10-28-13; Have IL WC Death Benefits for "Travelers" Morphed into Life Insurance?; Lack of SocSecurity Spread Language Leads to Lawsuit; State Chamber to Release Blockbuster WC Judicial Review and more

Synopsis: Could Arbitrator Neal’s and Arbitrator Holland’s Recent Passings Be Deemed “Compensable” under the New “Traveling Employee” Version of Illinois Workers’ Compensation “Law?” Have IL WC Death Benefits for “Travelers” Morphed into Term Life Insurance? How Far Will the Illinois Workers’ Comp System Go to Try to Catch Up to Global and Indefensible WC coverage like Kooky California?

Editor’s comment: We have discussed the untimely passing of these distinguished administrators and while considering the new “traveling employee” expansion, it compelled us to ask whether this new legal theory would make their passings indefensibly compensable, as a matter of law. At first glance, most of our clients, readers and observers on both sides may reject the concept, because neither hearing officer was actively on duty when they passed but we assure you that isn’t needed any more in our state. While the events leading to their passings clearly didn’t arise out of or in the course of their work, in our view, if you are a “traveler” you are entitled to global, no-fault and indefensible workers’ comp coverage.


In our reasoned legal view, the Illinois workers’ compensation system is trying to out-flank even the most liberal legislators who run California’s workers comp system on our “Left Coast.” News from California last week confirmed a former University of California, Davis police officer who casually pepper-sprayed “Occupy” protesters just reached a worker's compensation settlement with the University system, despite the lack of any defined injury, other than to his feelings. The Davis (California) Enterprise reports a judge on Oct. 16 approved a $38,000 settlement between former Officer John Pike and the University of California. The 40-year-old former official said he suffered depression and anxiety after death threats were sent to him and his family over the Nov. 18, 2011 event. University spokesman Andy Fell said the case was resolved in accordance with their goofy state laws.


It appears video of Pike pepper-spraying the protesters went viral online. His address and other personal information were posted online afterward, and he allegedly received scores of death threats. We find it hard to believe he would keep answering the phone after the first score of such calls. Pike was fired for using the pepper spray in July 2012 but not until receiving $70K plus in payments for eight months of paid administrative leave. To see the viral video, go to http://www.youtube.com/watch?v=uJb-LZGLOgU Again, this sort of workers’ comp handling indicates to us our workers’ compensation colleagues on the Left Coast won’t let any bad deed go un-rewarded and if you make a claim, you will get a settlement. Their benefits aren’t truly defensible—our concern is the administrators and reviewing courts in this state are going down the same silly “yellow-brick road.”


With deepest respect to the families, colleagues and friends of our recently departed administrators, one of them died of cancer and one died at home in bed. We do not feel the details of their passings are necessary for this article. What we do know is both Arbitrators were unquestionably “travelers” as travel was unquestionably an essential part of the Arbitrator job consistent with the Appellate Court, Workers’ Compensation Division’s definition in their ruling in Kertis v. IWCC. Neither Arbitrator conducted hearings anywhere near their homes and both would travel some distance to get to their work sites. To our understanding, all IL WC Arbitrators are provided expenses to make the trips to the hearing sites. Please also note all IL WC Arbitrators of whom we are aware diligently work at their home offices—downstate or out-state Arbitrators are scheduled to work both at their hearing sites and at their homes.


One of the two Arbitrators above was a cigarette smoker. She smoked on her way to work and smoked outside the hearing sites during work—every attorney who practiced before her knew she and her court reporter took regular smoking breaks during the work day. To the extent the new and unprecedented “traveling employee” concept makes the State of IL responsible for her actions basically on a 24/7/365 basis, if her survivors can prove her cancer was from smoking morning, noon or night, it is our view her untimely passing was compensable as a matter of law.


The other Arbitrator mentioned above, passed away recently at home and in his bed. Again, we don’t know the precise cause but we aren’t sure it makes the slightest bit of difference—we feel this new expansion of WC coverage makes such a worker covered on a 24/7 basis both at home, in transit and at work. To the extent this great man clearly and unquestionably fit the new definition of a “traveler” and worked in his home, wouldn’t he be covered for any and all injuries, illnesses and accidents while both at work and at home?


