Category Archives: Work Comp Legislation

Temporary Help Employees Can Sue Their Employers?!

Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.

Temporary Help Employees Can Sue Their Employers? …. Well, maybe not.

The Wisconsin Court of Appeals considered the following issue: can a temporary help employee who was injured at work elect not to pursue a worker’s compensation claim and, instead, actually sue their employer in civil court?  The Court said the answer is “YES.”  

Wait….what?!  That is not how the worker’s compensation system was supposed to work.  Cue panic mode for employers who used temporary help employees.  (or at least until the legislature “fixed” this).

The necessary background (and backbone) of the worker’s compensation system is the 100+ year old “grand bargain” between employers and employees.  Employers agreed to provide smaller, defined benefits regardless of fault for the work injury, while employees gave up the right to tort damages (like pain and suffering) in exchange for those benefits.   Thus, worker’s compensation became the worker’s exclusive remedy against the employer.  A worker cannot sue their employer (or co-worker) for a work injury.

That exclusive remedy also extends to temporary help agency situations.  Under the traditional interpretation of the worker’s compensation act, a temporary help employee is barred from any tort lawsuit against their employing temporary help agency and against the employer where they were placed/working.   This was the interpretation…or so we thought.

In Estate of Carlos Esterley Cerrato Rivera v. West Bend Mutual Ins Co., the Court of Appeals allowed a temporary help employee’s tort lawsuit to proceed against the placed employer.  The case arose from tragic and slightly convoluted facts.  Three temporary help employees all died in a motor vehicle accident.  All three were driving in the same car and performing services for Alpine Insulation (insured by West Bend Mutual).  Mr. Rivera was a temporary help employee of Alex Drywall, who sent him to work for Alpine Insulation.  Alpine, in turn, paid Alex Drywall for the services.  The driver, whose negligence resulted in the accident, was also a temporary help employee, but of another employer.

Mr. Rivera’s estate did not pursue a claim for worker’s compensation death benefits.  The estate instead sued the placed employer, Alpine Insulation, in circuit court for tort damages.   Alpine and West Bend Mutual argued that the work comp exclusive remedy protects them from these types of lawsuits.

[Note: the facts are unclear about whether there was an “election” not to pursue a work comp claim.  There could have been difficulties by the work comp carrier in determining if there were any eligible surviving dependents.  There also could have been issues involving establishing the employment relationship with Alex Drywall.  This is mere speculation, but it is interesting to think about how the case genesis]

The Court of Appeals interpreted the relevant statutes to allow the tort suit to proceed!  Specifically, Section 102.29(6)(b)1. says that “no employee of a temporary help agency who makes a claim for compensation may make a claim … in tort against … any employer that compensates the temporary help agency for the employee’s services.”   The Court ruled that because Rivera’s estate had never pursued a worker’s compensation claim, the statute actually allowed the tort suit.

Based on the immediate outrage and backlash in the employer community (and specifically the massive amount of employers who use temporary help employees), the Wisconsin legislature moved swiftly to “fix” this perceived loophole in the law.   The legislature passed 2017 Wisconsin Act 139 (effective March 1, 2018). The Act amended the governing statutes in Section 102.29 to now state that “no employee of a temporary help agency who has the right to make a claim for compensation may make a claim … in tort against … any employer that compensates the temporary help agency for the employee’s services.”  

Accordingly, for a fleeting moment, it appeared injured temporary help employees could elect to forego a work comp claim and maintain a civil lawsuit against their placed employers for pain and suffering.   The legislature effectively restored and reiterated the exclusive remedy provision in temporary help agency situations.  If a temporary help employee is injured on the job, worker’s compensation remains their only recourse against the temporary help employer and their placed employer.

Groups Oppose Legislation Aimed to Change Wisconsin’s Advisory Council

Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.

Wisconsin’s Worker’s Compensation Advisory Council serves as the driving force behind the state’s historically stable and first-rate work comp system.  Wisconsin gets its injured workers back to work faster than virtually all states in the country.  We have extremely low litigation rates (a recent study showed only 13% of work injuries require an attorney).  We have stable and falling work comp insurance premiums–an 8% decrease for 2017.  

These are the marks of a great work comp system thanks to the Advisory Council.

So, of course, some legislators want to blow it up!   This is a classic example of a fix looking for a problem!

