:

"174 This amendment provides that if an injured employe returns to work for that employer for whom he or she worked at the time of the injury without any wage loss, then the employe is not entitled to compensation for disfigurement. However, the employe may show that he or she has or will sustain a wage loss because the disfigurement has impaired his or her ability to obtain other employment. The standard of proof at this level is `probable' rather than `potential'."

In summary, Wis. Stat. § 102.56, allows "an employee who is so permanently disfigured as to occasion potential wage loss" to recover just compensation not exceeding his or her average annual earnings. However, if an employee returns to his time-of-injury-employer the employee must show he or she probably has lost or will lose wages due to disfigurement under Wis. Stat. § 102.56 (2). When a worker does not return to the time-of-injury employer, the statute recognizes essentially four issues in disfigurement cases: (a) is there a permanent disfigurement, (b) is the disfigurement exposed, (c) does the disfigurement occasion potential wage loss," and (d) if so, how much should be awarded?

In this case, the first two questions in a traditional disfigurement analysis (whether there is a permanent disfigurement, and whether it is exposed) must be answered affirmatively. No one would assert the applicant's burns and skin grafts are not disfiguring. Further, even if the applicant wore long-sleeved shirts (which may not practical for a waitress (2) )  the scarring on her hand would still be exposed.

The commission also concludes that the applicant has shown her disfigurement occasions potential wage loss. A worker need not show an actual, current wage loss to meet the "occasion potential wage loss" standard under the disfigurement statute. The legislature deliberately chose to allow awards for potential wage loss under sec. 102.56 (1), rather than probable loss or actual loss. The commission has previously concluded from this that a relatively low standard of proof applies on this issue when circumstances prevent the applicant from returning to work for his time-of-injury-employer. (3)

In this case, the respondent's vocational expert, Ms. Engebose, acknowledges the potential for wage loss due to the scarring, both with respect to earnings based on tips and on access to jobs. True, Ms. Engebose opined that a variety of other factors played a greater role in the applicant's vocational success, and that she (Engebose) could not rate a definite loss of earning capacity. However, the applicant is not seeking an award for permanent disability for a loss of earning capacity based on permanent work restrictions under Wis. Stat. § 102.44 and Wis. Adm. Code § DWD 80.34, but for a disfigurement that occasions potential wage loss under Wis. Stat. § 102.56(1). Ms. Engebose's acknowledgement of the potential role that scarring may play in the applicant's employment as a waitress is one basis for finding potential wage loss.

Moreover, the applicant testified without refutation that, following her return to work after her injury, some customers have commented on her scars or stared at them. The commission previously considered comments from customers and employers about a worker's disfigurement as significant in determining whether a worker has occasioned potential wage loss. (4)   Indeed, the department and the commission have previously found visible scarring on factory workers and construction workers to occasion potential wage loss. (5)   The facts of this case -- visible scars and skin grafts on a worker in a service industry whose employment depends on presenting a pleasing demeanor to customers and whose wages are dependent on customer tips -- show a potential wage loss even without expert testimony.

In analyzing whether the scarring occasions potential wage loss, the commission is required to consider a worker's age under the Wis. Stat. § 102.56(1). In this case, the commission's decision should reflect not only the applicant's current employment condition as a 25-year old. The commission must also consider the potential or future effects when she seeks work throughout her vocational life when the applicant attempts to find work, as a waitress or otherwise, with badly scarred arms from an employment-related accident. The commission must also consider the effect on her potential to obtain jobs in more expensive restaurants, where she would face greater competition for more lucrative employment.

The commission does not believe its conclusion may be validly criticized as too speculative, at least under the terms of Wis. Stat. § 102.56(1) as it is written. That section does not demand concrete proof that wage loss has occurred or must necessarily occur. Rather, it allows compensation on a showing that a worker is so permanently disfigured "as to occasion potential wage loss." Again, in direct contrast to Wis. Stat. § 102.56(2), the threshold test under Wis. Stat. § 102.56(1) is one of "potential" -- a term which expresses possibility (6) -- rather than of probability. Once the threshold is met, the statute allows the decision-maker to set an award based, not on a specific amount of wages actually even probably lost, but on what the decision-maker regards as "just compensation." Nothing in the statute requires proof of a current wage loss to warrant a disfigurement award.

