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Worker’s Compensation Mental Injury Standards in Wisconsin: Supreme Court Rulings

design-desk-display-313690“I could put 20 more people to work tomorrow,” the president of a mid-sized construction company told me recently. “But I can’t find 10 qualified people. I can’t even find 10 unqualified people.”

If that sounds familiar, be warned: The breaking point could be expensive.

Consider the case of Etha Schillinger and the rapid growth of Swiss Colony, Inc. Swiss Colony, now Colony Brands, Inc., is a classic American success story. According to the company’s website, founder Ray Kubly pioneered mail-order cheese sales, starting with just 50 holiday shipments, in 1926. By 1941, there were 100 seasonal employees, and “by 1948, the Milwaukee Road had to send an extra boxcar to Monroe daily from early December until Christmas to handle the demand for cheese,” the website says.

Schillinger began working for Swiss Colony in 1955, and by 1961—the year the company introduced its popular line of Petits Fours—­she was promoted to purchasing agent. She was responsible for purchasing all of the food products and packaging materials. With $2 million in sales that year, the job was tolerable. But Petits Fours, an ever-diversifying catalogue of mail-order holiday gifts, and the introduction of retail stores (for which Schillinger also performed purchasing tasks) fueled a decade of tremendous growth. By 1971, sales totaled more than $13 million, and Schillinger began to feel the strain.

In the spring of that year, Schillinger said she began to feel “rattled, disorganized, and less able to withstand the mounting pressures of her job.” By this time, she was reporting to a new Director of Materials, a man by the name of Ted Schneider, who would later be described in testimony as “emotionally cold.”

On October 29, 1971, after an incident of “abrupt, brusque criticism” by Schneider, Schillinger suffered an emotional breakdown. She sought medical treatment for exhaustion, depression, insomnia and weight loss, and was admitted to the hospital where she remained until mid-November. She underwent extensive psychological treatment and was in and out of the hospital over the next several months. She was ultimately diagnosed as schizophrenic. She resumed work intermittently at various light duty tasks, but never returned to her job in purchasing.

Mental Injury Standards Established by Supreme Court Cases

In Wisconsin worker’s compensation practice, mental injuries, suffered in the absence of a physical injury, are not compensated unless the mental stresses and strains causing the mental injury are out of the ordinary. The standard was established in a case brought by a contemporary of Schillinger’s, Mary Tauscher.

Tauscher worked as a guidance counselor at Brown Deer High School. In 1971 she was presented with a list of recommendations from the student council; among them was her removal from the school staff. Tauscher suffered an emotional breakdown and period of disability and sought worker’s compensation benefits. In “School District No. 1 vs. Industry, Labor and Human Relations Department,” the Wisconsin Supreme Court wrote:

“Here the emotional stress is no greater than the many differences and irritations to which all employees are subjected and is not an accident compensable under workmen’s compensation. The mere receipt of a partially blacked-out list of suggestions prepared by the student council which asked for her dismissal could not be deemed to be so out of the ordinary from the countless emotional strains and differences that employees encounter daily without serious mental injury. Rather, it is our opinion that the critical remarks advanced by the students of Brown Deer High School is but an occurrence encountered by numerous other employees in their day-to-day employment.”

But the court went on:

“We do not believe that an average man who, after being criticized and berated by an employer or whomever for a significant period of time, suffers a mental injury should be denied compensation.”

Wisconsin’s mental injury standard was further clarified by the Supreme Court’s 1989 ruling in Probst v. Labor & Industry Review Commission. In that case, the claimant ran a successful business supply company that came upon difficult financial times. The nuance in the Probst case was that the courts focused on the type of job duties that employees in similar situations face, rather than the stresses and strains which Probst actually endured.

“The Probst decision has been cited repeatedly to support the proposition that you must compare similar employment settings in order to establish exposure to unusual stress,” said Bob Zilske, a Brookfield defense attorney who specializes in worker’s compensation. “In other words, you do not compare neurosurgeons to garbagemen to establish relative stress levels.”

The Takeaway: The Boss Makes the Difference

What then, of Schillinger’s day-to-day stresses and strains?

When her own case was heard by the Supreme Court—two years after “School District”—Schillinger’s treatment by the “emotionally cold” Schneider was a key factor.

The Supreme Court wrote in its opinion:

“Ruth Gibbons, Schillinger’s assistant, testified that Schneider was negative, brusque, and belittling, especially to women, and that he challenged and belittled any decision Schillinger would make. Gibbons also stated that this attitude upset Schillinger and made her unsure of herself. Schillinger testified that Schneider was abrupt and overly critical of her, and that she would make statements she knew were correct and he would contradict them. She stated that this was very frustrating and disheartening.”

