Wis. Stat. section 102.35(3) provides a penalty of up to one year’s wages for employers who fail to rehire injured workers where suitable work is available within their restrictions.

In addition to standard claims for permanent damage to the body and compensation for time off work while healing, Wisconsin workers’ compensation law allows for several additional, less common claims, depending on the employee’s situation.

One of those claims is the unreasonable refusal to rehire (URR). To establish liability for a URR claim, the employee must show that they:

• were an employee;

• sustained a compensable injury;

• applied for rehire; and

• had the application for rehire refused due to the injury.¹

Note that there is no requirement for an employee to mitigate the employer’s damages by finding other employment. If the employee does find reemployment, however, it will offset damages due to the employee.

An Employer’s Defense: Good Cause

An employer can cite good cause² as a defense to a URR claim.

One way to establish good cause may be to show that eliminating a position was an effective business decision. For example, in Ray Hutson Chevrolet,³ the appeals court held that if an employer shows that it refused to rehire an injured employee because the employee's position was eliminated to reduce costs and increase efficiency, reasonable cause has been shown under sub. (3).

The reasonable cause inquiry presents a mixed question of fact and law. Once the facts are established, whether they give rise to reasonable cause under Wis. Stat. section 102.35(3) is a question of law.⁴

Not only must an employer need to demonstrate good cause not to rehire, but it must be sure to avoid pro forma hiring.⁵ 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.⁶

Liberal Construction

The purpose of Wis. Stat. section 102.35(3) is to protect injured workers.⁷ It is to be liberally construed to effectuate its beneficent purpose of preventing discrimination against employees who have sustained compensable work-related injuries.⁸

This statute presumably was created in recognition that case law does not authorize employees who are terminated for filing worker's compensation claims to bring wrongful discharge claims against their employers.⁹ As stated by the Wisconsin Court of Appeals: “We interpret sec. 102.35(3), Stats., as creating a new public policy. The practical effect of this statute is that the employment at will doctrine has been modified by this statute.”

Practice Tips

The underlying case must be established. While a URR claim is about a failure to rehire, it is predicated on the existence of an underlying worker’s compensation case with a compensable injury. Therefore, even if the core dispute is over a URR, an applicant must be prepared to prove their work injury and introduce supportive evidence such as a doctor’s report.

Duty to accomodate.​ Section 102.35(3) does not contemplate requiring employers to either deviate from a facially reasonable and uniformly applied policy, or explain why it would be burdensome to do so.¹⁰

The statute does not contain “accommodation” requirements and does not require an employer to change its legitimate and long-standing safety policies in order to assist an employee in meeting personal obligations. Similarly, the employer is not required to change valid business protocol to adjust for an injured employee's personal obligations.¹¹

However, employers should recognize that accommodations might be required relative to attendance policies and alternate positions.

Attendance policies. Employers who universally apply strict attendance policies risk violating section 102.35(3). ). An attendance policy that includes absences due to work-related injuries as part of the total of absences allowed violates sub. (3).¹²

Alternate jobs. An employer is not required to assume an employee with medical restrictions that would prohibit the employee’s normal work would like to come back and perform a different type work. When an employee's sub. (3) claim is predicated upon an employer's allegedly unreasonable refusal to rehire the employee to fill a different position than the one the employee previously occupied, employees must demonstrate that they made the employer aware, in some fashion, of the employee's willingness to accept other work.¹³ However, once an employer is aware of such interest, the burden shifts back to them again.

Endnotes

¹ Universal Foods Corp. v. LIRC, 161 Wis. 2d 1, 467 N.W.2d 793 (Ct. App. 1991).

² Also referred to as reasonable cause; the terms are interchangeable in the case law.

³ Ray Hutson Chevrolet, Inc. v. LIRC, 186 Wis. 2d 118, 519 N.W.2d 713 (Ct. App. 1994).

⁴ Ray Hutson, 186 Wis. 2d at 122.

⁵ I.e., hiring an employee without the intention of retaining them for an indeterminate time and, therefore, not in good faith.

⁶ Dielectric Corp. v. Labor & Industry Review Com., 111 Wis. 2d 270, 278.

⁷ West Allis Sch. Dist. v. DILHR, 116 Wis.2d 410, 422, 342 N.W.2d 415 (1984).

⁸ Id. at 422.

⁹ Brown v. Pick 'n Save Food Stores, 138 F. Supp. 2d 1133 (2001).

¹⁰ DeBoer Transportation, Inc. v. Swenson, 2011 WI 64, 335 Wis. 2d 599, 804 N.W.2d 658, 09-0564.

¹¹ Id.

¹² Great Northern Corp. v. LIRC, 189 Wis. 2d 313, 525 N.W.2d 361 (Ct. App. 1994).

¹³ Anderson v. LIRC, 2021 WI App 44, 398 Wis. 2d 668, 963 N.W.2d 89, 20-0027.