P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)




Claim No. 91060329

Administrative Law Judge (ALJ) Thomas J. McSweeney issued his findings of fact and order in this case on February 14, 1996, following a hearing on January 11, 1996. The applicant has submitted a petition for commission review of the ALJ's findings and order. Thereafter, both the employer and the insurer (collectively, the respondent) and the applicant submitted briefs.

The issues noticed for hearing were primary compensation and liability for medical expenses. Prior to the hearing, the employer conceded a compensable injury, and paid some compensation for disability. The respondent had also conceded jurisdiction, and initially raised no jurisdictional objection to the hearing before ALJ McSweeney. At the hearing, ALJ McSweeney raised the issue of subject matter jurisdiction and, after taking testimony on these issues, dismissed with prejudice the application for primary compensation and medical expenses for lack of subject matter jurisdiction.

The commission has carefully reviewed the entire record in this case, including the briefs submitted by the parties. Having done so, the commission hereby sets aside the findings and order of the ALJ, and substitutes the following:


a. Posture of the case and jurisdiction.

As noted above, the applicant sustained a conceded work injury for which the respondent has paid some temporary disability compensation. The applicant filed three separate applications: (1) for disfigurement under sec. 102.56, Stats., (filed in May 1992); (2) for unreasonable refusal to rehire/wrongful discharge under sec. 102.35 (3), Stats., (filed in June 1992); and (3) for additional disability and medical expenses beyond that conceded (filed in January 1993).

The applicant requested the disfigurement claim be dismissed early on. ALJ Andrew Roberts issued an order dismissing only the disfigurement claim in November 1992.

Thereafter, the unreasonable refusal to rehire claim was noticed for hearing on May 5, 1993. The only issue listed in the hearing notice was "refusal to rehire 102.35 (3)." The notice was sent only to the applicant and the employer as the insurer had no liability for a refusal to rehire claim.

The May 1993 hearing went on as scheduled. Presiding ALJ Ronald Ryan noted in his synopsis that:

"Claims for additional primary compensation are yet to be resolved. The only issue in dispute at [this hearing is] whether Respondent unreasonably refused to rehire Applicant..., i.e., whether Respondent had violated sec. 102.35(3)."

The parties evidently ran out of time, so further hearing was agreed upon. Transcript of May 5, 1993 hearing, pages 111-12.

In January 1994, a notice for a second hearing on April 12, 1994, was sent to the applicant and the employer. This notice, too, listed "refusal to rehire 102.35" as the only issue. ALJ Ryan stated on the record in this hearing that:

"The issues remain the same, which is the major issue - - there is only one -- and that is unreasonable refusal to rehire."

Transcript from April 12, 1994 hearing, page 4.

Thereafter, on September 8, 1994, ALJ Ryan issued the decision on the matter heard on May 5, 1993 and April 12, 1994. ALJ Ryan first noted that the only issue in dispute was whether the employer violated sec. 102.35 (3), Stats., by unreasonably refusing to rehire the applicant. He concluded, though, that the employer was under no obligation to furnish light work to the applicant, and so could not accommodate her work restrictions. He noted that the applicant was pursuing a claim for additional disability under a separate applicant, indicating that her disability was even worse than the employer believed. He concluded:

"Under all the circumstances, there can be no award entered under sec. 102.35 (3), Stats....


"The application is hereby dismissed."

This decision was evidently never appealed to the commission.

Next, in October 1994, the department sent out a notice of hearing on the issues of primary compensation and medical expense, i.e. the claims raised in the third application. This hearing was postponed twice, and eventually rescheduled before ALJ Thomas McSweeney on January 11, 1996. ALJ McSweeney took testimony on the disability and medical expense issues.

Prior to hearing the disability and medical expenses issue, though, ALJ McSweeney asked both parties if the department had jurisdiction and the parties agreed it did. ALJ McSweeney then raised, on his own motion, the question of whether ALJ Ryan's "final order" in the unreasonable refusal to rehire case deprived the department of continuing jurisdiction. He ultimately concluded ALJ Ryan's order had that effect, and dismissed the applicant's additional disability/medical expenses claim with prejudice. (1)    The applicant has appealed.

b. Discussion.

The primary issue before the commission is whether ALJ McSweeney, or the commission for that matter, has jurisdiction to decide the issues of primary compensation and medical expense. If the commission decides it has jurisdiction, a second issue is to determine what course of action is appropriate.

The commission has no problem with ALJ McSweeney raising a jurisdiction issue sua sponte. If the department does not have subject matter jurisdiction over a worker's compensation claim it cannot act, even if the parties waive jurisdictional objections. For example, the commission recently dismissed a claim on a jurisdictional basis regarding the statute of limitations, even though the statute of limitations defense was not raised until the hearing. Duberke v. School District of Ladysmith, WC claim no. 81054962 (LIRC, June 28, 1996).

