Oral arguments over agency deference

On December 1st, the Wisconsin Supreme Court heard oral arguments in TetraTech v. DOR, Appeal No. 2015AP2019, DWD v. LIRC (Beres), Appeal No. 2016AP1365, and Wisconsin Bell, Inc. v. LIRC, Appeal No. 2016AP355.

Here is a rundown of what happened.

Tetratech

For a description of the issues in this case, see TetraTech: Agency discretion and “process”.

The company began with agency deference, taking advantage of the Revenue Department’s concession that great weigh deference was no longer valid and that even due weight deference was not provided for under ch.227 except when the agency’s technical expertise was in play.

There was some general discussion of the facts in the case: which company did what task as part of the clean-up. TetraTech’s main point here was that in practical terms there was no real consumer good being sold, and so the sales tax in question lacked the basic requirement of a consumer good to be valid. Likewise, the cleanup of the polluted river silt did not lead to any new product that could be sold on a market of some kind.

The solicitor general disputed these points, claiming that the tax in question was valid because of: (1) the company’s role in processing the polluted silt or (2) its role as a consumer of the silt and water after cleaning by a sub-contractor.

The justices’ main concern was with how broadly the Revenue Department was interpreting the “processing” at issue in this case. Several justices indicated that the statutory term in this case — “processing” — was incredibly broad and could be applied to almost anything a company did. Accordingly, on several occasions they asked for guidance from counsel on how to narrow a reading of the term in some structured way. The Revenue Department advocated for a broad reading of “processing” based on the dictionary definition. TetraTech, on the other hand, sought to limit “processing” to a physical change in the raw materials rather than just the separation of materials into distinct parts or the enhancement of personal property in a way that creates commercial value.

In regards to agency deference, the Department of Revenue contended that agency deference only meant that a court could take account of the agency viewpoint and be persuaded by that viewpoint. In light of the amicus brief from the Wisconsin Utilities Association, the solicitor general indicated that courts could acknowledge the technical expertise of utilities when reviewing the rates set by those utilities.

Justice Gableman, however, apparently would go further in limiting court deference to state agencies. He asked specifically whether less deference was due to a state agency that was a party to the case than a neutral party that produces learned treatises (and most likely amicus briefs as well). This concern mirrored what Wisconsin Manufacturers & Commerce raised in its amicus brief in this case.

Beres

For the legislative history, see Beres/absenteeism at the Wisconsin Supreme Court, Part 1. For the facts and legal issues, see Beres: Agency discretion to undo a statutory scheme.

Counsel for the Department of Workforce Development began by proclaiming that great weight deference was invalid and even due weight deference was problematic. Prior to the current deference scheme, the solicitor general remarked, early court decisions had usually questioned and doubted the views of administrative agencies. In the current deference scheme, on the other hand, courts had ceded this caution and instead uncritically accepted the viewpoints of state agencies as valid simply because a state agency was behind that viewpoint. By failing to come up with its own interpretation and accepting the proffered rationale of an administrative agency, the Department explained, courts had improperly ceded their own authority and responsibility to determine for themselves what a law should mean.

NOTE: The solicitor general cited Boynton Cab v. Neubeck, 237 Wis. 249 (1941) as an example of the hard work of interpretation a court should always be doing. The problem with this claim is that the court in Boynton Cab relied heavily on and followed numerous reports and decisions of British and federal administrative agencies to determine what the term “misconduct” should mean for unemployment purposes.

As in TetraTech, the solicitor general would only concede that the limited deference due a state agency was the deference due a party for its persuasiveness (similar to the deference a higher court gives to a lower court that provides a persuasive analysis of an issue).

Furthermore, Borgnis was NOT on point, the Department responded when pushed, because the court review then was extremely limited to a jurisdictional question and did not inquire into whether an administrative agency had improperly usurped court authority.

As for the absenteeism provision itself, the Department argued that a plain reading of this statute allowed the employer to set its own misconduct disqualification, and the Commission’s arguments to the contrary were neither grammatically sound or in sync with the unemployment statute as a whole.

The Commission’s oral argument started with the strange question from Justice Abrahamson about why the Commission could not get along with the Department and somehow resolve these disputes prior to court action. Given that the Commission has statutory responsibility to decide how unemployment law should be interpreted and that the Commissioners themselves are independent of the governor (they have set terms and can only be removed for cause), this question made no sense. If the Department has a valid and strongly held dispute with the Commission over a Commission decision, then the only way to get that dispute resolved is through litigation. In no way should the Commission ever be responsible for getting disputes with the Department resolved through some kind of backroom deal. Such action would call into question the very independence that is condicio sine qua non to the Commission.

To keep matters off kilter, Justice Gableman repeated his concern from TetraTech about a state agency being a party to a dispute and so possibly biased in some improper way whereas a neutral law firm could provide unbiased guidance regarding the legal questions at issue. The response from the Commission about the legislature designating that administrative agency as having shared authority with courts for reviewing administrative law decisions did not seem to convince the justice that his concern over alleged agency bias was statutorily suspect.

Justice Gableman also pushed the Commission to explain what was wrong with the kind of persuasive deference lower courts could have on appellate courts under de novo review. The Commission’s response: the Commission is statutorily charged with deciding the legal disputes that come its way and by far most of those decisions are never appealed to court. See, for instance, the Commission’s statistics page. To do otherwise would scuttle the precedent Commission decisions provide employees and employers.

For the Commission, the holding in Borgnis was directly on point and reflected the simply reasonable notion that a court defer to a state agency when offering up a reasonable interpretation of the law. Some justices seemed to accept this point, others in addition to Justice Gableman seemed to reject it, and some (notably Chief Justice Roggansack) seemed to be on the fence.

The justices also seemed split on the absenteeism provision and whether the more than two absences in 120 days provision in the first part was a floor that no employer could lower or a default for when the employer lacked its own absenteeism policy. The Commission posited that this provision was a floor, and so the employee in Beres was not disqualified because her absence was not her fault and only a single absence. If this provision was just an option for an employer, then an employer would be free to set its own disqualification standard no matter how severe to its employees.

Wisconsin Bell

For a summary of this case, see Making factual findings subject to never-ending review: Wisconsin Bell.

The focus on agency deference in the first two cases allowed the oral argument here to focus almost entirely on the substance of discrimination law. The ensuring discussion, however, was hardly about the intersection of discrimination and disability law. Rather, the questions and answers almost entirely concerned the factual record in this case. As one of the attorneys observed after oral argument was over, it seemed like a motion for summary judgment was being heard. At one point, Justice Abrahamson even asked rhetorically where the discussion of the inference method had gone.

