STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

TERRY ANN MALLETTE, Applicant

HARTFORD FINISHING INC, Employer

CONNECTICUT INDEMNITY COMPANY, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 93036016

The administrative law judge issued his findings of fact, conclusions of law, and interlocutory order in this case on January 23, 1995, following a hearing on January 5, 1995. The employer and the insurer (collectively, the respondent) have submitted a petition for commission review of the administrative law judge's findings and order. Thereafter, both the respondent and the applicant submitted briefs.

Prior to the hearing, the respondent conceded jurisdictional facts, an average weekly wage of $317.84, and a May 20, 1993 compensable injury. The respondent conceded and paid approximately $4,500 in temporary disability benefits, permanent partial disability at 2 percent compared to disability to the body as a whole, and certain medical expenses.

The dispute at hearing centered on: (1) the applicant's claim for permanent disability for loss of earning capacity (in addition to the conceded "functional" permanent partial disability,) and (2) the applicant's entitlement to an interlocutory order for medical expense, additional permanent partial disability and vocational rehabilitation benefits.

The presiding administrative law judge awarded a 10 percent permanent partial disability for loss of earning capacity. He also issued an interlocutory order on all issues but the additional loss of earning capacity. The employer appealed. It does not challenge the interlocutory order, but contends that the applicant is statutorily- barred from receiving loss of earning capacity based on the facts of her discharge.

The commission has carefully reviewed the entire record in this case, including the briefs submitted by the parties. After consulting the administrative law judge concerning the credibility and demeanor of the witnesses, the commission hereby sets aside his findings of fact, conclusions of law and interlocutory order, and substitutes the following therefor:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Facts.

The applicant suffered a conceded work injury on May 20, 1993. Her doctor, Stanley Robbins, M.D., noted the acute onset of low back pain, with radicular symptoms into her legs, following repetitive bending and lifting at work. Based on an MRI, he diagnosed a herniated disc. During the course of conservative treatment, the applicant's back improved and her leg pain resolved.

On October 21, 1993, Dr. Robbins prepared a document releasing the applicant to work on October 25, subject to a 25-pound lifting restriction and re-evaluation in one month. The applicant altered the release to state she was released to work on October 26. Compare Exhibits 2 and 3. She then presented the altered release to the employer when she returned to work on October 26. The employer's witness testified that he was suspicious of the release and obtained a copy of the original document from the insurer. Upon discovering the applicant falsified the release, the employer fired her on October 28.

The applicant explained that, when she awoke on October 25 her back was still bothering her, so she called Dr. Robbins' office. According to the applicant, Dr. Robbins told her he would send her a release to return to work on October 26 and later did so. In short, the applicant testified that she altered Dr. Robbins release because she "was getting another one coming in for the 26th because the doctor said I could have off until the 26th."

The employer's witness testified that the applicant turned in another document from Dr. Robbins on November 11, 1993. That document, dated November 1, 1993, stated that the applicant was "off work 10/25 because she was released for PT." Exhibit 6. The employer points out that the November 1 document excuses the applicant for physical therapy, not because she was unable to work as she asserted.

In a practitioner's report dated December 18, 1993, Dr. Robbins eventually opined that the applicant plateaued with a permanent partial disability at 2 percent compared to disability to the body as a whole. He also established a permanent 35-pound lifting restriction. He concluded that work directly caused the applicant's disability.

After her discharge, the applicant eventually became re-employed at a bank. She was hired at $5.25 per hour. She earned $6.00 at the time of her hearing. This work is within the restrictions set by Dr. Robbins.

The applicant's vocational expert, Michael Ewens, opined that the applicant suffered a 10 to 15 percent loss of earning capacity based on Dr. Robbins' restrictions. The respondent's experts, Christina Buechel and Leanne Paniziche, found no loss of earning capacity. They noted that the applicant could have continued to earn her preinjury wage with the employer, had she not been discharged by the employer for misconduct. Ms. Paniziche and Buechel also believed that the applicant was capable of returning to Shaws Jewelers, for whom she worked before the named employer, and from whom she earned a higher straight-time wage than she earned with the named employer.

