Title: Steven Theuer v. Labor & Industry Review Commission
Citation: 2001 WI 26
Docket Number: 2000AP001085
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 3, 2001

2001 WI 26 
 
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
00-1085 
 
 
Complete Title 
of Case: 
 
Steven Theuer,  
 
Plaintiff-Appellant, 
 
v. 
Labor & Industry Review Commission, Ganton 
Technologies, Inc. and North River Insurance 
Company,  
 
Defendants-Respondents.  
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
Opinion Filed: 
April 3, 2001 
Submitted on Briefs: 
      
Oral Argument: 
February 28, 2001 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Racine 
 
JUDGE: 
Richard J. Kreul 
 
 
JUSTICES: 
 
Concurred: 
      
 
Dissented: 
      
 
Not Participating:       
 
 
ATTORNEYS: 
For the plaintiff-appellant there were briefs (in 
the Court of Appeals) by John A. Becker and Becker, French & 
DeMatthew, Racine, and oral argument by John Becker. 
 
 
For the defendant-respondent, Labor & Industry 
Review Commission, the cause was argued by Stephen M. Sobota, 
assistant attorney general, with whom on the brief was James E. 
Doyle, attorney general. 
 
 
2 
 
For the defendants-respondents, Ganton 
Technologies, Inc., and North River Insurance Company, there was 
a brief (in the Court of Appeals) by Robert P. Ochowicz and Patti 
J. Kurth, Milwaukee, and oral argument by Robert P. Ochowicz. 
 
 
An amicus curiae brief was filed (in the Court of 
Appeals) by William R. Sachse, Jr., Ricardo Perez and Peterson, 
Johnson & Murray, S.C., Milwaukee, on behalf of Wisconsin 
Manufacturers and Commerce, and oral argument by William R. 
Sachse, Jr. 
 
 
An amicus curiae brief was filed (in the Court of 
Appeals) by Thomas J. Flanagan, Hope K. Olson and Previant, 
Goldberg, Uelmen, Gratz, Miller & Brueggeman, S.C., Milwaukee, on 
behalf of the Wisconsin State AFL-CIO. 
 
 
2001 WI 26 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear 
in the bound volume of the official reports. 
 
 
No. 00-1085 
 
STATE OF WISCONSIN                    :  
  IN SUPREME COURT 
 
 
Steven Theuer,  
 
          Plaintiff-Appellant, 
 
     v. 
 
Labor & Industry Review Commission,  
Ganton Technologies, Inc. and North River  
Insurance Company,  
 
          Defendants-Respondents. 
 
 
APPEAL from a judgment of the Circuit Court for Racine 
County, Richard J. Kreul, Judge.  Affirmed. 
 
¶1 
SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE.   This case 
comes before the court on certification from the court of 
appeals, pursuant to Wis. Stat. § (Rule) 809.61 (1997-98).1  
Steven Theuer appeals an order of the Circuit Court for Racine 
County, Richard J. Kreul, Judge.  The circuit court affirmed a 
decision of the Labor and Industry Review Commission (the 
Commission) that health insurance premiums are excluded from 
                     
1 All subsequent references to the Wisconsin Statutes are to 
the 1997-98 version unless otherwise indicated. 
FILED 
 
APR 3, 2001 
 
Cornelia G. Clark 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
No. 
00-1085 
 
 
2 
calculating an employee's average weekly wage under Wis. Stat. 
§ 102.11(1)(e) to determine disability benefits.2  
¶2 
The sole dispute in this case involves a question of 
statutory interpretation.  Did the Commission in this worker's 
compensation case properly exclude health insurance premiums 
when calculating an employee's average weekly wage under Wis. 
Stat. 
§ 102.11(1)(e) 
for 
disability 
benefits? 
 
More 
specifically, are health insurance premiums a thing of value 
received in addition to monetary earnings as a part of the wage 
contract under § 102.11(1)(e)?  The Commission concluded that 
health insurance premiums are not a thing of value received in 
addition to monetary earnings as a part of the wage contract 
under 
§ 102.11(1)(e). 
 
This 
conclusion 
is 
a 
reasonable 
interpretation of the statute, and accordingly we affirm the 
judgment of the circuit court affirming the decision of the 
Commission. 
 
