Synopsis: Understanding Workers’ Comp Exclusivity and Nuances.
Editor’s comment: All sides in a workers’ comp claim have to have a sense of the rights and responsibilities of the parties to an injured or ill workers’ claim. One confusing aspect of the workers’ comp system is the employee can sometimes “choose” to make it a workers’ comp claim but the worker can just as easily abandon or “evade” the no-fault benefit system and seek benefits/recoveries in other places.
Why would someone avoid/abandon a work injury? It happens all the time—someone makes a mistake and gets hurt and work, treats and goes back to work. They don’t want to trouble with the system and that is their right to avoid the stress.
The other aspect of rights/responsibilities is some workers will become injured and then want to cash in on the “poor person’s lottery” that some common law verdicts now seem to be moving toward. We compare serious paralyzing and tragic injuries to two people that went to a jury verdicts this year. One was a paralyzed construction worker whose common law claim was handled by one of the top Plaintiff firms in Illinois—their work in the common law courts resulted in a reasonable verdict of $64M dollars. The other was a young woman struck by what I call a falling “gazebo” by O’Hare Airport who got a shocking verdict of $148M from the City of Chicago! That is so much money, we assume Mayor Rahm Emanuel and the City Council will have to raise our taxes if this astounding nine-figure verdict isn’t reduced on appeal. I was told but am not sure the City’s defense firm stipulated to liability for reasons no one could understand.
From those verdicts, one could see why someone would file both a WC claim and a GL claim for a worker with serious injuries.
So preliminary questions any claim handler has to routinely consider:
· Is this a workers’ comp claim?
· Can the worker bring a common law claim against the employer?
· Can the worker bring a common law claim against any other entity causing injury?
These basic questions are often overlooked. The assumption is that, if an Illinois workers’ compensation claim is filed, the case involves a loss that should be compensated under Illinois workers’ compensation law. However, in order to recover benefits under workers’ compensation law, the activities must be covered by the IL WC Act and not under any other benefit provision in a different system that may be considered exclusive.
For example, if an Illinois employee is working to maintain a watercraft when injured and the vessel is on a navigable waterway, such injuries would be covered by the exclusive provisions of the federal Longshore Harbor and Workers’ Compensation Act, administered by the OWCP. Such injuries would not be appropriately covered by the relative State’s Workers’ Compensation Act, even though the employee was hired by and working for a local employer. U.S. Postal workers are also covered by a similar federal-only WC Act. There are similar laws that have exclusive coverage to eliminate jurisdiction of the state WC body to hear the claim.
Another aspect of the WC system coverage question is when the employee can bring a workers’ compensation claim against an employer and when the employee can also sue the employer for the same injuries in civil court. This concept is a possibility but under very limited circumstances.
What Is Third Party Liability?
Third-party liability refers to insurance that protects the insured from legal liability claims presented by “third” parties. This means payment is usually not made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. Compensation throughout the industrialized world is the injured employee gave up his/her right to bring a common law action against the employer in exchange for workers’ compensation benefits that are more certain and more rapidly provided but potentially lower than what a jury might be able to provide for a similarly severe injury.
There have been a number of strange and complex legal devices that have allowed Illinois employees to maintain common law claims against third parties that might require the employer to pay a part of a jury verdict, but the general rule is supposed to be the employee cannot sue the employer at common law if he/she is entitled to workers’ compensation benefits. This rule applies even if the worker doesn’t seek WC benefits or abandons/avoids the WC system.
One clear exception to this concept is when an employer commits an intentional act or hires another to commit an intentional act to injure an employee. For example, if the employer were to hire a ruffian to injure/attack an employee due to a work-related dispute, the employee could seek workers’ compensation benefits and also sue the employer for the injuries suffered in the intentional attack.
In specialized circumstances, the employer and its carrier/TPA may have an ‘option’ with regard to payment of benefits under either workers’ compensation or general liability. For example, if an employer has an employee become injured as a result of slipping on ice and snow while working on company property, it is possible that you might successfully deny the claim for workers’ compensation benefits only to then face a premises liability or other general liability lawsuit which is possibly much more expensive to defend and potentially explosive due to the unpredictability of jury awards.
The employer can ‘opt’ not to fight the workers’ compensation claim and voluntarily pay workers’ compensation benefits which should block any third party claim against the employer if the employee knowingly accepts such benefits.
