Riech, 113018 WIWC, 2016-029538

• Case Date: November 30, 2018
• Court: Wisconsin

Darryl Riech Applicant S M & P Utility Resources, Inc. Employer No. 2016-029538 Wisconsin Workers Compensation State of Wisconsin Labor And Industry Review Commission November 30, 2018           Atty. Aaron N. Halstead.           Atty. Casey M. Kaiser.           WORKER’S COMPENSATION DECISION1           Georgia E. Maxwell, Chairperson.          Order          The commission modifies and affirms the decision of the administrative law judge. Accordingly, the application for benefits is dismissed.          By the Commission:           Laurie R. McCallum, Commissioner, David B. Falstad, Commissioner.          Procedural Posture          This case is before the commission to consider whether the employer unreasonably refused to rehire the applicant under Wis. Stat. § 102.35(3). An administrative law judge for the Department of Administration, Division of Hearings and Appeals, Office of Worker’s Compensation Hearings, held a hearing on October 30, 2017, and issued a decision dated January 24, 2018. The applicant filed a timely petition for commission review.          The commission has considered the petition and the positions of the parties, and has independently reviewed the evidence submitted at the hearing. Based on its review, the commission affirms the decision of the administrative law judge.          Findings of Fact and Conclusions of Law          The commission makes the same findings of fact and conclusions of law as stated in the decision of the administrative law judge and incorporates them by reference into the commission’s decision, subject to the following:          Modification          In the second full paragraph on page 4 of the decision, replace “March 26, 2016,” with “April 14, 2016.”          Memorandum Opinion          The issue in this case is whether the employer unreasonably refused to rehire the applicant under Wis. Stat. § 102.35(3). This statute provides:

Any employer who without reasonable cause refuses to rehire an employee who is injured in the course of employment, when suitable employment is available within the employee's physical and mental limitations, upon order of the department or the division, has exclusive liability to pay to the employee, in addition to other benefits, the wages lost during the period of such refusal, not exceeding one year's wages. In determining the availability of suitable employment the continuance in business of the employer shall be considered and any written rules promulgated by the employer with respect to seniority or the provisions of any collectivebargaining agreement with respect to seniority shall govern.

         As the court of appeals noted in Dielectric Corp. v. LIRC, the practical effect of the statute is to modify the employment-at-will doctrine in Wisconsin. “Normally, in an employment at will situation, the burden is on the employee to show bad faith on the part of the employer”; however, the court held:

Under [Wis. Stat. § 102.35(3)], once the employee has suffered a worker's compensation injury, the question initially becomes: does the employer have good cause not to rehire. If the employee is rehired, the rehiring cannot be a pro forma rehiring. Therefore, if there is an eventual discharge, the employer must show that there is no bad faith on its part to evade this statute and that the rehired employee was discharged with good cause.2

         The Dielectric court further held that Wis. Stat. § 102.35(3) applies to unreasonable discharges after a return to work following a work injury, as well as simple failures to rehire.3          The standard set out by the court in Dielectric was adopted by the supreme court in West Bend v. LIRC, where the court stated that, "after an employee 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 employee."4 The supreme court has described this as a “burden-shifting approach”:

Under this approach, the employee must first make a prima facie case of an unreasonable failure to rehire. It is undisputed that as part of the prima facie case, the employee must show that: (1) the claimant was an employee of the employer from which he or she seeks benefits; (2) the claimant was injured in the scope of employment; and (3) subsequent to the injury, the employer refused to rehire the employee. …

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…when the employee brings forth facts that support all the elements of a prima facie case, the burden shifts to the employer to show reasonable cause for its refusal to rehire the claimant. [citations omitted] We have defined “reasonable cause” under Wis. Stat. § 102.35(3) to mean that “an employer, if there is suitable employment available, can [] refuse to rehire [only] for a cause or reason that is fair, just, or fit under the circumstances.” West Allis, 116 Wis.2d at 426.5

         The purpose of the statute is “to prevent...