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Searching for Articles by Russell W. Wilson
Russell W. Wilson
Wausau Office
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Wisconsin Court of Appeals Rejects Labor and Industry Review Commission's Worker's Compensation Determination as Unreasonable

Posted on June 28, 2016, Authored by Russell W. Wilson, Filed under Employment

Circuit courts and appellate courts commonly apply “great weight deference” to worker’s compensation benefit determinations made by the Labor and Industry Review Commission (“LIRC”), but not this time.  In an unpublished opinion issued by the Wisconsin Court of Appeals on June 21, 2016, the appellate court found that LIRC impermissibly read into a statute an element the legislature did not put there.  Accordingly, the court of appeals reversed LIRC’s denial of disability (i.e. indemnity) benefits, and sent the case back to LIRC for a determination as to whether the employee underwent surgery in good faith so as to trigger payment of benefits. To be clear, the reversal and remand applies to one issue, but it is an important one that commonly recurs in worker’s compensation.  In this case the employee reported symptoms about, and sought medical treatment for, neck and shoulder problems that manifested one day while she continually performed work above her shoulder level (here, scanning items on a shelf with the use of a hand-held scanning device).  The ultimate medical question was whether she had a muscle strain or a nerve problem cause by degenerative arthritis in her cervical spine.  The ultimate answer was that she had both, but only the muscle strain (which healed without resulting in permanent partial disability) was found to be a compensable injury.  The cervical spine/neurologic problem was eventually determined not to have been a compensable injury or condition under worker’s compensation, but not before she had the surgery on her cervical spine.  (The court of appeals affirmed LIRC on this issue.) Following the advice of her health care providers, the employee underwent a surgery to remove a disc and to fuse two vertebral levels in her cervical spine.  That major surgical procedure alone causes time off work (temporary total disability) and residual impairment (permanent partial disability).  Section 102.42(1m) under the Worker’s Compensation Act specifies the following criteria for disability benefits: (1)  the employee sustained a compensable injury (emphasis mine); (2)  he or she undertook invasive medical treatment; (3)  the treatment was undertaken in good faith; (4)  the treatment was generally medically acceptable, but unnecessary; and, (5)  the employee incurred a disability as a result of the treatment. LIRC construed section 102.42(1m) narrowly to require that the cervical spine condition had to be compensable in order to award any disability benefits connected to the surgery on the cervical spine.  The court of appeals ruled, however, that LIRC’s interpretation added a criterion that the legislature had not included in the statute.  The legislature had specified only that there be “a compensable injury.”  In this instance there was a compensable injury – the diagnosis of a muscle strain for which the employer conceded and paid benefits before it obtained the report of its independent medical examiner.  Finding LIRC’s narrow construction of the statute unreasonable, the court of appeals refused to apply the “great weight deference” review standard to LIRC’s decision.  The court of appeals sent the case back to LIRC for further fact finding as to whether the employee underwent the surgery in good faith.  Interestingly, there is a similar provision for the recovery of medical treatment expenses incurred in good faith (section 102.42(1) and other case law), but the employee did not assert a claim to recover for medical expenses. The case is Flug v. Labor and Industry Review Commission, 2016 WL 3389965 and can be found here.  The decision will not be published.

Anhydrous Ammonia Release Kills Worker – U.S. DOJ Sues Company Under the Clean Air Act

Posted on December 30, 2015, Authored by Russell W. Wilson, Filed under Employment

... Process Safety Management program under the Occupational Safety and Health Act.  Section 112(r)(1) of the Clean Air Act provides that owners and operators of stationary sources of li...

Worker’s Compensation Light Duty Programs for Occupationally Injured Employees and the ADA

Posted on November 24, 2015, Authored by Russell W. Wilson, Filed under Employment

Employers often establish a light-duty program that is reserved for employees who have work-related injuries or conditions during their healing periods.  The hallmarks of these programs is that temporary light-duty work is reserved for those employees receiving temporary benefits under worker’s compensation.  The rationale for this program is to help the employer comply with the Worker’s Compensation Act (“WCA”) while managing its worker’s compensation insurance premiums and easing worker’s back into the workforce after an on-the-job injury or condition. But how does reasonable accommodation under the Americans with Disabilities Act (“ADA”) interplay with light-duty programs?  Specifically, does the ADA require that an employer that maintains a light-duty program offer a light-duty position to an employee who is a “qualified individual” but whose injury or condition is not work-related?  The Eastern District of Wisconsin recently addressed this question in Severson v. Heartland Woodcraft, Inc., 2015 WL 7113390 (November 12, 2015).  The answer is: it depends.  The Court in Severson was confronted with a decision it had issued in an earlier case, Gibson v. Milwaukee County, 95 F. Supp.3d 1061 (E.D. Wis.2015).  The outcome depends upon whether, at the time a request for a reasonable accommodation is made, a light-duty position established under a light-duty program exists and is vacant.  Neither the ADA nor the WCA require an employer to create a light-duty position.  Creating a light-duty program for worker’s compensation purposes goes beyond that required under the ADA.  Creating such a program allows the employer, pursuant to its light-duty program, to establish a temporary, light-duty job when an employee is ready to return to work during the healing period for a work-related injury or condition.  Once the employee’s healing period is over, the temporary position expires.  In other words, the employer’s light-duty program does not necessarily require that a permanent light-duty position be created.  Rather, the light-duty positions may be, and typically are, created on an ad hoc basis. In the Gibson case, the employer had a light-duty program and also had an existing and vacant light-duty position at the time a non-occupationally injured qualified employee made a request for a reasonable accommodation under the ADA.  The Court found under that circumstance that the employer had violated the ADA by not having considered offering the vacant position to the qualified individual.  In contrast, however, the employer in the Severson case had a light-duty program that allowed for establishing light-duty positions on ad hoc basis, i.e. whenever an employee could return to work during the healing period for a work-related injury or condition.  The Court in Severson had no difficulty in determining that there was no violation of the ADA under that circumstance.

Worker's Compensation: Opt Out in Wisconsin?

Posted on November 7, 2016, Authored by Russell W. Wilson, Filed under Employment

