October 2026; IL WC Appellate Court Sends a Death Claim Back for Reconsideration; Staffing Exposures in IL WC and more

Synopsis: IL Appellate Court, Workers’ Compensation Division gives Respondent hope for death claim denial on remand order, but we fear a re-instated award of death benefits is likely, based on the stated facts. Research and Writing by John P. Campbell, J.D.

Editor’s Comment: To be clear, in Subway v. IWCC 2026 IL App (5th) 250429WC we are not necessarily thrilled with the initial outcome or what we expect to be the final outcome of this case. We fear application of the correct legal standard is unlikely to change the resulting award of benefits, as we explain below.

There is a lot at stake in this claim. Please note if you look at our KCB&A IL WC Rate Sheet on our www.keefe-law.com website, the minimum IL WC death benefit for claims after 2/2026 is $979,225.00.

Facts and procedural posture:

Decedent Keeton was driving from one Subway store to another to deliver restaurant supplies when her vehicle struck the rear of a stopped truck and trailer, causing her death. The parties did not dispute her legal treatment as a “traveling employee” for purposes of the claim. Please note there is no statutory definition of the term “traveling employee” in the IL WC Act or rules.

The record described by the Court in its ruling included a police report noting cell-phone use, speeding, failure to reduce speed, and lack of a safety belt; a firefighter reportedly found a phone playing a video after and at the site of the collision. Postmortem testing also detected THC-related compounds. Importantly, Claimant’s toxicology expert, challenged any inference of THC impairment from the blood results alone.

The arbitrator awarded weekly death benefits and medical and funeral expenses. Rather than expressly applying the traveling-employee standard, the arbitrator asked whether Decedent Keeton had acted intentionally, knowing serious injury was likely, or with wanton disregard of the probable consequences. The IL WC Commission adopted that decision without further analysis, and the circuit court confirmed it. Subway preserved its objection to the legal test in its statement of exceptions before the IL WC Commission panel.

Why the award was set aside:

The IL WC Appellate Court held that a traveling employee’s injury arises out of employment when the employee was engaged in reasonable and foreseeable conduct—conduct the employer might normally anticipate from its workers. The Court distinguished that inquiry from the arbitrator’s much narrower question of whether Decedent Keeton’s conduct amounted to intentional or wanton wrongdoing. An employee’s conduct could fail the traveling-employee test without reaching that more extreme level. Thus, even if the IL WC Commission correctly found no wanton conduct, it had not answered the question that governed this claim. The Court also explained that whether Keeton’s conduct was reasonable and foreseeable is ultimately a factual determination for the Commission, not one the Il WC Appellate Court would make in the first instance. As such, the matter was remanded to the Commission for application of the proper standard.

Respondent’s perspective:

Subway has new hope on remand, as they need not prove that Keeton deliberately courted serious injury or acted wantonly. Its argument is that, considering the evidence as a whole, the conduct associated with the crash was not conduct an employer would reasonably foresee as part of the assigned delivery trip. Subway will no doubt highlight the cell phone video play, the lack of seat belt and positive THC in the blood as collective evidence that amounts to unreasonable and unforeseeable conduct.

However, we must remember the delivery itself was an assigned work activity and also remember that mere negligence is not a defense to workers’ compensation benefits. Subway therefore needs to distinguish the ordinary risks of driving between stores from the particular conduct it contends was unreasonable and unforeseeable. The reported video-playing phone is strong evidence of intentionally distracted driving. This is also a clear violation of the Illinois Rules of the Road. The positive THC compounds, absent toxicity levels, is insufficient to establish unreasonable conduct. Remember, marijuana remains in the system far longer than alcohol, so an inference of intoxication cannot necessarily be made simply based on a drug screening alone (toxicity levels are needed). Also, these facts do not conclusively establish precisely what Decedent Keeton was doing immediately before impact. Th difficult question for the IL WC Commission on remand is whether driving violations such as watching/using a cell phone and failure to use a seat belt is sufficient unreasonable and unforeseeable behavior to deny statutory death benefits (vs ordinary negligence). As a regular contestant on the Dan Ryan Expressway, I have to say that neither of these is unforeseeable (I see it all the time), nor is the daily scent of marijuana uncommon, but I digress.

