Accommodating Disabilities under the Wisconsin Fair Employment Act

Municipal Law Alert, February 2008

The Wisconsin Supreme Court in a recent decision, Stoughton Trailers, Inc. v. Labor and Industry Review Commission, 2007 WI 105, held that an employee was terminated because of a disability within the meaning of the Wisconsin Fair Employment Act. The Court’s decision resulted in the employer being liable for reinstatement, ten years of back pay with interest and the employee’s attorney’s fees.

The case involved the application of a no-fault attendance policy when an employee was temporarily disabled. The company terminated an over-the-road truck driver because he exceeded the allowable amount of missed time under the company policy. The driver challenged his discharge, claiming his termination was because of his disability. The Supreme Court upheld the finding of the Labor and Industry Review Commission that the employer failed to reasonably accommodate the employee’s disability.

The employer had a no-fault attendance policy. The employer utilized this policy to terminate an employee after he met the requisite number of absences. The Supreme Court looked beyond the no-fault attendance policy in deciding that the employer failed to exercise what it called “clemency and forbearance.” “Clemency and forbearance” is a temporary accommodation. An employer must forbear by, as in this case, temporarily tolerating absences due to the disability. This temporary forbearance is to allow medical treatment that potentially could remove the difficulty in performing the job.

The decision means that employers cannot solely rely on a no-fault attendance policy in disciplining and/or terminating employees for attendance problems. An employer will have to make an additional inquiry prior to taking any action for an attendance problem. This means that an employer is obligated to temporarily tolerate absences under certain situations. The decision effectively undercuts the uniform application of no fault attendance policies.

The lesson of Stoughton Trailers is that employers must tolerate absences when the employee is undergoing medical intervention related to an employee’s disability that may resolve the problem. Therefore, medical treatment effectively tolls the implementation of a no fault attendance policy. How long an employer has to wait is not clear. Employers will have to wait for future decisions that better define medical interventions and what is a treatable disability.

This decision should compel all employers to revisit their attendance policies regarding how and when they implement disciplinary action for attendance matters. Employers will have to insure that they accommodate employees undergoing medical treatment and or potentially face claims for reinstatement, back pay and attorney’s fees.

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Proposed Amendments to Impact Fee and Land Division Rules Become Law

Municipal Law Alert, February 2008

2007 Wisconsin Act 44 was enacted on January 4 and took effect on January 8, 2008. The proposed provisions of this Act were summarized in the July 2007 issue of the Municipal Law Alert. Since additional provisions were added to this Act since that time, a brief review of the major provisions of this Act is warranted.

1. The time period within which impact fees must be used:

Impact fees collected prior to April 10, 2006 (the effective date of the prior amendment containing the previous seven-year limit) must be used prior to the following deadlines:

a. For impact fees collected prior to 2003: December 31, 2012.

b. For impact fees collected from January 1, 2003 through April 10, 2006: the first day of the 120th month beginning after the date on which the fee was collected (this would be a maximum of ten years and one month).

c. For impact fees collected after April 10, 2006, and within seven years of the effective date of the municipality’s impact fee ordinance: ten years from the effective date of the ordinance.

d. For impact fees collected after April 10, 2006, and more than seven years from the effective date of the municipality’s impact fee ordinance: “within a reasonable period of time after they are collected.”

Note that only the ten-year limitation specified for those impact fees collected within the time frames specified in Paragraph “c.” above can be extended for an additional three years by passage of a resolution detailing the extenuating circumstances justifying the extension.

To some degree, then, the Wisconsin legislature has come “full circle” on this issue. For fees collected consistent with the time frames specified in Paragraph “d.” above, the “reasonable period of time” language that was in the original statute is now brought back. Some commentators attributed the previous reduction of the time limit to seven years to the fact that some municipalities had interpreted the “reasonable period” language too broadly and had specified limits of 40 years or more in their ordinances.

In light of this history, municipalities that choose to specify a specific number of years for impact fees collected within the time frames in Paragraph “d.” above would be well advised to avoid setting that limit too long – it should perhaps be 10-15 years at the very most and should be based on the nature and type of public improvement for which the fees are collected.