In 2014 Oklahoma enacted a radical change to its workers’ compensation statute, and on September 13, 2016, the Oklahoma Supreme Court held that it violates the state constitution. The case is Dillard’s, Inc. v. Vasquez, 2016 OK 89. Some version of the Oklahoma legislative plan might be considered by the Wisconsin Legislature. This article explores the structure of what the Oklahoma Supreme Court majority opinion termed the “Opt Out Act.” Oklahoma enacted a dual workers’ compensation scheme on February 1, 2014. In doing so, the legislature repackaged its long-standing traditional workers’ compensation program to become known as the “Administrative Workers’ Compensation Act” (AWCA) and created the “Oklahoma Employee Injury Benefit Act” (referred to in the majority opinion as the “Opt Out Act” and in the main concurring opinion as the “OEIBA”). Whereas the AWAC is a traditional statutory workers’ compensation act, the Opt Out Act is an employee welfare benefit plan operated under the Employee Retirement Income Security Act of 1974 (ERISA). Under the new law Oklahoma employers were required to select one or the other. Opting out of workers’ compensation entirely was not allowed. Generally speaking, self-funded employee welfare benefit plans under ERISA are devised so as to vest the plan sponsor with maximum discretion to establish what benefits may be eligible for award. Claims administrators are sometimes appointed to review claims submitted by the beneficiary, here, the injured worker, although in some cases the employer is the claims administrator. The “hearing” is typically a paper review, not a contested case with adverse testimony. Likewise, appeals are usually a paper review. Decisions of the appeal adjudicator are final and binding. Judicial review in state or federal court is subject to narrow review on the paper record established during the claims process with deference to the plan sponsor’s decisions. ERISA, a federal statute, preempts state laws that govern such benefits, except for those state laws enacted solely to provide workers’ compensation benefits. Oklahoma’s Opt Out Act required certain benefit levels for work-related injuries to meet or exceed the same levels as those in the AWCA. In other words, items such as temporary total disability rates and permanent partial disability percentages under the Opt Out Act must meet or exceed those of the AWCA. The critical provision which was held to be unconstitutional provided, however, that no other provision of the AWCA defining covered injuries, medical management, dispute resolution or other process, funding, notices or penalties shall apply unless the plan sponsor expressly chose to do so. Moreover, all employers in Oklahoma under the AWCA and the Opt Out Act retained the full protection of the exclusive remedy of workers’ compensation under the dual scheme. A Dillard’s, Inc. employee, Jonnie Yvonne Vasquez, injured her neck and shoulder while lifting a shoe box in a Dillard’s department store in the fall of 2014. Dillard’s, Inc. had selected the Opt Out Act, and it denied her claim. Ms. Vasquez sought relief before the Oklahoma Workers’ Compensation Commission. Dillard’s, Inc. attempted to remove the matter to federal district court, but the federal judge, having found that the Opt Out Act is not pre-empted by ERISA because it is a workers’ compensation statute, sent the case back to the Oklahoma Commission. The Oklahoma Commission ruled that the Opt Out Act violates Oklahoma’s constitutional prohibition against “special laws.” Dillard’s, Inc. appealed to the Oklahoma Supreme Court, which affirmed the Commission’s ruling. The court found that the dual system creates two classes of employees, those who have work-related injuries or conditions whose employers selected statutory worker’s compensation benefits and those whose employers chose the Opt Out Act. “The core provision of the Opt Out Act . . . creates impermissible, unequal, and disparate treatment of a select group of injured workers. Therefore, we hold that the Oklahoma Employee Injury Benefit Act . . . is an unconstitutional special law under the Oklahoma Constitution . . .” (internal citations omitted). We understand that bills to establish similar opt out schemes have been introduced in Tennessee and South Carolina. The lobbyist for opt out plans is said to be the Association for Responsible Alternatives to Workers’ Compensation (ARAWC). It is said that ARAWC has met with elected officials in the Wisconsin Legislature.

Employers Who “Usually” Employ 3 or More Employees: the Threshold for Mandatory Worker’s Compensation in Wisconsin

Posted on August 2, 2016, Authored by Russell W. Wilson, Filed under Employment

In general (i.e. non-farm) employment, Wisconsin’s Worker’s Compensation Act becomes mandatory for employers under either of two circumstances.  In the event such an employer pays $500 in wages during any calendar quarter, worker’s compensation becomes mandatory on the 10th day of the next quarter.  That’s a “bright line” rule.  Alternatively, worker’s compensation becomes mandatory when the employer “usually” employs three or more employees during a calendar quarter (irrespective of the total amount of wages paid) which also becomes effective on the 10th day following that quarter.  This alternative threshold criterion is much less clear because the Worker’s Compensation Act does not define the term “usually.”  So what does the term “usually” mean for the small business that once in a blue moon hires one, two, or three people for a small amount of work for which it pays very small wages?  The Wisconsin Court of Appeals interpreted the meaning of “usually” in this context in Noyce v. Aggressive Metals, Inc., 2016 WL 4016088 issued on July 28, 2016.  The facts on which the Noyce case was based were straight-forward.  The employer, Aggressive Metals, offered on December 27, 2010, one week’s worth of work to Noyce to install insulation in its building.  Aggressive Metals had been in business for only about 10 months and had only two employees, Neil and Nick Holland, brothers who owned the corporation.  Noyce performed the installation work and suffered  a serious injury when he fell through a ceiling on the last day of his employment, January 4, 2011. The work had begun before December 31, 2010, which meant that as of the fourth quarter in 2010, Aggressive Metals had in its employment three employees (the Holland brothers and Noyce).  Presumably, any wages paid for services during that quarter did not equal or exceed the sum of $500.  Under the Worker’s Compensation Act, worker’s compensation would become mandatory on January 10, 2011, i.e. the 10th day in the next succeeding quarter, i.e. the first quarter of 2011.  Noyce sought coverage under the Act for his injuries.  Noyce argued that a case decided by the Wisconsin Supreme Court in 1947 was binding precedent, but the court of appeals pointed out that the current version of the Worker’s Compensation Act on this very point had been amended by the legislature after the 1947 case. It still remained, however, for the court of appeals to interpret the meaning of “usually” because the legislature did not define that term in the statute.  The court of appeals did what courts do in that circumstance – consulted a well-recognized dictionary.  The court of appeals relied on Black’s Law Dictionary (10th ed.2014) (“ordinary; customary”) and Webster’s Third New International Dictionary ( (1) “by or according to habit or custom” and (2) “more often than not”).  The court of appeals noted that Aggressive Metals had been in business for only 10 months during which period it had only two employees until it offered “limited, short-term work” to a third employee.  Under this circumstance, Aggressive Metals was held not to have “ordinarily, customarily, or habitually employ three employees at the time Noyce was injured.”  And having a third employee “for a few days” did not suffice to meet the “more often than not” definition of “usually.” Noyce was not alone in seeking worker’s compensation benefits; his claim was supported by the Department of Workforce Development Uninsured Employers Fund (“UEF”).  Evidently, Aggressive Metals had not purchased a worker’s compensation policy on a voluntary basis.  Why might a start up business have done so?  Because if the UEF is required to pay worker’s compensation benefits (which in this case it did not have to do), it must seek reimbursement from the uninsured employer.  Moreover, individual owners of a corporation are not shielded from liability to the UEF, and the standard personal exemptions in bankruptcy are not applicable as against the UEF.  Uninsured employers who are found to be required to have mandatory worker’s compensation may face serious and unappreciated, financial risk.  Even start up companies on a tight budget should strongly consider obtaining a worker’s compensation policy on a voluntary basis.

Automobile Dealerships and Part Suppliers: Unintended Consequences in Whistleblower Rules?

Posted on December 15, 2016, Authored by Russell W. Wilson, Filed under Employment

...efects (including noncompliance and violation of applicable reporting requirements) (P.L. 112-141, 49 U.S.C. 30171).  Think ignition systems that burst into flame, engines that overri...