That said, however, the commission must conclude that ALJ McSweeney did in fact have jurisdiction in this case. First, as the applicant points out, she filed three applications and ALJ Ryan's order dismissed only one. Given that the ALJ noted that his hearing was limited to the single issue of refusal to rehire, and that all of his findings address that claim, the commission must conclude it was the refusal to rehire application he dismissed.

The respondent counters this assertion by citation to Borum v. Industrial Commission, 13 Wis. 2d 570, 573 (1961), where the court stated that a worker's right to recover worker's compensation is based on chapter 102, and that he has only one cause of action for it. When the commission decides a worker's compensation case, it is passing on all compensation payable for the injuries caused by the accident. The Borum court reasoned that commission therefore cannot, after a final order and expiration of appeal periods, resume consideration of a case upon application for compensation of additional injuries allegedly sustained in the same accident. See also Kwaterski v. LIRC, 158 Wis. 2d 112 (Ct. App., 1990).

Borum and Kwaterski, of course, are distinguishable on the facts. In those cases, the injured worker attempted to reapply for additional disability benefits after a hearing had already been held (and benefits already were awarded) on the issue of disability from his injury. In our case, the applicant filed all three of her applications prior to the hearing before ALJ Ryan. Nor is the applicant here seeking relitigation of an issue that has already been heard and decided.

The respondent, the commission believes, cites Borum primarily for the legal proposition that there is only one cause of action in worker's compensation cases into which all issues are merged. Thus, once an ALJ issues a final order on any one issue without specifically reserving jurisdiction on other issues, the respondent asserts, all issues are resolved.

Given the broad definition of "worker's compensation" under sec. 102.01 (1), Stats., to include all liabilities under ch. 102, Stats., an argument could be made that the sec. 102.35 (3), Stats., penalty is part of the general cause of action that also includes the disability claims. On the other hand, sec. 102.18 (4)(a), Stats., recognizes that the refusal to rehire penalty, like the safety violation penalty and vocational rehabilitation benefits, are separate from the underlying disability or "primary compensation" claim. Indeed, under sec. 102.18 (4)(a), Stats., had the reverse situation been presented (a final order on disability without reserving jurisdiction on refusal to rehire), the department would retain jurisdiction by operation of the statute.

Those points aside, some limits on the scope of the Borum holding have been recognized by the court in other cases, even where disability is the only issue. Most relevant is American Motors Corp. v. Industrial Commission, 26 Wis. 2d 165 (1965). That case is fairly confusing procedurally, but it involved the question of whether a first administrative decision on causation and temporary disability, which reserved jurisdiction only on permanent partial disability, permitted subsequent administrative decisions on temporary disability. The court held that it did, explaining that the parties intended to retain jurisdiction on both temporary disability and permanent disability after the first hearing, and that the interlocutory order on permanent disability only was the result of an inapt or incomplete phraseology used by a busy and harassed examiner. Id., at 26 Wis. 2d 172-73.

More to the point, the court also pointed out that the examiner in American Motor Corp. had never made an express finding that a healing plateau had been reached. Since sec. 102.18 (1), Stats., required that the rights of a party be spelled out, the court reasoned, an express severing of the claimant's right to temporary disability was necessary; it could not be done by silence. Id., at 26 Wis. 2d 172.

In this case, of course, ALJ Ryan never made any findings about the merits of the applicant's claim for additional disability/medical expenses. His decision, synopsis and statements on the record affirmatively indicate he did not consider that issue at all. ALJ McSweeney in effect allows ALJ Ryan's "final order" on the separate application for refusal to rehire to be a dismissal of the additional disability/medical expenses claim, even though no evidence has ever been considered and no findings have ever been made by either ALJ on the question.

The commission therefore concludes that the Department of Workforce Development (Department of Industry, Labor and Human Relations before July 1, 1996) has jurisdiction to decide the primary compensation and medical expenses issues noticed for hearing on January 11, 1996. Because ALJ McSweeney heard the testimony at the hearing and would have the benefit of any first-hand credibility impressions, the commission remands this case to ALJ McSweeney for a decision on the primary compensation and medical expenses issues.

NOW, THEREFORE, the Labor and Industry Review Commission makes this


The findings and order of the administrative law judge are reversed and set aside. This case is remanded to the Department of Workforce Development for further proceedings, including a decision by ALJ McSweeney in accordance with this decision.

Dated and mailed July 31, 1996
millede.wrr : 101 : 3 ND 8.17

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner


The commission did not confer about witness credibility and demeanor with ALJ McSweeney under Transamerica Ins. Co. v. ILHR Department, 54 Wis. 2d 272, 283-84 (1972), as both he and the commission decided this case strictly on a question of law.



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(1)( Back ) Except for claims for future medical expenses brought under Lisney v. LIRC, 171 Wis. 2d 499 (1992).