I 
 
¶3 
The facts were either admitted in the pleadings or 
stipulated to by the parties.  Steven Theuer suffered a work-
                     
2 Wisconsin Stat. § 102.11(1)(e) provides: "Where any things 
of value are received in addition to monetary earnings as a part 
of the wage contract, they shall be deemed a part of earnings 
and computed at the value thereof to the employe." 
No. 
00-1085 
 
 
3 
related injury on October 29, 1997, while employed by defendant 
Ganton Technologies, Inc.  At the time of his injury, Theuer 
received an average weekly salary of $506.86.  His employer also 
contributed $77.14 each week toward Theuer's health insurance.  
Theuer's labor agreement provided that the employer would 
continue to pay the health insurance premiums for 90 days when 
an employee was out of work due to a work-related injury.  
Following the expiration of the 90-day period, Theuer was no 
longer 
covered 
by 
his 
employer's 
health 
insurance 
plan.  
Instead, he had the option of extending this coverage by paying 
premiums of $626.61 per month. 
¶4 
The Department of Workforce Development (DWD) excluded 
the cost of the health insurance premiums in determining 
Theuer's average weekly wage under Wis. Stat. § 102.11, from 
which his 
worker's 
compensation benefits were 
calculated.  
Theuer appealed, contending that the DWD should have included 
the cost of health insurance premiums in calculating his average 
weekly wage.  An administrative law judge rejected Theuer's 
argument, concluding that the exclusion of fringe benefits such 
as health insurance premiums reflected longstanding DWD policy. 
 The Commission affirmed the administrative law judge, stating 
that under its longstanding interpretation of Wis. Stat. 
§ 102.11(1)(e), only taxable compensation was included in the 
No. 
00-1085 
 
 
4 
calculation of an employee's average weekly wage.  The circuit 
court affirmed the Commission's decision. 
 
II 
 
¶5 
The facts are undisputed and the sole question for 
this appeal is whether Wis. Stat. § 102.11(1)(e), which was 
adopted in 1937,3 requires the inclusion of health insurance 
premiums in calculating an employee's average weekly wage for 
the purpose of disability benefits.  The interpretation of a 
statute and its application to undisputed facts are questions of 
law that courts generally review under a de novo standard.4  The 
courts have recognized, however, that when the legislature has 
vested a state agency with the administration of a statute, the 
agency's decision, although not controlling, is entitled to 
deference.  The court has set forth three standards of 
deference: great weight deference, due weight deference, or no 
deference.5 
¶6 
The parties disagree about the proper level of 
deference we should give to the Commission's interpretation of 
Wis. Stat. § 102.11(1)(e) in this case.  Ganton Technologies and 
the Commission, the defendants, urge that the Commission's 
                     
3 Section 3, ch. 180, Laws of 1937. 
4 Hagen v. LIRC, 210 Wis. 2d 12, 18, 563 N.W.2d 454 (1997).  
5 Id. 
No. 
00-1085 
 
 
5 
interpretation should be accorded great weight deference.  This 
court has previously stated that great weight deference is 
appropriate in the following circumstances: 
1) 
the 
agency 
is 
charged 
by 
the 
legislature 
with 
administering the statute;  
2) 
the interpretation of the agency is one of long 
standing;  
3) 
the agency employed its expertise or specialized 
knowledge in forming the interpretation; and  
4) 
the agency's interpretation will provide uniformity in 
the application of the statute.6 
The weight that is due an agency's interpretation of the law 
thus depends on the comparative institutional capabilities and 
qualifications of the court and the administrative agency.7 
¶7 
The first, third, and fourth elements are present in 
this case: The Commission is charged by the legislature with 
administering the worker's compensation law; the Commission 
employed its expertise in its interpretation of the statute; and 
the 
Commission's 
interpretation 
of 
the 
statute 
provides 
uniformity in the application of the statute.  The parties 
disagree, however, about the second element for great weight 
deference, namely, whether the Commission's interpretation of 
Wis. Stat. § 102.11(1)(e) is of long standing. 
                     