Municipal officials in municipalities which have unused impact fees would also be well advised to track those impact fees, in order to determine and document the specific deadline that applies to the various fees already collected. Failure to analyze impact fees that have been collected but not spent could result in a claim that certain impact fees be refunded because the applicable statutory deadline for use has expired.

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Regional Business Fund, Inc. Launches “Downtown Façade” and “MicroLoan” Loan Programs for Area Municipalities

Municipal Law Alert, February 2008

The Regional Business Fund recently announced the inauguration of two new loan programs that may be of interest to area municipalities. These programs are available to most municipalities located within a seven-county area of western Wisconsin – Barron, Chippewa, Clark, Dunn, Eau Claire, Polk, and St. Croix counties.

The “Downtown Façade” Loan Program is intended to provide incentives and financial assistance to encourage business owners in historic downtowns of west central Wisconsin to revitalize commercial buildings located in those downtowns. Startup (new) business owners may also be eligible for this program as well, provided they can meet certain qualifications. Downtown Façade loan funds would typically be used for façade renovation, signs, awnings, windows, exterior doors, graphics or lighting, and landscape improvements. Loans are available in amounts from $5,000 to $30,000, at 0% interest, for a term not to exceed fifteen years. Area municipalities can set up downtown revitalization committees which then apply for lending authority under the program. Those committees which meet the qualifications will then have authority to review and approve local loan applications which meet the program requirements.

The second loan program is the “MicroLoan Program.” This program is designed to provide small loans to start-up, newly established or growing small businesses. A key objective of this program is to make funds available to business owners who may have difficulty obtaining financing through traditional avenues. Priority will be granted to business entities which show the greatest need and can demonstrate an ability to repay the loan. Loan funds can be used for working capital, inventory, machinery and equipment, furniture and fixtures, supplies, leasehold improvements, building renovation, land acquisition and natural disaster recovery. Loans can range in amount from $5000 to $25,000, at 4.00% fixed interest, with terms not to exceed ten years (the term of working capital loans cannot exceed three years). Area municipalities which comply with the program requirements will be given lending authority in this program as well. One committee can be created to consider applications under both programs.

Municipalities which pooled their Community Development Block Grant Funds into the recently created regional fund will have first priority to loan funds. Other communities may have access to loan funds as fund balances allow.

The West Central Wisconsin Regional Planning Commission (WCWRPC) in Eau Claire is serving as agent for the Regional Business Fund in administering these loan programs. Further information can be obtained from Char Gurney or Beth Waldhart at WCWRPC (715-836-2918), or from area County Economic Development Corporation Directors.

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When can Publicly-Owned Land be Taxed by a Municipality?

Municipal Law Alert, February 2008

The Wisconsin Supreme Court, in the case of Milwaukee Regional Medical Center, Inc. v. City of Wauwatosa, 2007 WI 101, has once again considered when publicly owned land can be taxed. Generally, real estate owned by a municipality or other public entity is exempt from property taxation under Wis. Stat. § 70.11(2). However, as examined in Milwaukee Regional Medical Center, whether real estate is “owned” by a municipality is not determined simply by the name on the deed. Instead, an assessor can look past the record title holder to the “beneficial owner” of the property and tax land owned in the name of a public entity.

Determining the beneficial owner of property is done on a case-by-case basis. “Ownership” is described by courts as a bundle of rights or bundle of sticks. Record title is one of many rights in the bundle. Courts weigh the rights held by one party against the rights held by the other party to determine who is the beneficial owner and, therefore “owner” under the tax exemption statute. A governmental entity can be both record title owner and beneficial owner. If so, the land is tax exempt. It is when the beneficial owner is other than the governmental entity and record title owner that the property can become taxable.

In Milwaukee Regional Medical Center, the Supreme Court held that the government entity was not the beneficial owner and therefore the property in question was taxable. The case involved a day care located on land with record title held by Milwaukee County but operated by Milwaukee Regional Medical Center, Inc. (MRMC). The City of Milwaukee sought to tax the property.

The County leased land located at the Milwaukee Medical Complex to MRMC. The lease terms required MRMC to build and operate a childcare facility on the site. The lease term was 50 years. MRMC paid $1.00 per year for rent for the first 30 years and then market rent for the last 20 years. At the end of the lease, the building would be owned by the County.

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