Wisconsin Legal Update OSI’s WC Conference April 17, 2014

1. Presented by Robert W. Dean Wisconsin Legal Update OSI’s WC ConferenceApril 17, 2014

2. Changes to the WC Law • The Advisory Council is composed of an equal number of voting members from Business & Labor • Council members hold hearings throughout Wisconsin • Council also reviews proposals from all sources • Wisconsin WC Advisory Council submits an Agreed Upon Bill to Legislature for changes to law

3. Wisconsin WC Advisory Council • https://dwd.wisconsin.gov/wc/councils/wcac/ • To find out addresses for current members • https://dwd.wisconsin.gov/wc/councils/wcac/wcacmembers.htm • Have suggestions or ideas? • Give them a call or write a letter/email • Ideas from all sides will lead to more consensus

4. Wisconsin WC Advisory Council • Council also has ex-officio legislative members who can be contacted for suggestions (see website for details) • Latest Agreed Upon Bill was introduced in the Wisconsin Legislature on January 31, 2014 • Assembly Bill 711 • Senate Bill 550

5. 2013 Bills to change WC • Legislative Session ended April 1, 2014 • Both Bills ‘died’ in respective chambers within referred committees • However, based on calls to Madison, another WC Bill will be introduced in the next session

6. What Happened to 2013 Bill? • Several proposed amendments created concern: • Medical costs provisions creating a fee structure • Providers could not charge more than 10% above the average paid by state group health plans • Continuation of Health Coverage • Created a new WC benefit to require WC to pay injured worker health care insurance premiums during healing period to avoid loss of coverage

7. What Happened to 2013 Bill? • Statute of Limitations to drop from 12 to 9 years for Traumatic Injuries (still 12 years for occupational) • Vocational retraining could be granted via interlocutory order • PPD rate to go up to $337/wk for injuries in 2014 • PPD rate to go up to $352/wk for injuries in 2015 • Other proposed changes regarding appeals process to Circuit Court to avoid dismissals for failure to join a necessary party

8. What Happened to 2013 Bill? • Based on concerns (and lobbying) from various groups, the legislation stalled • Since similar amendments will likely be re-introduced next year, consider getting involved with the Advisory Council by: • Attending a Meeting • Writing a letter to a Member

9. Updated Case Law • Will discuss several topics • Please note that unpublished decisions are not binding law • However, they can be considered for persuasive legal authority • Thus, will consider some unpublished decisions

10. Liberty Mutual Fire Insurance Co. v. Voight2013AP198 (Oct. 15, 2013)(Unpublished Decision)Limited Compromise AgreementsTALK TO YOUR ATTORNEYS ABOUT TERMS

11. Facts: Claimed Elbow Injury • Right elbow injury. After elbow surgery, applicant experienced severe pain and numbness with forearm, hand and finger pain. Second surgery relieved some symptoms, but continued to experience hand issues. • Treater issued 20% PPD rating to the right elbow for chronic pain, weakness, and loss of sensation. IME doctor found 3% PPD rating at the right elbow for pain, diminished grip strength, and sensory changes in the hand and finger.

12. Facts: Limited Compromise Agreement • Agreement: $21,000 for 20% credit toward “any future claims for permanent partial disability.” • Limited compromise was a full settlement of liability for indemnity and all expenses through the date the settlement was executed. • Limited compromise would have “no effect on the applicant’s ability to seek further benefits” under workers compensation.

13. Facts: Claimed Right Wrist Injury • Applicant sought 45% PPD rating for the right wrist. • Respondents denied the claim: 1) claim was foreclosed by the 2007 limited compromise agreement; and 2) disability must be rated at the elbow joint, the site of the occupational injury. • ALJ dismissed the claim finding it was closed out by the limited compromise agreement. • ALJ rejected the argument that disability must be rated at the elbow.

14. Appeal to Labor & Industrial Review Commission • Commission ordered taking of new evidence. Included different IME that attributed wrist symptoms to unintentional injury sustained during the work-related elbow surgery. IME concluded no longer any disability at the elbow, but a 45% PPD rating at the right wrist (consistent with treaters rating). • Commission found that applicant sustained a 45% PPD rating to the wrist attributable to the effects of the work-related right elbow injury. • Further determined that limited compromise agreement did not represent a final settlement of applicant’s claim. Agreement did not effect applicant’s ability to seek further benefits. • Commission awarded the 45% PPD rating. Commission then applied the offset required by the limited compromise agreement. Awarded a total of $21,780.00

15. Issue on Appeal • Respondents argued that the 2007 settlement foreclosed applicant's wrist claim. • Symptomatic foundations of the two claims were identical and characterized by right hand pain and weakness as well as diminished grip strength and sensation. • Applicant should be bound by his initial choice to bring his claim as an elbow injury.

