The Supreme Court of Wisconsin on Tuesday, October 7 issued a split decision which resulted in a loss for Sohn Manufacturing in a worker’s compensation case. The issue before the Court was whether the federal Occupational Safety and Health Act (OSHA) preempts the State of Wisconsin from imposing penalties for safety violations under Wisconsin laws.

In a 3-3 decision, Chief Justice Abrahamson, Justice Bradley, and Justice Crooks voted to affirm the Court of Appeals’ decision in favor of the employee. Justices Roggensack, Ziegler and Gableman voted to reverse the Court of Appeals’ decision. Justice Prosser did not participate, leading to the split decision.

The case is Sohn v. Manufacturing v. Labor and Industry Review Commission, 2014 WI 112.

Background
An employee (Tonya Wetor) was injured on the job while working at Sohn Manufacturing. Wetor was cleaning a machine when her hand was pulled into the machine, causing severe injuries. Sohn Manufacturing’s practice at the time was to clean the machines while they were running. The state investigated the accident and determined that Sohn Manufacturing had not complied with OSHA standards and Wisconsin’s Safe Place Statute (Wis. Stat. § 101.11).

During the worker’s compensation hearing, the issue was whether Sohn Manufacturing was liable for a penalty payment under Wis. Stat. § 102.57, which provides an extra 15 percent of the damages award, capped at $15,000, when employees’ workplace injuries are caused by their employer’s safety violations.

The administrative law judge determined that the injury was caused by Sohn Manufacturing’s violations of the OSHA standard and Wisconsin Safe Place Statute and therefore ordered the company to pay the 15 percent payment penalty.

The case was appealed to the Court of Appeals, which affirmed the administrative law judge’s decision.

Arguments before the Supreme Court
The Court heard oral arguments on September 23, 2014. The main issue was whether the State of Wisconsin may use OSHA standards or the Wisconsin Safe Place Statute (Wis. Stat. § 101.11) to inspect private workplaces and impose penalties under Wis. Stat. § 102.57. Specifically, Sohn Manufacturing argued that the federal law (OSHA) preempted both § 102.57 and the Wisconsin Safe Place Statute and therefore the State of Wisconsin did not have authority to issue the 15 percent payment penalty under § 102.57.

According to Sohn Manufacturing, OSHA preempts Wis. Stat. § 102.57 because the alleged violation of the state statute is predicated on the violation of an OSHA standard. The company argued that states may regulate occupational health and safety only by submitting state plans to OSHA for approval, or by limiting the state regulation to areas in which no OSHA standard exists.

Wisconsin has not submitted any such plan to OSHA. In addition, the lower courts determined that Sohn Manufacturing violated an OSHA standard relating to the control of hazardous electrical energy. Therefore, Sohn Manufacturing argued that state enforcement of Wisconsin Stat. § 102.57 has crossed into the federal government’s regulatory space and therefore is preempted.

Wisconsin Supreme Court Evenly Splits, Court of Appeals’ Decision is Upheld and Adopted
Because the Supreme Court split 3-3, the Court of Appeals’ decision is affirmed in favor of the employee. The Supreme Court provided no analysis of the decision, but instead adopted the Court of Appeals’ decision, Sohn Manufacturing v. Labor and Industry Review Commission, 2013 WI App 112.

This an unfortunate decision for businesses in Wisconsin and is even more troubling that the case was not decided by all seven members of the Court, with Justice Prosser not participating.