Workers’ Compensation Appellate Commission Decides Important Procedural Point in Vocational Rehabilitation Proceedings

The Workers’ Compensation Appellate Commission has issued an important en banc opinion. An en banc opinion is a rarity. It is an opinion issued by the entire Appellate Commission, all Commissioners participating so as to create a precedent in the state. The recent en banc opinion is Slais v State of Michigan, Department of State Police, 2009 ACO #10.

Mr. Slais was a State Trooper who suffered an injury that prevented him from returning to work for the State Police. The State of Michigan invoked formal, MCL 418.319 vocational rehabilitation proceedings and Mr. Slais resisted them saying that he wanted vocational rehabilitation in the form of attending law school to become a lawyer. Mr. Slais did in fact then enroll in law school and is attending presently.

A § 319 vocational rehabilitation dispute is initially heard by the Director of the Workers’ Compensation Agency or one of his surrogates, usually David R. Campbell, who serves as the vocational rehabilitation consultant for the State of Michigan. Mr. Campbell conducted a hearing and ruled that the State was responsible for Mr. Slais’ law school tuition. The State then challenged that ruling by requesting a hearing before a Magistrate. The Magistrate affirmed Mr. Campbell’s ruling. The State then appealed to the Appellate Commission who decided to hear the case en banc.

The State argued before the Appellate Commission that it was deprived of due process of law because neither the proceeding before Mr. Campbell nor the proceeding before the Magistrate was made on the record and the State was not permitted to introduce evidence before the Magistrate. The State insisted that the proceeding before the Magistrate was a “hearing” where it was entitled to produce new evidence and make its case anew. Plaintiff disagreed. The Director of the Agency intervened and supported plaintiff’s position.

The Appellate Commission agreed with the State that the proceedings before the Magistrate are a “hearing” that must be conducted on the record and recorded, and the “ hearing” affords both parties the opportunity to produce evidence. And, the Magistrate is to decide the case as if he or she “is starting over with the evidence,” without indulging in any presumption that the initial proceeding was correct. A good summation of the Appellate Commission’s opinion is as follows:

As indicated earlier in this opinion, we believe that even before considering constitutional issues, that the Worker’s Disability Compensation Act requires that in rehabilitation hearings before a magistrate, stenographic notes or the use of recording equipment is mandatory. Further, to the extend that the Commission’s opinion pertaining to constitutional issues is pertinent, we find that failure to grant such a hearing so recorded before a magistrate would deprive the appellant due process of law. The proceeding before the magistrate is a de novo hearing. Essentially the magistrate is starting over with the evidence. The parties are not limited to submitting the exhibits or “testimony” discussed or used at the informal hearing with the director’s representative/mediator. Because there is no record of the informal hearing, practically there would be no way for the magistrate to discern what transpired at the informal hearing level. (Commission’s opinion, p 8).

This is a welcome ruling. The way the system had been operating prior to this opinion was that the initial proceedings were not on the record and the later proceedings before the Magistrate were not on the record and no new evidence was allowed before the Magistrate. Therefore, it was virtually impossible for a party aggrieved by the process to challenge it in any meaningful way on appeal. It was impossible because there was no record made of the proceedings. The State argued that this was a deprivation of due process of law. Now, the Appellate Commission agrees. Its ruling is that the initial proceeding at the Director/Mr. Campbell level is more like a mediation. Any party dissatisfied with the outcome of that mediation-like proceeding is then entitled to go before a Magistrate, not for an appeal of Mr. Campbell’s order, but instead for a “hearing” that allows both parties “starting over with the evidence” and the Magistrate to make a record of the proceeding.