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Change LIRC-ing around the corner?

By: Erika Strebel, [email protected]//March 2, 2017//

Change LIRC-ing around the corner?

By: Erika Strebel, [email protected]//March 2, 2017//

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Lawyers leery of budget proposal’s effect on workers’ comp, jobless-benefits appeals

Thomas Rohe and Jennifer Barwinsky, both lawyers at Kasdorf, Lewis & Swietlik in Milwaukee, represent employers and businesses in workers’ compensation cases. Barwinski said she feels that doing away with LIRC would be akin to doing away with the state Court of Appeals. (Staff photo by Kevin Harnack)
Thomas Rohe and Jennifer Barwinsky, both lawyers at Kasdorf, Lewis & Swietlik in Milwaukee, represent employers and businesses in workers’ compensation cases. Barwinski said she feels that doing away with LIRC would be akin to doing away with the state Court of Appeals. (Staff photos by Kevin Harnack)

Practitioners don’t know exactly what to expect from Gov. Scott Walker’s proposal to eliminate the independent commission that now reviews administrative-law judges’ decisions in workers’ compensation, jobless-benefits and equal-rights cases.

But many fear they would be losing an essential check-and-balance that can help resolve disputes before they get into the general court system.

The state’s Labor and Industry Review Commission, known as LIRC, reviews decisions handed down by administrative-law judges in the Department of Workforce Development’s equal-rights and unemployment-insurance divisions. Workers’ compensation cases, meanwhile, come to it from the state’s Department of Administration’s Division of Hearings and Appeals.

All that would change under a budget proposal released by the governor last month. Were LIRC eliminated, appeals in equal-rights and unemployment-insurance cases would go before division administrators within the Department of Workforce Development. And appeals in workers’ comp disputes would be heard by the administrator of the Department of Hearings and Appeals.

In other words, the proposed changes would put the responsibility of review in the hands of officials who are in the very same divisions as the administrative-law judges who made the original decisions. For many practitioners, that’s too close for comfort. For an appeal to receive a fair hearing, they argue, it must go before a truly independent body.

The governor’s proposed budget, for its part, refers to LIRC as “an unnecessary layer of government” and predicts that eliminating it would save the state $3.2 million over the course of two years. Walker’s representatives did not respond to requests for comment.

Milwaukee attorney Charlie Domer, who specializes in workers’ compensation, equal rights and jobless benefits, said he is uneasy with the proposed law changes to the LIRC. (Staff photo by Kevin Harnack)
Milwaukee attorney Charlie Domer, who specializes in workers’ compensation, equal rights and jobless benefits, said he is uneasy with the proposed law changes to the LIRC.

Charlie Domer, a Milwaukee attorney who represents injured workers in workers’ compensation cases, said the state seems poised to step into the unknown. Before pushing for so radical a change, he said, state officials should have had their ideas vetted by the Workers’ Compensation Advisory Council — the usual starting point for workers’ comp policy.

“This is a major change to the substance of the Worker’s Compensation Act,” said Domer. “This proposal provides a lot of unknowns to the stakeholders in the system. It’s unclear how the appeals process would work.”

Some of those stakeholders include Jennifer Barwinski’s clients. Barwinski and her colleague, Thomas Rohe, have long used their practice in Milwaukee to represent employers and businesses in workers’ compensation cases. Barwinski said she thinks doing away with LIRC would be akin to doing away with the state Court of Appeals.

“If we eliminate LIRC we eliminate that review level,” Barwinski said. “It’s part of the checks and balances that I think the system needs.”

Kevin Magee, a staff attorney at Legal Action of Wisconsin and a supervising attorney at the University of Wisconsin Law School’s Unemployment Appeals Clinic in Madison who specializes in unemployment-benefit cases, agreed that it’s hard to tell how the proposed elimination of LIRC would change appeals procedures. Magee, who often provides pro bono representation to clients who cannot afford legal services, said his chief fear is that more benefits claimants would end up being charged with a type of fraud known as concealment — even if they have done nothing wrong.