Bizarrely, one of Schillinger’s treating psychologists lived next door to Schneider and testified to his demeanor. The psychologist described Schneider as “a very aggressive man, somewhat cold in his dealings with other people, emotionally cold … brusque, very challenging, very critical.”

That testimony convinced the Supreme Court that Schillinger had endured constant criticism, and was berated and belittled by her immediate supervisor. The court found that the treatment was enough to give rise to an occupational accident, and awarded benefits.

The case should be instructive to employers today, according to James O’Malley, administrative law judge and Director of the Legal Services Bureau of the Worker’s Compensation Division of the Wisconsin Department of Workforce Development.

“At a time when business needs to do more with less, it is important for supervisory personnel to be mindful of the consequences this has on the workforce and the potential for generating valid worker’s compensation claims,” O’Malley said. “Employers should train supervisory personnel to recognize and appreciate the employees working in challenging jobs. Supervisory personnel should be trained to appropriately motivate and discipline employees by avoiding unwarranted and constant unreasonable criticism—belittling and berating such as occurred in the Swiss Colony case.”

In order to protect your employees and your company from expensive claims of this type, it’s important to consider wellness and stress management resources. In our next issue, Integrated Risk Solutions Benefits Practice Leader John Gallagher will discuss how wellness programs and employee assistance programs can help your business generate a healthier culture.

Worker’s Compensation Legislative Update: Still No Fee Schedule

appointment-appointment-book-blur-40568The Wisconsin State Legislature chose not to act on the agreed-upon bill negotiated by the Worker’s Compensation Advisory Council (WCAC). The agreed bill would have introduced medical cost containment to Wisconsin in the form of a fee schedule.

Because the legislature failed to act on this measure, however, Wisconsin employers will continue to pay unmitigated costs for medical treatment of work injuries.

Did you know that Wisconsin is just one of six states without a fee schedule for worker’s compensation medical services?

According to the Worker’s Compensation Research Institute,

  • Wisconsin had the highest average per-claim medical payments from 2014-2015.
  • Wisconsin employers pay more than double the typical price for common services like X-rays and basic evaluations.

According to the National Council on Compensation Insurance (NCCI), from 2009-2013 (the most recent years for which that organization has data),

  • Wisconsin’s costs for no lost time claims rose by 30 percent compared to just 14 percent nationwide.
  • Wisconsin’s costs for lost time claims rose by 22 percent for the same period, compared to just five percent nationwide.

If Wisconsin employers are paying so much more for Worker’s Compensation claims, why hasn’t a fee schedule been approved? 

Medical providers are intent on protecting their rich revenue stream from worker’s compensation, which means the healthcare industry contributes a pretty significant amount of money to Wisconsin lawmakers. In fact, the healthcare industry contributed more than $4 million to Wisconsin lawmakers in 2017, according to data from That’s more than the combined contributions of the transportation industry, agriculture industry, and labor unions.

It’s imperative that Wisconsin employers stand together and insist the legislature act on their clear demand: Bring medical costs for work injuries in Wisconsin in line with the rest of the nation.

To learn more, read the full article available on our WEEWC website. You’ll gain even more insight about:

  • How we can create and propose a fee schedule that more effectively rallies the support of employers and appeals to a wider audience
  • Whether a solution beyond a fee schedule could be feasible
  • Steps employers can take to control costs under the current law
  • Worker’s compensation indemnity benefits and how they could be improved

Wisconsin employers face many issues as our state competes for business and labor. Wisconsin Employers for Equitable Worker’s Compensation provides a forum to understand the challenges and opportunities in our worker’s compensation system, and to stand together for positive change.

For more information on WEEWC, please contact John Tindall at


Integrated Risk Hosts Seminar “Controlling Work Comp Medical Costs Without a Fee Schedule”

Four expert perspectives on managing the costs of worker’s compensation claims in the current Wisconsin environment were presented on May 10th as part of an on-going series of educational opportunities for Integrated Risk clients and partners.

Medical costs for workers compensation claims can be controlled through innovative treatment arrangements, careful case management and utilization of cutting-edge billing procedures, according to expert presenters at “Controlling Work Comp Medical Costs Without a Fee Schedule,” a free seminar hosted by Integrated Risk Solutions on May 10.

Wisconsin Employers to Endure High Worker’s Compensation Medical Costs …For Now

pexels-photo-263402-1Despite a strong push by Wisconsin employers, including members of the WEEWC, the State Assembly ended its session without advancing the Worker’s Compensation agreed bill, which would have imposed a fee schedule on medical bills for treating work injuries. That means Wisconsin employers will endure at least another year of worker’s compensation medical charges that are much higher than those in neighboring states.

The fee schedule issue is not going to go away, and without significant worker’s compensation reform, Wisconsin will remain one of the most expensive states for treating injured workers.