2. The statute.

As discussed above, the issue before the commission is the applicant's eligibility for loss of earning capacity given the facts of her discharge. Generally, a worker with an unscheduled permanent disability is eligible for an award based on loss of earning capacity (LOEC) under sec. 102.44 (3), Stats. However, an award for LOEC itself is subject to the so-called 15 percent rule under sec. 102.44 (6), Stats.

That section provides, in relevant part:

"102.44 (6)(a) Where an injured employe 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%.

" (b) If, during the period set forth in s. 102.17 (4) the employment relationship is terminated by the employer at the time of the injury, or by the employe because his or her physical or mental limitations prevent his or her continuing in such employment, or if during such a period a wage loss of 15% or more occurs the department may reopen any award and make a redetermination taking into account loss of earning capacity.

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

The department explains the provision in its footnote 122 to the Wisconsin Worker's Compensation Act as follows:

"102.44 (6) provides that in case 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 employe has returned to work for the same employer at the time of injury at a wage loss of less than 15%. A good faith offer of employment refused by the employe without reasonable cause has the same effect as an actual reemployment. The claims subject to this subsection 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."

3. Prior cases.

The commission has considered numerous claims for LOEC made by injured workers who, after returning to their pre-injury work without wage loss, subsequently separate from their employer. For example, in Donald E. Robb v. Brodhead School District, claim no. 87016091 (LIRC July 10, 1991), the applicant had returned to work following a 1987 work injury, but took early retirement in 1988 after telling his supervisor that 30 years of teaching was enough. The commission agreed with the ALJ that the applicant had retired for reasons other than his physical disability, and denied LOEC (although it awarded 3 percent functional permanent partial disability). In doing so, the commission reiterated its interpretation of sec. 102.44 (6), Stats.:

"In situations involving a termination or quit, the Commission and the Department exercise the statutory discretion to reopen the matter for assessment of loss of earning capacity only if the termination was without reasonable cause, or the quitting was due to physical or mental limitations, or to improper inducement to quit by the employer. This interpretation of the statute is consistent with the policy evident in section 102.44 (6)(g), Stats., which provides that if an employer in good faith makes an offer of employment which is refused by the employe without reasonable cause, the employe is considered to have returned to work with the earnings he/she would have received had it not been for the refusal.

See also William Brown (deceased) v. P.H. Orth Company, claim no. 83041928, (LIRC December 6, 1991)[allowed LOEC on discharge of a worker for a rule violation where work was beyond worker's restrictions]; Teodora E. Wittenberg v. Briggs and Stratton Corporation, claim no. 87008397 (LIRC May 31, 1991)[awarded functional PPD, denied LOEC on quit]; and Hewitt v. LIRC Birchwood Manufacturing, claim no. 88031649 (LIRC, May 8, 1991); affirmed Barron County circuit court, case no. 91 CV 230 (February 4, 1992); affirmed court of appeals case no. 92-0872, district III unpublished decision (December 8, 1992)[court of appeals affirmed commission's award of functional PPD and denial LOEC under sub. (6)(b) on a quit.]

Although sec. 102.44 (6)(b), Stats., by its terms only refers to reopening awards, the commission has traditionally applied a similar logic to cases where an employe is returned to work and either fired or quits before any permanent partial disability award is made. The commission specifically considered and rejected the argument that the commission lacked jurisdiction on an LOEC claim under sub. (6)(b) absent a prior award to "reopen." In Kurt D. Koltz v. Kolbe & Kolbe Millwork Company, Inc., claim no. 88027739 (LIRC, February 14, 1991), the applicant returned to work with no wage loss following his injury. The commission considered whether it could "reopen" or "redetermine" LOEC under sub. (6)(b), based on wage loss caused by the discharge. Despite the fact that there was no prior LOEC or even functional permanent partial disability award to "reopen," the commission concluded sub. (6)(b) could apply because the applicant had been discharged. This is consistent with Robb, Wittenberg, Brown and Hewitt, cited above: each of those cases involved an LOEC claim decided under sub. (6)(b) on the application raising functional permanent partial disability for the first time.