Magee said Walker’s proposal is especially alarming given the state Department of Workforce Development’s aggressive push for a stricter interpretation of the state’s unemployment-insurance laws.

INSIDE THE LIRC

The Labor and Industry Review Commission is typically made up of three commissioners, each of whom serves a six-year term. Until recently, they were Laurie McCallum, Dave Falstad and Bill Jordahl, all people with law degrees. Jordahl left the commission in January.

LIRC’s annual budgets call for spending about $3.2 million. The money comes from four sources:

  • State tax dollars makes up only 8.4 percent of the total budget;
  • Money from workers’ compensation insurance carriers provides about 24 percent of the total, or $777,100;
  • About 62 percent comes from the federal government in the form of unemployment-insurance grants;
  • The Employment and Equal Opportunity Commission separately provides $181,000, or 6 percent of the total.

In disputes over unemployment-insurance law, the state Department of Workforce Development has regularly butted heads with the LIRC over statutes laying out what is meant by the term concealment. This type of fraud involves deliberately withholding information, or purposely submitting false information, in order to obtain unemployment benefits.

In their disputes, the DWD and LIRC have disagreed mostly about who should be responsible for showing that claimants who submit false information or withhold pertinent information did so intentionally. Should the burden fall on state officials, as has long been the interpretation? Or should claimants themselves be responsible?

“LIRC has strongly resisted the department’s push to treat nearly all of repayments as concealment,” Magee said. “LIRC has, I think, taken a reasonable approach to the facts of the case in determining whether the person intentionally took actions to mislead the department or withheld information.”

The dispute is evident in statistics recording unemployment-benefits decisions. In 2014, for instance, administrative-law judges within the DWD found fraud in 151 of the concealment cases it had heard that year. LIRC later knocked down most of those rulings, overturning a full 123.

DWD officials later brought forward legislation to change the definition of concealment, which the Legislature passed last session. More recently, lawmakers have tried to lower the burden of proof the state must meet in all jobless-benefits cases. DWD officials have meanwhile maintained that they have not changed their interpretation of the law.

Magee said it would not be fair to say that the LIRC’s frequent sidings with unemployment claimants are a sign of bias.

“I always advise claimants that going to LIRC, you probably won’t win,” he said.

According to LIRC data, 80 percent of the jobless-benefits appeals it decided in 2015 came from unemployment-insurance claimants and 19 percent from employers. Of the 1,420 appeals filed by claimants, 9 percent were reversed in favor of the claimant. Of the 343 appeals filed by employers, 12 percent were reversed in favor of the employer.

Both Domer and Barwinski noted that Walker’s budget proposal, when it comes to workers’ comp cases, does not explain how the Division of Hearings and Appeals’ division administrator would be able to take on the roughly 200 workers’ compensation cases that the LIRC hears on average every year. Domer noted that there have been no additional staff employees or attorneys assigned to the division.

Barwinski said the plan seems unrealistic given the nature of workers’ compensation cases.

“Quite frankly, I can’t understand how one person can be asked to do that,” Barwinski said. “These cases involve hundreds of thousands of dollars and possibly even millions of dollars, complicated issues and the hearing can go on for days. There are thousands of pages of exhibits. It’s an important decision that needs to be made and have that chance for review.”

Domer said uncertainty also hangs over the body of law LIRC has been issuing for more than four decades.

The commission was created in 1911 and began, in 1977, hearing appeals in cases involving equal rights, unemployment insurance and workers’ compensation.

“Those cases are not precedential but do provide significant guidance as to the agency’s interpretation of the Worker’s Compensation Act,” he said. “They are relevant upon appeal. … It’s unclear as to whether the division administrator can still utilize those cases.”

Rohe agreed.

“One concern, if you eliminate LIRC, is that you literally could end up with as many interpretations of the law as there are ALJs,” he said. “The commission brings everyone’s ideas together and establishes policies that can be applied as a whole.”

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