6 CBS, Inc. v. LIRC, 219 Wis. 2d 564, 572, 579 N.W.2d 668 
(1998). 
7 State ex rel. Parker v. Sullivan, 184 Wis. 2d 668, 699, 
517 N.W.2d 449 (1994). 
No. 
00-1085 
 
 
6 
¶8 
In 
its 
order 
affirming 
the 
decision 
of 
the 
administrative law judge in the present case, the Commission 
asserts that the DWD "has never considered fringe benefits 
including health insurance as a thing of value and part of the 
weekly wage under Wis. Stat. § 102.11(1)(e)." 
¶9 
As support for this assertion the Commission relies on 
its longstanding administrative interpretation of this statute, 
which appears in its publications dating back to at least 1956. 
¶10 The worker's compensation manual now published by the 
DWD 
and 
the 
prior 
editions 
of 
the 
manual 
reflect 
the 
Commission's policies and procedures for administering worker's 
compensation benefits.  The manual includes directions for 
interpreting and applying Wis. Stat. § 102.11.  The relevant 
section, entitled "Wage," specifies the means for calculating 
wages based on salary; bonus payments; tips; the value of room, 
board, and laundry; and vacation pay.  The manual does not 
include health insurance premiums within the definition of wages 
in § 102.11.  The 1956 and 1968 versions of the manual define 
wages as follows: 
 
To assure payment of the exact amount of compensation 
due, the proper determination of wage must be made in 
accordance with the provisions of Wis. Stat. § 102.11. 
 The 
difficulty 
arises 
from 
the 
many 
possible 
situations 
concerning 
reimbursement 
for 
services 
rendered.  Employment may be full or part time.  
Payment may be by fixed weekly or monthly salary or by 
hourly rate.  To this may be added piece rate, 
incentive pay, shift differential, bonus and vacation 
pay.  Many salesmen are paid on a commission or 
guarantee and commission.  Many service employes 
No. 
00-1085 
 
 
7 
receive tips.  Those handling food often receive meals 
while others are furnished a room or laundry service.8  
¶11 The 
current form 
through 
which employers 
report 
injuries appears in the DWD's worker's compensation manual.9  The 
form requires employers to report the injured employee's salary, 
along with the meals, lodging, and tips received on a weekly 
basis by the employee.  This form does not require reporting 
health insurance premiums or other non-taxable fringe benefits 
paid by the employer.   
¶12 The 
defendants 
rely 
solely 
on 
the 
Commission's 
administrative interpretation appearing in these publications.  
They do not cite any administrative agency cases or Wisconsin 
court cases to support their assertion that the Commission's 
decision in the present case represents the Commission's 
longstanding 
interpretation 
of 
Wis. 
Stat. 
§ 102.11(1)(e).  
Theuer, in contrast, directs our attention to two recent 
decisions of administrative law judges that included health 
insurance premiums in the calculation of the average weekly wage 
                     
8 Worker's Compensation Office Manual at 47-51 (1956); see 
also Worker's Compensation Office Manual at 1-20 through 1-24 
(1968).  Courts may take judicial notice of official state 
agency publications.  See Wis. Stat. § 902.03(1)(b); Hagen v. 
LIRC, 210 Wis. 2d at 21. 
The 1956 version also includes procedures for calculating 
the value of apprentice training.  See Worker's Compensation 
Office Manual at 48 (1956).  This category is no longer included 
in the department's calculation of wages under Wis. Stat. 
§ 102.11, and does not appear in the revised version of the 
manual. 
9 See DWD Form WKC-12, Worker's Compensation Handbook at 135 
(2000).  
No. 
00-1085 
 
 
8 
under Wis. Stat. § 102.11(1)(e).  Theuer argues that these 
decisions are proof that the Commission's interpretation of Wis. 
Stat. 
§ 102.11(1)(e) 
is 
not 
of 
long 
standing 
and 
that 
furthermore the Commission has not consistently interpreted the 
statute.  
¶13 We are not persuaded by Theuer's argument.  Unreviewed 
administrative law judge decisions regarding Chapter 102 are not 
binding on the Commission and do not constitute the Commission's 
authoritative interpretation of a statute.  Indeed, Wis. Stat. 
§ 102.18 
accords the Commission substantial 
authority and 
discretion to review decisions of administrative law judges, 
either by petition of one of the parties10 or on its own motion.11 
                     
10 See Wis. Stat. § 102.18 (3), which provides inter alia: 
A party in interest may petition the commission for 
review of an examiner's decision awarding or denying 
compensation if the department or commission receives 
the petition within 21 days after the department 
mailed a copy of the examiner's findings and order to 
the party's last-known address. . . .  The commission 
shall either affirm, reverse, set aside or modify the 
findings or order in whole or in part, or direct the 
taking of additional evidence.  This action shall be 
based on a review of the evidence submitted. 
 