So, the factual record was immediately in play in this matter. Justice Gableman and Chief Justice Roggansack wanted to know what evidence the employer had to support its claims that the employee’s disability was illegitimate and nothing more than the shirking of job duties. The employer’s theory of the case, however, did not turn on the court re-assessing the credibility of the evidence presented. As a result, Wisconsin Bell could not point to evidence in the record to counter the employee’s claims in large part because the employer had never presented such counter evidence at the administrative hearing. Indeed, Chief Justice Roggansack along with Justice Bradley challenged the employer about whether specific findings of fact in the record were clearly erroneous, and Wisconsin Bell had to admit that there WAS evidence in the record to support those findings.

NOTE: Only Justice Kelly seemed ready to agree that court review of the factual record was needed anew when reviewing the case. For him, a new look at the factual record could verify the employer’s concerns about the employee’s alleged shirking. Justice Gableman also seemed ready for some additional court review of the facts if a reason for such review was presented to him. At several points, he voiced concerns about the employee working disability law to his advantage. In other words, Justice Gableman thought it improper in some way for an employee to exercise his rights in an astute manner.

Rather, the conceit of the employer’s case turned on a change in discrimination law that would make the employer’s decisions unassailable unless there was a some kind of admission by it of an illicit intent. It did not seem that the justices were ready to adopt that legal position, however (it barely came up at all). Only Justice R. Bradley indicated that she was willing to alter the law in a substantial way when she cited a statutory exception to Wisconsin’s discrimination law — Wis. Stat. § 111.34(2)(a) — as allowing any employer to discharge its employees who fail to do their assigned job duties regardless of their disabilities. This provision, however, is simply an affirmative defense available to employers to allow them to discharge permanently disabled employees who can no longer perform necessary job duties — like firefighters having their employment terminated should they become blind — and has nothing to do with employees who have temporary disabilities or illnesses that occasionally limit how they perform their jobs. So, it is unclear how this provision could be transformed in the way J. Bradley indicated.

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A quick note on the agency deference briefs

TetraTech v. DOR, Appeal No. 2015AP2019, DWD v. LIRC (Beres), Appeal No. 2016AP1365, and Wisconsin Bell, Inc. v. LIRC, Appeal No. 2016AP355, have attracted numerous briefs, including several amicus briefs (somewhat unusual for the Wisconsin Supreme Court). Some of the briefs are excellent; others contain outright laughers. Given the importance of these cases, some comment on the briefing on which Wisconsin administrative law may be revolutionized is vital.

TetraTech

The Department of Justice’s newly-created solicitor general’s office represents both the Department of Revenue and the Department of Workforce Development in these cases. For both clients, the solicitor general’s briefing is little more than a big, sloppy kiss to the three-justice concurrence in Operton that first challenged the status of agency-deference. Indeed, the Department of Revenue brief in TetraTech does little more than shadow-dance with the arguments and claims made in the Operton concurrence. In this brief, “great weight” deference is statutorily and constitutionally suspect, and only consideration of an agency’s technical, long-standing decisions that do not carry political or economic import is allowable. At one point, this brief even cites a federal court dissent to the denial of en banc review as support for claims that courts cannot defer at all to administrative agencies over economic or politically significant questions. See TetraTech’s Respondent’s Brief at 38-9. There is hardly any detailed discussion by the solicitor general of how the administrative deference case law has developed in Wisconsin or how these new claims against deference recall attacks against state agencies from a century before that were rejected at the time.

Instead, the solicitor general makes the unhistorical and inaccurate argument that court review was much broader and less deferential in bygone days and urges the court to return to this less deferential review.

NOTE: This argument is true to the extent that “review” of a century ago led judges to apply their own economic and policy preferences under Lochnerism, but the solicitor general leaves this legal history completely out of its briefing.

This argument runs counter to the conclusion of Kenneth K. Luce, “The Wisconsin Idea in Administrative Law,” 34 Marq. L. Rev. 1 (1950) about how Wisconsin’s then new administrative review law considerably expanded judicial review of administrative agencies:

The Administrative Procedure Act has broadened the scope of review beyond certiorari and other forms formerly available, and the Court has stated that “few if any statutes have come under our observation which prescribe broader or even as broad a scope of review as that prescribed by Ch. 227, Stats.” Clearly the circuit courts today have broader review powers in most cases than under previous statutes and decisions.

Luce, “The Wisconsin Idea in Administrative Law,” 34 Marq. L. Rev. at 14-15 (footnotes omitted). Where Luce is discussing much broader judicial review being put into place, the Department of Justice is positing that same review becoming narrow and more limited under ch.227 or ch.102/108. The hundreds of cases and issues in Luce’s short law review article simply do NOT appear with any detail in the Department of Justice briefs advocating that deference to state agencies statutorily and constitutionally runs afoul of independent court review.

NOTE: Also at issue in Luce’s law review examination is the replacement of limited certiorari review and mandamus actions with ch.227 review. Hence, there have been both major procedural as well as substantive expansions in court review of state agencies that appear haphazardly at best in the solicitor general’s briefing in these cases.

Beres

The Department of Justice repeats these claims in Beres, but the Justice Department also has to contend with some excellent points by the Commission in its brief about how many of the same questions over agency deference were previously argued and decided by the Wisconsin Supreme Court. For instance, the Commission explains that the constitutional questions of agency deference raised in Beres were previously decided in Borgnis v. Falk Co., 147 Wis. 327, 358-61, 133 N.W. 209, 219 (1911):

There are many such administrative bodies or commissions, and with the increasing complexity of modern government they seem likely to increase rather than diminish. Examples may be easily thought of. Town boards, boards of health, boards of review, boards of equalization, railroad rate commissions, and public utility commissions all come within this class. They perform very important duties in our scheme of government, but they are not Legislatures or courts. The legislative branch of the government by statute determines the rights, duties, and liabilities of persons and corporations under certain conditions of fact, and varying as the facts and conditions change. Manifestly the Legislature cannot remain in session and pass a new act upon every change of conditions; but it may and does commit to an administrative board the duty of ascertaining when the facts exist which call into activity certain provisions of the law, and when conditions have changed so as to call into activity other provisions. The law is made by the Legislature; the facts upon which its operation is dependent are ascertained by the administrative board. While acting within the scope of its duty, or its jurisdiction, as it is sometimes called, such a board may lawfully be endowed with very broad powers, and its conclusions may be given great dignity and force, so that courts may not reverse them unless the proof be clear and satisfactory that they are wrong.

Borgnis, 147 Wis. at 359, 133 N.W. at 219.

NOTE: Despite being squarely on point about the constitutionality of agency deference, Borgnis only appears in the solicitor general’s opening brief as a passing reference. According to the Justice Department, Borgnis concerns the limited court review of agency actions to determine whether the agency has acted in “excess of its powers.” Respondent’s Brief at 22-3 in Beres. Only in its reply brief does the solicitor general begin to deal with the central holding in Borgnis.

