DIANA LEE DRAKE, Applicant

NORTHSTAR PRINT GROUP INC, Employer

NORTHSTAR PRINT GROUP INC, Insurer
c/o GAB ROBINS NORTH AMERICA INC

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 October 30, 2002
drakedi . wsd : 101 : 3  ND § 5.23

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

Laurie R. McCallum, Commissioner

1. Facts and posture.

At issue before the ALJ was the nature and extent of disability, and liability for medical expenses. The ALJ issued his decision on May 20, 2002, which awarded compensation for loss of earning capacity at 35 percent, and which ordered payment of the disputed medical expense. Both the employer and its insurer (collectively, the respondent) and the applicant have petitioned for commission review. (1)

The applicant was born in 1995. She attended school through the eleventh grade, and has obtained a GED. At the time of her injury, she was a production worker earning $9.08 per hour. She sustained a conceded back injury while at work on May 29, 1996, and underwent a laminectomy and fusion in August 1996. Following surgery, the applicant returned to work with temporary restrictions set by then-treating doctor Stanley Robbins, M.D., that Northstar accommodated.

In September 1997, Dr. Robbins set permanent restrictions against lifting more than 20 pounds, with some restriction on repetitive bending and twisting. Northstar could not accommodate the permanent restrictions. It discharged the applicant effective September 19, 1997.

In early January 1998, the applicant found a job at Karavan Trailers where her husband worked. She told them about her restrictions, and they offered her $6.70 per hour for forty hours per week, which she accepted.

After she had the job with Karavan lined up, Ms. Armstrong, Northstar's human resource manager, called her and offered her 25 hours per week at $11.32 per hour as an office worker with Dr. Robbins's permanent restrictions. At that hourly rate, the applicant's weekly earnings would have been 86 percent of her pre-injury average weekly wage.

The applicant refused the job. According to the applicant, Ms. Armstrong could not guarantee how long the job would last. The applicant declined the offer, and went to work at Karavan, which was closer to her home.

Asked on cross-examination if she refused the job at Northstar because she had a better job lined up, she said "no" but went on to explain she took the Karavan job because she felt the Northstar job was not secure and, to a lesser extent, because it offered only five hours per day. Transcript, page 42. The applicant also said that she was most comfortable when she did not drive further than 20 miles at a time, and this, too, played a part in accepting the Karavan job closer to home.

At the hearing, Northstar elicited testimony from its vice president of human resources, Brendel. He said the job offered to the applicant was "regular part- time" meaning it was not temporary though of course no job is guaranteed.

The applicant has continued to work at Karavan to the time of the hearing. However, her back problem continued, and she eventually sought treatment from David Jones, M.D. She is apparently working now only 6 hours per day at Karavan. While his notes indicate that Dr. Jones approved of this arrangement, at least temporarily in 1999 (exhibit C), his formal restrictions set out in a letter to the applicant's attorney in 2002 are no repetitive bending of the back, and no lifting over 15 pounds. Dr. Jones's restrictions do not mention an hour restriction. Exhibit A.

2. Applicable statute.

As noted above, this case involves the applicant's claim for permanent disability compensation for loss of earning capacity. The relevant statutes provide:

"102.44 (6) (a) Where an injured employee claiming compensation for disability under sub. (2) or (3) has returned to work for the employer for whom he or she worked at the time of the injury, the permanent disability award shall be based upon the physical limitations resulting from the injury without regard to loss of earning capacity unless the actual wage loss in comparison with earnings at the time of injury equals or exceeds 15%.

"(g) For purposes of this subsection, if the employer in good faith makes an offer of employment which is refused by the employee without reasonable cause, the employee is considered to have returned to work with the earnings the employee would have received had it not been for the refusal."

The department's interpretative footnote provides:

"¹⁷³ Section 102.44(6) provides that in cases of non-scheduled injury permanent partial disability is to be determined on the basis of the physical limitations without regard to loss of earning capacity where the employee has returned to work for the same employer as at the time of injury at a wage loss of less than 15 percent. A good faith offer of employment refused by the employee without reasonable basis has the same effect as actual reemployment. The claims subject to this section including those upon which an award is issued remain open for the period of the statute of limitations in the event that there is a termination of the employment or a wage loss of 15% or more occurs."

DWD Worker's Compensation Act of Wisconsin with Amendments to January 1, 2002 (R. 07/2002.)

3. Discussion.

a. LOEC claim barred by the 85 percent rule?

The first question in this case is whether the applicant refused Northstar's re-employment offer without reasonable cause, requiring the denial of compensation for loss of earning capacity under Wis. Stat. § 102.44(6)(a) and (g). The ALJ found the applicant had reasonable cause to refuse the offer, based on the job at Karavan which the applicant felt was more secure and which was closer to her home. He accordingly proceeded to rate and award loss of earning capacity.

Northstar appeals, asserting the ALJ erred in admitting the applicant's recital of what Ms. Armstrong said about being unable to guarantee how long the job would last. It asserts that even if that testimony is considered, the act does not require it guarantee the employment, but only that it offer re-employment at 85 percent of the pre-injury wage.

