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




Claim No. 93068744

The employer has filed a petition for commission review of the administrative law judge's Findings and Order dated December 14, 1994. The employer contends that the administrative law judge (ALJ) erred by finding for the applicant and by rendering a decision in default on the employer's failure to appear. The employer also submitted a brief in support of its petition to which the applicant did not respond.

Prior to considering the ALJ's Findings and Order on the merits of the applicant's claim, the commission considered the employer's request that the commission remand this case to the Worker's Compensation Division (the division) for further hearing. On this issue, after reviewing the employer's brief and the file in this case, the commission takes the following :


This case arose on the applicant's claim for lost wages based on an alleged unreasonable refusal to rehire under sec. 102.35 (3), Stats. An application for hearing on this issue was served, apparently by the applicant, on the employer at its headquarters in Ohio in October 1993. The employer answered the hearing application by a letter to the applicant's attorney dated October 25, 1993.

On January 20, 1994, the employer wrote a letter to the Worker's Compensation Division (division), relaying substantially the same information as in its October 1993 letter. Both letters were signed by Linda Czapp and stated that the applicant "was terminated because of shortages in the warehouse." The October 1993 letter to the applicant's attorney also stated that the applicant "was not terminated because of any supposed accident or injury."

On or about January 26, 1994, the division served its copy of the hearing application on the employer's retail outlet in Milwaukee where the applicant worked. Along with the hearing application, the division provided two explanatory letters to the employer dated January 26, 1994. One of the explanatory letters stated that the applicant had filed a claim under sec. 102.35 (3), Stats.; that if the applicant prevailed on this claim, the employer could be liable for up to one year's wages; and that "the worker's compensation insurer has no duty to defend or pay this claim." The employer admits receiving these documents at its retail outlet in Milwaukee.

On or about October 13, 1994, the division sent a notice of hearing to the employer at the Milwaukee retail outlet. The notice stated the hearing was to be held in Milwaukee on December 5, 1994, and listed "REFUSAL TO REHIRE 102.35 (3)" as the issue to be heard. The employer acknowledges receiving the notice of hearing at its Milwaukee outlet before the December 5, 1994 hearing.

The hearing went forward as scheduled on December 5, 1994. However, the employer did not appear at hearing. The ALJ issued his Findings of Fact and Order in favor of the applicant on December 14, 1994. The issue now before the commission is whether the employer should be given the opportunity for further hearing, despite its failure to appear at the December 5, 1994 hearing.

The first subissue is whether the department provided adequate notice to the employer of the hearing. If sending the notice to the employer's Milwaukee address was statutorily-deficient, the employer's failure to appear must be excused. Section 102.17 (1)(a), Stats., deals with notice of hearing and provides in part:

"102.17 (1)(a) ... The department shall cause notice of hearing on the application to be given to each party in interest, by service of such notice on the interested party personally or by mailing a copy to the interested party's last known address at least 10 days before such hearing. In case a party in interest is located without the state, and has no post-office address within this state, the copy of the application and copies of all notices shall be filed in the office of the secretary of state and shall also be sent by registered or certified mail to the last known post-office address of such party. Such filing and mailing shall constitute sufficient service, with the same effect as service on a party located within this state. [Italics supplied.]"

The quoted language may not go so far as to state that notice must be provided to a Wisconsin address if an employer has one. However, the commission cannot conclude, given the wording of the statute and the facts of this case, that the department's notice was inadequate as a matter of law because it was sent to the employer's Milwaukee address instead of its Ohio address.

The next subissue in this case is whether, despite adequate notice of the hearing, the employer failed to appear for a reason that justifies a remand for further hearing.

Section 102.18 (1)(a), Stats., authorizes the department to issue decisions in workers compensation cases by default. The commission and the department routinely issue decisions following hearings at which only the applicant appears on the theory that the non-appearing respondent was in default. The court of appeals has affirmed the practice in County of Juneau v. LIRC and Skalak, court of appeals case no. 84-1746, district IV unpublished decision (October 24, 1985).

However, a non-appearing party may be entitled to relief in the form of further hearing if his or her failure was the result of excusable neglect. Auclair v. LIRC and Friendly Village, Inc., court of appeals case no. 83-836, district III unpublished decision (May 22, 1984). Excusable neglect is that neglect that might have been the act of a reasonably prudent person under similar circumstances. Auclair, slip opinion at 3, and Hedtcke v. Sentry Ins. Co., 109 Wis. 2d 451, 468 (1982). Excusable neglect is not the same as neglect, carelessness or inattentiveness. Id.

The employer explains that it failed to appear because it did not know that it, rather than its insurer, had the duty to defend the unreasonable refusal to rehire claim. The employer admits the hearing application and the hearing notice both listed "unreasonable refusal to rehire" as the issue. In addition, the employer acknowledges that one of the explanatory letters served with the notice specifically stated that the insurer had no duty to defend, and that the employer was solely liable. However, the employer contends that this letter was "hidden" behind the other documents in the packet of three documents served on the employer on or about January 26, 1994. Due to confusion, the employer alleges it did not appear because its personnel in Milwaukee assumed the worker's compensation insurer would handle the claim.