Republican legislators recently introduced legislation (AB 308) to drastically alter the makeup of the Advisory Council.  Traditionally, the Advisory Council’s makeup is five management, five labor, and three non-voting insurance members appointed by Secretary of Dept. of Workforce Development (DWD).  After Council deliberations, they produce a biennial “agreed upon” bill, which is then submitted to lthe egislature that, in turn, generally accepts the bill.   As the DWD site proudly prounces:

One of the most important and enduring principles of the Council is maintaining the overall stability of the worker’s compensation system without regard to partisan changes in the legislative or executive branches of government. The Council provides a vehicle for labor and management representatives to play a direct role in recommending changes in the worker’s compensation law to the Legislature.

The 2017 introduced bill proposes to alter only the makeup of the “labor” side of the Council.  The proposal would reduce the amount of organized labor representatives on the Council in proportion to the amount of unionized workers in the state.  

When a hearing occurred last week on this bill in the assembly labor committee, the legislature faced overwhelming opposition to this measure.   A story on WorkCompCentral (Stakeholders Line Up Against Bill Aimed at Reducing Union Role on Advisory Council) detailed that opposition from the system’s stakeholders–including a broad array of the insurance company community.   The insurance companies know that any major change to the Council could create uncertainty in the system.  With uncertainty, there is risk.  With risk, there are increased costs and insurance premiums.

There is no need to change the current Council makeup, especially in light of the beneficial metrics the current system produced–and continues to produce.  The five organized labor representatives continue to be the best representatives–with the broadest expertise and breath of knowledge–for all workers, whether unionized or not.   

We hope this proposed legislation is dead on arrival.  The Advisory Council system works for Wisconsin.  An attack on the Council is an attack on the system’s stability.

 

MORE changes to Work Comp: Elimination of Court Reporters & Appeals Commission?

Budget Bill Proposes Eliminating Court Reporters

Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.

Wisconsin’s Governor recently proposed significant changes to Wisconsin’s best-in-nation worker’s compensation system.  For the second budget cycle in a row, the Governor’s Budget Bill wants to drastically change the structure of worker’s compensation cases.  

The Budget Bill, revealed on February 8, 2017, proposes two main changes : (1) the elimination of court reporters in litigated worker’s compensation trials; and (2) the elimination of the independent body that reviews judge decisions.  

A base level concern exists, again, because these proposals were made outside the stabilizing force of the Wisconsin Worker’s Compensation Advisory Council.   As mentioned at length in this forum, the Advisory Council, with its balanced membership of labor and management representatives, has produced reasoned, incremental changes historically–creating a beneficial system for all stakeholders.  Hopefully the Advisory Council will weigh in on the potential effects of the unveiled Budget Bill proposals.

Each of the proposals significantly impact the state’s work comp system:

Elimination of Court Reporters:

The Budget proposes eliminating the use of statutorily-required stenographic court reporters in worker’s compensation trials.  The specific proposal is to eliminate necessary court reporters (who ensure decorum in the court room, properly manage exhibits, make sure parties do not talk over each other, and create an accurate and legitimate transcript) in exchange for some type of ill-defined audio recording equipment.

Employers and carriers in our state—facing six to seven figure exposures—will have concerns about facing such liability based on questionable audio technology.  Imagine if at a critical point in trial, a witness talks to softly or inaudibly, resulting in a blank area in the transcript.  No stakeholder wants this, and our live court reporters ensure that it does not.  

Also, the circuit court (and further appellate courts) want an accurate, undisputed transcript of the lower trial proceedings.   If the audio is poor, unclear or inaccurate, we may be forced to re-litigate the trial.  A redo will increase system costs.  Further, if court reporters are eliminated, the private parties will bear the costs by hiring their own court reporters.  We then may face disputes about the “real” transcript between the state’s audio recording (which will need to be transcribed for appeals) and the privately-hired court reporter transcript.  

Wisconsin is not alone in its use of court reporters in worker’s compensation trials, as an informal poll revealed the use of court reporters in IN, PA, CT, IA, NC, MT, NE, WY, SC, CA, MA, GA, KS, IL, LA, NY, WA…and the list goes on.

Near universal opposition exists to this unnecessary proposal to eliminate live court reporters.  The State Bar litigation section board voted unanimously to oppose this proposal.  Moreover, all of the three main groups of attorneys that represent clients in worker’s compensation proceedings oppose this proposal.   The Wisconsin Defense Counsel (defense attorneys), the Wisconsin Association of Justice (injured worker attorneys), and the Wisconsin Association of Workers’ Compensation Attorneys (bi-partisan group) jointly drafted a letter to the Governor voicing their opposition.    

All parties to litigation want a fair and accurate depiction of the trial proceedings, and court reporters help secure that justice.  This proposal faces stiff opposition.