11 See Wis. Stat. § 102.11(4), which provides, inter alia: 
 
(b) Within 28 days after a decision of the commission 
is mailed to the last-known address of each party in 
interest, the commission may, on its own motion, set 
aside the decision for further consideration. 
(c) 
On 
its 
own 
motion, 
for 
reasons 
it 
deems 
sufficient, the commission may set aside any final 
order or award of the commission or examiner within 
one year after the date of the order or award, upon 
No. 
00-1085 
 
 
9 
However, the Commission is not required to review on its own 
motion every decision of an administrative law judge to ensure 
that its longstanding interpretations of statutes are applied 
uniformly.  As a result, these recent, unreviewed decisions of 
administrative law judges are not proof sufficient for this 
court to reject the Commission's longstanding administrative 
interpretation 
of 
Wis. 
Stat. 
§ 102.11 
appearing 
in 
its 
publications.  Because the Commission's interpretation in the 
present case satisfies the criteria this court has established 
for according the interpretation great weight deference, we 
agree with the defendants that great weight deference to the 
Commission's determination is appropriate in the present case.12 
¶14 Under the great weight deference standard of review a 
court 
will 
uphold 
the 
Commission's 
interpretation 
and 
application of Wis. Stat. § 102.11(1)(e) unless the Commission's 
interpretation is unreasonable.13  An unreasonable interpretation 
of a statute is one that "directly contravenes the words of the 
                                                                  
grounds of mistake or newly discovered evidence, and, 
after further consideration, do any of the following: 
 
1. Affirm, reverse or modify, in whole or in part, the 
order or award. 
2. Reinstate the previous order or award. 
3. Remand the case to the department for further 
proceedings. 
 
12 CBS, Inc., 219 Wis. 2d at 572. 
13 Wisconsin Electric Powers Co. v. LIRC, 226 Wis. 2d 778, 
787, 595 N.W.2d 23 (1999); CBS, Inc., 219 Wis. 2d at 573; Hagen, 
210 Wis. 2d at 20. 
No. 
00-1085 
 
 
10
statute, is clearly contrary to legislative intent, or is 
otherwise . . . without rational basis."14 
 
III 
¶15 We now turn to the Commission's interpretation of Wis. 
Stat. 
§ 102.11(1)(e) 
to 
determine 
whether 
it 
directly 
contravenes the words of the statute, is clearly contrary to 
legislative intent, or is otherwise without rational basis.  
Wisconsin Stat. § 102.11(1)(e) directs the Commission to include 
in earnings any things of value received in addition to monetary 
earnings as a part of the wage contract.  The statute provides 
as follows:  
 
(e) Where any things of value are received in addition 
to monetary earnings as a part of the wage contract, 
they shall be deemed a part of earnings and computed 
at the value thereof to the employe. 
¶16 The statute does not define the terms "things of 
value," "received," or "wage contract."  The Commission's 
position is that health insurance premiums are excluded from the 
calculation of average weekly wage.  The Commission interprets 
Wis. Stat. § 102.11(1)(e) "to include those things which are 
received which are taxable" and to exclude non-taxable fringe 
benefits such as meals for cost, insurance, and retirement 
contributions.  Under the great weight deference standard, we 
                     
