Responding to the worker's comp aspect of your question, Wisconsin's worker's compensation statute has a provision that prevents unreasonable terminations following a work injury. In essence, the employer has the burden to show that it had reasonable cause to terminate, and its motive cannot have anything to do with the work injury. The specific facts of the case are critical to knowing whether you have a claim.
Feel free to call me to discuss, free of charge. Aaron Halstead (608-257-0040).
Mr. Halstead is correct. However, before you can make such a claim, you will have to be able to sucessfully prove that you indeed suffered a work related injury (you did not state why your claim was "denied").
Your emotional suffering from your termination is not an issue and will not be compensated..only your wage loss (not to exceed a year's worth/value of wages) will be compensable if you prevail.
Talk to Mr. Halstead, he can also look at potential ERD claims regarding your panic attacks/ demotion.
The above is general legal information that may or may not apply in your state. You should use this information only as a general guideline in determining what the laws and regulations of your state or jurisdiction require or allow.
Yes you can allege retaliatory dismissal, but prevailing is going to be harder. A good WC attorney in WI will be necessary to navigate the minefield of your litigation.