MARLA  McCLAFLIN, Applicant

MASON SHOE MFG CO, Employer

WAUSAU BUSINESS INS 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 July 8, 2003
mccafma . wsd : 101 : 9    ND § 5.23   § 5.32  

David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

1. Background and posture.

The applicant suffered a conceded work injury in the nature of permanent chemical sensitization -- that is, repeated chemical exposure at work that has caused her to become sensitive to a chemical or chemicals when she was not before. In the applicant's case, exposure to a substance in the shoes she worked with in the employer's factory caused a dermatitis or similar condition on her hands. The condition clears when the applicant leaves the factory environment. Indeed, the employer provided her with office work, and she no longer suffers from the dermatitis condition. However, the office work pays only 86 percent of what she earned in the factory.

The application for hearing raises the question of compensation under the "Wagner- Butler doctrine."  The Wagner-Butler doctrine governs situations where a worker who suffers a "permanent sensitization" to certain chemical substances because of work exposure may be eligible for permanent partial disability based on wage loss, even though the problem completely clears up when he or she is away from work. Thus, "it is utterly impossible to make a physical examination ... to determine the percentage of permanent partial disability," Wagner, 273 Wis. at 567c; that is, a doctor cannot rate permanent disability on a functional basis. Nonetheless, the worker with the permanent sensitization may no longer be able to perform his or her work -- and perhaps similar work with other employers -- creating a very real permanent effect on earning capacity. In such cases, then, the court permits an award for permanent disability based on wage impairment, rather than impairment of bodily function. Ibid.

The court fashioned the Wagner-Butler doctrine based largely on a concern that otherwise workers with conditions like contact dermatitis (that is, a permanent condition without bodily impairment discernible on examination) would be left without a remedy. Wagner, 273 Wis. 2d at 567c; Butler, at 57 Wis. 2d 195. However, the court makes it clear that the doctrine applies only to those cases where the partially disabling occupational disease cannot be measured objectively during medical examination. Butler, at 57 Wis. 2d 196. Indeed, in Kohler Co. v. ILHR Department, 42 Wis. 2d 396, 406 (1964), the court specifically rejected a claim that the Wagner-Butler doctrine applied to a case of silicosis and emphysema. The Kohler court noted that a physician could rate functional impairment to pulmonary impairment as a result of the silicosis, so the condition could be measured objectively.

The supreme court has also provided some guidelines on how to calculate an award for permanent disability in Wagner-Butler cases. In Wagner, the court wrote:

"The measure of disability in terms of percentage is the percentage of wage loss he has sustained as a result of being unable to do work in a machine shop or industrial plant where he was earning $1.89 per hour. On this ... point we quote 2 Larson, Law of Workmen's Compensation, p.1, sec. 57.00 as follows:

`Compensable disability is inability, as the result of a work- connected injury, to perform or obtain work suitable to the claimant's qualifications and training. The degree of impairment depends on impairment of earning capacity, which in turn is presumptively determined by comparing pre-injury earnings with post-injury earning ability; the presumption may, however, be rebutted by showing that post-injury earnings do not accurately reflect claimant's true earning power.'"

Wagner v. Industrial Commission, 273 Wis. 553, 565-66 (1956). Similarly, the court in Butler directed the commission to "evaluate the claimant's disability in terms of actual wage loss, based on the extent of impairment of earning capacity" using information about pre-injury and post-injury wages in the record. Butler, at 57 Wis. 2d 197.

In this case, the applicant sought, and the ALJ awarded, compensation under the Wagner-Butler doctrine at 14 percent. Applying the 14 percent to the 1000-week base under Wis. Stat. § 102.44(3), she based the award on 140 weeks at $179 per week, totaling $25,060. The employer and its insurer (collectively, the respondent) appeal.

2. Discussion.

a. Expert vocational testimony not required.

First, the respondent contends that the award is unsupported in the absence of expert evidence from a vocational expert. However, the commission cannot agree. The Wagner court's quotation of Professor Larson's treatise states that the commission should presume the actual wage loss establishes the loss of earning capacity unless rebutted. Thus, the commission starts with 14 percent here, derived by the simple arithmetic of dividing the difference between the pre- and post-injury wages by the pre-injury wages. No expert is needed for that.