The solicitor general’s response is simply to exclaim that Borgnis only concerned the ability of a state agency to find facts and apply established law to those facts and did not deal in the least with the ability of an administrative agency to render its own legal interpretations. The above quotation belies that argument, however. The application of law to facts in Borgnis is framed in the same way that a court might apply the law to facts. Indeed, the solicitor general’s quotation from Borgnis in support of this claim for limited agency discretion is woefully incomplete.

The next important contention is that the law is unconstitutional because it vests judicial power in a body which is not a court and is not composed of men elected by the people, in violation of those clauses of the state Constitution which vest the judicial power in certain courts and provide for the election of judges by the people, as well as in violation of the constitutional guaranties of due process of law.

* * *

It is an administrative body or arm of the government, which in the course of its administration of a law is empowered to ascertain some questions of fact and apply the existing law thereto, and in so doing acts quasi judicially[.]

Borgnis, 133 N.W. at 218-19 (emphasis indicates the quoted language in the Solicitor General’s Reply Brief at 4 for Beres).

NOTE: The Commission’s brief is also worth reading for pointing out how the solicitor general’s crabbed view of executive, legislative, and judicial functions having to be isolated and distinct from each other does not match what the founding fathers believed, what federal courts historically have held, and what Wisconsin courts have maintained.

And, in regards to the substance of the absenteeism provision at issue in Beres, the Commission explains (1) the risk the Department’s position has for employers should the U.S. Department of Labor conclude that the state is no longer in compliance with federal requirements for how unemployment disqualifications should function and (2) how employers could use this expanded disqualification to not only cut off unemployment benefits to claimants but also deny employees their workers’ compensation benefits. The response of the solicitor general to these points, respectively: (1) No response; and (2) Agreed, because such harsh results on the unemployed and in favor of employers are what was intended by the new absenteeism disqualification.

Amicus briefs in TetraTech and Beres

Wisconsin Manufacturers & Commerce along with other industry groups has an amicus brief in TetraTech that presents some whoppers of legal argument. For instance:

When the government as a party is systematically given predisposed deference, the other litigants are systematically disadvantaged. It is invariably a zero-sum game to the detriment of Wisconsin Employers.

TetraTech WMC amicus Brief at 7. There is also:

If there has been an interpretation of a statute by the agency, any respectful consideration of such interpretation should consider both the agency bias and limited qualifications for agencies to interpret the law. Notably, and we are in complete agreement, the Solicitor General concludes “in every case, the court must ultimately interpret the law for itself.” Id. at 31 (Emphasis theirs).

TetraTech WMC amicus Brief at 13.

WMC has drawn nationwide attention for its cozy relationship with and support of some of the Wisconsin Supreme Court’s current justices. So, these claims about being discriminated against by state agencies is akin to a deer hunter bemoaning an unsuccessful hunt because the deer did not cooperate and demanding that the deer be rounded up and caged so as to make all future hunts “fair.”

This WMC brief also indicates some of the ideological goals of this attack on agency deference:

Even so, subject matter expertise is frequently not relevant when the court is charged, and is seeking assistance, with reading the law. Judges have relevant education, training, and most importantly, the experience to discern what the law is (underscoring their unique constitutional duty), whereas agency bureaucrats generally have no training on or knowledge of the legal methods of statutory interpretation.

TetraTech WMC amicus Brief at 10. In this framework, judicial reasoning bests the scientific or professional expertise of the administrative agency. Indeed, the more professional or technically competent the administrative agency, the more doubt a court should have for the agency’s proffered legal reasoning. Id. at 8-9 (citing Gorsuch concurrence in Guitierrez-Brizuela, 834 F.3d at 1158).

The Wisconsin Institute for Law & Liberty filed amicus briefs in both TetraTech and Beres. Both briefs emphasize the importance of judicial authority over the executive authority of administrative agencies and how the separation of powers preserves and protects the liberty interests of Wisconsin citizens. As such, these briefs demonstrate the connection this attack on agency deference has to the liberty interests that fueled the Lochnerism of old.

Finally, the Wisconsin Utilities Association has an amicus brief in TetraTech in favor of agency deference. The utilities association explains:

when a plaintiff challenges a utility rate as “unreasonable,” this implicates “statutory interpretation” by the agency only in the loosest sense of the term. What is really at issue is reasonableness, and courts understand the Commission is best able to balance the multitude of technical, equitable and policy considerations that underlie a “reasonable” rate.

Moreover, WUA’s members have come to rely on this level of deference to the Commission’s rate-setting decisions. It deters what would otherwise be prolonged legal challenges to new rates, terms and conditions of public utility service, while at the same time guaranteeing any challenges that do arise do not devolve into judicial scrutiny of highly technical policy choices by an expert agency. In a world without great weight deference, it is difficult to see what would prevent a reviewing court from substituting its own view of how utility costs should be apportioned among various customer classes or what level of carrying costs should be authorized on a particular escrow account-all because, on some level, these issues go to the Commission’s “interpretation” of the statutory directive to set “reasonable” rates.

WUA amicus Brief at 10 in TetraTech (emphasis in original). This brief states exactly what is at stake in these cases: whether judges will substitute their preferences about the scope and impact of regulations for the judgments of the state agency by subjecting the decisions of those agencies to heightened scrutiny.

Wisconsin Bell

The briefing in this case was done on a tight time frame, as the court granted the petition for review on Sept. 12th and then set oral argument for December 1st.

Like the solicitor general, Wisconsin Bell contends that the viewpoint of an agency be simply a factor for consideration by a reviewing court and that any weight given to that factor depends on the agency’s specifically demonstrated expertise, technical competence, and specialized knowledge. Wisconsin Bell Brief at 21.

As to the substance of the alleged discrimination, Wisconsin Bell contends that the Commission is essentially making itself into the personnel office of the employer. This usurping of the employer’s own prerogatives over its employees, according to Wisconsin Bell, is legally suspect.

The Commission’s and the employee’s briefs dispute these claims, showing how the employer’s arguments do not apply to the facts of this case and why prior court and Commission precedent support the employee’s claim of discrimination.

As these briefs demonstrate, the dispute with Wisconsin Bell essentially turns on whether the employer had a reasonable basis for concluding the employee’s disability claims were illegitimate in some way.

Three amicus briefs were filed in this matter. The WMC amicus brief presents additional argument for why the employer’s decision to discharge the employee should be considered to be non-discriminatory. Amicus briefs from the Wisconsin Employment Lawyers Association and from Disability Rights Wisconsin and Survival Coalition Wisconsin, on the other hand, aver that: (1) the current system of agency deference is constitutional and promotes efficiency and predictability in the judicial system, (2) the legal issues in this case involve long-accepted methods of establishing disability discrimination, and (3) there is little to anything that is controversial in the Commission’s reasoning and conclusions that Wisconsin Bell had discriminated against one of its employees because of his disability.

NOTE: I drafted an amicus brief for the Wisconsin Employment Lawyers Association in the unemployment case, Operton v. LIRC.