Recent Ruling of Note on Exclusivity in Workers’ Comp
In Peng v. Nardi, issued December, 14, 2017, our Illinois Appellate Court ruled a worker could not proceed with her lawsuit against a coworker for injuries in a car accident that occurred while the co-worker was driving her to work in a van owned by their employer.
Claimant Peng and a co-worker named Lei Guan worked for a restaurant. The restaurant was in Hoffman Estates, a community northwest of Chicago. Claimant Peng and Guan both lived on the south side of Chicago, as did a number of other employees.
The restaurant owned and gave co-worker Guan the keys to a 15-seat Ford E350 passenger van to transport himself and other workers to and from the restaurant. The company paid Guan $600 a month for his driving duties and covered the cost of fuel. Guan wasn’t allowed to use the vehicle for personal errands, and he was not allowed to let anyone else drive. The restaurant initially told Guan where to pick up new employees, but he later chose the pick-up and drop-off points on his own. Guan also chose the specific route to take to and from work, based on the vagaries of Chicago-area traffic.
Claimant Peng was a passenger in the van in June 2014 when the van collided with another vehicle on Interstate 90. The car had been struck a van being driven by another individual. Claimant Peng suffered an injury to her hip in the crash. Doctors originally diagnosed Peng with a muscle injury but later determined she had a pelvic fracture.
Claimant Peng filed an IL WC claim currently pending and assigned to one of our State’s more venerable Arbitrators, George Andros.
At the same time, Claimant Peng also filed a negligence suit against co-worker Guan and the other two drivers of separate vehicles, seeking damages for her injury in the MVA. A trial judge granted Guan’s attorney’s motion to dismiss Peng’s claims against him, finding Guan was immune from civil liability to a coworker under the Illinois Workers’ Compensation Act.
On appeal, the Illinois Appellate Court explained an employee injured on the job normally cannot sue the employer if they receive worker’s compensation benefits, and an employee acting in the course of his employment who accidentally injures a colleague is also immune from a common law negligence action because of the WC Act’s underlying policy outlining the costs of work accidents be placed on that industry and not insurance or assets of co-workers.
The Court ruled accidents occurring while an employee is traveling to or from work generally are not treated as occurring within the course of the worker’s employment, although there is an exception when the employer has provided a means of transportation or “controls” the method of the worker’s travel.
The ruling also indicates Claimant Peng was not compensated for her commute time and was not required to use the restaurant vanpool to get to and from work. However, she relinquished control over the conditions of transportation when she climbed into a vehicle owned by her employer and driven by her co-employee under the employer’s selection/direction. Accordingly, the Court concluded the accident occurred while Claimant Peng was in the course of her employment, and the workers’ compensation system provided her exclusive remedy against Guan.
Please also note when your company provides transportation and/or company vehicles to facilitate workers getting to and from work, you may be expanding work comp coverage for accidents/injuries occurring during trips that might otherwise not be covered.
To read the decision, click here Ping v. Nardi We appreciate your thoughts and comments. Please post them on our award-winning website.
Synopsis: Why the Defense Team at KCB&A Provides Free Emails Confirming We Saw an “Unrep.”
Editor’s comment: For our clients and potential clients, our KCB&A defense team scours the WC call sheets to check and see if your company or insured has a pending claim that you might not be aware of. If you would like, we can add you to the list of companies we watch out for—simply send a reply.
If we see a WC claim without defense, we send a very brief email indicating it is on the call and/or set for hearing. We quickly advise don’t see a defense attorney assigned. You don’t have to reply to such emails if you are covered.
It is possible you have relayed the claim to an attorney for defense—if their appearance isn’t on file, we assure you they won’t get IWCC notices or decisions. That isn’t a great idea and you might want to let them know to contact the IWCC information desk and get the situation remedied.
We also know some claims handlers will hold off on assigning files to defense to see if they can rapidly settle and save that cost of counsel. That isn’t a problem for us with the single caveat—if a matter is set for trial and a trial begins, even if we are hired and quickly join in defending the claim, there is a chance the Arbitrator won’t allow further defense evidence, consistent with IL case law. We don’t suggest claims handlers play a game of WC “chicken” to see how long you can wait before sending a claim to counsel.
Please also remember another service the defense team at KCB&A provides—we fight to get your claims closed. Sometimes we feel adjusters may hold claims for months and years, as claimants’ counsels may not be aggressive in moving the file. We don’t feel you should rely on claimant’s counsel to take months and years to get around to closing files. This also may be counterproductive and result in reserves sitting.
We appreciate your thoughts and comments. Please post them on our award-winning website.