The Fifth District WC Court corrected the legal framework; it did not hold that speeding, distraction, marijuana use, or any combination necessarily defeats compensation. The Commission could award benefits again if, after applying the reasonable-and-foreseeable test, it finds the claimant met their burden. Conversely, a properly supported finding that the relevant conduct was unreasonable and unforeseeable could defeat the claim.

Bottom line: Subway is best understood as a respondent-favorable correction of the standard of proof and analysis, not an appellate determination of non-compensability. Its practical value is strongest where a respondent identifies the traveling-employee issue early, preserves the objection—as Subway did—and develops evidence addressing whether the employee’s particular conduct, rather than merely the travel assignment, was reasonable and foreseeable. We will continue to track this case on remand and report accordingly.

This article was researched and written by John P. Campbell, J.D. John can be reached for questions or thoughts at jcampbell@keefe-law.com.

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Synopsis: Staffing Companies and Workers’ Compensation: Hidden Exposures Behind the Temporary Workforce

Editor’s comment: Temporary staffing is an essential part of the modern workplace. Manufacturers, warehouses, logistics companies, healthcare facilities and other employers routinely rely on staffing agencies to fill workplace vacancies, meet seasonal demand and avoid adding permanent employees. Research and writing by Eugene F. Keefe, J.D.

From a workers’ compensation perspective, however, the arrangement creates an unusual situation: the company writing the staffing employee’s paycheck may not be the company controlling the employee’s work.

That distinction can become extremely important after an accident.

For employers, staffing companies, insurers and claims professionals, temporary employees create several overlapping exposures involving workers’ compensation liability, borrowed-employee status, exclusive-remedy protection, contractual indemnification, safety obligations and potentially expensive disputes over who ultimately pays the claim brought by a “staffer.”  

The Basic Staffing Arrangement

A typical staffing arrangement involves three parties:

1. The staffing agency recruits the employee, tests or trains the worker, places the worker in a suitable position, issues the paycheck and frequently provides workers’ compensation insurance.

1. The client company provides the workplace, assigns the employee's daily tasks and usually supervises the actual work.

1. The temporary employee technically remains on the staffing company's payroll while performing work for the client.

The mistake we want our readers to be aware of is assuming the staffing agency's workers’ compensation policy automatically eliminates the client's workers’ compensation exposure.

In Illinois work comp, it does not. The client company has to be aggressive to insure the workers’ comp policy provides coverage for the staffing worker’s injury.

Section 1(a)(4) of the Illinois Workers’ Compensation Act specifically addresses loaned employees. As your editor, I feel it is confusing.

A business whose enterprise substantially consists of furnishing employees to other employers and paying those employees while they perform the other employers' work is treated as a "loaning employer." More importantly, Illinois law provides that the loaning and borrowing employers can have joint and several liability for benefits owed to an injured loaned employee.

That odd and challenging statutory structure should be the starting point for analyzing virtually every serious Illinois temporary-worker claim.

Who Is the Employer?

Following the “joint and several liability” statutory language above,  the answer can effectively be: both companies.

Illinois courts traditionally examine two principal questions in deciding whether a borrowed-employee relationship exists: 

1. Did the borrowing employer have the right to direct and control how the employee performed the work?

2. Was there an express or implied contract of hire between the worker and the borrowing employer?

Per our Illinois courts, the “right of control” is the more important consideration. Courts can examine who supervised the employee, who directed the work, who could remove the worker from the assignment, how the employee was hired and how the worker was paid. See Chaney v. Yetter Manufacturing Co., 315 Ill. App. 3d 823 (2000).