The briefing in this case describes exclusive world views of the law. The briefs in support of the employer contend that the Commission’s legal reasoning is highly suspect and lacking factual support. For such a misapplication of the law, these parties argue that no deference is due the Commission. In contrast, the parties supporting the Commission and the employee find nothing unusual or suspect in the Commission’s legal reasoning, question mightily leaps in logic in the opposing briefs, and point to copious examples in the record that support the Commission’s contentions and findings.

Given these differences, one side of this dispute is far afield in its claims, and the employer side seems to be the one that lacks a solid foundation. Wisconsin Bell is basically asserting that it should be believed even though it never presented much evidence to substantiate its alleged doubts about the employee’s disability claims. For the employer, its decision to discharge an employee should be presumed correct unless the employee can reveal an admission of some kind by the employer revealing its illicit motive. Such a requirement upends discrimination law in this state and allow all but the most obvious and crude discrimination to go unchecked. At a time when the nation is finally waking up to the widespread nature of sexual harassment, no court should pretend that workplace discrimination is no longer a problem and assert that employers are as innocent as new-born babes.

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Making factual findings subject to never-ending review: Wisconsin Bell

In Wisconsin Bell, an employee with bi-polar disorder asked to be off work temporarily because his anxiety was triggering a mental breakdown. The employer did not believe the request was legitimate, however, and dismissed the employee for shirking.

The employee presented copious evidence about his disability, while the employer simply asserted it did not believe him. Unfortunately for the employer, an administrative law judge and the Commission found that the employee’s disability and mental breakdown to be credible, and so the employer’s dismissal for that disability constituted a discriminatory discharge.

The original petition for review from Wisconsin Bell concerned a legal question over the status and proper use of a legal theory for determining an intent to discriminate called the “inference” method. But, baked into any examination of the inference method is most likely an examination of the the evidence in the record, and in this case that examination will almost certainly include the credibility of witness testimony.

Here, the employer is claiming that it discharged an employee because it did not believe the disability claims of its employee and instead concluded he was shirking. The administrative law judge and the Commission, on the other hand, found that employee to be quite credible in contrast to the rather in-credible employer claims.

So, this legal dispute over the “inference” method when coupled to the question of agency deference that the Wisconsin Supreme Court added to this case essentially opens up findings of fact to constant review up the appellate ladder. In other words, the deference at issue in this case is to the factual findings and credibility determinations of the agency.

This factual review by courts — even a supreme court — is explicitly included in the attack on agency deference. Philip Hamburger’s, Is Administrative Law Unlawful? specifically concludes that a proper and constitutional separation of powers requires courts to do their own fact-finding regardless of any fact-finding by a state agency. He writes:

Whereas judges once heard independent actions against executive officers, they now are the final participants in an appeals process that oversees administrative agencies. The result is that administrators feel liberated from the constraints of law, and judges feel bound to make the administrative system work.

Hamburger, Is Administrative Law Unlawful? at 304. For Hamburger, the deferral to administrative agencies contrasts mightily with rights to constitutional due process and an independent judiciary obligated to follow the law and not the whims of the executive branch. Whatever technical matters are at stake in an administrative proceeding, Hamburger reasons, those technical matters also involve political questions that are appropriately decided legislatively and judicially rather than through an executive. Id. at 314. As a result, trial court judges who defer to administrative fact-finding, according to Hamburger, abandon their constitutional obligations and prejudice the judicial review in favor of the administrative agency. Id. at 317-18.

So, Wisconsin Bell presents the Wisconsin Supreme Court with the opportunity to make judicial fact-finding part-and-parcel of the judicial review process at every step of the appellate process.

All the posts in this series

UPDATE (12 Dec. 2017): Added links for all the posts in this series.

Beres: Agency discretion to undo a statutory scheme

In Beres, the case turns on a dispute between the Department and the Commission over whose interpretation of the absenteeism disqualification is most reasonable. In its quest to get its interpretation adopted, the Department is willing to subject all agency decision-making to heightened scrutiny.

Taking effect in January 2014, Wis. Stat. § 108.04(5)(e) provides that a claimant will be disqualified for misconduct when an employee is absent “on more than 2 occasions within the 120 day period before the date of the employee’s termination, unless otherwise specified by his or her employer.”

The employer nursing home in Beres apparently took advantage of the “unless otherwise specified by his or her employer” provision and had an attendance policy which indicated that employees would be terminated for a single absence during their 90-day probationary period if they were a no call, no show. The claimant in this case, Ms. Beres, was extremely ill and did not report to work or call in her absence. The employer called her home, and her spouse indicated that she was too sick to work. The employer then terminated her employment, and the Department denied her claim for unemployment benefits as misconduct because of absenteeism.

So, unlike the long-standing statute being applied in a new situation at issue in TetraTech, the statute in question in Beres is brand new, poorly drafted, and in conflict with what was originally proposed. See Beres, part 1. The language in question literally makes no sense for purposes of unemployment law. Cf. Wis. Stat. § 108.01.

Confronted with this nonsensical provision, the Commission reasonably concluded that the “unless otherwise” provision for an employer absenteeism policy cannot set a threshold lower than the statutory “more than two absences in 120 days.” Because the claimant in Beres was not responsible for her illness and a single illness did not meet the threshold disqualification of more than two absences within 120 days, the Commission explained, she was NOT disqualified. See Absenteeism decision excludes zero-tolerance policy as misconduct (8 Match 2017) for discussion of the court of appeals decision.

The Wisconsin Supreme Court is now considering this case alongside the question of what level of deference is constitutionally and statutorily due. At the court of appeals (which sided with the Commission 2-1), due weight deference was given the Commission’s position. Under this standard, the court would only affirm the Commission if there was NO other reasonable interpretation proffered.

So, there is no reason per se in this case to create a new deference standard. The justices will find either the Commission or the Department interpretation of the absenteeism to be the reasonable one.

But, there is a long-game for what the Department is doing in this case. If there is no more “great weight” deference given to long-standing Commission interpretations, then the Department (along with all employers and employees) can challenge any and all of the Commission’s prior precedents. The Commission will need to defend its prior decisions as the most reasonable interpretation available rather than relying on their previously established reasonableness to stop the challenge in its tracks.

And, the first target of this attack will certainly be on the Commission’s unemployment concealment decisions that mandate the alleged unemployment fraud in question be intentional rather than accidental. As noted numerous times here, the Department and the Commission have been at odds on this issue since 2014, and the dispute led in 2017 to the Department pushing for the elimination of the Commission in the state budget.