OSHA’s Final Rule Clarifying (and Confirming) the Employer’s Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illness

Posted on December 20, 2016, Authored by Russell W. Wilson, Filed under Employment

OSHA has always taken the position that the duty to record accurate and complete injuries and illnesses is a continuing duty.  OSHA concedes, however, “that its recordkeeping regulations were not clear with respect to the continuing nature of employers’ recordkeeping obligations.”  OSHA has now issued a Final Rule that clarifies the continuing nature of the recordkeeping requirement.  The Final Rule was published on December 19, 2016. Why does a continuing obligation matter?  It matters because a continuing duty operates to extend the reach of the statute of limitations.  OSHA can reach back further in time to issue citations.  The Final Rule was developed in response to the prior (“not clear”) recordkeeping language that was held to not create a continuing obligation in AKM, LLC v. Sec’y. of Labor, 675 F.3d 752 (D.C. Cir. 2012) (Volks II).  OSHA has perpetuated its disagreement with the interpretation of the U.S. Court of Appeals for the District of Columbia.  OSHA spells out its disagreement in the Final Rule, which is expressly “adopted in response” to the Volks II ruling.  “This final rule is designed to clarify the regulations in advance of possible future federal court litigation that could further develop the law on the statutory issues addressed in the D.C. Circuit’s decision.” The facts in Volks II illustrate why it matters whether the recordkeeping duty is one that is continuing.  The employer had recordkeeping deficiencies during a 54-month period from January 11, 2002, through April 22, 2006.  OSHA began its inspection on May 10, 2006, and issued citations (that reached back to January 11, 2002) on November 8, 2006.  Employers “must save” records for a period of 5 years.  The statute of limitations in which citations must be issued is 6 months.  OSHA argued (unsuccessfully) that the 5-year record retention and access period must be added to the 6-month statute of limitations.  Under that theory the statute of limitations would have expired on November 10, 2006.  According to OSHA’s argument, the citations were issued timely, by a bare two days, so as to encompass all the violations.  The Court of Appeals rejected OSHA’s argument, however, and determined that OSHA’s interpretation would “subvert the Act’s six-months statute of limitations.”  The last violation (April 22, 2006) occurred more than 6 months before the citations were issued (November 8, 2006); none of the violations occurred within 6 months of issuance.  The court, therefore, ordered that all of them be dismissed. Now in this Final Rule OSHA has added language to clarify (and I would say to confirm) its long-held position that employers hold a continuing duty to perform their recordkeeping obligations.  The Final Rule takes effect on January 18, 2017, two days before the presidential inauguration. 

Willful Permit-Required Confined Space Entry Citation Upheld by the Seventh Circuit

Posted on February 9, 2017, Authored by Russell W. Wilson, Filed under Employment

On February 1, 2017, the United States Court of Appeals for the Seventh Circuit affirmed the decision of the Occupational Safety and Health Review Commission (“Commission”) which imposed serious willful citations under the permit-required confined space entry standard.  In doing so the Seventh Circuit discussed imputed knowledge to the employer, foreseeability of a supervisor’s misconduct, and willful violations.  The case is Dana Container, Inc. v. Secretary of Labor, 2017 WL 430079. Dana Container, Inc. (“Dana”) provides tank cleaning services and has its own permit-required confined space (“PRCS”) safety program.  In 2009 a supervisor disregarded Dana’s safety program and entered a dirty tank in order to kick open a clogged valve so as to allow the tank to drain chemical residue.  No entry permit was applied for or issued, no atmospheric testing of the tank was performed, no harness or respirator was worn, and no attendant stood ready to attempt rescue. The supervisor lost consciousness.  Fortunately, a worker spotted the unconscious supervisor and called the fire department, which rescued the supervisor. First, in order to impose a serious violation, the employer must know that the problem existed.  The Seventh Circuit upheld the Commission’s determination that the supervisor’s actual knowledge of his own misconduct imputed his knowledge to Dana.  “This path for imputing knowledge is common in employment law.”   Whether Dana’s PRCS safety program was adequate is not material when knowledge of a violation is imputed to the employer. Second, Dana argued that its PRCS safety program demonstrated that the supervisor’s misconduct was unforeseeable and unpreventable.  The Commission, however, examined Dana’s PRCS records and took a different view.  The Commission determined that nearly all of the tank entry permits contained errors and omissions.  For example, some permits had exceeded the maximum duration of exposure by more than one hour.  Some lacked air testing monitoring, and others failed to show how long the permits were valid.  Some failed to state whether employees had reviewed material safety data sheets; some did not identify entrants and attendants.  These might have been actual deficiencies, failures of documentation, or a combination of the two.  In any event there was no documentation that Dana ever took action or followed up on the deficiencies.  The Commission concluded Dana’s PRCS safety program was inadequate. Finding that the Commission’s determination was supported by credible evidence, the Seventh Circuit ruled that the supervisor’s misconduct was both foreseeable and preventable.  “Even in the face of a robust written program, lax disregard of the rules can send a message to employees that a company does not make safety a priority.  In such an environment, conduct such as Fox’s is reasonably foreseeable.” Finally, the Seventh Circuit reviewed its 2016 ruling in Stark Excavating, Inc. v. Perez, 811 F3d. 922, 928-29, where a good faith defense to a willful violation involving a trench collapse was not recognized where the employer had violated its own safety rules and policies.  Likewise, in Dana Container, the Seventh Circuit ruled that Dana’s violation of its own PRCS safety program defeated a defense of good faith and supported the Commission’s determination that the serious violation was also willful. The Dana Container case serves as a cautionary tale reminding employers that their safety policies and procedures must not merely meet OSHA standards.  Rather, safety policies and procedures must be robustly and comprehensively written, painstakingly adhered to, and swiftly acted upon whenever noncompliance is detected.

A Seemingly Important Win for Wisconsin Worker’s Compensation Insurance Carriers and Employers