Despite this challenge, there ARE important steps that employers can take to mitigate these costs even without legislative help.

These are exactly the types of strategies we plan to discuss during our free Seminar on Thursday, May 10th. For example, employers may wish to consider the following strategies for reducing medical costs:

  • Implement a claim response protocol that incorporates best practices for incident investigation and reporting.
  • Identify quality medical providers outside the expensive hospital systems, and develop cooperative strategies with employees to treat work injuries at those locations.
  • Carefully monitor ongoing care to quickly identify and mitigate over-treatment without sacrificing employee health.
  • Understand innovative medical cost management strategies, and how to make sure they are being used effectively on their claims.

These and other detailed strategies for managing the medical cost will be presented by leading worker’s compensation professionals.

To register, please fill out the form below! Or click here for more information We hope to see you there.

Integrated Risk Solutions’ Tindall Named to Wisconsin Workers Compensation Advisory Council

John TindallJohn Tindall, Director of Client Claim Advocacy for Integrated Risk Solutions, has been appointed to the Wisconsin Worker’s Compensation Advisory Council by Raymond Allen, Secretary of the State of Wisconsin Department of Workforce Development.

Tindall is a graduate of UW-Green Bay with more than eight years of claims experience including serving as a claims adjuster for a monoline worker’s compensation insurer. In his role as Director of Client Claim Advocacy, Tindall works closely with clients and insurance carriers to seek positive resolutions to claims of all types. Tindall’s appointment to the council was effective October 21.

Integrated Risk Solutions Executive Vice President and Co-founder Pete Aisbet said the appointment will allow Tindall to have a direct hand in impacting Wisconsin worker’s compensation legislation in the future. “John was appointed because of his extensive industry knowledge, background and experience,” Aisbet stated.

In making the appointment, Secretary Allen said those qualities will make Tindall “a valuable representative of management” on the council.

Tindall said he intends to listen very carefully and work for legislation that will continue to improve Wisconsin’s business climate. “Everyone has a voice in Wisconsin’s Worker’s Compensation system,” he stated. “The Advisory Council process has kept our Wisconsin Worker’s Compensation act stable for decades. I am excited to work through that process to produce meaningful changes that will benefit everyone.”

Aisbet said the appointment is significant for both Tindall and for Integrated Risk Solutions. “It allows us to continue to build our leadership role in the industry and to impact issues that touch each and every one of our clients,” he said.

The Wisconsin Worker’s Compensation Advisory Council provides direction for Wisconsin’s Worker’s Compensation program. It provides a forum for labor and management representatives to collaborate and formulate amendments to the worker’s compensation act and administrative rules. This cooperative amendment process is called the “agreed bill” and is unique to Wisconsin.

What Does Wisconsin’s New Worker’s Compensation Act Mean for Your Business?

As part of the on-going Integrated Risk Solutions Education Seminar Series, John Tindall, Director of Client Claim Advocacy at Integrated Risk discussed the law changes and the two-year cycle for updating the Act during a March 31st seminar.

Wisconsin’s workers’ compensation act was updated March 2, 2016 with several provisions that may prove beneficial to employers, but meaningful control of medical costs remains an elusive goal.

The worker’s compensation act now allows employers to deny temporary disability benefits to injured workers terminated for good cause while working light duty. Repealing the longstanding “Brakebush” rule, this provision gives employers more flexibility in dealing with employees who might use workers’ compensation as a cover for insubordination, absenteeism or poor performance. Employees whose terminations that would be justified under the unemployment statute would not receive disability pay after being fired.

The updated statute calls for a total denial of indemnity benefits for injuries with a causal connection to violation of an employer’s drug or alcohol policy. The statute is unclear as to what proof is required of a causal connection, and in time case law will clarify the standard. In the meantime, employers would be well served to review and carefully enforce their drug and alcohol policies.

The value of permanent partial disability (PPD) and the process for assessing PPD ratings both received updates in the legislation.

  • The weekly PPD rate increased to $342 March 2, and increases again to $362 January 1, 2017.
  • A panel of physicians will be assembled to evaluate the statutory minimum PPD ratings and update them in light of current medical outcomes.
  • Employers are given more clear ability to apportion PPD ratings between current work injuries and prior disabilities. This makes pre-employment screening more crucial, so a baseline can be established.

Missing from the March 2 updates to Wisconsin’s Worker’s Compensation Act is a medical fee schedule. Wisconsin is just one of seven states without a fee schedule, and several studies show medical fees in Wisconsin far outpace the national average. Employers are encouraged to attend upcoming Worker’s Compensation Advisory Council meetings to encourage favorable changes to the act during the next cycle. The Worker’s Compensation Act should next be updated in January 2018.