Finally, if the court should agree with the Department and find that an employer gets to set an absenteeism disqualification based on a single absence regardless of reason, then the court will essentially be creating a disqualification that swallows all of unemployment law. Under the Department’s interpretation, any employer can replicate this “single absence provides the basis for a discharge” provision and then apply this disqualification whenever an employee is absent in order to keep an employee from receiving any unemployment benefits connected to that employer. The limited misconduct disqualification that should never apply when employees lose work through no fault of their own essentially becomes a no-fault disqualification for absenteeism.

And, an employer has much to gain from this broard disqualification. Whenever there is a finding of misconduct in Wisconsin unemployment law, the employee guilty of that misconduct loses all of his or her income from the employer for determining both current and future benefit year eligibility for unemployment benefits. Hence, this broad reading of the absenteeism provision enables an employer to discharge employees for misconduct purposes for any of their absences and thereby insulate itself from ever having its experience rating increased.

All the posts in this series

UPDATE (12 Dec. 2017): Added links for all the posts in this series.

TetraTech: Agency discretion and “process”

The alleged problems with regulation and administrative agencies is exemplified in the TetraTech case. In this tax matter, the dispute concerns how expansive for tax purposes a statutory reference to “process” should be read. A company, TetraTech, was responsible for “processing” contaminated water as part of an effort to clean the Fox River of pollutants. Wis. Stat. § 77.52(2)(a)11 (emphasis supplied) provides that “[t]he producing, fabricating, processing, printing, or imprinting of tangible personal property or items, property, or goods” for materials either directly or indirectly provided to consumers shall be taxed.

As obvious, “processing” is an incredibly broad term. Writing a brief can be considered a process that transforms the paper on which the brief is printed, for instance. So, the main question presented in this case is how broadly or narrowly the court should understand “processing.” Since the revenue statutes in question do not define “processing” and the term itself is extremely broad, this kind of case calls for the kind of court intervention to clarify exactly how “processing” should be understood.

That is, this kind of case contains a bread-and-butter question courts typically address whenever reviewing how a statute should be understood. There is nothing here that indicates that a substantial change in agency deference is needed in order to resolve this dispute. The Wisconsin Supreme Court could hold that the Department of Revenue has the correct, broad interpretation of “processing” and decide to defer to it or even not defer to it but support it in any case. Or, the court could conclude that the current agency interpretation is NOT a reasonable application of the law and overturn that finding. Or, the court could do any number of things in between these two outcomes. A company like TetraTech certainly would want the interpretation of “processing” adopted by the Department of Revenue to get no deference. But, whether there is deference or not does not automatically lead to TetraTech getting the outcome it desires, especially when this case presents a very typical scenario of an extremely broad statutory term that requires clarification. Only if there already had been a similar case with similar facts to this one would the court even consider deferring to the administrative agency. But, the briefs indicate that this case presents a unique situation — processing of river silt to remove the contaminants as part of an environmental clean-up effort — that does not appear to have ever been contemplated by the agency of the legislature.

So, the question of agency deference does not really add anything to this case other than to provide an opportunity to expound on the separation of powers between administrative agencies and courts. The interpretation of the statutory term itself presents the kind of statutory construction work courts have to confront day-in and day-out. While the court of appeals decision granted great weight deference to the Department of Revenue, the appeals court still conducted a full analysis of the statutory terms and arguments to determine that the agency’s proffered interpretation was reasonable. The Wisconsin Supreme Court could easily disagree with any of the conclusions reach by the court of appeals and consequently issue a decision in favor of TetraTech.

But, this kind of point-by-point review is exactly what is at stake here. The attack on agency deference is about a court coming up with its OWN interpretation of the law without first considering whatsoever the interpretation of the state agency. Only after the court has its own interpretation is the court supposed to examine the agency’s proffered interpretation.

In this light, a non-deference court is subjecting state agencies to heightened scrutiny of some kind, as the court gets to decide what the statute means and the agency’s interpretation must then match up with what the court considers correct more so than what the opposing side posits. The court is no longer just deciding a legal dispute between parties. Instead, the court is exercising policy-making discretion to determine how administrative agencies should develop their administrative rules and decisions.

And, as noted already, the justices pushing this agenda are adding an additional concern for “liberty interests” that are NOT part of the statutory language but which were part and parcel of the court attack against regulation under modern Lochnerism. Under this modern version of Lochnerism, any regulation of commercial activity is automatically suspect because of how it infringes on the liberty interests of commercial enterprise.

All the posts in this series

UPDATE (12 Dec. 2017): Added links for all the posts in this series.

Beres, agency deference, and Lochnerism, Part 2

In three cases set for oral argument on December 1st — TetraTech v. DOR, Appeal No. 2015AP2019, DWD v. LIRC (Beres), Appeal No. 2016AP1365, and Wisconsin Bell, Inc. v. LIRC, Appeal No. 2016AP355 — the Wisconsin Supreme Court is re-considering the whole field of agency deference in what could be a legal revolution that up-ends modern governance.

In a previous post, I described the statutory text at issue in Beres, the unemployment case among the three. Here, I want to deal directly with why the Wisconsin Supreme Court might scuttle agency deference and what is at stake in such an event.

Why agency decision-making is being questioned

The decisions of administrative agencies are the building block for modern government. In 19th-century America, there was no government bureaucracy available for enforcing much of anything. There were no requirements for food to be safe to eat, for instance, or for protecting worker safety. Cities had water and sewer services that in some instances were collectively run or in other instances were operated by private companies. But, outside of police, there were little to any regulations for: (1) how public services were to be provided or (2) how private companies and individuals could interact with each other. Hence, snake oil salesmen abounded, and companies and individuals could do what they want with the land they owned and the people they hired.

The modern world we know today is built on the idea that there needs to be some organization to how businesses and people interact. Health and building codes are needed to prevent cows from starting fires that burn entire cities to the ground or to stop epidemics and food poisoning from becoming rampant. And, safety and health and other regulations are needed to make sure people get paid the wages promised them, that companies sell the products they proffer, and that products and workplaces are generally safe for workers and the public in general.

As modern living has grown more complex, so has the scope and complexity of the administrative agencies needed to regulate the interactions among people and among people and companies. The legislatures in the late 19th and early 20th centuries that created these administrative agencies recognized this complexity of modern life. The administrative agencies that were created were not only literally drafted into existence by these laws, but these agencies also were given the responsibility and power to manage these laws through the regulations the agencies issued. As such, these agencies took on this combination of responsibilities and authority that joined legislative, executive, and even judicial functions together because the complicated reasoning and scope of their actions (like setting safety standards or usage rates that would apply across thousands of different companies and types of businesses) needed this combination of actions simply in order to function.

NOTE: Courts were initially reluctant to follow along with these legislative endeavors and struck many of them down as violations of individual liberty to contract (what become known as Lochnerism, after a famous case with that name). Eventually, judges realized that modern living required legislative regulation to some extent of that ‘liberty.’ More on *Lochnerism below.*

Unemployment was one such effort to overcome the problem of individual companies laying people off. Layoffs could easily accelerate a decline in economic growth when the laid-off workers lacked monies for rent and groceries and thus turned an economic decline into a recession or even a depression.