Posted on July 11, 2017, Authored by Russell W. Wilson, Filed under Employment

On its face the decision of the Wisconsin Supreme Court in Flug v. LIRC, 2017 WI 72 (decided on June 30, 2017), is a clear, important win for the employer side in common injuries that involve pre-existing degenerative conditions.  The general circumstances presented in Flug are familiar.  In that case, a forty-three year old retail store supervisor was changing merchandise prices with the use of a hand-held scanner, a device of negligible weight.  Although she had never before experienced severe, sudden pain in her neck that radiated down her right arm, she did have that experience while scanning shoe boxes located above the level of her head.  Diagnostic tests revealed the presence of pre-existing degenerative arthritis in her cervical spine. The employee’s course of treatment led to surgery, a discectomy in the cervical spine.  After the surgery her pain subsided and her lifting restrictions were gradually lifted.  Her post-surgical permanent partial disability rating to the body as a whole, however, was rated at 22 percent. The employer initially conceded and paid for medical expenses and temporary total disability indemnity.  After the employee had her surgery, however, the employer obtained an independent medical evaluation (“IME”).  According to the IME report, nothing more than a temporary neck strain resulted from the shoe scanning incident, but not the need for surgery (and its attendant permanent partial disability rating to the total body) to remove a disc in the arthritic cervical spine.  Prior to the Supreme Court ruling, the administrative law judge (“ALJ”), the Labor and Industry and Review Commission (“LIRC”), and the circuit court had ruled in favor of the employer.  By contrast, the Wisconsin Court of Appeals had ruled partially in favor of the employee by remanding the case to LIRC for further hearing to determine whether the employee had undertaken the invasive surgical procedure in good faith.  In a 4 to 3 decision authored by Justice Kelly, a majority of the Wisconsin Supreme Court held that “[b]ecause Ms. Flug’s surgery treated her pre-existing condition, not her compensable injury, her claim must be disallowed.”  The majority further held that “. . . an employee is not eligible for benefits under Wis. Stat. § 102.42(1m) if the disability-causing treatment was directed at treating something other than the employee’s compensable injury.” Chief Justice Roggensack thoroughly analyzed her view of the deficiency of the majority opinion in her dissenting opinion.  Pointing out that the IME report was obtained only after the employee had undergone surgery, Justice Roggensack concluded: Post-hoc examinations like Dr. Soriano’s are not relevant when determining whether Flug acted with a good faith belief at the time she undertook surgery that it would alleviate the pain she had suffered since her work-related injury on February 14, 2013.  Flug’s good faith belief is her state of mind at the moment when she undertook the invasive treatment.  And, it is her state of mind at the time she undertook surgery that the majority opinion avoids discussing. In a separate and equally persuasive dissenting opinion, Justice Ann Walsh Bradley highlighted that LIRC had concluded in clear error that the employee had not suffered any work-related injury.  “There is a reason that the court of appeals issued an unpublished opinion here.  And it likely is the messy record, which certainly does not represent LIRC’s finest hour.”  Both dissenting opinions would send the case back for further hearing before the ALJ to decide the issue of the employee’s good faith or lack thereof. Worker’s compensation insurance carriers and self-insured employers will likely redouble their efforts to seek post-surgical IMEs in cases that involve pre-existing arthritis.  They may press for recoupment of benefits paid after a retroactively-determined healing date.  Some employees might be deterred from seeking invasive treatment they otherwise would have pursued; others may be more inclined to undergo invasive treatment and proceed to hearing.  The import of Flug might not be as great as might appear from the majority’s decision.  It is likely lawyers for workers who, like Ms. Flug, had a clearly compensable injury initially will lay a careful evidentiary record of the employee’s subjective good faith in undergoing surgery.  What information did the employee have at that time?  What information was learned only after-the-fact of surgery?  What were the considerations, pro and con, for deciding to undergo an invasive procedure?  With a careful record established it is unlikely that LIRC would again erroneously conclude that no work-related injury had occurred.  Thereafter, it would be up to the courts to decide whether Flug will stand as a black-letter ruling on the one hand, or whether it may be distinguished on the facts on which it is based, on the other. To some extent Flug will become superseded.  The facts in Flug are based on a 2013 date of injury.  For injuries occurring on or after March 2, 2015, health care professionals (both treating and IME examiners) will be required to consider “other factors” (such as pre-existing degenerative arthritis) and allocate disability ratings between such other factors and those caused by work-related injuries or conditions. Yet even then it remains to be seen how Flug will be interpreted. Consider, for example, a work-related injury occurring after March 2, 2015.  Suppose the agency’s findings include that (1) it was pre-existing arthritis in the cervical spine that necessitated surgery rather than lifting a lightweight scanner overhead at work; (2) the employee thoroughly considered the pros and cons of undergoing surgery on her cervical spine and concluded in her good faith belief that it was for the purpose of relieving her pain from the work-related injury; and, (3) a bad surgical outcome, paralysis, occurred.  Would Flug be applied to deny compensation under that circumstance?  Or would Flug be limited to instances in which no work-related injury occurred (as LIRC erroneously concluded in Flug)?  This would appear to be an issue for the Wisconsin Supreme Court to decide.

Federal Court Applies Worker’s Compensation Exclusive Remedy to Asbestos Secondary Exposure Lawsuit

Posted on April 20, 2015, Authored by Russell W. Wilson, Filed under Employment

Plaintiffs in asbestos personal injury and wrongful death lawsuits often attempt to circumvent the exclusive remedy of worker’s compensation. The federal district court for the Western District of Wisconsin has recently applied Wisconsin’s exclusive remedy provision to dismiss a Wisconsin employer from an asbestos lawsuit brought by an employee. The case is Boyer v. Weyerhauser Company, et al., 39 F. Supp.3d 1036 (issued Aug. 22, 2014; reconsideration in part Nov. 4, 2014).  Milton Boyer’s complaint alleged that in 1973 he began work for Weyerhauser at its Marshfield plant where asbestos fireproofing products were manufactured and products containing asbestos were used in the manufacturing process. The complaint was drafted so as to circumvent Wisconsin’s exclusive remedy provision of worker’s compensation. For example, the complaint alleged that asbestos fibers reached Mr. Boyer’s home and auto, as well as the plant’s lunchroom and other locations where no work-related activities were conducted. The complaint alleged that the fibers were transported from the production area on worker clothing, personal effects, skin, and hair. Weyerhauser moved to dismiss the complaint on the theory that the allegations of exposure to asbestos fibers outside the plant manufacturing area could not overcome the fundamental gist of the complaint:  that exposure to asbestos fibers occurred in the course of employment and arising out of employment. The court ruled in favor of Weyerhauser and dismissed Boyer’s complaint as to Weyerhauser with prejudice. In its analysis the court summarily rejected the “dual persona” exception to the defense of exclusive remedy. Rather, the court found that the complaint clearly alleged that Boyer’s exposure to asbestos fibers occurred while in the course of his employment (i.e. the time, place, and circumstances of employment) and that the exposure arose out of his employment under the zone of special danger doctrine (i.e. the causal origin of the injury). The court relied on established Wisconsin case law, but it also reviewed case law outside of Wisconsin, notably Silkwood v. Kerr-Magee Corp., 667 F.2d 908 (10th Cir.1981), rev’d on other grounds, 464 U.S. 238 (1984). In that case an employee at the defendant’s nuclear fuel processing plant won a judgment at the district court level for radiation from plutonium found at her apartment. The Tenth Circuit Court of Appeals, however, applied Oklahoma’s exclusive remedy provision of worker’s compensation, noting that all of the plutonium to which the employee was exposed originated from her place of employment. Although the Boyer decision of the federal court in the Western District of Wisconsin is not binding (i.e., precedential) in Wisconsin state courts, the decision is highly persuasive as it is based on well-settled Wisconsin law. This decision might be persuasive in cases brought in jurisdictions outside Wisconsin depending upon the specific allegations. Click here for a link to a copy of the Boyer decision.

Seventh Circuit Affirms “Willful” OSHA Violation

Posted on May 18, 2015, Authored by Russell W. Wilson, Filed under Employment

The Seventh Circuit Court of Appeals has issued a decision that is interesting for its discussion and analysis of what a “willful” OSHA violation means. A worker for a precast concrete manufacturer fell into a sand bin in which he became engulfed up to his neck. Fortunately, he survived, but the complicated five hour rescue caused serious injuries. Co-workers responded to the trapped worker’s screams; they were able to clear the sand from his neck to his waist. They were not able, however, to extract the victim on account of the sand that was pressing in on him. During the ordeal the trapped worker requested that a call be placed to 911. The plant manager was aware of the request, but for unexplained reasons that call was not made until after it became apparent the attempt by co-workers to dig him out of the sand would not be successful. OSHA cited the employer for a willful violation for having failed to immediately call rescue services. The applicable regulation, 29 C.F.R. § 1910.146(d)(9) (permit required confined space program), requires the employer to develop and implement procedures for summoning rescue and emergency services, for providing necessary emergency services to rescued employees, and for preventing unauthorized personnel from attempting a rescue. The Seventh Circuit summarily determined that the employer had failed to develop and implement rescue procedures. The more difficult question was whether that violation was “willful.” The Seventh Circuit began its discussion by noting that neither the OSHA statute nor the regulations that implement the statute define the term “willful.” Nor does the common law provide a standard definition. The Court noted that it may have “muddied the waters” as to the meaning of “willful” in a 2005 decision, in which it held that “an OSHA violation is willful if it is committed with intentional disregard of, or plain indifference to, the requirements of the statute.” Here, OSHA deemed the employer’s violation to have arisen out of “plain indifference.” The Court observed, however, that “plain indifference” merely duplicates the first alternative, “intentional disregard.” The Court added that its attempt to clarify “willfully” in a 2014 case “may not have been entirely successful.” There the Court said that “willfully” for purposes of civil law is conduct that creates “an unjustifiably high risk of harm that is either known or so obvious that it should be known.” The statute that provides for civil penalties, 29 U.S.C. § 666(a), requires proof the employer was aware of the risk, knew that it was serious, knew that effective measures could be taken, and failed to take them. The Court equated this description to reckless conduct The Court stated that the conduct of the plant manager to delay making the 911 call “no doubt” acted “recklessly and therefore willfully within the meaning of section 666(a) and that his reckless behavior must be imputed to [the employer].” If the employee had died, a criminal penalty under 29 U.S.C. § 666(e) for a willful violation would have been applicable. In that circumstance, the statute requires proof “not only that the risk was known to the defendant, but also that he knew he was violating the law.” While this case, Dukane Precast, Inc. v. Perez, 2015 WL 1967405 (May 4, 2015) does not change the existing law, it describes how the term “willful” in the context of OSHA violations has been interpreted in the Seventh Circuit. Accordingly, this case is a good place to start for assessing a challenge to a “willful” violation, especially if the violation arises out of the confined space entry program.

