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



Claim No. 95007425

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development (Department of Industry, Labor and Human Relations prior to July 1, 1996) issued a decision in this matter. Issues included whether there was an employer-employe relationship between the applicant and Douglas County and, if so, Douglas County's liability for primary compensation and medical expenses. Other issues arising at the hearing or mentioned in the hearing application include Douglas County's liability for the penalties provided under sec. 102.18, 102.22, and 102.35 (3), Stats.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on the applicable law, records and evidence in this case, the commission makes the following:


The applicant provided services to Ray Sandstrom and Tom Schmitz, two individuals who were eligible for services under the Douglas County community options program. Specifically, the applicant cooked, cleaned, washed dishes, and did tasks of a personal nature for both individuals. The applicant alleges he was injured on December 26, 1994 while providing services to Mr. Sandstrom.

The coordinator of the community options program, Mary Grandstrom, testified that she was supervised by the Douglas County department of human services. She explained that Douglas County contracted with Lutheran Social Services to supervise the program. According to Ms. Grandstrom, the hiring and firing decisions with respect to service providers like the applicant would be made by service recipients like Messrs. Schmitz and Sandstrom. Ms. Grandstrom also testified, however, that certain unspecified state and federal regulations required that service providers like the applicant be capable of lifting some unspecified minimum weight.

The record also contains a document entitled "Community Options Program, Douglas County Wisconsin, Service Verification, Billing and Department of Human Services Action Sheet." That document, signed by the applicant as "service provider" and Mr. Schmitz as "client/consumer," contains language under which Mr. Schmitz and the applicant make Douglas County their agent with respect to the payment of wages, benefits, taxes, etc., although Mr. Schmitz retained the right to hire and fire the service providers. Exhibit B. As is evident from the document and the testimony of Ms. Grandstrom at the hearing, the money to pay the service providers under the community options program generally comes from the government, not from service recipients like Messrs. Schmitz and Sandstrom.

Based on physical restrictions imposed after the December 1994 injury (including a ten-pound lifting limit and a restriction against repetitive neck or back motions), Douglas County no longer wanted the applicant to provide services to eligible individuals. Douglas County was evidently concerned that the applicant was not physically able to safely perform his duties, and that Mr. Schmitz no longer met the minimum physical requirements Ms. Grandstrom contends were set by law. Consequently, Douglas County refused pay for his services to Mr. Schmitz in May 1995. It is this action that the applicant contends constituted the unreasonable discharge.

a. Employer-employe relationship.

The commission first turns to the issue of whether there was an employe-employer relationship between the applicant and Douglas County. If there was no such relationship, of course, the applicant cannot prevail, either on a disability claim or his associated penalty claims.

The commission recently dealt with the employment relationship issue in this very context in Shirley Nickell v. Kewaunee County, WC claim no. 94064155 (LIRC, September 24, 1996). In that case, the commission rejected the argument that an individual who provided housecleaning and cooking services under the long term support community options program was the employe of the recipients of the services. Instead, the commission concluded that the service provider was the employe of the county that administered the program, at least for worker's compensation purposes.

As the commission pointed out in Nickell, the guiding supreme court decision on the issue is Kress Packing Company v. Kottwitz, 61 Wis. 2d 175 (1973). According to the court in Kress, the primary test for determining the existence of an employer- employe relationship is whether the alleged employer has a right to control the details of the work; among the secondary tests are: (1) direct evidence of the exercise of the right of control, (2) method of payment of compensation, (3) furnishing of equipment or tools for the performance of the work, and (4) right to fire or terminate the employment relationship. Kress, at 61 Wis. 2d 182.

In this case, Mr. Schmitz and Mr. Sandstrom controlled many of the details of the provision of services by the applicant. On the other hand, the applicant testified he did not have any contact with Mr. Schmitz before he worked for him, and that he was referred to Mr. Schmitz by Elaine Heath whom he identified as the community options program director. Program coordinator Grandstrom testified that training was required under the community options program, and that this was provided by case managers. In addition, Ms. Grandstrom stated that if the applicant's restrictions were lifted "we would want him back." Significantly, Mr. Schmitz himself apparently would like the applicant to resume providing services, but Douglas County will not pay for the applicant's services because of his work restrictions. Considering the record in this case in light of the Kress factors and its holding in Nickell, the commission concludes that the applicant was the employe of Douglas County at the time of his injury while providing services to Mr. Sandstrom.

Because the ALJ did not find an employment relationship, he dismissed the application without resolving the substance of the issues of primary compensation, medical expense, or liability for penalties under sec. 102.18 and 102.22, Stats. The commission thus remands this case to the department for a decision on those issues, and further action as is appropriate, consistent with this decision finding an employe-employer relationship between the applicant and Douglas County.

b. Refusal to rehire.