The employer has not shown that its failure to attend the hearing was the result of excusable neglect. A reasonably prudent company employe or officer who gets an application for hearing, a notice of hearing, or other legal document, will refer the matter up the chain of command. Reasonably prudent company management makes sure its workers do this. The hearing notice in this case specifically listed where it was sent; only the applicant, his attorney, and the employer's Milwaukee retail outlet were listed as addressees. Under these circumstances, the commission cannot conclude that a reasonably prudent person acting on behalf of the employer's Milwaukee outlet might simply disregard the hearing notice on the assumption that an insurer or the company headquarters was handling the matter.

A third subissue arises from the employer's contention that the commission should remand this case for further hearing under sec. 102.18 (4)(c), Stats., on grounds of mistake. Specifically, the employer contends that the ALJ's decision was based on his mistaken interpretation of the letters accepted into evidence at the hearing as respondent's Exhibits 1 and 2. The letters state that the applicant was terminated because of "shortages in the warehouse," which the ALJ interpreted as labor shortages. The employer asserts that the letters actually referred to $20,000 worth of shortages in inventory, for which the applicant and two coworkers were discharged.

However, any "mistake" by the ALJ on this point is due to the employer's failure to appear at the hearing. Under sec. 102.35 (3), Stats., after an employe shows that he has been injured in the course of employment and subsequently is denied rehire, it becomes the burden of the employer to show reasonable cause for not rehiring the employe. West Bend Co. v. LIRC, 149 Wis. 2d 110, 123 (1989). When the employer here failed to appear and prove its case, the ALJ was left to draw his own inferences from the evidence. The commission does not see mistake based on the fact that the ALJ did not interpret respondent's Exhibits 1 and 2 the way the employer now argues they should be interpreted, in the absence of any evidence at the hearing to support that interpretation.

Further, the commission does not believe that the ALJ even had to address the reason for discharging the applicant that the employer asserted in respondent's Exhibits 1 and 2 at all, much less interpret the exhibits in the manner now advanced by the employer. Because Ms. Czapp's January 20, 1994 letter to the division was essentially its answer in this case, the commission believes ALJ Schaeve properly admitted it for the purposes of establishing that the employer denied the claim and raised no jurisdictional defense, especially in the absence of objection by the applicant. However, both letters are hearsay, for which the record provides absolutely no foundation and to which no exception applies under ch. 908, Stats. Consequently, the commission declines to consider either respondent's Exhibit 1 or 2 as evidence of the reason why the applicant was discharged.

It is true, of course, that case law and the department's rules do permit the introduction of hearsay testimony with probative value. Section Ind 80.12 (1)(c), Wis. Adm. Code. However, the exhibits introduced on behalf of the absent employer in this case strain the boundaries of even the less formal application of evidentiary rules in administrative law proceedings. See: City of Superior v. ILHR Department, 84 Wis. 2d 663, 672, note 6 (1978), citing Outagamie County v. Brooklyn, 18 Wis. 2d 303, 312 (1962).

In sum, the commission concludes that ALJ Schaeve need not have considered respondent's Exhibits 1 or 2 for the truth of the employer's assertion that the applicant was discharged because of warehouse shortages, so his alleged misinterpretation of those documents is irrelevant. In any event, the ALJ's alleged misinterpretation is not the type of "mistake of fact" covered under sec. 102.18 (4)(c), Stats.

The commission thus concludes the employer is not entitled to further hearing in this matter. It therefore turns to the issue of whether the record at the hearing supports the applicant's claim under sec. 102.35 (3), Stats.


The commission has carefully reviewed the entire record in this case, including the petition for review and accompanying brief from the employer. Based on its review, the commission agrees with ALJ Schaeve's decision dated December 14, 1994, and it adopts the Findings and Order in that decision as its own, except that it makes the following modification:

The seventh and eighth paragraphs of the Findings of Fact are deleted.


The employer's request for further hearing is denied. The Findings of Fact and Order of the administrative law judge, as modified, are affirmed.

Dated and mailed April 20, 1995

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

James R. Meier, Commissioner


The applicant established he was injured in the course of employment and subsequently was not returned to work by the employer. It then became the employer's burden to prove that it acted reasonably in failing to return the applicant to work, either because work was not available, because of the applicant's misconduct, or for other valid reasons. West Bend Co., supra., 149 Wis. 2d 123; Dielectric Corp. v. LIRC, 111 Wis. 2d 270, 278 (Ct. App., 1983); Ray Hutson Chevrolet, Inc. v. LIRC, 186 Wis. 2d 118, 122-23 (Ct. App, 1994).

The employer has not met that burden in this case. The commission modified the findings of the ALJ to remove his discussion of respondent's Exhibits 1 and 2 on the question of why the applicant was discharged. As explained above, the commission believes that respondent's Exhibits 1 and 2 are hearsay without foundation, and should not be considered for the truth of the matter asserted therein. Without respondent's Exhibits 1 and 2, the record contains no evidence at all to establish a reasonable basis for the applicant's discharge. Even with the exhibits, however, the employer has not met its burden, since it would require a great deal of extrinsic evidence beyond the representations in the exhibits to establish a reasonable basis for the applicant's discharge.



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