Comparative MRIs Support IME Opinion

Posted on October 13, 2015, Authored by Russell W. Wilson, Filed under Employment

The Wisconsin Court of Appeals has affirmed a Labor and Industry Review Commission (LIRC) decision that denied additional benefits for an initially conceded injury based on the independent medical examiner’s (IME) review of comparative MRIs.  David Dollar had pre-existing degenerative joint disease, as confirmed by a 2009 MRI.  On June 23, 2011, while at work Dollar was injured when a file cabinet fell and struck him in the head.  The injury was conceded; medical treatment and temporary total disability were paid for about eight months after the injury.  The treating physician opined that a surgical fusion would be necessary on account of the work-related injury.  The employee complained of increased pain, which he attributed to the cabinet incident.  At that point an independent medical evaluation was conducted. An MRI from 2009 demonstrated the existence of degenerative joint disease.  A repeat MRI was taken just two weeks after the work-related injury.  The IME read the second MRI as “largely unchanged” and showing “slight progression” of the degenerative process that had been on-going for several years.  The hearing record contained competing medical opinions as to whether the cabinet incident at work accelerated, precipitated, and aggravated the pre-existing degenerative condition beyond its normal progression. LIRC accepted the IME’s opinion over that of the treating physician.  There being credible and substantial evidence in the hearing record, the court of appeals affirmed LIRC’s decision.  While the employee argued on appeal that his subjective testimony of increased pain went unchallenged, the court of appeals noted that LIRC had simply concluded that the employee’s increased pain was caused by his underlying disc disease, rather than his work injury. The employee’s last argument was to assert that there is “no legitimate doubt that he is entitled to benefits.”  The court of appeals found this argument to be equally unavailing.  “This argument simply recasts his first argument that the Commission’s decision is not supported by credible and substantial evidence.  Therefore, we reject this argument.” The reported case is Dollar v. LIRC, 2015 WL 5554243, decided on September 22, 2015.  Final publication is pending.

Wisconsin Unemployment Insurance Benefits Upon Discharge for Absenteeism – the Employer’s Policy May Be More Generous, But Not More Restrictive, Than the Statutory Default

Posted on March 21, 2017, Authored by Russell W. Wilson, Filed under Employment

The Wisconsin Court of Appeals issued a decision in an unemployment insurance benefits case on March 8 that provides clarity where an employee is discharged for absenteeism.  The case is Wisconsin Department of Workforce Development v. Wisconsin Labor and Industry Review Commission, et al (2017 WL 946724).  In doing so the court of appeals described recent legislative history as it relates to discharge for absenteeism. Prior to 2013, unemployment insurance (UI) benefits could be denied where an employee was discharged for “5 or more” absences without notice in a 12-month period.  In 2013 the legislature changed the standard to “more than 2 absences” without notice in a 120-day period “unless otherwise specified by his or her employer in an employment manual.”  What does that last phrase mean?  The Wisconsin Department of Workforce Development (DWD) asserted that UI benefits could be denied where the employer’s handbook provided that its attendance policy was more restrictive than the “2 in 120 days” floor set in Wisconsin Statute section 108.04(5)(e). The facts that gave rise to the case involved an employer’s written policy that just one “no call no show” during the probationary period would result in termination.  The flu bug visited the employee shortly before her shift was to begin, and she did not call in. The employer fired her.  The Labor and Industry Review Commission (LIRC) did not accept the DWD’s argument that the employer had free rein to impose a stricter standard than provided by the legislature.  Rather, LIRC ruled that eligibility for UI benefits cannot be eliminated upon an employer’s written attendance policy that is more restrictive than the “2 in 120 days” standard.  The court of appeals affirmed LIRC’s determination. The court of appeals accorded “due weight” deference to LIRC’s decision.  The due weight standard applies where the agency has “some experience” in administering the statute in question.  Indeed, LIRC has issued over 50 decisions interpreting section 108.04(5)(e).  The due weight standard calls for deferring to LIRC’s judgment “as long as it is reasonable and another interpretation is not more reasonable.”  LIRC employed a 3-step analysis, which the court of appeals found to be reasonable.  First, was the employee discharged for “misconduct” by engaging in any of the seven activities listed in section 108.04(5)(a)-(g)?: use of drugs or alcohol; theft from an employer; conviction of a crime that affects the employee’s ability to perform his or her job; threats or harassment at work; absenteeism or excessive tardiness; falsifying business records, and, willful or deliberate violation of a written and uniformly applied government standard or regulation. The terminated employee did not meet any of those seven activities. Second, did the employee’s action amount to “misconduct” as defined from prior case law (Boynton Cab Co. v. Neubeck, 237 Wis. 249, 259-60, 296 N.W.2d 636 (1941)) and codified in the 2013 statute?  LIRC found that failing to call in on just one occasion was “an isolated incident of ordinary negligence resulting from her ill health” that did not amount to “misconduct.”  Finally, did the employee’s conduct constitute “substantial fault”?  The employee did not have control over becoming ill, and her failure was viewed as health-related inadvertence.  LIRC acknowledged that the statute allows employers to “substitute a different standard to suit its needs, in this case a different quantity of absences.” But LIRC noted the distinction between the discharge decision of an exacting employer, on the one hand, and eligibility for UI benefits, on the other.  The UI statute is remedial in purpose such that provisions for denial of benefits should be narrowly construed in order to soften the law’s severity and to liberally effect coverage for those who are economically dependent on others.  The court of appeals found LIRC’s 3-step analysis to be reasonable.  As an example, the court reasoned, would there have been any difference if the employee, instead of coming down with the flu, had been involved in a car crash within two hours of the start of her shift so as to require hospitalization?  Almost no one would deny coverage under that circumstance.  Alternatively, the employee could fail to call in due to drunkenness, in which case almost everyone would deny coverage   LIRC’s 3-step analysis, according to the court of appeals, allows the agency to balance the legitimate concerns of the employer with the remedial purpose of UI benefits.  The court viewed the DWD’s analysis as not more reasonable than that of the LIRC.  And it’s the LIRC, not the DWD, whose decisions are judicially reviewed because the LIRC hears UI appeals and has final review authority of DWD’s decisions. The minority dissented, noting that review of LIRC’s decision should be “de novo,” in which no deference is given to its analysis.  According to the dissent, the plain language of section 108.04(5)(e) allows the employer to substitute a more generous or a more severe “no call no show” standard.  Moreover, the dissent argued that what is really more or less generous may be a matter of subjective interpretation.  Will we see this case petitioned for review to the Wisconsin Supreme Court for a final determination? Or will LIRC be abolished after the next budget is enacted?