The commission appreciates that the applicant retains her personality and her skills as a waitress, continues to work as a waitress, and has enjoyed relatively decent earnings upon her return to work. The commission does not doubt the applicant has a friendly and pleasing demeanor, or that she has the skills and personality of an excellent waitress. However, a disfigurement award is not based on functional loss, or on physical or mental limitations on an injured worker's ability to use his or her vocational skills, as an award for loss of earning capacity is. See Wis. Adm. Code, § DWD 80.34(1)(intro.) Rather, it is necessarily based on how a worker is or may be perceived by others; the very nature of the remedy indicates it involves more than the injured worker's personal ability or functional capacity to do his or her job.

The commission also acknowledges that the applicant currently only works a few hours per week. A disfigured worker's attachment to the labor market is, of course, significant. Obviously, there has to be a wage to be lost to have the potential for wage loss. A worker who has withdrawn from the labor market permanently for reasons unrelated to the disfigurement may well be unable to demonstrate a disfigurement that "occasions potential wage loss." Indeed, present earnings, as well as previous earnings and future suitable occupational change are among the factors required to considered under Wis. Stat. § 102.56(1).

In this case, the applicant worked full time, or nearly full time, for two years after the disfiguring injury, and she continues to work part-time now. She has worked almost continuously since she was in high school and while attending college. The commission finds it likely that she will return full time, or nearly full time, to the labor market. Her current reduced-hour schedule does not eliminate her potential wage loss.

In short, applicant has demonstrated that the disfigurement from her burns and skin grafts is so permanently disfiguring as to occasion potential wage loss.

The next issue is the amount of the award. Wis. Stat. § 102.56(1) permits the decision-maker to "allow such sum as it deems just as compensation [for the disfigurement], not exceeding the employee's average annual earnings as defined in s. 102.11."

"Average annual earnings" is defined in Wis. Stat. § 102.11(2) as fifty times the employee's average weekly earnings. In this case, because the applicant is under 27, her average weekly earnings for the purposes of permanent disability (7) are the amount she probably would have earned at age 27. Those "projected earnings," in turn, are presumed to be equivalent to the amount upon which the maximum weekly indemnity is paid unless another amount is established. Wis. Stat. § 102.11(1)(g).

In this case, the presiding ALJ recognized that the applicant was not yet 27 when injured. Accordingly, he set the "average annual earnings" limit by starting with the maximum average weekly earnings for the purposes of determining the weekly compensation for permanent partial disability in the year of the applicant's injury (1997), or $261 per week (8). Multiplying that figure by 50 weeks, the ALJ determined average annual earnings at $13,050 figure.

It has been suggested that the appropriate course in this case would be to take the maximum average weekly earnings for temporary total disability or permanent total disability for 1997, or $763.50 per week, which yields an annual figure of $38,175. This later calculation mimics the course taken in Evans Brothers, where the young worker's average annual earnings were determined to be $14,176.50, which on a weekly basis is $283.53, the maximum wage for temporary total disability or permanent total disability purposes at the time of his injury in 1977. See id., at 113 Wis. 2d 226-228.

In this case, however, the presumption of the statutory maximum wage (whether for permanent partial disability or temporary total disability) does not apply. Ms. Engebose opined that the applicant would have been capable of maximizing her earnings within the range of $17,000 to $19,000 annually by the time she reached age 27. Exhibit 3, August 17, 2000 report of Engebose, page 17. The commission therefore concludes that the projected annual earnings the applicant would probably have been earning by age 27 are $19,000. According, that is the maximum that may be allowed for her disfigurement award.

Having set the maximum amount that may be awarded, then, the question remains about the amount that is just as compensation for the applicant's disfigurement. While the commission has not actually seen the scar, the ALJ's description in the record is quite complete. In other words, the record may provide a sufficient factual basis for setting an award.

However, while the commission possesses the authority to decide the issue at this point, the statutory framework contemplates an initial decision as to compensation by an ALJ, followed by review by this commission. That course seems particularly appropriate in a disfigurement case. If the commission were to proceed to decide the amount of compensation at this point, it would effectively eliminate one step in the review process.

In conclusion, the applicant is so permanently disfigured from the work injury as to occasion potential wage loss. The commission finds it appropriate to allow an award under Wis. Stat. § 102.56(1) in this case, not to exceed the applicant's average annual earnings. The applicant's average annual earnings for the purpose of Wis. Stat. § § 102.56 are $19,000.

Under the authority set out in Wis. Stat. § 102.18(3), the commission remands this case to the department for a decision by another ALJ on the amount of just compensation for the applicant's disfigurement under Wis. Stat. § 102.56(1). The ALJ's findings and order, of course, shall not revisit the issues of whether the applicant's disfigurement occasions potential wage loss or the amount of her average annual earnings.