Today, to accomplish this legislative goal in unemployment matters, the Department of Workforce Development drafts and publishes regulations that fill in the details of the unemployment laws passed by the state legislature and Congress. The Department is also charged with handling investigations into unemployment claims, managing the unemployment taxes paid by employers, and “helping” claimants understand the unemployment system and apply for unemployment benefits. Finally, the Department also has the judicial responsibility for running hearing offices that adjudicates employee and employer disputes over unemployment claims. In this way, the Department — an executive agency that exists as an arm of the governor — has legislative, executive, and judicial responsibilities.

Because the Department has so many responsibilities in the field of unemployment benefits, the Labor and Industry Commission is a second administrative agency that has judicial oversight of the Department: decisions by administrative law judges can be appealed to the Commission. Moreover, the Commission’s decisions in unemployment cases should provide guidance to the Department about how to manage the unemployment law and the Department’s regulations. Naturally, the Commission also has to create its own regulations to indicate how its judicial-like decision-making is administered. So, the Commission — an executive agency that is independent of the governor as the Commissioners serve set terms and cannot be removed from office except in limited circumstances — has judicial and legislative functions.

Keep in mind that all of this bureaucracy is intended to provide guidance and transparency into what these administrative agencies do and offer reasonably clear expectations into how unemployment benefits operate (at least, these are the goals).

But, the past forty or so years have seen a growing push against all of this bureaucracy connected to the “administrative state.” Rather than making the modern world easier to manage, the argument goes, bureaucracy has become over-grown and has started to strangle innovation and economic growth. In the last decade, these attacks exploded to become a diatribe against all regulation rather than targeted attacks against specific instances of over-regulation.

Moreover, in legal circles connected to the Federalist Society there has been a push to re-visit the earlier court decisions that accepted the existence and need for administrative agencies. The center-piece of this attack has been on the deference courts give to administrative agencies.

In Wisconsin, courts have generally granted administrative agencies “great weight” deference when the agency decision or action turns on a long-standing legal issue that the agency has addressed numerous times before. Under this standard, the court will affirm the agency interpretation if the court finds that interpretation reasonable or rationale. State agencies get “due weight” deference when the issue has previously been addressed by the administrative agency. Under this standard of deference, a court will affirm an agency interpretation if the court determines that there is no more reasonable interpretation available to the court. Finally, when the issue is a matter of first impression, the court will NOT defer to the agency at all.

The three justice concurrence in Operton called into question this deference standard. For them, great weight and even due weight deference could no longer be followed because:

  • courts are constitutionally and statutorily obligated to interpret statutes independent of any administrative agency,
  • the prevailing scheme of great weight and due weight deference hamstrings courts and thereby thwarts the constitutionally-mandated separation of powers,
  • the accumulation of legislative, executive, and judicial powers within a single administrative agency runs counter to the constitutional framework of dispersing governing power among the three separate branches of government, and
  • a judicial check is needed against executive interpretations that harm citizens’ liberty interests.

Operton (J. R.Bradley, concurring); see also Gillian E. Metzger, “Forward: 1930s Redux: The Administrative State Under Siege,” 131 Harv. L. Rev. 1 (Nov. 2017), for a detailed discussion of the history and current forms of this attack on the administrative state.

As these points from Operton demonstrate, this criticism of administrative agencies is built on a didactic view of the law: each branch has their own distinct set of prerogatives that cannot be mixed and that courts alone have the predominate and sole responsibility for judicial interpretation.

Operton, however, did not lead to a fundamental re-working of agency deference. While three justices supported this change, four justices either rejected this change outright or held that the time was not yet ripe for such a fundamental change in the law.

In TetraTech, Beres, and Wisconsin Bell, however, it appears that the time is now ripe for a fundamental change in agency deference. In each of these cases, the Wisconsin Supreme Court has added a question about agency deference.

Does the practice of deferring to agency interpretations of statutes comport with Article VII, Section 2 of the Wisconsin Constitution, which vests the judicial power in the unified court system?

Whether the administrative decision in each case represents some kind of administrative abuse that the court needs to correct, however, remains to be seen.

What is central to this push for a new standard of deference is the empowerment of courts and judges to decide on their own how state agencies should decide legal disputes. Before most of the modern administrative agencies existed, judges following Lochnerism claimed that economic qua constitutional rights based on “substantive due process” or “liberty of contract” overrode legislation that sought to regulate the conduct of corporations. For judges of this era, government could not show any favoritism or hostility to any class or special interest.

Over time, there was a recognition that this Lochnerism was allowing judges essentially to legislate economic outcomes from the bench, and even Conservative jurists lambasted these decisions as judicial gerrymandering of the law. The “neutrality” of Lochner judges was simply a mask to hide real intentions of judges to write their own policy preferences into the law.

The new assault of administrative law seen in Operton decries any connection to the Lochnerism of old. But, the emphasis on contractual liberty and the preeminence of judicial acumen over the reasonable discretion of administrative agencies belies any substantive distinction from Lochnerism of old. The attack on agency discretion at issue in these cases is little more than old wine in a new bottle. Certainly, some of the tenets of legal interpretation have changed (substantive due process is probably NOT going to be revived any time soon), but the basic objectives and tactics — economic and contractual liberty alongside basic doubts about any and all economic regulation — remain the foundation for empowering judges to insert their own policy preferences into the law.

TetraTech, Beres, and Wisconsin Bell are simply the front line of a revolution that could return governance to the days of 1890 when judges reigned supreme over legislators and the executive branch. The judges on the Wisconsin Supreme Court essentially want to return court jurisprudence to the time when judges got to determine economic winners and losers. As described in other posts, each of these cases has some clear winners and losers to pick from.

All the posts in this series

UPDATE (12 Dec. 2017): Added links for all the posts in this series and updated title of post.

Beres/absenteeism at the Wisconsin Supreme Court, Part 1

I previously described an Appeals Court decision in DWD v. LIRC (Beres), 2017 WI App 29, 375 Wis.2d 183, 895 N.W.2d 77, where the Department argued that a new definition of absenteeism qua misconduct allowed an employer unilaterally to determine a claimant’s eligibility for unemployment benefits by setting an employer that disqualified an employee for a single absence. In a 2-1 decision, the Court of Appeals concluded that such an outcome contradicted the entire point of unemployment law and sided with the Commission that the employer cannot define for itself what absenteeism will constitute misconduct.

The Department subsequently asked the Wisconsin Supreme Court to get involved, and the state court accepted the invitation. Furthermore, the justices added this case to their push to re-examine the deference given administrative agencies.

In Operton v. LIRC, 2017 WI 46, 375 Wis.2d 1, 894 N.W.2d 426, three justices issued a concurrence calling into question whether judicial deference to administrative agencies violated the constitutionally-mandated separation of powers among the three branches of government.