Unemployment Benefits Cannot Be Denied Based on Eight Cash Transaction Inadvertent Errors Out of 80,000 Transactions in a 21-Month Period

Posted on May 22, 2017, Authored by Russell W. Wilson, Filed under Employment

The Wisconsin Supreme Court has interpreted the meaning of “substantial fault” in an unemployment insurance case, which will be applicable in worker’s compensation cases, as well.  The case is Operton v. Labor and Industry Review Commission, 2017 WL 1743039.  In doing so the Supreme Court affirmed the ruling of the Wisconsin Court of Appeals, which had reversed the Labor and Industry Review Commission.  This case is about the meaning of “substantial fault” as applied to a cash register clerk who goofed from time to time. First, what the case is not about is the employer’s right to fire the employee for having made cash transaction errors.  The employer clearly held that right, which was never at issue in the case.  The case was about the employee’s eligibility for unemployment benefits after her employment was terminated. The Supreme Court’s decision recites the broad policy that underlies unemployment insurance, which is to alleviate the social cost of unemployment.  In furtherance of that policy, eligibility for benefits is liberally interpreted in favor of the unemployed worker.  Recent legislative changes, however, have tightened eligibility based on “misconduct” and “substantial fault.” The facts in the case were straight-forward.  The clerk had worked for 21 months during which time she would have made roughly 80,000 cash register transactions.  Over the course of that employment she made eight errors while processing payments.  The errors were broadly similar in nature; they were not identical.  For example, in one instance she accepted a Women Infants and Children (WIC) check for $8.67 worth of items when the check was actually worth only $5.78.  Once she allowed a customer to leave without finishing the transaction on the pin pad.  On another occasion she failed to check the identification of a customer who used a credit card for a purchase of over $50.  The errors occurred sporadically over the term of her employment. The employee is now entitled to receive unemployment benefits based on this ruling because she did not engage in “misconduct” or “substantial fault.”  In fact, the employer did not claim misconduct on her part.  Rather, the employer argued that her unintended errors met the definition of “substantial fault.” That definition is general in the positive sense and specific in the negative sense.  Broadly, “substantial fault” means “acts or omissions of an employee over which the employee exercised reasonable control and which violated reasonable requirements of the employee’s employer.” (My emphasis)  So what does the exercise of “reasonable control” by the employee mean?  And what are “reasonable requirements”?  The legislature did not say.  The legislature did say, however, what does not constitute “substantial fault”: One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction. One or more inadvertent errors made by the employee. Any failure of the employee to perform work because of insufficient skill, ability, or equipment. Exemption number one did not apply because the payment transactions were mistakes, not infractions of rules.  And exemption number three did not apply because the employee, having processed about 80,000 payment transactions, clearly had the skill and ability to do so.  The case came down to whether eight sporadic, broadly similar yet not identical errors out of roughly 80,000 successful transactions in a 21-month span met the exemption criteria of “one or more inadvertent errors.”  The Supreme Court held that there was no substantial fault on the part of the employee because she had merely committed “one or more inadvertent errors” so as to be exempt from the definition of “substantial fault” as a matter of law. When a court of last resort rules that a particular set of facts satisfies a legal criterion, the message sent is: This case was not close.  We do not want to see cases on similar facts brought again.  Despite the apparent bright line ruling, the Supreme Court decision left the uncertainty door ajar just a bit.  Although the court of appeals decision stated that an employer’s warning as to inadvertent errors is not material (since the legislature did not allow for warnings in exemption number 2), the Supreme Court cautioned “[t]hat is not to say an employer’s warning can never be relevant to whether an employee’s error was inadvertent.”  The Supreme Court also stated it need not determine whether a numerical limit on the number of inadvertent errors may exist before they become intentional. The definition of “substantial fault” in the unemployment benefits context applies in worker’s compensation where the employer discharges an employee who is on light duty for a work-related injury.  In the past a discharge for whatever reason resulted in worker’s compensation temporary benefits being reinstituted for the duration of the healing period.  In light of recent changes to the Worker’s Compensation Act, however, those benefits are not payable where the employer can prove that its decision to terminate the employee was based on substantial fault (or on misconduct).  Operton shows that the full parameters of “substantial fault” have yet to be developed.  But if the facts are close to those in Operton, employers should think hard before contesting unemployment benefits.  Likewise, worker’s compensation insurance carriers (and employers who are self-insured for worker’s compensation) should consider the wisdom of not reinstituting temporary benefits when the employee is discharged while on light duty from an industrial injury or condition.

OSHA Ban on Incident-based Safety Incentive and Routine Mandatory Post-incident Drug Testing Programs Delayed

Posted on July 18, 2016, Authored by Russell W. Wilson, Filed under Employment

The date for implementation of OSHA’s ban on two programs – Incident-based Safety Incentive and Routine Mandatory Post-incident Drug Testing – has been set back from August 10, 2016, to November 1, 2016, as a result of motion practice in a legal challenge.  The ban on these programs are part of a new regulation.  The U.S. Department of Labor Occupational Safety and Health Administration promulgated “Improve Tracking of Workplace Injuries and Illnesses” as published in 81 Federal Register 29,624 on May 12, 2016, and as amended  at 81 Federal Register 31,854 on May 20, 2016.  This new rule will be codified in 29 Code of Federal Regulations Part 1904. Much of this new rule is to take effect in 2017, but the ban on Incident-based Safety Incentive Programs and Routine Mandatory Post-incident Drug Testing Programs was to have taken effect on August 10, 2016.  The National Association of Manufacturers and others filed a challenge to the new rule in the U.S. District Court for the Northern District of Texas, Dallas Division, seeking an injunction against the ban.  (Texo ABC/AGC, Inc., et al. v. Thomas E. Perez, Civil Action No. 3:16-cv-1998 (N.D. Texas)  While seeking a preliminary injunction against the ban immediately, the challengers have reserved the right to contest other portions of the new rule which are to take effect in 2017 at a later time. The plaintiffs assert a number of reasons, but the heart of the matter is the assertion that OSHA’s ban is arbitrary and capricious.  According to the plaintiffs, OSHA views incident-based safety incentive programs and routine mandatory post-incident drug testing programs as retaliatory.  They assert that safety incentive programs and drug testing programs actually make the workplace safer and should be promoted by OSHA instead of being banned.  The plaintiffs filed their emergency motion seeking a preliminary injunction and an expedited briefing schedule on July 12, 2016.  On the following day OSHA announced that the August 10 effective date would be postponed to November 1, 2016. If you have any questions regarding this post, please contact Russ Wilson.