INTEROCUTORY ORDER

The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are reversed. This matter is remanded to the department for further action, consistent with this decision.

Dated and mailed April 6, 2001
frankbr . wrr : 101 : 8 ND § 4.14  § 5.36

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The commission conferred with the presiding ALJ in this case concerning witness credibility and demeanor. During the conference, the ALJ informed the commission that he believed that his impression of the witness told the whole story. He explained that while she had an obvious disfigurement, her personality could overcome any possible impairment from the disfigurement. He noticed that her skills as a waitress, including her concern for her customers, were undiminished. He noted she had withdrawn to some extent from the labor market, and saw also no evidence of current wage loss noting she had on one evening earned nearly $200 in tips. He explained he felt the best approach was to adopt a wait-and-see approach pending the running of the statute of limitations. Finally, the ALJ stated he regarded the issue of her average annual earnings as a legal issue, but that he also felt she had not proven a higher wage than $13,050.

The commission in no way questions the ALJ's view of the applicant's credibility or her demeanor while testifying. However, the commission reversed the ALJ's decision because commission believes he in effect required a showing of current wage loss, or that the applicant would probably sustain a future wage loss. However, a showing of current loss, or even probable future wage loss, is not contemplated by the part of the disfigurement statute applicable in this case.

cc:
Attorney Anthony J. Skemp
Attorney Joseph Berger

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Footnotes:

(1)( Back ) In its petition, the applicant also disputed the department's refusal to approve a limited compromise in this case. This apparently refers to a January 3, 2000 letter from department ALJ Roberta Arnold. However, the applicant's October 18, 2000 is well beyond the 21-day deadline to seek commission review ALJ Arnold's January 3, 2000, letter, assuming the commission has jurisdiction to review orders refusing to approve compromises.

(2)( Back ) The applicant testified she usually wore short sleeved shirts at Country Kitchen and Blancks Supper Club, because it was hot. Transcript, pages 14-15.

(3)( Back ) Alsteen v. US Stick Corp., WC Claim No. 91019663 (LIRC, March 27, 1997); Thompson v. Thompson Roofing, WC Claim No. 85003642 (LIRC, February 28, 1997).

(4)( Back ) Blaise v. Berliner and Marx, WC claim no.90024198 (LIRC, October 6, 1993); Alsteen v. US Stick Corp, WC Claim No. 91019663 (LIRC, March 27, 1997)

(5)( Back ) Thompson v. Thompson Roofing, WC Claim No. 85003642 (LIRC, February 28, 1997), potential wage loss for roofing estimator with leg scars ($2,500 awarded); Blaise v. Berliner and Marx, WC claim no.90024198 (LIRC, October 6, 1993), potential wage loss for factory worker/laborer with arm scar that could be covered by sleeves; and AAlsteen v. US Stick Corp., WC Claim No. 91019663 (LIRC, March 27, 1997), potential wage loss for crater-like arm scar on factory worker whose scar attracted comment by coworkers ($6,240 or half annual earnings awarded.)  Most relevant among the prior cases, probably, is Evan Bros. v. LIRC, 113 Wis. 2d 221 (Ct. App., 1983). There, a worker, Palmer, was had surgical injuries and scarring following an accident while working at age 17.  LIRC and the court of appeals affirmed an ALJ's decision to award a full year's earnings as compensation for a raised pinkish scar on Palmer's right arm, a scar visible with an open collar shirt, and further scarring visible on only when he worked shirtless. By age 24 when the hearing was held Palmer, was a self-employed carpet installer. There was no evidence that Palmer had even lost any wages or any job due to his scarring. Although it characterized the case as close, the court of appeals affirmed the finding that that Palmer's scarring "will occasion potential wage loss." Palmer's award was over $14,000, based on one year's wage at the statutory maximum for temporary disability under Wis. Stat. § 102.11(1)(g).

(6)( Back ) Webster's Third New International Dictionary (Unabridged) defines the first sense of "potential" when used as an adjective as "existing in possibility: having the capacity or strong possibility for development into a state of actuality."

(7)( Back ) Disfigurement, which is dealt with in Wis. Stat. § 102.56, is included in the definition of permanent disability in Wis. Stat. 102.44(3), which provides for LOEC "for permanent partial disability not covered by ss. 102.52 to 102.56." Indeed, the wage of the young worker in Evans Bros. was increased under Wis. Stat. § 102.11(1)(g), as discussed below.

(8)( Back ) 1995-96 Wis. Stat. § 102.11(1)(intro.)

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