Wisconsin Court of Appeals Rejects Labor and Industry Review Commission’s Worker’s Compensation Determination as Unreasonable

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June 27, 2016

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  In an unpublished opinion issued by the Wisconsin Court of Appeals on June 21, 2016, the appellate court found that LIRC impermissibly read into a statute an element the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.

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