Please note in their ruling in Admiral Mechanical v. IWCC, the Appellate Court, Workers’ Compensation Division outlined the Commission and attorneys on both sides should be able to litigate IL WC claims over the issue of “reasonable and foreseeable” actions by the travelers. In our view, 99.44% of human behavior is “reasonable and foreseeable.” We consider the passings of both of these illustrious administrators to be the result of “reasonable and foreseeable” activities—there is nothing unreasonable or unforeseeable about smoking cigarettes or passing while in bed. Both things happen around the state every day of every year. In our view, once you define any IL worker as a “traveler,” you owe WC benefits and there are no true defined defenses for accidents, injuries and illnesses. Maybe one “traveler” case in a thousand might have a defense—in our view, WC death coverage for all IL “travelers” is identical to term life insurance. If you think it isn’t just like term life insurance, please reply to tell us your thoughts.


At a recent meeting we had with a current client, she became incensed to hear our suggestion that such global and indefensible WC coverage might exist for millions of IL workers—we advised her of our opinion she was “shooting the messenger” to get mad at us to even consider this potential. We want to emphasize we are completely opposed to this unsustainable expansion of our state’s already generous workers’ compensation benefits. We simply feel our readers, clients and everyone in the system needs to understand where this clunky WC caravan is now moving. In our view, there is no defined “limit switch” once our State’s WC system starts to openly and unquestionably award WC benefits outside what the legislation provides—if you aren’t crystal-clear about it, we are happy to copy and paste to you the section of the ruling inAdmiral Mechanical where the Court’s majority confirms they are no longer constrained by the statutory requirement that an injury “arise out of and in the course of employment.” If you want that language, please send a reply.


Please note the WC death benefits for such workers would be $1,331.20 per week on a tax-free basis for 25 years or $1,730,560.00. The family will also get an $8,000 burial benefit and COLA increases. All of that money will come from IL taxpayers and businesses. As there are probably tens of thousands of IL state, city and local government workers who are “travelers,” please understand our governments workers’ compensation costs may triple or more as these claims start to be filed and indefensible benefits will be due. Taxes are going to have to rise to meet these new and unexpected costs. Your editor and others will be discussing this at the IL State Chamber’s Annual Confab tomorrow—for details or to register, please see their advertisement for it below.


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Synopsis: Insurance Employee Cries Foul over Conduct of Her Petitioner’s Attorney While Lack of Social Security Spread-Language Rider to IL WC Contracts Allegedly Costs Petitioner $100,000.00. Analysis by Joe Needham, J.D.


Editor’s comment: The enemy of your enemy is your enemy? Curious is a circumstance where an employee sues first her employer, then the attorney she hired to sue her employer.   

This past week the Madison-St. Clair Record reported the story of a legal malpractice lawsuit brought by an Illinois workers’ compensation claimant against her former WC attorney for mistakes made in the settlement of her claim. Plaintiff Barbara Boda’s case is filed in St. Clair County under case number 13 L 430 and the Madison-St. Clair Record article can be accessed at http://madisonrecord.com/issues/889-legal-malpractice/260112-attorney-sued-over-work-comp-case-denies-allegations in the event you want greater detail of the allegations and parties involved. The claim of legal malpractice centers around Petitioner’s Social Security Disability status and the fact a lump-sum settlement payment was considered income for SSDI purposes. Common in the industry is the use of Social Security “spread language” wherein a lump-sum settlement payment is extrapolated out over the expected life-span of the recipient to minimize the annual total received, as nominal earnings will not reduce SSDI payment amounts.

Apparent in Ms. Boda’s case is her settlement did not include a spread language rider extrapolating her settlement payment over time, and the lump sum payment resulted in a reduction of her SSDI recovery, consistent with U.S. law. The Complaint also alleges Petitioner was counseled to accept only a third of her original claim suggesting her attorney undervalued her claim in reaching settlement, and alleges damages of $100,000.00 which is curious in its own right.

Ms. Boda either is or was a Broadspire Insurance Company employee alleging a work-related motor vehicle collision resulting in injury and lumbar fusion surgery. It is not clear in what capacity she was employed or what level of claims sophistication she possesses, but the Madison-St. Clair Record article notes she hired a local workers’ compensation attorney to represent her in the claim. The malpractice suit is still in litigation and to our knowledge there is no records in the WC case other than the settlement contract, so the full facts of either suit are not yet known and the outcome of the malpractice suit has not played out, but while the chips are waiting to fall the matter raises a number of obvious and subtle cautions about the Illinois Workers’ Compensation claims and settlement process.