Exclusive Remedy of Worker’s Compensation Bars State Law Claims for Emotional Distress

Posted on February 1, 2016, Authored by Russell W. Wilson, Filed under Employment

The federal District Court for the Eastern District of Wisconsin dismissed two state law emotional distress claims in a lawsuit based on the exclusive remedy provision of the Wisconsin Worker’s Compensation Act (WCA).  The employee filed suit under the Americans with Disabilities Act (ADA) alleging that the failure of her employer to provide requested leave under the Family Medical Leave Act constituted discrimination under the ADA.  In addition, the employee alleged two claims under Wisconsin law:  intentional infliction of emotional distress against her direct supervisor and negligent infliction of emotional distress against the supervisor and her employer.  Specifically, the employee alleged that her supervisor and employer had assigned her additional duties which caused her to gain weight, become diabetic, and to suffer sleep loss and panic attacks.  The allegations of the complaint made it clear that the allegedly injurious conduct occurred to the employee while she performed her work duties and her emotional injuries arose out of her work duties. Under these allegations, the federal district court readily dismissed the emotional distress state law claims pursuant to established Wisconsin judicial decisions.  The federal district court judge reviewed, however, Wisconsin case law in the sexual harassment context.  Examining Lentz v. Young, 536 N.W.2d 451, 457 (Wis. Ct. App. 195), the court noted that Wisconsin’s exclusive remedy provision does not bar a claim for intentional sexual harassment where the perpetrator and the employer are one and the same.  In Lentz the sexual harasser was the business owner, who operated as a sole proprietorship.  The federal judge interpreted the Lentz case as presenting a “unique situation” where the concern is that “a sole proprietor would be able to use the WCA as a shield to protect himself or herself from liability for intentional acts against an employee.”  By contrast the perpetrator here, the direct supervisor, was clearly a co-employee and the alleged wrong was the denial of requested accommodation in the form of leave.  The case is Robinson v. Gateway Technical College, 2016 WL 344959 (E.D. Wis. January 26, 2016). It should be noted that the state law claim barred by the exclusive remedy provision is for emotional distress.  The outcome would have been different if the complaint had alleged the supervisor had assaulted the employee with intent to cause her bodily harm (even though bodily harm typically entails emotional injury), which is explicitly carved out of the exclusive remedy provision.  It should also be noted that federal court decisions are not binding precedent in the Wisconsin courts or in the Department of Workforce Development.  Having said that, the dismissal of the state law emotional distress claims pursuant to the exclusive remedy provision of the WCA is not at all surprising.

Employer Waived the Exclusive Remedy Protection of Worker’s Compensation

Posted on May 11, 2015, Authored by Russell W. Wilson, Filed under Employment

The important protection that employers have under Wisconsin’s Worker’s Compensation Act is the exclusive remedy against employees for work-related accidents, conditions, or illnesses. While the employer enjoys near immunity from a civil suit, that protection can be waived. The Wisconsin Court of Appeals recently held that an employer had waived its exclusive remedy protection through broad language in a service contract in Zenoni v. Discover Property & Casualty Insurance Company, 2015 WL 1824381 (April 23, 2015). The employer, a restaurant, contracted with a supplier of uniforms and floor mats. The employee tripped on a floor mat in the restaurant’s kitchen. She had a worker’s compensation claim. She also brought a civil suit against the owner of the building where the restaurant was located and against the floor mat supplier. There is nothing out of the ordinary about this scenario so far. Ordinarily, the employer would be fully protected by the exclusive remedy of worker’s compensation from liability in the civil suit against third parties, i.e. the floor mat supplier and the building owner. The restaurant’s problem was that it had signed a service contract containing a broad indemnification clause in favor of the floor mat supplier. The contract obligated the restaurant to “defend, indemnify, and hold harmless” the floor mat supplier “from any claims and damages arising out of or associated with this agreement, including any claims arising from defective products.” When the restaurant worker sued the mat supplier, the mat supplier sued the restaurant under the service contract. Interpreting and applying established Wisconsin case law, the Court of Appeals ruled that this broad language operated as a waiver of immunity from suit that the restaurant would otherwise have enjoyed. As a result, the suit was remanded to the circuit court for trial. Depending upon how causal negligence is assessed and allocated, the restaurant could be held liable to the floor mat supplier for the restaurant’s share of the employee’s damages. Alternatively, the restaurant might be found not liable under Wisconsin’s law of comparative negligence. In any event, however, the restaurant must pay for the floor mat supplier’s defense to the employee’s civil suit. Many service providers and suppliers propose contracts that require indemnification and defense from lawsuits. Employers should carefully review those contracts. If indemnification provisions cannot be excluded entirely, their scope should be reduced by carving out liability that arises out of the employer-employee relationship or in which there is entitlement to worker’s compensation benefits.

Fairly Debatable IME Report Defeats Bad Faith Claim in Worker’s Compensation

Posted on July 6, 2015, Authored by Russell W. Wilson, Filed under Employment

This scenario in worker’s compensation is familiar.  A worker has a pre-existing, degenerating, and progressively deteriorating condition, in this case an old injury to his knee.  Later, there’s an accident at work, shortly after which, knee surgery is required.  The treating physician believes the work-injury necessitated the surgery and permanent partial disability.  The independent medical examiner, however, opines the work injury caused only a sprain, a temporary injury that did not necessitate surgery or its attendant permanent partial disability.  Acting in accordance with the IME examiner’s opinion, the worker’s compensation carrier pays temporary total disability benefits from the date of the injury until the IME report was received.  The case goes to hearing, and the administrative law judge (“ALJ”) and the Labor and Industry Review Commission (“LIRC”) choose to adopt the opinion of the treating physician and award the cost for the surgery, temporary total disability through the post-surgical healing period, and permanent partial disability benefits.  A not uncommon course of events. The employee now claims, however, the carrier acted in bad faith by having terminated on-going indemnity and medical benefits and forcing the case to hearing.  The employee’s argument is that where the employee undergoes treatment in good faith for a work-related injury, the employer and carrier are liable for the consequence of treatment even if it is later determined the treatment was not necessary.  That argument is premised on the holding from Spencer v. DILHR, a Wisconsin Supreme Court case decided in 1972.  The ALJ adopts the employee’s argument and awards $30,000, the maximum penalty for bad faith under Wis. Stat. § 102.18(1)(bp).  The LIRC, however, reverses the ALJ’s award, noting the carrier’s IME report was “fairly debatable.”  While the IME report was not believed, it could have been believed. This was the situation presented to the Wisconsin Court of Appeals in Coe v. Labor and Industry Review Commission, 2015 WL 3949147, an unpublished decision issued June 30, 2015. The court of appeals made two important points in denying the claim for bad faith.  First, it accorded great weight deference to LIRC’s legal conclusion that existing law does not support the employee’s argument.  Second, the court of appeals observed that the rule in Spencer applies only to cases in which there was an undisputed compensable injury.  Here, however, the IME report put into dispute whether the work-related injury had run its temporary course a few weeks later and whether the need for surgery was unrelated to the work injury.  The court of appeals thus held that the carrier had a reasonable basis on which to deny benefits and force the case to hearing.  While an unpublished decision cannot be cited in court as precedent, the Coe case is nonetheless reassuring because it puts the court of appeals’ approval on common claims handling practice.

Attempted End Run Around Wisconsin’s Exclusive Remedy of Worker’s Compensation Fails in Asbestos Litigation in the Seventh Circuit