In Beres and two other cases — TetraTech v. DOR, Appeal No. 2015AP2019, and Wisconsin Bell, Inc. v LIRC, Appeal No. 2016AP355 — the Wisconsin Supreme Court has decided to address the following question:

Does the practice of deferring to agency interpretations of statutes comport with Article VII, Section 2 of the Wisconsin Constitution, which vests the judicial power in the unified court system?

This question represents a RADICAL restructuring of jurisprudence that could essentially transform state court judges into super-legislators whose own preferences and desires supplant the reasoning and knowledge of state agencies and even their expert opinions and information-gathering. As such, this change is so fundamental that it requires its own separate, post to describe.

What first needs to be done, however, is to describe the statutory framework of the unemployment law at issue in Beres so that we at least have some idea of how we are getting to this fundamental re-thinking of administrative law in general.

Absenteeism as misconduct

At issue in Beres is the following absenteeism and tardiness provision in Wis. Stat. § 108.04(5)(e):

(e) Absenteeism by an employee on more than 2 occasions within the 120 day period before the date of the employee’s termination, unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature, or excessive tardiness by an employee in violation of a policy of the employer that has been communicated to the employee, if the employee does not provide to his or her employer both notice and one or more valid reasons for the absenteeism or tardiness.

This change in unemployment law began at the 29 November 2012 meeting of the Unemployment Insurance Advisory Council when the Department, on its own initiative, dropped more than a dozen substantive changes to unemployment law. See this post for the memo that originally describes all of these changes. Proposal D12-01 included numerous changes to disqualification standards, including the elimination of the absenteeism and tardy provisions in Wis. Stat. § 108.04(5g) by adding a new disqualification called “substantial fault” and the addition of a new, specific absenteeism provision that would qualify as misconduct. This proposed absenteeism and tardiness qua misconduct provision in Proposal D12-01 stated:

Excessive absenteeism or tardiness in violation of a known company policy and the individual does not provide to the employer both notice and a valid reason or reasons for the absence or tardiness.

See D12-01 at 3.

At the 1 April 2013 meeting of the Advisory Council, the Advisory Council rejected the proposed substantial fault provision and made some changes to the absenteeism and tardiness thresholds set forth in Wis. Stat. § 108.04(5g) for triggering a disqualification. The specific changes, however, were not announced to the public.

NOTE: The minutes of the 1 April 2013 meeting of the Advisory Council only state the following:

(A) Department Proposal D12-01 (Misconduct Standard) the Council supported this Department proposal with modifications. The Council agreement enumerated within the statute the standard taken from the Wisconsin Supreme Court decision of Boynton Cab and amended the proposal to solely provide four examples of conduct that would qualify as misconduct, but not limit misconduct to these four examples. The four examples relate to employee conduct concerning:

  1. Illegal Use of Drugs and Use of Alcohol While on the Job;
  2. Larceny;
  3. Crimes Related to the Job; and,
  4. Violations that would lead to Fines or License Suspension of the Employer.

The Council also agreed to amend the language of section 108.04(5g) of the Wisconsin Statutes with respect to absenteeism and tardiness to make it easier for either reason to disqualify a claimant from benefits.

After the meeting ended, I asked Robert Andersen if he could send me a copy of what the Advisory Council had specifically agreed on.

NOTE: Robert Andersen, worked with the members of the Advisory Council’s labor caucus during non-public discussion of proposed changes to unemployment law, and he helped facilitate agreement between the labor and management caucuses.

On 2 April 2013, I received an e-mail message from Mr. Andersen that contained the specific provisions agreed upon by the Advisory Council in an attachment. That attachment indicates that the Advisory Council agreed to to amend sub-section (5g) in the following manner:

(5g) DISCHARGE FOR FAILURE TO NOTIFY EMPLOYER OF ABSENTEEISM OR TARDINESS. (a) If an employee is discharged for failing to notify his or her employer of absenteeism or tardiness that becomes excessive, and the employer has complied with the requirements of par. (d) with respect to that employee, the employee is ineligible to receive benefits until 6 weeks have elapsed since the end of the week in which the discharge occurs and the employee earns wages after the week in which the discharge occurs equal to at least 6 times the employee’s weekly benefit rate under s. 108.05 (1) in employment or other work covered by the unemployment insurance law of any state or the federal government. For purposes of requalification, the employee’s weekly benefit rate shall be the rate that would have been paid had the discharge not occurred.

(b) For purposes of this subsection, tardiness becomes excessive if an employee is late for 6 4 or more scheduled workdays in the 12 month 120 day period preceding the date of the discharge without providing adequate notice to his or her employer.

(c) For purposes of this subsection, absenteeism becomes excessive if an employee is absent for 5 2 or more scheduled workdays in the 12 month 120 day period preceding the date of the discharge without providing adequate notice to his or her employer.

(d) 1. The requalifying requirements under par. (a) apply only if the employer has a written policy on notification of tardiness or absences that:

a. Defines what constitutes a single occurrence of tardiness or absenteeism;

b. Describes the process for providing adequate notice of tardiness or absence, and, regarding tardiness, which gives the employee a reasonable time for providing notice and which at least allows the employee the opportunity to provide notice as soon as practically possible; and

c. Notifies the employee that failure to provide adequate notice of an absence or tardiness may lead to discharge.

2. The employer shall provide a copy of the written policy under subd. 1. to each employee and shall have written evidence that the employee received a copy of that policy.

3. The employer must have given the employee at least one warning concerning the employee’s violation of the employer’s written policy under subd. 1. within the 12 month period preceding the date of the discharge.

4. The employer must apply the written policy under subd. 1. uniformly to all employees of the employer.

This memorandum does not appear in the Department’s supportive materials for Beres, however.

Janell Knutsen is the director of the Bureau of Legal Affairs for the Department’s Unemployment Division and serves as the non-voting chair of the Advisory Council. In her affidavit included in the record in this matter, Ms. Knutsen states:

12. The April 1, 2013 resolution recommending legislative change to the absence and tardiness statute was the only action by the UIAC on a proposal to change the disqualification for absence or tardiness during my tenure as UIAC Chair. I do not find in the Minutes of the April 1, 2013 UIAC meeting or in the Minutes of subsequent meetings in 2013 any other or additional recommendations or other action of the UIAC regarding disqualification for absence and tardiness. A copy of the five-page Minutes of the April 1, 2013 meeting of the UIAC is attached to this affidavit and identified as Exhibit 4. The attached minutes were formally approved by unanimous vote of the UIAC members at the April 18, 2013 UIAC meeting.