However, the commission in Koltz nonetheless decided not to award LOEC under sub. (6)(b), based on "good cause" for the discharge. After reciting the Robb analysis set out above the commission concluded in Koltz:

" [W]hen an employe is returned to employment without wage loss and is subsequently terminated for good cause by the employer at the time of the injury, it can be appropriate for the Commission to decline to exercise the discretionary authority provided by section 102.44 (6)(b) to make a determination taking into account loss of earning capacity.

"In this case [Kurt D. Koltz], the Commission is satisfied that the employe was terminated on January 23, 1989 for good cause. ... [T]he evidence introduced into the record at the hearing held on the application ... support[s] the conclusion that the employe was discharged justifiably. He knew he was expected to work unless excused by a physician; he knew that further unexcused absence would result in discharge; he had been provided a note from his physician which legibly and unambiguously indicated that he could engage in seated work on January 26 and 27 and that he could return to work on Monday, January 30 with only his prior restrictions in force; and despite this he failed to report to work and failed to further notify the employer of his absence. In these circumstances, the commission is not inclined to exercise its discretion under section 102.44 (6)(b), Stats., to make a determination relating to loss of earning capacity."

See also: Louisiana-Pacific Corporation v. LIRC and Craig William Vallem, Sawyer County circuit court, case no. 87-CV-189 (July 28, 1988); and Louisiana-Pacific Corporation v. Paula R. Stangret, court of appeals case no. 92-0478, District III unpublished decision (August 18, 1992).

4. Discussion.

In sum, the argument that the commission has no authority to award or deny LOEC under sub. (6)(b) in the absence of an award to "reopen" has been rejected by the commission, a circuit court, and the court of appeals. The argument that a discharge for cause constitutes an automatic bar to LOEC as a refusal of an offer of work by direct operation of sub. (6)(g) was also rejected. The commission in Kurt Koltz, however, stated that the sub. (6)(g) indicated a legislative intent to deny LOEC under sub. (6)(b) in cases where a discharge was made for misconduct or similar reasonable cause, and this approach has received at least tacit approval from the courts. The circuit court in Vallem stated that when an employe is terminated for misconduct, the employer need not pay LOEC, although the court of appeals used more reserved language in Stangret.

Thus, in this case, the commission concludes it has the authority to "reopen" to award LOEC under sub. (6)(b) for wage loss caused by the applicant's discharge. However, it declines to do so in this case based on the circumstances of her discharge. An employer should be able to expect that its employes will present documents from medical practitioners as written, especially when there is potential liability for worker's compensation. The applicant's intentional alteration of Dr. Robbins' release was inexcusable and not simply a harmless act of poor judgment. It provides good cause not only for the discharge, but also for denying an award of LOEC under sec. 102.44 (6)(b), Stats.

The applicant requested an interlocutory order for future medical expense, possible additional functional permanency benefits, possible additional loss of earning capacity benefits in excess of the amounts issued in this decision, possible additional temporary disability benefits, and a possible retraining claim. The administrative law judge issued an interlocutory order on all issues except loss of earning capacity, and the respondent did not object to the interlocutory order in its petition. Therefore, this order reserves jurisdiction for future claims of medical expense, additional functional permanent disability, additional temporary disability and possible vocational retraining benefits. With respect to loss of earning capacity, however, this order is final.

NOW, THEREFORE, this

INTERLOCUTORY ORDER

The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are reversed in part and affirmed in part. The applicant's claim for permanent disability based on loss of earning capacity is dismissed.

Jurisdiction is reserved for future findings and orders as are warranted under this decision.

Dated and mailed July 31, 1995
ND § 5.23

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

James R. Meier, Commissioner

MEMORANDUM OPINION

The commission conferred 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). The administrative law judge stated he did not believe the question of whether Dr. Robbins orally extended the applicant's leave on October 26 was at issue. The commission is not certain it agrees, given testimony about Exhibit 6. Even if the doctor had extended the leave as the applicant testified, however, that would not excuse the applicant's alteration of the doctor's release.

Appealed to Circuit Court. Affirmed March 22, 1996.

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