STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

RONALD DRECKMAN, Complainant

HENKEL TRANSPORT, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 199900800

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modification:

Paragraph #3 of the administrative law judge's ORDER is deleted and the following paragraph substituted therefor:

"3. That within 30 days of the expiration of time within which an appeal may be taken herein, Henkel Transport shall submit a compliance report detailing the specific action it has taken to comply with the commission's decision. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P. O. Box 8126, Madison, Wisconsin 53708. The statutes provide that every day during which an employer fails to observe and comply with any order of the commission shall constitute a separate and distinct violation of the order and that, for each such violation, the employer shall forfeit not less than $10 nor more than $100 for each offense. See Wis. Stats. § § 111.395, 103.005(11) and (12)."

DECISION

The decision of the administrative law judge (copy attached), as modified, is affirmed.

Dated and mailed February 16, 2001
dreckma.rsd : 101 : 9

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The complainant alleges that the employer cancelled his COBRA health insurance policy -- and subsequently failed to reinstate it -- because he (the complainant) filed a wage claim. The ALJ found for the complainant on this issue, and concluded the employer illegally retaliated against the complainant for filing a wage claim, in violation of Wis. Stat. § 111.322 (2m). The employer has filed a petition for commission review. No briefing schedule was requested, and no briefs were filed.

In affirming the ALJ's decision and order in this case, the commission notes that the best evidence in the record is that vice president Chris Henkel had recently learned about the complainant's wage claim when he cancelled the insurance. Mr. Henkel took this action during the 90-day period that former employees have to elect COBRA coverage. It is also clear that employer never warned the complainant his insurance was in imminent danger of being cancelled. Indeed, it did not inform him that it had cancelled his insurance until several weeks later when it returned the check he sent for the December 1998 premium.

The employer's cancellation of the policy within the 90-day period to make the COBRA election itself raised a key question. If the complainant had 90 days to elect (and necessarily pay for) COBRA coverage, why would the employer have acted to cancel the policy -- for nonpayment or otherwise -- before the period had run? Asked about this at the hearing, the vice president had no real explanation.

Further, Mr. Henkel had no real explanation why he did not regard the December 1998 premium payment, sent on or about November 30, 1998, as evidence the complainant intended to continue the COBRA coverage. Mr. Henkel did not claim he received the premium too late to act within the 90 days. Rather, Mr. Henkel stated that if the complainant had clearly told him he wished to continue the COBRA coverage in the December 1998 phone call occurring after the employer returned the premium, Henkel would have reinstated the coverage. Mr. Henkel did not, he says, because the complainant did not expressly ask him to.

The commission cannot accept this explanation. The complainant sent in the premium check for December 1998 to maintain his COBRA coverage. He called Mr. Henkel to inquire about the status of that coverage. Again, Mr. Henkel does not dispute that either of these events took place in the 90-day COBRA election period. Whatever duty a terminated worker has to make his intention to obtain COBRA coverage known, the complainant met it in this case. He filed the election form within the 90 days. He sent in at least one premium payment within the 90 days. He called the employer to discuss the cancellation within 90 days.

On the other hand, the employer here acted unilaterally and without notice in canceling the COBRA policy before the period to elect it in the first place had even ended. Having done so, the employer may not rely on the failure of the complainant to utter some magic words in the early December 1998 phone call as its defense for not reinstating the COBRA plan. To the extent that the employer has articulated a non-discriminatory reason for the cancellation and the failure to reinstate the COBRA policy, the nonpayment of premiums and failure to specifically demand reinstatement, the commission is satisfied that the complainant has established that the articulated reasons were mere pretext, and that the employer, through its vice president Chris Henkel, cancelled the complainant's COBRA policy and failed to reinstate the policy in retaliation for the complainant's wage claim.

Finally, the ALJ's award in this case is fairly calculated based on the additional expense incurred for more expensive non-group coverage and out-of-pocket costs that would have been covered under the COBRA plan. The award is clearly within the broad scope of remedy allowed under Wis. Stat. § 111.39 (4)(c), which applies to retaliation claims.

PAMELA I. ANDERSON, (dissenting):

I am unable to agree with the result reached by the majority herein and I dissent. The administrative law judge and majority believe that the employer retaliated against the complainant because he filed a wage claim. The employer knew that there was a dispute about some commissions when the employee left his employment. The applicant had not decided whether he wanted insurance coverage through COBRA when he left the employment. Chris Henkel approved the complainant's coverage the same day he received the paperwork. The employer sent the complainant the cost per month in late October which was $531.67 per month. The complainant alleged but did not prove that he sent the employer a check for three months. The check was never cancelled and the employer denied receiving it.

The employer cancelled the complainant's COBRA on November for non-payment of premiums. The employer also cancelled another truck driver's policy at the same time for non-payment and that truck driver had no wage claims. The employer testified "I learned of the wage claim filed by the complainant three to four days after he filed it and we received it two or three days after that. I learned about the wage claim before I canceled the complainant's insurance. I was not worried about the wage claim because I had documentation to prove what was and was not owed to the complainant. I was not bothered by the wage claim.I did not cancel the insurance as a result of the wage claim. I canceled the insurance because of non-payment of premiums."

I found the employer's statement to be the reason for the cancellation and I do not believe it is pretextual. The administrative law judge and the majority believed the employer's statement to be pretextual because the employer did not hold the applicant's hand and explain to him that he needed to submit a check for the first three months as well as return the check for December in order to have the COBRA reinstated. The employer promptly sent back the check and explained that the insurance had been canceled. The fact that the employer did not have a rehearsed explanation for why he did not again ask the complainant if he wanted to elect his COBRA option at the end of the 90 days does not surprise me. I am sure the employer was not counting the days so that he was aware of exactly when the deadline was when he talked to the complainant. The administrative law judge has a footnote which indicates that when the employer received the December check it should have been no later than December 2 which would have been 88 days from September 5. The complainant did not talk to the employer until the 89th or 90th day. The complainant testified that if the employer had contacted him to tell him it had not received the check for the premium for the first three months, he would have followed up on it. Usually people who elect COBRA coverage pay the premiums in a timely fashion so the employer may have believed the complainant had simply changed his mind about coverage.

The bottom line here is not whether the complainant should have received his COBRA coverage. The answer to that was yes he should have. The question was why didn't he? The answer to that is he would have if he had gotten his first check for the three months to the employer. He did not and that was not the employer's fault. Had the employee followed up with the employer to say I will bring a check over for the first three months right away when he talked to the employer after he received the December check back, he also probably would have had COBRA. The fact that the employer did not restore COBRA coverage without payment of all the premiums that were due is not discrimination by retaliation.

For these reasons, I dissent and would dismiss the complaint.

__________________________________________
Pamela I. Anderson, Commissioner

cc: Joel W. Kanvik

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