16. Wisconsin Court of Appeals • Court found that the settlement agreement effectively paid the applicant $21,000 for “a credit of 20 percent permanent partial disability to the right elbow toward any future claims for permanent partial disability.” • It further noted that the settlement had a limited scope – covering only the liability accrued through the agreement’s execution. • Highlighted that the agreement further provided that it would have no effect on the applicant’s ability to seek further WC benefits and that the respondents had explicitly reserved all rights and defenses to future claims. • Concluded that the agreement’s language supported the Commission’s findings

17. Wisconsin Court of Appeals (cont.) • The Court rejected the argument that ‘downstream’ (distal) disabilities like the wrist are subsumed by the disability at the elbow. Noted that the Commission had cited two of its prior cases to make this determination. • In the cited decisions, the Commission had noted that it was technically correct to assess separate disabilities separately and not to combine them. However, in cases where the medical testimony does not make separate assessment the commission would merely uphold the most credible of the opinions. • Moral to Story: Speak to your Attorneys regarding scope of settlement!

18. Sohn Manufacturing Inc.v. LIRC2012AP2566 (Aug. 7, 2013)Penalties Case

19. FACTS • The applicant injured her hand when it was pulled into a machine she was cleaning. • The employer’s practice at the time of the accident was to have employees clean the machines while they were running. • A state investigation concluded that the employer had not complied with an Occupational Safety and Health Administration (OSHA) standard related to safe shut-down procedures when servicing machines and WIS. STAT. § 101.11 – the safe place statute.

20. ISSUE Whether the employer is liable for a penalty payment under WIS. STAT. § 102.57, when it is found to have violated an OSHA regulation or state statute. • § 102.57 provides an extra fifteen percent of the damages award, capped at $15,000, when employees’ workplace injuries are caused by their employers’ safety violations.

21. ANSWER: Yes. • The applicant was awarded increased compensation under a Wisconsin penalty statute based on the employer’s violation of a federal safety regulation.

22. Issue on Appeal On appeal, the employer raised two arguments: • (1) that federal work condition law preempts Wisconsin’s ability to award penalty payments under WIS. STAT. § 102.57. • (2) that violations of the safe place statute and of federal regulations may not form the basis for an increased compensation award under § 102.57.

23. HOLDING AND ANALYSIS The Court of Appeals rejected the preemption argument: • Explicit clause in the OSH Act stating the Act shall not supersede or affect any workmen’s compensation law. The court also rejected the employer’s argument that § 102.57 constituted an enforcement of federal law: • Statute was plainly a state worker’s compensation law that allows increased worker’s compensation benefits if found that the employer also failed to comply with any statute, rule, or order of the department. • In this case, the employer directly failed to comply with the Wisconsin’s safe place statute - WIS. STAT. § 101.11

24. HOLDING AND ANALYSIS (cont.) The court also rejected the employers argument that the OSHA Standard cannot be used to justify an increased penalty under § 102.57 because the OSHA Standard is not “a statute, rule, or order of the department.” • Held that the employer’s OSHA violation was not a law used to establish the increased penalty; • Rather the violation was used as evidence that the employer violated Wisconsin’s safe place statute - a valid law for purposes of the state’s increased penalty.

25. Milwaukee Transport Services Inc.v. LIRC2012AP2255 (June 4, 2013)(Unpublished Decision)Deviation from Employment

26. FACTS • The employee, a bus driver, was injured while attempting to chase an unruly passenger. • The employee had informed the passenger that his transfer ticket was not valid and asked him to leave. The passenger cursed at the employee, threw a fake punch, spit on him and ran. • In response, the employee ran off the bus in pursuit. Within a few steps, the employee fell, crawled back onto the bus, and continued his route. The employee was later diagnosed with a ruptured left Achilles tendon and a right quadriceps tendon, which were surgically repaired.

27. ISSUE Whether the injuries occurred in the scope of employment.

28. The administrative law judge found that the employee was not entitled to worker’s compensation because he violated several employment rules of the employer in pursuing the passenger. These violations amounted to a deviation from his employment. • Though, the ALJ admitted “that I probably would have acted the same way.” • The Commission reversed the ALJ decision. • The Commission did assume that the employee deviated from his employment by leaving the bus. • However, the Commission held that the employee’s response was “unquestionably impulsive” and that the deviation was momentary. • The circuit court affirmed the Commission’s ruling.

29. HOLDING The court of appeals found that “great weight” deference applied to the Commission’s decision because it had been specially tasked with administering the worker’s compensation statute. • The court affirmed that current Wisconsin case law maintained that an impulsive, momentary, and insubstantial deviation would not bar recovery. • Here, considering the events the employee faced, the court held that the Commission’s ruling was “under the circumstances of the case, entirely reasonable.”