In a conventional staffing relationship, the answers frequently point toward the client company.

Consider a warehouse worker supplied by ABC Staffing to XYZ Distribution. ABC hires the worker and cuts the paycheck. But once the worker walks through XYZ's doors, an XYZ supervisor tells the worker where to report, which forklift to operate, which loads to move, when to take breaks and how the job should be performed.

ABC Staffing may be the putative general employer, but XYZ has obviously assumed substantial control over the staffing employee's actual work.

That is precisely why the borrowed-employee doctrine matters.  

The Chaney Decision Remains Important

Chaney v. Yetter Manufacturing Co. provides a particularly useful illustration. Petitioner-Plaintiff was employed by a temporary staffing company and assigned to work at Yetter's plant. The staffing agency handled payroll, tax withholding, insurance and workers’ compensation coverage.

Yetter, however, controlled the plaintiff's activities at the plant. It instructed her concerning her tasks and could remove her from the assignment. The court determined that Yetter qualified as a borrowing employer and that the employee had impliedly agreed to that relationship.

The consequences were significant. Because Yetter was a borrowing employer under the IL Workers’ Compensation Act, the employee could not simply circumvent workers’ compensation and sue Yetter in tort, outside the WC sphere. The Court ruled “exclusive-remedy provisions” of the IL WC Act applied.

For client companies, this limiting aspect of borrowed-employer status can be enormously valuable. You may note workers’ compensation liability simultaneously comes with potential workers’ compensation immunity from a civil action. In a claim with serious injury, workers’ comp liability may be dramatically lower than civil liability.

The Exposure Nobody Wants to Own

Illinois law provides that, as between a loaning employer and borrowing employer, the borrowing employer is generally primarily liable and the loaning employer secondarily liable. If the loaning employer pays the WC defense costs and benefits, the statute provides a reimbursement mechanism against the borrowing employer—unless the parties have agreed otherwise.

That final qualification is crucial to risk management analysis. IL Staffing contracts frequently contain extensive provisions governing workers’ compensation insurance, indemnification and allocation of liability. The commercial agreement can therefore become nearly as important as the workers’ compensation statute.

A staffing company may promise in writing to obtain workers’ compensation coverage and handle claims involving its employees. It may also agree to indemnify the client for particular liabilities. Those provisions can shift the ultimate economic burden between the companies, but they do not necessarily rewrite the employee's statutory rights.

Chaney illustrates the distinction. The staffing company's agreement concerning workers’ compensation responsibility did not eliminate the borrowing employer's status under the Workers’ Compensation Act.

In other words, there are really two questions:

What does the injured employee have a right to recover?

And separately:

Which company or insurer ultimately has to pay for it?

Those are not always the same inquiry.

The General Liability Trap in IL WC and GL claims

One of the most important issues in a catastrophic temporary-worker accident is whether the client company qualifies as the worker's borrowing employer.

Imagine a temporary worker suffers a devastating hand injury involving an allegedly unsafe machine. A workers’ compensation claim worth several hundred thousand dollars is serious. That said, a product-liability or negligence action seeking millions of dollars can be substantially more serious.

If the client company is established as the borrowing employer, workers’ compensation exclusivity may provide a defense to a common-law negligence action by the worker. Illinois courts have recognized application of exclusive-remedy protection in temporary-worker/borrowed-employee situations.

Consequently, determining employment status should be an immediate priority following any catastrophic accident involving temporary labor. Claims professionals should not simply open the workers’ compensation file and stop there. The potential civil exposure needs to be evaluated at the same time.

Workplace Safety Is a Shared Problem in Illinois

Another common misconception is that because the staffing agency employs the worker, workplace safety is primarily the staffing agency's responsibility. As a practical matter, the client often knows far more about the hazards of its own workplace.

The staffing agency can provide general safety training to staffing workers. But the staffing company may know very little about a particular conveyor system, punch press, forklift, chemical process or production line.