* * *

16. As the UIAC files show, there is no evidence in the UIAC files regarding the development of the language that became Wis. Stat. § 108.04(5)(e) and no evidence of involvement of the UIAC in the choice of words by the Legislature in its enactment of Wis. Stat. § 108.04(5)(e), except as generally reflected in the UIAC resolution of April 1, 2013, that stated “The Council also agreed to amend the language of section 108.04(5g) of the Wisconsin statutes with respect to absenteeism and tardiness to make it easier for either reason to disqualify a claimant for benefits.”

R.18-4 and 18-5. Ms. Knutsen also states in ¶15 of her affidavit (R.18-5) that she and Department staff searched Department records for “all written materials in those files relating to the action that the UIAC took to recommend changes to the unemployment law regarding disqualification for absenteeism and tardiness” and that she believes she has “identified in this Affidavit all such materials in the UIAC files.”

Michael Duchek is a legislative attorney at the Wisconsin Legislative Reference Bureau who was directly involved in drafting unemployment legislation in 2013. In his affidavit, part 1 included in the record in this matter, Mr. Duchek states:

10. I understand that the Unemployment Insurance Advisory Council considered the D12-01 proposal (Exhibit 7) and that on April 1,2013 the Advisory Council voted to recommend to the Legislature amendments to Wis. Stat. §§ 108.04(5) and (5g), although the Council’s recommendation departed from the statutory language that the Department had proposed in its D12-01 proposal.

11. The language that LRB incorporated in draft bills to amend Wis. Stat. §§ 108.04 (5) and (5g), although similar in general to D12-01 and the recommendation of the Council, was developed by LRB in consultation with the legislative requestor and did not match the amendments which were recommended to the Legislature by the Council.

12. It is evident from the proposals by the Department and the Council that each of them was drafted to strengthen the disqualification provisions related to misconduct, absenteeism and tardiness. The same is true of Wis. Stat. § 108.04(5)(e) and the other misconduct provisions as drafted by LRB and enacted in Act 20, although the enacted provisions went further to achieve this objective than did the Department and Council proposals.

R.19-3. Mr. Duchek indicates in ¶18 of his affidavit that his first draft of a new absenteeism and tardiness qua misconduct disqualification occurred on 13 May 2013. R.19-5. As indicated throughout the supporting materials attached to Mr. Duchek’s affidavit, this language was drafted at the request of Rep. Knodl and his legislative assistant, BJ Dernbach. See also the available drafting requests.

There is no indication in Mr. Duchek’s affidavit or in the 800+ pages of supporting materials that any action was undertaken to enact the changes to Wis. Stat. § 108.04(5g) approved by the Advisory Council (fyi, part 2 of Mr. Duchek’s affidavit is also available).

The Department bill that purportedly set forth what the Advisory Council had proposed was introduced as 2013 SB200. That bill did NOT include any of the recommended disqualification changes to the misconduct or quit provisions of unemployment law approved by the Advisory Council. When the first public hearing for 2013 SB200 was under way on 29 May 2013, the Joint Finance Committee also met that day in regards to the budget bill at issue then, 2013 AB40. At that meeting, the Joint Finance Committee introduced an amendment via Motion #506 to 2013 AB40. Motion #506 included the absenteeism language Mr. Duchek had drafted. See ¶¶23 and 24 of Mr. Duchek’s affidavit, R.19-7, and R.19-14 to 19-27 for a copy of Motion #506; see also Advisory Council — 2 May 2013 meeting — and legislative actions today (29 May 2013).

As evident in her affidavit, Ms. Knutson has studiously avoided any mention or description of the actual language the Advisory Council specifically had adopted in regards to new absenteeism and tardiness disqualification thresholds in Wis. Stat. §108.04(5g).

Neither affidavit by Mr. Duchek or Ms. Knutsen indicate how and why the clause “unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature” was added to the draft legislation, as this clause was NOT part of: (1) the original Department proposal, (2) what the Advisory Council adopted, or (3) the 1 April 2013 letter and proposals from legislators featured prominently in Ms. Knutsen’s affidavit at ¶¶10-11, R.18-3 to 18-4, and also noted in Mr. Duchek’s affidavit at ¶¶7, 8, and 10 (the legislator’s letter is available in the record at 18-23 to 18-36 and in partial form at 19-35 to 19-46).

In contrast to Ms. Knutson’s statements omitting the existence of any specific absenteeism proposals by the Advisory Council, Mr. Duchek’s affidavit provides evidence that the Advisory Council’s specific proposals existed, were circulated beyond the Advisory Council, and indeed were reviewed by Mr. Duchek himself. Mr. Duchek states that the “Council’s recommendation departed from the statutory language that the Department had proposed” and also that the Legislative Reference Bureau’s draft bill that would become Wis. Stat. § 108.04(5)(e) “did not match the amendments which were recommended to the Legislature by the Council.” Ducheck Aff. at ¶¶10-11.

Mr. Ducheck also states in his affidavit that it is “evident from the proposals by the Department and the Council that each of them was drafted to strengthen the disqualification provisions.” Ducheck Aff. at ¶12. While the Advisory Council’s April 1st proposal did make it easier to disqualify claimants, nowhere in the Advisory Council’s proposal were employers given the unilateral power to determine employees’ eligibility for benefits via employer policies.

Finally, neither Ms. Knutsen nor Mr. Duchek explain how the Advisory Council’s threshold for absenteeism of “2 or more scheduled workdays” became “more than 2” absences in the enacted legislation. In other words, the three absences in 120 days provision that was enacted is less strict than what the Advisory Council had adopted and includes a number that was completely absent from the original Department proposal.

What next?

Today, December 1st, is scheduled for oral arguments in Beres, TetraTech, and Wisconsin Bell.

This legislative history for the absenteeism changes in unemployment law will probably NOT come up, however. This legislative history has not been part of the Wisconsin Supreme Court briefing, and the acclaimed focus of judges on the statutory text does not seem to hold much water in comparison to the policy issues at stake in such legislation. Indeed, what has featured prominently in the briefing is the marker laid down in Operton about agency deference and the ability/responsibility of judges to determine on their own constitutional initiative the reasonableness of what administrative agencies decide.

So, in follow-up posts I will delve into this question of agency deference, and I will attempt to explain what happened in oral arguments today in these three cases.

But, the complete mess of the statutory text at issue in Beres should matter, especially when that statutory text will likely serve as a vehicle for probably proclaiming how administrative agencies cannot provide, according to newly empowered judges, rationale applications of that statutory text. For these judges (as the Department of Justice claimed in its briefing), the Commission is being accused of not transforming a nonsensical absenteeism disqualification into something rational, let alone provide an interpretation that is so reasonable that no judge could ever disagree with it. In short, a **ed-up statute is being used as the vehicle for requiring administrative agencies to provide explanations for their interpretations that survive heightened scrutiny.

All the posts in this series

UPDATE (11 Dec. 2017): Added links for all the posts — expanded from the original plan.

UPDATE (12 Dec. 2017): Added links for all the posts in this series.