30. County of Outagamiev. LIRC2013AP217 (July 30, 2013)(Unpublished Decision)Special Errand

31. FACTS • Applicant was a maintenance worker for the county. • County maintenance workers were subject to rotational “pager duty” which required a worker to carry and respond to emergency pages on nights and weekends. • Upon receiving a page, a worker was required to report to the maintenance building within thirty minutes. • A worker was paid overtime from the moment the worker received the page until the worker resumed the activity he was doing when he received the page.

32. Facts: Scope of Employment • On a Sunday night, the applicant, while relaxing at home, received a page to fix a jail door. • That night, the area was in the midst of an ice storm. • After fixing the door, the applicant drove home and parked in his garage. • However, to reenter his house, the applicant needed to step on his driveway, which was glazed with ice. The applicant slipped on the ice, fell and injured himself.

33. Primary Issue: Whether the injury occurred within the course of employment. • The administrative law judge determined the applicant was injured in the course of his employment because he was on a “special errand” for the county that had not yet concluded. • The ALJ based his decision in part on the fact that the applicant was being paid overtime at the moment he was injured. • The Commission and circuit court affirmed.

34. HOLDING & ANALYSIS • First, the appellate court conceded that the typical employee going to or from work is not covered until he or she reaches the employer’s premises. • However, the court noted that there are exceptions to this rule, including a “special errand” performed by the employee for the direct benefit of the employer. • The “special errand” covers an employee from the time the employee crosses the portal of his home to the time the employee returns to his home.

35. HOLDING AND ANALYSIS (cont.) • The court affirmed the applicant’s coverage because he was still in the process of returning from his trip and had not resumed his personal activities. • The court noted: • The applicant was relaxing inside his house when he received the emergency page. • The page required him to leave the comforts of his home to travel in the ice storm, and • After completing the work the applicant was required to step on the icy driveway in order to reenter his house. • Thus, the applicant had not resumed his personal on-call activities.

36. Adamsv.Northland Equipment Company, Inc.2012AP580 (March 7, 2013)(Unpublished Decision)Subrogation Claims

37. FACTS • The employee suffered a spinal cord injury while plowing snow for his employer—a municipality. The plow had been repaired and re-sold to the municipality by a third-party. • The employee brought a personal injury claim against the company. The employer was joined as a party because it had paid worker’s compensation benefits to the employee.

38. Facts: Compelled Settlement • Prior to trial, the employer moved the court to compel settlement of the case on the third-party’s $200,000 offer. • In support of its motion, the employer cited WIS. STAT. § 102.29(1)(a) which provides that an employer or worker’s compensation carrier has the same right as the injured employee to make a tort claim against a third-party for the employee’s injury.

39. Facts: Compelled Settlement • After a motion hearing, the court granted the employer’s motion to compel settlement. • The court found that the employee had a difficult case on liability and cause and that the risk of a no liability jury verdict exceeded the possibility of recovering more than $200,000.

40. ISSUE Whether: 1) The order violated the employee’s right to a jury trial; 2) The court was required to conduct an evidentiary hearing prior to compelling acceptance; and 3) The court erroneously exercised its discretion in determining the settlement was fair.

41. HOLDING: No, on all three questions. • The court of appeals cited case precedent and § 102.29(1)(a) in holding that the court, without a jury trial, can pass upon a dispute where claimants under the statute cannot agree on the proper prosecution of a claim against a third-party tortfeasor.

42. HOLDING AND ANALYSIS (cont.) • The court further cited Dalka v. American Family Mut. Ins. Co., 2011 WI App 90, which held that the constitutional right to a jury trial is waived by the employee’s acceptance of worker’s compensation benefits and maintains the court’s authority to compel acceptance of a settlement.

43. The appellate court also rejected the employee’s appeal for an evidentiary hearing on the settlement motion. • The court found that the trial court was merely being asked to resolve a dispute between joined plaintiffs and was not being asked to decide disputed issues of fact. • Thus, the procedural protections of Due Process did not entitle the employee to a full evidentiary hearing that would amount to a mini-trial of the personal injury claim. • The court noted that the employee was given notice of the motion and a sufficient hearing to advance his argument.

44. Finally, the court ruled that the trial judge properly exercised discretion in compelling the settlement. • The court noted there were proof problems on liability and causation because of a seat belt defense. • Citing Dalka, the court noted that it is appropriate for the court to inquire into the nature and strength of the case in deciding whether to compel acceptance of a settlement. • Here, the ALJ’s decision reflected a “logical interpretation” of the facts surrounding the settlement offer.

45. QUESTIONS?Thank you!www.hennessyroach.comrdean@hennessyroach.com(920) 569-4620