Illinois has increasingly formalized these responsibilities under the Day and Temporary Labor Services Act.

Covered day and temporary labor agencies must provide workers with general safety training addressing known hazards associated with the client company assignment. The training must be provided without cost to the employee, and training time must be paid.

Illinois also requires covered agencies to maintain workers’ compensation coverage as part of the registration process.

The client cannot simply ignore the regulatory side of the relationship either. Third-party clients using covered agencies have obligations of their own, including verifying the agency's registration. Illinois currently requires verification when the parties enter into the contract and again on March 1 and September 1 each year.

For workers’ compensation risk management, the practical lesson is straightforward: the staffing company and client should treat safety as a coordinated responsibility rather than assuming the other company is handling it.  

Classification Creates Another Exposure

Staffing companies present a difficult underwriting problem because their employees may perform radically different work for different clients. An administrative employee sitting at a desk presents one risk. A warehouse picker presents another. A forklift operator presents another. A temporary worker operating industrial machinery presents an entirely different exposure.

The staffing company's premium and underwriting therefore depend heavily upon accurate information about what its employees actually do. Problems arise when the staffing agency believes it is supplying general labor but the client begins assigning workers to more hazardous operations. That creates both safety and insurance problems.

For that reason, staffing agreements should restrict clients from materially changing an employee's job duties without notifying the staffing company. High-risk operations should be identified before placement, not after the first serious accident.

The Contract Deserves More Attention

Companies frequently negotiate staffing agreements as purchasing documents rather than risk-transfer documents. That is a mistake.

Before temporary employees arrive at a facility, both sides should understand the agreement's provisions concerning workers’ compensation coverage, employer's liability coverage, general liability insurance, additional-insured status where applicable, indemnification, waiver of subrogation, allocation of statutory reimbursement rights, accident reporting and responsibility for safety training.

The agreement should also address who investigates an accident and who controls the defense if litigation develops. These provisions become particularly important when the staffing company and client have different insurers.

The workers’ compensation carrier may pay the injured employee while another insurer defends the client against a civil lawsuit. Meanwhile, the parties may litigate contractual indemnification or statutory reimbursement. One accident can therefore generate multiple claims and multiple lawsuits.

Illinois Adds Another Layer of Compliance

Illinois businesses using day and temporary labor should also remember that workers’ compensation is now only one component of the regulatory environment. The Illinois Department of Labor states that covered staffing agencies must register with the Department and maintain proof of workers’ compensation insurance. Clients can face penalties for contracting with unregistered covered agencies and must periodically verify registration.

Illinois law also imposes safety-training, notice, recordkeeping and other requirements on covered staffing arrangements. IDOL currently advises that qualifying temporary workers may also acquire equal-pay rights after working more than 720 hours for a single client during a 12-month period.

The result is that the temporary-workforce relationship can no longer be viewed simply as:

“The staffing company employs them, so the staffing company handles everything.”

That simplistic approach is increasingly dangerous.

Conclusion: Temporary Labor Does Not Mean Temporary Exposure

Staffing arrangements offer employers tremendous flexibility, but they do not allow companies to outsource every consequence of an employee injury. Illinois workers’ compensation law expressly recognizes the relationship between loaning and borrowing employers. Depending upon the facts, both may have exposure for workers’ compensation benefits, while borrowed-employer status may simultaneously provide the client with the valuable protection of the Workers’ Compensation Act's exclusive-remedy provisions.

• That combination makes temporary-worker cases unusual.

• The staffing company may issue the paycheck.

• The client may control the work.

• One insurer may initially pay the claim.

• A contract may ultimately shift the loss.

And the most financially important question may not be who pays the workers’ compensation claim at all—it may be whether workers’ compensation exclusivity prevents the accident from becoming a much larger civil lawsuit.

For staffing companies, client employers, insurers and defense counsel, the best time to resolve those questions is before the staffing employee ever reports for the first shift.

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