Changes to unemployment venue now and in the future

In DWD v. LIRC, 2015 WI App 56 (“Froehlich,” after the claimant at issue in the case), the Department filed an unemployment appeal case in Milwaukee County even though none of the parties resided in that county.

Normally, unemployment cases in circuit court must be brought in the county where the claimant or the employer (i.e., the plaintiff in the case) resides. But, the Department also has the ability to appeal any LIRC decision even if the parties to that case do not. And, in Froehlich, the Department did just that. Under Wis. Stat. § 102.23(1)(a), when the Department of Workforce Development is the appealing party, venue is in “the county where the defendant resides.”

Typically, when a claimant or employer appeals a LIRC decision in the wrong county, the Commission immediately moves to dismiss the action for lack of venue. And courts routinely grant such motions, ending the unemployment appeals before the merits of the case are ever addressed.

But, in Froehlich the Department was the appealing party, and the Commission did not immediately move for dismissal. Instead, the Commission said it was willing to agree to venue in Milwaukee County subject to what other parties wanted and the circuit court’s permission. For some reason, the Department did nothing. When additional Department appeals were filed in numerous other cases throughout Wisconsin (and again in counties where no defendants resided), the Commission moved to dismiss Froehlich. The circuit court granted that request, and the Department appealed that dismissal to the appeals court.

NOTE: In the past, when the Department appealed a Commission decision because of a fundamental disagreement with the Commission over the meaning of unemployment law, the Department filed those appeals in Dane County, where the defendant Commission resided.

The court of appeals held that dismissal was NOT warranted in Froehlich because the Commission had accepted jurisdiction in Milwaukee County and the other defendants never objected to venue in Milwaukee County. Since the active parties to the case — the Department and the Commission — had indicated that Milwaukee County was a proper venue, dismissal for lack of venue was improper. But, the case was still remanded to the circuit court to determine whether it would agree to jurisdiction, and the appeals court strongly hinted to the circuit court that it should agree. See n.4 in Froehlich.

The end result in Froehlich is that a wrong venue no longer leads to automatic dismissal, at least when the Department is the plaintiff. Whether Froehlich might also lead to claimants and employers being able to keep their cases alive despite filing in the wrong venue remains an open question. But, a colorable claim is now viable that such cases should NOT be dismissed but remain either in the county where filed or transferred to another county where venue is proper before any dismissal for lack of venue takes effect.

For its sake, the Department is not sitting on its laurels. At the September 17th Advisory Council meeting, the Department presented a new proposal to create a new unemployment venue provision, D15-11. In place of Wis. Stat. § 102.23, a new Wis. Stat. § 108.09(7) is created and which includes a host of changes to how unemployment appeals will be handled in the future. These changes include:

• Who is a party — Under new 108.09(7)(c)1, “every other party to the proceedings before the commission shall be made a defendant.” So, the parties of interest from workers’ compensation precedents no longer have to be included.
• DWD is a required defendant — Under new 108.09(7)(c)1: “The department shall also be made a defendant if the department is not the plaintiff.” So, copies of complaints and summons have to made for the Department in every unemployment case. And, the Department explained to the Advisory Council that it will most likely file a routine answer in all of these appeals. Moreover, the Department may decide to take an active role in some cases. Certainly, if the Department does not receive its summons and complaint, expect a motion to dismiss from either the Commission or the Department for failing to serve a necessary party. See also new 108.10(4). At the very least, this new provision will make unemployment appeals that much more expensive, especially for large employers involved in numerous unemployment cases.
• Commission excluded as a defendant for purposes of venue — Under new 108.09(7)(c)2: “if the plaintiff is the department, the proceedings shall be in the circuit court of the county where a defendant, other than the commission, resides.”
• Proceedings in any court — Under new 108.09(7)(c)2: “The proceedings may be brought in any circuit court if all parties appearing in the case agree OR if the court, after notice and a hearing, orders.” So, the parties can agree to venue in a court whether or not that court agrees to venue. Or, a court might order the parties to file in another venue or accept venue itself if one of the parties disputes venue (and, as noted below, the court will have no reason for declining venue).
• Lack of venue is NOT lack of competency — Under new 108.09(7)(c)2: “Commencing an action in a county in which no defendant resides does NOT deprive the court of competency to proceed to judgment on the merits of the case.” In other words, the Department can file its own unemployment appeals in any county it wants, regardless of whether the claimant or employer have any connection to that county whatsoever.
• A 60-day time limit for submitting the record to circuit court is mandated. See new 108.09(7)(c)5.