Moreover, Wis. Stat. § 102.17(7) indicates that the reports of vocational experts may be received into evidence, but are to be considered with all the evidence to determine loss of earning capacity, presumably by application of the standard under Wis. Admin. Code § DWD 80.34. The department's interpretative note specifically states that Wis. Stat. § 102.17(7) "gives the department the option of using or not using the testimony or reports of expert witnesses in determining the loss of earning capacity resulting from nonscheduled injuries." DWD Worker's Compensation Act of Wisconsin with Amendments to January 1, 2002 (WKC-1-P (R. 07/2002)), note 89. Finally, the court of appeals has stated:

Testimony must be offered that will permit such a comparison or there must be other evidence from which [a comparison with injuries that render a person permanently totally disabled for industrial purpose allowing some kind of prediction as to the impairment of earning capacity] may be inferred. This testimony need not be presented by an employment expert; a qualified physician and even the Department itself can determine the percentage of such disability. While an employment expert can establish lost earning capacity due to the unavailability of work suitable for a claimant, no such expert is required under our case law... [Footnotes omitted.]

Bituminous Casualty Co. v. ILHR Department, 97 Wis. 2d 730, 736-737 (Ct. App. 1979). (1)

In sum, the applicant did not need a vocational report to support her claim, though it could be argued that the respondent might need expert opinion to establish that "post-injury earnings do not accurately reflect claimant's true earning power." Wagner, 273 Wis. at 556. Since neither side submitted an expert report, however, the applicant's claim based on a 14 percent wage loss prevails.

b. Wis. Stat. § 102.44(6) generally.

The respondent also asserts that since the applicant's actual wage loss is only 14 percent, she should not get any award, pointing to Wis. Stat. § 102.44(6)(a). (2) In general, awards for permanent disability in cases of nonschedule injuries must be based on some kind of prediction of impairment of loss of earning capacity. Pfister & Vogel Tanning Co. v. DILHR, 86 Wis. 2d. 522, 528 (1976); Northern States Power Co. v. Industrial Commission, 252 Wis. 70, 76 (1947). (3) Wisconsin Stat. § 102.44(6) provides an exception to that rule, barring a worker's claim for loss of earning capacity if the worker returns to work with his or her time-of-injury employer with less than a 15 percent actual wage loss. In such cases, the statute requires that the award for permanent partial disability be based on the physical limitations from the injury without regard to loss of earning capacity.

Limiting the award for permanent partial disability in such cases to a rating based on physical limitations -- that is, an award based on a "functional" rating rather than a rating for loss of earning capacity -- was a departure from earlier court holdings. For example, the supreme court stated:

In Kurschner v. ILHR Department, 40 Wis.2d 10, 161 N.W.2d 213 (1968), this court concluded that the Industrial Commission's finding of 15 percent permanent partial disability based solely on impairment of bodily function without regard to impairment of earning capacity was error. Sec. 102.44(2) and (3) must be applied carefully if they are not to lead to a confusion between functional or medical impairment on the one hand and impairment with regard to earning capacity on the other. It is the latter impairment that the section is intended to measure....

In Kurschner we held that the Industrial Commission erred in adopting the finding of the examiner who determined permanent partial disability by comparing the employee's injuries to those of a hypothetical person totally disabled functionally and not to one totally disabled as to loss of earning capacity. Workers' compensation disability is not the same as functional disability. In a number of cases we have said that a finding of permanent partial disability by the Industrial Commission must be based on a consideration of both factors -- loss of bodily function and loss of earning capacity. Consideration of both factors is necessary to implement the objective of the Worker's Compensation Act, namely "to compensate in some measure injured workmen for loss of wage-earning power sustained in the industry..." [Citations omitted.]

Pfister & Vogel Tanning Co. v. DILHR, 86 Wis. 2d 522, 527-28 (1979).

Wisconsin Stat. § 102.44(6) must thus be viewed in the context of the existing case law. Pfister & Vogel, Kurschner, and the cases they cite, require the consideration of both the loss of bodily function and the loss of earning capacity ordinarily occurring in cases of permanent partial disability, and hold that an award for permanent partial disability may not be based on the impairment of bodily function alone. In contrast, Wis. Stat. § 102.44(6) mandates a permanent partial disability award based on the functional impairment or "disability ... imposed by the physical limitations" alone, "without regard to loss of earning capacity," where the actual wage loss does not equal or exceed 15 percent. See Wis. Stat. § 102.44(6)(a) and (h).

c. Wis. Stat. § 102.44(6) and the "15 percent rule" in Wagner-Butler cases.