Posted on July 13, 2017, Authored by Russell W. Wilson, Filed under Employment

Wisconsin’s exclusive remedy of worker’s compensation has long been a bulwark against civil suits brought by employees (subject to a few narrow exceptions not applicable here).  This bulwark has survived a creative attack in an asbestos case in Pecher v. Owens-Illinois, Inc. 859 F.3d 396 (2017), which was decided on June 6, 2017. The case involved six plaintiffs who sued in federal district court for the Western District of Wisconsin for compensation for mesothelioma. They had built fire-proof doors that incorporated asbestos-containing materials. Three of them (the “Weyerhaeuser plaintiffs”) were former Weyerhaeuser Company employees who asserted claims against Weyerhaeuser. The other three (the “Owens-Illinois plaintiffs”) were also former Weyerhaeuser employees, but they sought instead to impose liability on Owens-Illinois, Inc. by virtue of its status as the licensor of the patent on the fire-proof door.  The district court dismissed all of the claims, and the U.S. Court of Appeals for the Seventh Circuit upheld the dismissals. The focus of this article is on the background to the reasons for the dismissal, that background being Wisconsin’s exclusive remedy of worker’s compensation. Weyerhaeuser operated a plant in Marshfield, Wisconsin, from 1960 until 1978 at which it made fire-proof doors, some of which contained asbestos. The doors were made under a patent that Owens-Illinois licensed to Weyerhaeuser.  All six plaintiffs alleged that they developed mesothelioma not from exposure to asbestos fibers while at work in the factory, but rather from the ambient atmosphere in their homes or their community. While the Weyerhaeuser plaintiffs brought claims grounded in the law of nuisance against their former employer, the Owens-Illinois plaintiffs tried to impose liability against the licensor of the patent by which the asbestos-containing doors were made. The Seventh Circuit began its decision by noting: Each of the Weyerhaeuser plaintiffs worked at Weyerhaeuser for years in close contact with asbestos. Therefore, on the surface at least, it appears their claims should be limited to the procedures set out in Wisconsin’s Worker’s Compensation Act, which provides the “exclusive remedy against the employer” for work-related injuries. All six plaintiffs offered opinion testimony of experts that non-occupational exposure to asbestos fibers in the ambient atmosphere caused their mesothelioma.  In its role as the gatekeeper of opinion testimony, the district court determined that the individual circumstances of the Weyerhaeuser plaintiffs did not provide a sufficient basis on which reliable expert opinions on causation could be rendered. The Weyerhaeuser plaintiffs did not live close enough to the factory for a long enough period of time, so their expert opinion testimony was not admissible into evidence.  The Owens-Illinois plaintiffs had a bit stronger showing; their expert opinion testimony was admissible.  The end result for both groups, however, was the same. (The Seventh Circuit did not disturb the district court’s rulings on the admissibility of the opinion evidence since those decisions are reviewed only for abuse of discretion, and the appellate court observed that the district court’s evidentiary rulings did not meet that difficult standard of review.) The nuisance-based claims of the Weyerhaeuser plaintiffs were dismissed for reasons (apart from having no proof of causation) of the changed circumstances and the passage of time. To state a claim under Wisconsin’s law of nuisance, there must be a current interference with a property right, i.e. the use and enjoyment of one’s property.  At the time the Weyerhaeuser plaintiffs were allegedly exposed to non-occupational asbestos fibers in the ambient atmosphere, they had the full, unimpeded use and enjoyment of their respective properties.  They were first diagnosed with mesothelioma long after the plant had stopped manufacturing the fire-proof doors. Accordingly, their claims under nuisance theories were not recognized.  In addition, the six year statute of limitations had expired. As for the Owens-Illinois plaintiffs, the law does not recognize a claim against a party based solely on its status as the licensor of a patent.  (In fact, the claims of the Owens-Illinois plaintiffs were found to be frivolous.) I think it is fair to say that both the district and appellate courts were troubled by, and skeptical of, the obvious gambit to make an end run around the exclusive remedy of worker’s compensation.  Quoting the district court in regard to the Owens-Illinois plaintiffs, the Seventh Circuit stated: [t]he [district] court specified it could not “ignore the real possibility that any trier of fact might be unable to balance defendant’s right to exclude liability or damages for occupational exposure under compensation laws against the understandable, if unduly prejudicial, sympathy that would be engendered at trial in light of the inexorable pain and death that results from this disease.  (Emphasis in the original.) The Seventh Circuit went on to say that: One not need read between the lines to note that the district court was concerned that the expert testimony proffered by plaintiffs’ counsel was an attempt to avoid the exclusive remedy provisions of Wisconsin law, offering jurors a way to reward damages under a cause of action that should otherwise be foreclosed. While Pecher was not decided by direct application of Wisconsin’s exclusive remedy defense, it seems that the spirit of that important provision was very much at play.  Wisconsin’s exclusive remedy provision is part and parcel of the “grand bargain,” the quid pro quo, of worker’s compensation that has served this state well for more than a century. It is good to see recognition of that venerable doctrine when federal courts apply Wisconsin law.

Repeated Inadvertent Errors Do Not Constitute “Substantial Fault” For Unemployment Insurance (Or For Worker’s Compensation)

Posted on April 25, 2016, Authored by Russell W. Wilson, Filed under Employment

“Substantial fault” is a new concept that may determine whether a terminated employee is eligible for unemployment insurance benefits.  In 2013 the Wisconsin Legislature amended the unemployment insurance eligibility statute to create “substantial fault” as a basis to deny benefits; the new law took effect on January 5, 2014.  On April 14, 2016, the Wisconsin Court of Appeals issued the first judicial decision that interprets the meaning of “substantial fault.”  Operton v. Labor and Industry Review Commission, 2016 WL 1552178.  Moreover, the new amendments to the worker’s compensation act took effect on March 2, 2016, that govern eligibility for continued temporary total disability (“TTD”) benefits where an employee returns to work under a light duty program while still in the healing period.  If the employee’s employment is suspended or terminated during this time for “substantial fault” (or for “misconduct”) as set forth under unemployment insurance, TTD payments may be ended. In Operton the employee had been fired for having made eight cash transaction errors for a retail business over the course of twenty months of employment.  The employee had been warned of the consequences of continued cash transaction errors.  During the period of employment the employee handled about 80,000 transactions, which meant that about “99.99 %” of the transactions had been correctly performed.  The eight instances of nonperformance were instances of “errors” or “mistakes”; they were not deliberate or intentional. The unemployment insurance statute defines “substantial fault” as “acts or omissions of an employee over which the employee exercised reasonable control” that are subject to three specific independent exceptions that do not constitute “substantial fault”: One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction; One or more inadvertent errors made by the employee; Any failure of the employee to perform work because of insufficient skill, ability, or equipment. The Labor and Industry Review Commission (“LIRC”) had determined that the employer demonstrated “substantial fault” so as to make the employee ineligible for unemployment insurance benefits.  The Court of Appeals analyzed each of the three exceptions to “substantial fault” and reversed LIRC’s decision.  First, the court noted that exception number 1 applies to “infractions,” not “inadvertent errors.”  Unlike “inadvertent errors,” “infractions” may constitute “substantial fault” if the “employer warns the employee about the infraction.”  The evidentiary record established that the employer had repeatedly issued warnings; however, the record was silent as to whether the employee had committed any kind of infraction.  The employer had offered no evidence that what were offered into evidence as “errors” constituted “infractions.”  Nor did the court of appeals provide any guidance as to what conduct or omissions would constitute an “infraction.” Second, the court unequivocally ruled that exception number 2 is applicable because the Wisconsin Legislature determined that “[r]epeated inadvertent errors do not statutorily morph into ‘infractions’ if warnings have been given.”  In other words, no amount of warnings can remove “inadvertent errors” from exception number 2 to the definition of “substantial fault.”  Finally, exception number 3 did not apply on the basis of “insufficient skill, ability, or equipment.”  The court noted that the employee possessed the requisite skill or ability because she had successfully handled “99.99%” of the approximate 80,000 transactions during the period of her employment.  According to the court, the employer was well within its right to discharge the employee for failing to meet its “high expectations.”   Under the facts of this case, however, the employee met exception number 2, and therefore, was exempted from the definition of “substantial fault.” Worker’s compensation insurance carriers and employers should carefully consider the language of the three exceptions when deciding whether to suspend or terminate an employee based on  “substantial fault” after the employee returns to work on a light duty program during the healing period.  Otherwise, a claim for bad faith under the Worker’s Compensation Act could arise.

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