14 Hagen, 210 Wis. 2d at 20 (quoting Lisney v. LIRC, 171 
Wis. 2d 499, 506, 493 N.W.2d 14 (1992)). 
No. 
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11
review this interpretation of Wis. Stat. § 102.11(1)(e) to 
determine whether it is reasonable. 
¶17 Theuer contends that under any standard of review, the 
Commission's 
interpretation 
of 
Wis. 
Stat. 
§ 102.11(1)(e) 
regarding 
health 
insurance 
premiums 
is 
unreasonable 
as 
contravening the plain words of the statute.  Health insurance 
premiums, he asserts, are without question a "thing of value" 
within the plain meaning of the statute.  Moreover, he contends 
that the Commission's interpretation contravenes legislative 
intent because it fails to construe the worker's compensation 
law, a remedial statute, liberally to effectuate its purpose of 
compensating the injured employee.15   
¶18 Although we agree with Theuer that payment of health 
insurance premiums is valuable to employees and that the phrase 
"thing of value" may reasonably be interpreted to include health 
insurance 
premiums, 
we 
conclude 
that 
the 
Commission's 
interpretation of Wis. Stat. § 102.11(1)(e) is also reasonable. 
 The words "thing of value" cannot be read in isolation.  The 
statute requires average weekly wages to include "any things of 
value . . . received . . . as part of the wage contract."  Wis. 
Stat. § 102.11(1)(e). 
¶19 Both Theuer and the defendants direct our attention to 
other courts that have interpreted statutes similar to but not 
necessarily the same as Wis. Stat. § 102.11(1)(e).  It is 
                     
15 United Wis. Ins. v. LIRC, 229 Wis. 2d 416, 426, 600 
N.W.2d 186 (1999); State v. LIRC, 136 Wis. 2d 281, 288, 401 
N.W.2d 585 (1987). 
No. 
00-1085 
 
 
12
significant that courts interpreting a variety of statutory 
phrases defining wages for worker's compensation purposes have 
reached contradictory results in deciding whether wages include 
fringe benefits.  Despite different statutory language, the 
reasoning in these cases is similar.  
¶20 Several jurisdictions have concluded that wages under 
their respective statutes do not include fringe benefits.16  The 
leading decision that wages do not include fringe benefits is 
Morrison-Knudsen Construction Co. v. Director, OWCP, 461 U.S. 
624 (1983), a case that arose under the federal Longshoremen's 
and Harbor Workers' Compensation Act.  The U.S. Supreme Court 
rejected the argument that tax-free fringe benefits should be 
included in the term wages.  The Court was persuaded that 
certain fringe benefits do not have a present value that can be 
readily converted into a cash equivalent; that there is no 
direct relation between the cost of the fringe benefit and the 
benefit to the employee; and that an expanded definition of 
                     
16 See, e.g., Nelson v. SAIF Corp., 731 P.2d 429, 432 (Ore. 
1987) (concluding that the word "received" does not encompass 
health insurance premiums because such premiums never come into 
an employee's physical possession); Schlotfield v. Mel's Heating 
and Air, 445 N.W.2d 918, 927 (Neb. 1989) (fringe benefits are 
not part of the wage contract because they are not the result of 
an employee's individual labor, but rather the fruit of 
collective bargaining). 
Compare International Paper Co. v. Murray, 490 So. 2d 1238 
(Ala. 1986) (fringe benefits are "allowances of any character" 
to be treated as part of an employee's earnings); Ragland v. 
Morrison-Knudsen Co., Inc., 724 P.2d 519 (Alas. 1986) (readily 
identifiable and calculable fringe benefits should be included 
in wage determination). 
No. 
00-1085 
 
 
13
wages would disrupt the process for prompt compensation by 
making the computation of wages a disputed issue.  
¶21 Professor Arthur Larson supports the Morrison-Knudsen 
decision in his treatise Larson's Workers' Compensation Law.17   
¶22 Other courts, however, have concluded that wages 
include 
fringe 
benefits 
for 
purposes 
of 
their 
worker's 
compensation law.  These courts tend to follow the reasoning of 
Justice Thurgood Marshall's dissent in Morrison-Knudsen, 461 
U.S. at 638, that fringe benefits are an important part of an 
employee's earning power and that it is harsh to ignore these 
benefits.  Regarding the difficulty of evaluating fringe 
benefits, the Justice wrote that "it is better to be roughly 
right than totally wrong."18 
¶23 The Commission apparently adopted the analysis that 
appears in the majority opinion in Morrison-Knudsen years before 
the U.S. Supreme Court did.  One of the purposes of the 
Wisconsin 
worker's 
compensation 
law 
is 
to 
ensure 
speedy 
disposition of cases and to avoid protracted litigation.19  The 
Commission's decision to distinguish taxable earnings from non-
taxable fringe benefits when applying Wis. Stat. § 102.11(1)(e) 
                     
