Wisconsin Supreme Court Sides With Employer in Workers’ Compensation Unreasonable Refusal to Rehire Case

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July 27, 2011

The Wisconsin Supreme Court has issued a decision in favor of an employer in a workers’ compensation case for unreasonable refusal to rehire. In doing so, the court emphasized that an employer is not required to make an accommodation to an employee’s personal obligations in order to escape liability under the unreasonable refusal to rehire statute. Further, the court observed that Wisconsin’s Fair Employment Act likewise does not require accommodations in order to meet an employee’s personal needs. Employers are likely to find useful clarity in this decision, DeBoer Transportation, Inc. v. Swenson, (2011 WI 64), issued on July 12, 2011.
In the absence of an employment contract, employment in Wisconsin is “at will,” which means that an employer may make a hiring or firing decision for a good reason, a bad reason, or no reason at all. This common law employment-at-will doctrine is subject to a host of exceptions created by statutes. One such statutory exception arises in the context of workers’ compensation, the unreasonable refusal to rehire claim under section 102.35(3) of the Wisconsin Statutes. Claims are commonly brought under this statute, which can require the employer to pay up to one year’s actual wages lost as a result of discriminatory firing or refusal to rehire after a work-related injury or condition. Workers’ compensation insurance policies do not cover this particular claim.
The facts of the employee’s injury and his recovery from it were not at issue in DeBoer. The employee, a truck driver who normally made nighttime local trips, was fired when a conflict arose between the employer’s need to have the employee undergo a multi-day safety recertification trip for truck driving and the employee’s need to provide daytime care to his father who was afflicted with spinal cancer. The employee’s work-related injury was not a factor in the decision. Nor was the willingness of the employee to undertake the safety recertification trip so long as the recertification trip conformed to his conditions of regular employment, i.e., nighttime local runs that allowed him to be home with his disabled father during the daytime. The multi-day recertification trip proposed by the employer, however, would have prevented the employee from providing care for his father.
On these facts the majority opinion drew a bright line around personal obligations, no matter how sympathetic they may be. According to the court, the statute simply requires the employer to prove that it had “reasonable cause” for discharging the employee. “It is unreasonable to conclude . . . the legislature intended to burden employers by mandating that they change legitimate business policies to assist employees with meeting personal obligations.” In reaching its decision, the court determined that the employer’s explanation for the multi-day recertification trip was not a pretext for a discriminatory motive. The court further clarified that the question of the employer’s motive, i.e. its good faith or bad faith, is subsumed within the issue of whether the employer demonstrates “reasonable cause” for its termination decision.
Unreasonable refusal to rehire claims apply, by definition, to instances in which the employee has suffered, or has claimed to have suffered, a work-related injury or condition. The Wisconsin Fair Employment Act is not restricted to work-related injuries or conditions. Although DeBoer did not involve a request for an accommodation under the Wisconsin Fair Employment Act, the court pointedly observed:
Notably, Wis. Stat. 111.34(1)(b) does not require an employer to accommodate an employee’s personal obligations, such as child or elder care, rather, it requires the employer to reasonably accommodate the employee’s disabilities. We do not intend to imply that it requires accommodations for personal obligations. (Emphasis supplied.)
The DeBoer case declined to clarify a recurring procedural point under the unreasonable refusal to rehire statute. Under that statute, the burden of proof shifts to the employer where the employee demonstrates a prima facie claim of unreasonable refusal. The employee must meet three elements in order to shift the burden of proof: (1) claimant must have been an employee of the employer; (2) the claimant must have been injured in the scope of employment; and, (3) subsequent to the injury the employer must have refused to rehire the employee. What is not clear in the case law is whether the refusal to rehire must have been because of the work-related injury. In DeBoer, the court assumed for the purpose of that decision that the truck driver had not been required to prove that the reason for his termination was tied to his uncontested work-related injury. That issue – whether the employee must demonstrate that the employer’s reason is tied to an arguably work-related injury – must await another day for determination.
Nonetheless, DeBoer provides employers with a clear statement of the law in unreasonable refusal to rehire claims. Section 102.35(3) does not require employers to accommodate the personal obligations of their employees, no matter how compelling those obligations might be. Employers will prevail where they can demonstrate nonpretextual reasonable cause for their decisions. Moreover, the court hinted that the Wisconsin Fair Employment Act likewise would not be construed so as to require accommodations for personal reasons. If you have questions regarding the above, please contact Russ Wilson, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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