Elimination of the Appeals Commission

Traditionally, the Labor and Industry Review Commission (LIRC) is an independent body of three political appointees that rule on worker’s compensation, unemployment, and equal rights appeals.  The cases are litigated in front of administrative law judges and then the appeal is to LIRC, who have a virtual de novo review.  The appeal from LIRC is direct to circuit court, which has a very deferential standard and will uphold the LIRC decision if there is any “credible and substantial evidence.”  Barring a legal issue, the circuit court upholds the factual and credibility findings of LIRC.  

LIRC has been in existence in some form since the inception of the worker’s compensation act in 1911.  LIRC actually serves to define much of the worker’s compensation case law—for over one hundred years.  When I look at our treatise, I’d guess 80% of the cited cases are LIRC cases.  Judges use the LIRC decisions in making determinations.

The current Budget proposal is the complete elimination of LIRC.  However, as opposed to a direct appeal from a judge determination to circuit court, the proposal is to substitute the Division Administrator for LIRC.  Thus, litigants would trial cases to the administrative law judge, with an appeal to the state Division of Hearings and Appeals Administrator (currently Brian Hayes) as the intermediate level of appeal.  Appeal from the Administrator’s decision would be to circuit court–with no apparent change in the standard of review by circuit court.

The upshot is to give much authority and discretion back to the actual administrative law judges–the ones who actually observed the witness and heard the evidence.  One of the statutory proposals indicates that the “findings of fact” by the judge “shall, in the absence of fraud, be conclusive.” That appears to give even less discretion to the Administrator’s ability to review judge decisions.

There is much ambiguity about the reasoning behind these proposals, as well as the potential impact.  I’ve already heard from a number of individuals that the proposal comes from issues within the unemployment insurance arena (and unemployment appeals fill up the majority of LIRC’s docket).  If true, worker’s compensation appeals are being swept up with the issues within unemployment.

However, if implemented, the practical effects are drastic.  Presumably, the Division Administrator would likely be more deferential to the sitting administrative law judges (i.e., approve more ALJ decisions) and probably produce a faster appeal turnaround time than the current LIRC process.   The catch is that it remains unknown how the Adminstrator would handle the influx of worker’s compensation appeals. Would there need to be additional staff?  (if so, budgetary costs need to be considered).  If no new staff, the simple time constraints lead to the likelihood of rubberstamping judge determinations.   

In the future though, the Administrator position changes.  Future appointees could have their own political proclivities that could impact the system.  Also, the proposal may have just eliminated 100 years of case law as guidance for future judicial determinations.  The budget is devoid of what happens to the precedential value of past LIRC decisions.  

Accordingly, further details really need to be revealed about the proposed plan before the stakeholders can weigh in.

One further item is known, based on the intersection of the two proposals.  If the system eliminates LIRC and provides more deference to the underlying judge determination, the value of court reporters increases exponentially.  If the judge factual determination is conclusive, a reviewing circuit court certainly wants an accurate, credible, and decipherable transript of those all-important findings.  

We will explore the further Budget process and these proposals as they progress…

For further information:

The full statutory text of the Budget Bill (2017 Assembly Bill 64/ 2017 Senate Bill 30) can be found here, with a summary found here.

Unemployment and Worker’s Comp

Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.

Interesting take on a provision in the newly proposed Worker’s Compensation Advisory Council (WCAC) bill: https://wisconsinui.wordpress.com/2016/01/15/substantial-fault-and-misconduct-principles-from-unemployment-law-to-come-to-workers-compensation/ 

One of the provisions in the new WCAC bill would allow denial of temporary disability/lost time benefits if a worker is terminated for “misconduct” or “substantial fault.”  These terms will be defined based on unemployment law standards.  Misconduct and substantial fault recently were brought into play with changes to the unemployment insurance laws in Wisconsin.  These legislative changes certainly were employer-friendly, allowing employers a greater ability and opportunity to deny unemployment benefits.

With worker’s compensation poised to adopt this standard for lost time benefit denials, workers definitely could face a rough spot when recovering from a job injury.  If the employer terminates a worker for alleged misconduct or substantial fault, they would be denied unemployment benefits and worker’s compensation benefits–until an administrative hearing is held to determine the legitimacy of the employer’s actions.  The possibility for many worker’s compensation hearings turning into “he said/she said” determinations like in unemployment cases is a strong possibility.

In the bigger picture, all sides must remember that this was a compromised agreed-upon bill by labor and management.  Both sides gained and gave up provisions–this produces the stability in the worker’s compensation system.