However, the record does permit the commission to resolve now the applicant's unreasonable refusal to rehire claim. That claim arises under sec. 102.35, Stats., which provides as follows:

102.35 (3) Any employer who without reasonable cause refuses to rehire an employe who is injured in the course of employment, where suitable employment is available within the employe's physical and mental limitations, upon order of the department and in addition to other benefits, has exclusive liability to pay to the employe the wages lost during the period of such refusal, not exceeding one year's wages....

The "unreasonable refusal to rehire" statute applies to unreasonable discharges following a work injury, as well as simple failures to rehire. (1)

In an unreasonable refusal to rehire case, an applicant has the burden of proving he or she was an employe with a compensable injury who was denied rehire or discharged. Once that is shown, the burden is on the employer to show reasonable cause for the failure to rehire or for the discharge. (2) The employer may establish "reasonable cause" by showing that the work injury prevents the applicant from doing available work, or that the employer discharged for some valid reason unrelated to the injury such as poor performance or a business slowdown. (3) Finally, the supreme court and court of appeals have held that sec. 102.35 (3), Stats., "must be liberally construed to effectuate its beneficent purpose of preventing discrimination against employes who have sustained compensable work-related injuries." Great Northern Corp. v. LIRC, 189 Wis. 2d 313, 317 (Ct. App., 1994), citing West Allis School Dist. v. DILHR, 116 Wis. 2d 410, 422 (1984).

In this case, the applicant has established that he was an employe of Douglas County and that he was discharged. The commission shall assume for the purposes of resolving this issue that the applicant has sustained a compensable injury. Accordingly, the burden is on the employer to show reasonable cause for discharging him.

The applicant and Ms. Grandstrom testified that Mr. Schmitz, a chain smoker, was entirely bedridden. Ms. Grandstrom testified Mr. Schmitz needed to be lifted into (and presumably and out of) bed. The applicant's duties evidently included assisting the services recipients in that manner; he alleges he was injured helping Mr. Sandstrom out of a van. Further, the personal services the applicant provided involved more than light work; the day he was injured he had completed changing the oil in Mr. Sandstrom's vehicle.

Respondent exhibit 1 is a copy of certified medical report from a Minnesota physician dated May 16, 1995, a week before Douglas County stopped employing the applicant. According to the doctor, the applicant had permanent restrictions against lifting more than ten pounds, and against repetitive neck or back movements, prolonged trunk positions, or lifting above shoulder level. Obviously, these restrictions are inconsistent with the personal care the applicant was expected to provide to a bed-ridden man.

The applicant introduces the report of another doctor who only issued restrictions against heavy lifting (exhibit A). However, Douglas County is not required to act on those restrictions rather than the restrictions imposed by its doctor for the purposes of sec. 102.35 (3), Stats. In short, Douglas County has met its burden of showing a reasonable basis for concluding that the applicant was not able physically able to do his work. West Bend v. LIRC, 149 Wis. 2d 110, 126 (1989). It therefore may not be held liable under sec. 102.35 (3), Stats., regardless of whether a compensable work injury is established, The application on that issue must be dismissed.


The findings and order of the administrative law judge are affirmed in part and reversed in part. This case is remanded to the department for further action on the application for disability benefits and medical expenses generally and for penalties under sec. 102.18 and 102,22, Stats., consistent with the terms of this decision. The application dealing with the claim under sec. 102.35 (3), Stats., is dismissed.

Dated and mailed January 30, 1997
bunnege.wrr : 101 : 3  ND 2.11  7.32

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner


The commission's reversal in this case depended on reaching a different legal conclusion from largely undisputed facts. Because no issue of witness credibility was presented, the commission did not confer about witness credibility and demeanor with the administrative law judge who presided at the hearing. Transamerica Ins. Co. v. ILHR Department, 54 Wis. 2d 272, 283-84 (1972).



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(1)( Back ) Dielectric Corp. v. LIRC, 111 Wis. 2d 270, 278 (Ct. App., 1982).

(2)( Back ) This "very correct standard" set out by court in Dielectric, supra, at 111 Wis. 2d 278 was adopted by the supreme court in West Bend v. LIRC, 149 Wis. 2d 110, 121 (1989) which specifically stated that "after an employe shows that she 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, at 149 Wis. 2d 123.

(3)( Back ) See Great Northern Corp. v. LIRC, 189 Wis. 2d 318-19 (Ct. App., 1994); Ray Hutson Chevrolet v. LIRC, 186 Wis. 2d 118, 123 (Ct. App., 1994).