The Worker's Compensation Act is a remedial act, to be liberally construed to advance the basic purpose of the statute, UFE, Inc. v. LIRC, 201 Wis. 2d 274, 288 (1996). Thus, the court has generally stated that

"It has been said over and over again in workmen's compensation cases that the act should be liberally construed, and a consideration of the cases indicates that a most liberal construction has been placed upon it in order that the injured workmen may be compensated for injuries incident to their employment."

Johnson v. Wisconsin Lumber & Supply Co., 203 Wis. 304, 310 (1932)(noting further that the legislature made the act "as broad and inclusive to do the greatest good to the greatest number, and enjoined the courts upon a liberal construction of the act.)  More specifically, the supreme court has previously held that the should not be construed to leave workers with a Wagner-Butler type disability remediless. See Wagner, 273 Wis. 2d at 567c; Butler, at 57 Wis. 2d 195.

As noted above, Wis. Stat. § 102.44(6) does not simply prohibit all compensation for permanent partial disability unless at least a 15 percent wage loss is shown. Rather, the statute contemplates an alternative award for permanent partial disability based on "physical limitations resulting from the injury," without considering loss of earning capacity. This necessarily assumes the presence of "physical limitations" or "loss of bodily function" upon which to base the alternative rating. In cases resulting in Wagner-Butler awards, there is no "loss of bodily function" or permanent disability based on "physical limitations resulting from the injury" because the worker's condition clears when he or she is no longer exposed to the sensitizing chemical.

If Wis. Stat. § 102.44(6)(a) were to apply to a worker who fits under Wagner-Butler doctrine and has no permanent functional loss discernible during a medical examination, the worker would be left with no award for permanent partial disability at all unless the actual wage loss exceeded 15 percent. In other words, despite suffering a very real permanent impairment from his or her injury, such a worker would receive permanent disability compensation neither for loss of earning capacity nor for the functional loss based on physical limitations provided under Wis. Stat. § 102.44(6)(a) and (h) as an alternative to a loss of earning capacity award.

It was a very similar concern that led the court to set out the Wagner-Butler rule in the first place. The commission therefore concludes that the exception preventing consideration of loss of earning capacity under Wis. Stat. § 102.44(6)(a) does not apply to Wagner-Butler awards. Alternatively, it could be argued that the Wagner-Butler doctrine permits a showing of actual wage loss to act as a substitute for the requirement of "physical limitations resulting from the injury" for the purposes of Wis. Stat. § 102.44(6)(a) and (h). In either event, the ALJ's award of permanent partial disability at 14 percent is appropriate in this case.

cc: 
Attorney Steve M. Jackson
Attorney Kevin M. McDonald

[ Search Decisions ] - [ WC Legal Resources ] - [ LIRC Home Page ]

(1)( Back ) The court continued: That employment experts have become commonplace in worker's compensation cases, perhaps through the ingenuity of attorneys, may or may not be a beneficial development in worker's compensation law. In any event, such experts are not now required,... Bituminous Casualty Co., 97 Wis. 2d at 738.

(2)( Back ) 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%. (h) In all cases of permanent partial disability not covered by ss. 102.52 to 102.56, whether or not the employee has returned to work, the permanent partial disability shall not be less than that imposed by the physical limitations.

(3)( Back ) The Northern States case, decided eight years before Wagner, is generally considered to be the genesis of the method of assessing permanent partial disability based on loss of earning capacity. The supreme court has described Northern States as "the watershed between yesterday and today" with respect to the adoption of the "loss of earning capacity" theory in this state. Kohler, at 42 Wis. 2d 405. Similarly, in Balczewski v. ILHR Department, 76 Wis. 2d 487, 492-493 (1977) the court noted that Northern States "traced early decisions under the Workman's Compensation Act stressing the loss of earning capacity as well as the loss of function" and held that "the emphasis in awards for nonschedule injuries was on the future ability to earning a living" -- that is loss of earning capacity. See also: Neal & Danas, Worker's Compensation Handbook § 5.21 (5th ed. 2003). For a discussion of the distinction between the Wagner-Butler cases and the cases contemplated by Northern States Power, see Wagner at 273 Wis. 567b-567c, and Butler, at 57 Wis. 2d 194-95. 4

uploaded 2003/07/14