17 5 Larson's Workers' Compensation Law § 93.01[2][b] at 93-
21-24 (2000) (citing cases from several jurisdictions and noting 
that the U.S. Supreme Court's decision in Morrison-Knudsen 
represents the majority position on fringe benefits). 
18 Morrison-Knudsen Constr. Co. v. Director, OWCP, 461 U.S. 
624, 642 (1983) (Marshall, J., dissenting). 
19 See Nelson Mill & Agri-Center, Inc. v. ILHR Dept., 67 
Wis. 2d 90, 95, 226 N.W.2d 435 (1975). 
No. 
00-1085 
 
 
14
is a bright-line rule that helps to promote this legislative 
goal of speedy compensation. 
¶24 Furthermore, this court has often referred to the 
balance that Chapter 102 strikes between employer and employee 
interests.20  "Worker's compensation laws are basically economic 
regulations by which the legislature, as a matter of public 
policy, has balanced competing societal interests."21  Theuer's 
proposed interpretation of Wis. Stat. § 102.11(1)(e) would 
undoubtedly create additional costs for employers that would 
disrupt this careful balance.  Indeed, Theuer admits that his 
interpretation of Wis. Stat. § 102.11(1)(e) would not be 
restricted to health insurance premiums, but would apply to 
other fringe benefits that have not traditionally been included 
in calculating worker's compensation awards.  Thus, employers in 
collective bargaining situations, who agreed to certain fringe 
benefits with the understanding that these benefits were not 
considered wages under worker's compensation, would face new 
                     
20 See, e.g., Bauernfeind v. Zell, 190 Wis. 2d 701, 713, 528 
N.W.2d 1 (1995) (worker's compensation represents a compromise 
in which employees give up the right to recover from employers 
in tort 
in exchange for 
the right 
to receive worker's 
compensation regardless of fault). 
21 Mulder v. Acme-Cleveland Corp., 95 Wis. 2d 173, 180, 290 
N.W.2d 276 (1980). 
No. 
00-1085 
 
 
15
costs that were not part of the bargaining process.22  Such a 
significant change in the careful balance that the worker's 
compensation scheme represents is best left to the legislature.23 
¶25 In light of the contradictory views from different 
jurisdictions on the issue of whether wages include fringe 
benefits, 
we 
can 
only 
conclude 
that 
the 
Commission's 
interpretation of Wis. Stat. § 102.11(1)(e) does not contravene 
the plain meaning of the statute, is consistent with the 
purposes of the worker's compensation act, and is reasonable.  
Under the great weight deference standard of review, a reviewing 
court may not second-guess a reasonable interpretation of a 
statute by the Commission.  Applying the great weight deference 
standard, 
we 
uphold 
the 
Commission's 
interpretation 
as 
reasonable.  
¶26 For the reasons set forth, we conclude that the 
Commission's determination is reasonable and must be affirmed by 
this court. 
                     
22 Indeed, as the Commission noted in its decision, Theuer's 
employer agreed as part of its union contract to continue paying 
health insurance premiums for 90 days after a work-related 
injury.  This agreement illustrates how employees may bargain 
for additional protections that are beyond the scope of Wis. 
Stat. § 102.11(1)(e), such as continued payments of health 
insurance premiums. 
23 Wisconsin Stat. § 102.14(2) creates a council on worker's 
compensation 
to 
submit 
recommendations 
with 
respect 
to 
amendments to the worker's compensation statutes.  The Council, 
composed 
of 
labor 
and 
business 
representatives, 
has 
met 
regularly over several decades and makes biennial reports on 
recommended statutory amendments.  The legislature often adopts 
the Council's recommendations without change.   
No. 
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16
By the Court.—The judgment of the circuit court is 
affirmed.  
 
No. 
00-1085 
 
 
1