Monday, July 11, 2011

Wisconsin Court of Appeals Finds Employer Unreasonably Refused to Rehire Despite Attempt to Commit Fraud by Employee

The Wisconsin Court of Appeals released an opinion today (not to be published) upholding the Labor and Industry Review Commission (LIRC) and circuit court's decision finding that an employer, Advanced Transmission Service, LLC, (ATS), unreasonably refused to rehire an employee, Bradley Woodford, contrary to Wis. Stat. § 102.35(3) despite the fact evidence was presented showing Woodford asked ATS's owner to participate in a fraudulent scheme, and ATS did not want to employ someone who would "propose and perpetuate a fraud."

As I have discussed in a previous post, to recover under § 102.35(3), an employee must show that he or she sustained an injury in the course of employment and was subsequently terminated or denied rehire. In finding that Woodford met his burden and rebutted ATS' reasonable cause for the refusal to rehire, the Court stated:

Here, the Commission made the following factual findings in support of its conclusion that ATS lacked reasonable cause for refusing to rehire Woodford: (1) Woodford's elbow was still sore in July 2008; (2) Woodford convinced his physician to release him to return to work, even though his elbow was still sore; (3) Woodford would not have asked to be released had he known ATS did not have enough work for him; (4) during the July 24 conversation, Woodford told Effertz that his elbow was not fully healed and he wanted to go back to work for a week in order to reinstitute his existing worker's compensation claim; (5) by making this proposal, Woodford did not intend to do anything fraudulent; (6) Woodford did not realize that he did not need to return to work in order to reinstitute his worker's compensation claim; and (7) Effertz knew on July 24 that Woodford's elbow was not fully healed and that Woodford had "forced" his doctor to release him to return to work.

The Court and ALJ who decided the case at the administrative level also gave huge points to Woodford for his "extreme" honest and truthfulness relating to the fraud issue:

At the hearing [Woodford] was extremely honest and truthful. He did not deny that in July 2008, he told [Effertz] about going back to work so that he can go back to his doctor and then continue his eligibility to receive temporary disability benefits. He did not need to go back to work to receive temporary disability benefits and what he actually needed was for his doctor to state that he did not reach maximum medical improvement. On the other hand, Effertz was calculating and unconvincing. He was programmed to answer his questions in a manner to always include such terms as "fraudulent" and dishonesty. He calculated every step to see that he would have what he perceived to be legitimate reason so that he would not hire [Woodford] again. Simply, Effertz['s] testimony that he did not call [Woodford] to work for him in November 2008, because he was not willing to participate in a potential fraudulent scheme, is not convincing. [Woodford] wanted to go back to work so that he would receive wages which are higher than the temporary total disability benefits he was receiving.

(Emphasis added.) In its memorandum opinion, the Commission stated that it had "discussed the witnesses' credibility" with the ALJ, and the ALJ "did not credit Mr. Effertz['s] testimony that the only reason he refused to rehire [Woodford] in November 2008 was because of the proposal [Woodford] made in July 2008." Additionally, the ALJ "indicated that he found [Woodford] to be very credible and straightforward in his testimony that he did not intend anything dishonest or fraud[ulent.]" Based on its independent review of the record, the Commission "found nothing to warrant overturning the [ALJ's] credibility determination[s]."

The full opinion can be read here.

1 comment:

  1. It will really be important to make sure that any chance for fraud will not happen within a company and by that, employees who were proven to engage on the idea should be reprimanded to make sure that they will learn from the mistake that they committed.

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