However, Ms. Armstrong was a human resources manager who was directed to contact the applicant about the job, so her statement was an admission of a party opponent and technically not hearsay under Wis. Stat. § 908.01(4)(b). Further, even if the statement is hearsay, case law and the department's rules permit the introduction of hearsay testimony with probative value, Wis. Admin Code, § DWD 80.12 (1)(c), so long as it does not serve as the sole basis for a finding, Erickson v. DILHR, 49 Wis. 2d 114, 121-22 (1970). In this case, it is extremely credible that Ms. Armstrong would have told the applicant Northstar could not guarantee the job, as Mr. Brendel made the point that really none of the employer's jobs are guaranteed -- and he testified for Northstar.

It is true that Northstar is not required to guarantee a job, other things being equal, to avail itself of the defense under Wis. Stat. § 102.44(6). However, other things are not equal in this case. First, the employer originally fired the applicant because of her restrictions, and only was able to offer work to her several months later, giving some credence to the applicant's concern about job security. In other words, while Northstar indicates it made work available for the applicant as soon as it became economically feasible, (2)  that in and of itself indicates that if the economics changed, she might lose her job. Second, the applicant did not simply choose to remain unemployed rather than taking a chance on the job offered by Northstar. Rather, in order to undertake the office work with Northstar, she would have had to have foregone the employment at Karavan, which she felt was more secure -- and with some justification as she was still working at Karavan at the time of the hearing despite increased restrictions.

In short, while Northstar's offer was in good faith, and while it might have been unreasonable for the applicant to refuse it under other circumstances, the "reasonable cause" standard under Wis. Stat. § 102.44(6)(g) allows a worker to act in his or her own interest when choosing between competing offers of employment as long as he or she does so reasonably. Under the facts of this case, the applicant acted reasonably.

b. Amount of LOEC.

Northstar's vocational expert, Dennis Gross, estimated a loss of earning capacity at 30-35 percent based on Dr. Jones's restrictions -- assuming that the applicant was not permanently restricted to part-time work. If the applicant in fact could only work part-time under Dr. Jones's restrictions, the employer's expert rated loss of earning capacity at 45 to 55 percent if the restriction was to 30 hours per week, and 25 to 35 percent if the restriction was to 34 hours per week. (3)  Mr. Gross estimates loss of earning capacity in an 11 to 25 percent range on Dr. Robbins's 1997 restrictions.

The applicant's expert, Donald Modder, estimates a loss of earning capacity at 55 to 60 percent based on Dr. Jones's restrictions-assuming the applicant was permanently restricted to part-time work at 30 hours a week. Mr. Modder's report indicates that the restriction to part-time work (6 hours a day) adds 25 percent to the loss of earning capacity rating. Mr. Modder rated loss of earning capacity under Dr. Robbins's restrictions at 25 to 30 percent.

Thus, the estimates of the vocational experts are relatively consistent: about a 25 percent loss under Dr. Robbins restrictions, about a 30 to 35 percent loss under Dr. Jones's restrictions if the applicant can work full time, about 55 percent under Dr. Jones's restrictions if the applicant can only work 30 hours per week. Finding Dr. Jones's restrictions more credible, and concluding that Dr. Jones did not permanently restrict the applicant to part-time work, the ALJ rated LOEC at 35 percent.

The commission agrees. A loss of earning capacity award should be based on a worker's reduced capacity from the work injury when the award is made, not on what the capacity was in the past. Dr. Jones has examined the applicant more recently, and his restrictions presumably better reflect the applicant's current condition than Dr. Robbins's restrictions.

Moreover, the actual set of restrictions from Dr. Jones, stated in a January 2002 letter to the applicant's attorney, say nothing about an hours restriction. See exhibit A. His 1999 treatment notes do mention the fact the applicant was only working six hours per day, and with approval, but do not specifically permanently restrict the applicant to six hours per day of work. The vocational experts agree that with Dr. Jones's 15-pound restriction, but no limitation to part-time work, the applicant's loss of earning capacity would be 35 percent. The ALJ's decision to award loss of earning capacity at that level is the most reasonable result on this record.

cc: Attorney Thomas M. Domer
Attorney Kurt R. Anderson

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(1)( Back ) In her answer to the respondent's petition for review, the applicant counterclaimed for an increase in the ALJ's loss of earning capacity award. Because the applicant's counterclaim was filed within 21 days of the ALJ's order, it is treated a timely cross-petition for commission review. Wis. Admin. Code, § LIRC 1.026.

(2)( Back ) Northstar's July 10, 2002 brief at page 5.

(3)( Back ) Mr. Gross separated employment opportunties into Tier One and Tier Two jobs. Tier Two jobs include additional opportunities that theoretically would have been available to her had she become proficient at the office job offered by Northstar in January 1998. Because it concludes the applicant reasonably refused that job, the commission concludes the loss of earning capacity award should not factor in Tier Two jobs.

uploaded 2002/11/08