Obvious is the caution to the claimant’s bar to always know your client’s Social Security status upon settlement, and apply amortizing Social Security approved spread language when necessary to circumvent the reduction of SSDI benefits upon lump sum settlement payment. We can only assume it was ignorance or oversight of the facts of a client’s status and not ignorance of the law and the need for spread language that leads to this type of error, preventable through a detailed but rather simple interview of the client. Between the possible need for Medicare Set-Aside allocation considerations, four separate methods of computing permanency values, additional maintenance entitlement issues, and the SSDI spread language considerations present in this case, there are numerous potential pitfalls on an unwary attorney’s path to case settlement, most if not all of which are avoidable through a single re-interview of the client at the time of settlement negotiation. The alternatives are an ounce of prevention or a pound of pain. If you are interested in reviewing our Social Security spread language to incorporate it into future settlements, please send a reply to the email address below.

Whether there is merit to the claim Boda was counseled to take a short settlement we cannot say without knowledge of the value of the WC claim and Broadspire’s possible defenses, but it raises another less-obvious caution to our insurance community and readers at large; the caution that a legal claim may make for strange bedfellows. There is a certain irony to an employee of a workers’ compensation insurance company claiming to be wronged by an attorney in the business of suing her employer’s clients; the changing of hats does not necessarily make for a better fit. It makes sense Boda’s attorney would negotiate the greatest possible recovery if for no other reason than to maximize his fee and we assume a sounds assessment of the value of the case and the defenses impeding or discounting recovery was employed before counseling Boda on the fair settlement value of her claim. With an employer and a legal advocate comprising notches in her belt and additional litigation pending, we further assume Ms. Boda’s current attorney has made a point to update his own malpractice insurance policy.

It is not our intention to comment on the strengths and weaknesses of Plaintiff’s claim and/or defenses of the parties Defendant. This article was researched and written by Joe Needham, J.D. You can contact Joe about it at jneedham@keefe-law.com.


Synopsis: Illinois State Chamber to Release A Blockbuster Report on IL WC Judicial Activism—We Consider It a Must-Read for All IL WC Risk and Claims Managers.

Editor’s comment: The Illinois Chamber will release its latest public policy research document when their Annual Workers' Compensation Conference convenes Tomorrow, Tuesday, October 29 at the Lisle Hilton. The report "The Impact of Judicial Activism in Illinois: Workers' Compensation Rulings from the Employer's Perspective" was created earlier this year. The report was created in recognition of the fact that while significant progress has been made with our Governor's office and with members of the Illinois General Assembly toward improving Illinois' workers' compensation climate for business, there has been little progress in our reviewing courts. At the same time, the IL Courts have had a dramatic influence upon rising workers' compensation costs and our business climate.

In this report, the Illinois State Chamber analyzes numerous workers' compensation rulings from the Appellate Court, Workers’ Compensation Division and our highest court, the IL Supreme Court. The rulings analyzed are generally considered as expanding employer liability and creating Illinois' growing reputation for having a costly workers' compensation system. In about a decade, we note the IL workers’ compensation system’s ranking in relation to other states has moved from about the middle to what is now number 4 highest of all 50 states. As we have advised our readers, the new court-created “traveling employee” expansion is almost certain to take us to no. 1, as the concept becomes more widely known and understood. All but two of the 19 decisions reviewed in this epic report have been decided within the past ten years, eleven of the decisions have been handed down within the past five years.

Illinois' general economic woes - incremental recovery from the recession, continued job losses, and years of high unemployment are highlighted in multiple studies and reports about the high cost of doing business in Illinois and poor showings on numerous competitive business evaluations.  Illinois' high workers' compensation costs are a major contributor to low economic development rankings. Media coverage of scandals and abuse in the workers' compensation system and a very candid expose' on the part of Lisa Madigan and her Attorney General's staff provide important and irrefutable evidence of a system in need of administrative and judicial reform. We join with the State Chamber to confirm our view many of the appellate rulings in workers' compensation cases have effectively rewritten the IL Workers’ Compensation Act in new and unprecedented ways. We are certain some rulings have undermined administrative and legislative efforts to improve the state's standing in the eyes of Illinois and U.S. employers.

The full report "The Impact of Judicial Activism in Illinois: Workers' Compensation Rulings From The Employer's Perspective" will be available on line at the Illinois Chamber's web site www.ilchamber.org after November 1. A limited number of hard copies will be available. We urge you to get a copy for your WC library.