Synopsis: Will Northwestern Football Players Forever Change College Sports and Possibly All Scholarships to Get WC Benefits?
Editor’s comment: This past week, the world of college sports was tossed on its ear with a ruling from the Chicago District of the National Labor Relations Board. The Board ruled last Wednesday that Northwestern football players are now employees of the university and can unionize. NLRB regional director Peter Ohr cited the players' time commitment to the sport and the fact their scholarships were tied directly to their performance on the field as reasons for granting them union rights. Ohr wrote in his ruling the players "fall squarely within the [National Labor Relations] Act's broad definition of 'employee' when one considers the common law definition of 'employee.'" Ohr ruled players can hold a vote on whether they want to be represented by the College Athletes Players Association, which brought the case to the NLRB along with former Wildcats quarterback Kain Colter and the United Steelworkers union.
Northwestern issued a statement shortly after the ruling saying it would appeal to the full NLRB in Washington, D.C.:
While we respect the NLRB process and the regional director's opinion, we disagree with it," the statement read. Northwestern believes strongly that our student-athletes are not employees, but students. Unionization and collective bargaining are not the appropriate methods to address the concerns raised by student-athletes.
In a statement, NCAA chief legal officer Donald Remy said: "While not a party to the proceeding, the NCAA is disappointed that the NLRB Region 13 determined the Northwestern football team may vote to be considered university employees. We strongly disagree with the notion that student-athletes are employees." Remy added: "Over the last three years, our member colleges and universities have worked to re-evaluate the current rules. While improvements need to be made, we do not need to completely throw away a system that has helped literally millions of students over the past decade alone attend college. We want student athletes -- 99 percent of whom will never make it to the professional leagues -- focused on what matters most -- finding success in the classroom, on the field and in life."
The Big Ten also disagreed with the ruling and released a statement that read: "While we respect the process followed by the National Labor Relations Board, we disagree with the ruling. We don't believe that student-athletes are university employees. The issues raised during the hearings are already being discussed at the national level, and we believe that students should be a part of the conversation."
Colter, whose playing eligibility has been exhausted, said nearly all of the 85 scholarship players on the Wildcats' roster backed the union bid, though only he expressed his support publicly. The United Steelworkers union has been footing the legal bills. CAPA attorneys argued college football is, for all practical purposes, a commercial enterprise that relies on players' labor to generate billions of dollars in revenues. They contend the commercial enterprise makes the relationship of schools to players one of employers to employees.
Should Northwestern Football Players Get IL WC Benefits?
One of the benefits the football player/students are seeking is workers’ compensation coverage for all injuries they suffer. This benefit might provide them full medical coverage for football-related injuries, “lost time” and permanency. Please note one of the fundamentals of workers’ comp benefits other than medical benefits is having a salary or wages from which to compute the Average Weekly Wage, TTD and PPD. The only current salary the players have is the compensation they receive for tuition, room and board. All reports indicate the value to the players for an annual scholarship is $76,000 a year which would render an AWW of about $1,461.54 each week. Their TTD rate would be $974.36 and PPD would be the current maximum IL WC PPD rate of $721.66.
The problem the football players have is they remain on scholarship on a year-to-year basis so they wouldn’t need TTD until their scholarships ran out. While serious and moderate football injuries do happen, most of the players are young, strong and recover for the most part. We don’t see significant PPD awards other than for the most serious injuries. However the risk and cost of WC insurance for such players would be significant. The whole thing could be replaced by a group health policy for the players with benefits to match need.
In short, we can’t think workers’ compensation is much of a benefit for the players to throw the whole world of college football/sports and scholarships upside-down about. There have to be better paths to remedy the problem. We haven’t seen one compelling reason to change all of it.
How About Federal and State Income Taxes? Aren’t These Players Fighting for the Right to Pay Union Dues?
Please note the football players at Northwestern basically agree their annual scholarship “compensation” or “income” is tax-fee income of up to $76,000 a year. To net that much income if they are going to be taxed, you would have to pay each player from the third-string offensive tackle to the star quarterback over $100K a year.
Starting with $76,000 as tax-free income, it appears from reports there are 85 such NU athletes. The annual cost to Northwestern of 85 football scholarships at $76,000 per year is $6,460,000. There are also multimillion-dollar annual costs paid by the University for equipment, maintenance, coaches, training, transportation and lots of other things. There is an unstated assumption Northwestern University nets zillions of dollars on college football and the school is being “pigs” not to share all or more of it with the players—it is our thinking NU does somewhat better than break even during the good years and use the profits for the overall sports program. We are sure there are lots of college football programs that don’t make money.
To our understanding, for the first time in U.S. history, college scholarship money has been legally ruled to be compensation or income. Up to now, the federal government and all state governments don’t tax it. Please understand our view the lack of taxation to date is precisely because the kids are viewed as students who willingly participate in sports they love in exchange for free education, current popularity and future opportunities. College football players don’t have written employment contracts and can leave college sports to turn professional very rapidly. College football players are promised professional opportunities in and out of sport along with the fame and fun that comes with the college game.
In our view, the lack of taxation is because the kids weren’t previously viewed as employees and the money wasn’t viewed as “compensation.” For the first time, the kids now demand to be employees, contribute union dues and their scholarships have now been ruled income. At the behest of NU Football Players with the funding of the United Steelworkers, the Chicago District Office of the NLRB has now expressly decided the $76,000 in tuition, room and board is payment for services. The Feds and the State of Illinois always and routinely tax payment of income for services rendered. It is possible we may see class action lawsuits demanding government tax levies. These suits may come from ordinary folks who didn’t get the opportunity to attend Northwestern and who don’t care a whit about what would be semi-pro football players getting an undue pass on the income taxes, FICA and other things we all have to pay..
It isn’t a major leap to then add all Northwestern basketball, lacrosse, soccer or other male and female athletes as being “compensated” for their services. We assure our readers the same legal factors/principles apply to them as they do to college football players. Why can’t all those athletes be similarly taxed? And why stop with athletic scholarships—can’t all college scholarships for science, medicine, arts and other pursuits also be viewed as income for services? Can’t we tax all of those dollars? Don’t universities and colleges make untold millions off research by college students for science, software development and medicine?
If we start to treat college scholarships as “income,” can the students affected afford to pay the taxes on what they demand is their compensation? Well, the federal taxes on $76,000 are something like $20K. The 2015 Illinois state income tax that we now call the “Quinn-come tax” is at 5% is $3,800. Please note the tax monies may be due from all scholarship students to include athletes and non-athletic scholarships. Please further note if the students have to pay taxes and union dues on their scholarship income, they still have to pay their schools the missing balance due—Northwestern isn’t going to take $50K in net scholarship money when room, board and tuition are $76K.
So What is the Best Answer?
We are unsure but uncertainty clearly prevails. In our view, every college football player who excels at this lower level of sports feels they are entitled to much more than they receive. We are also sure the college football system could be improved in lots of ways—what system can’t be improved? But to
· Turn all college athletes and others on scholarships into university employees;
· Unionize all college athletes or others on scholarships;
· Provide global WC benefits and
· Make college scholarships taxable income
is going to be a major transition. This may go all the way to SCOTUS (Supreme Court of the United States) before it ends. We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: IL WC Appellate Court Affirms Denial of Deep Venous Thrombosis Leading to Trucker’s Passing. We Note No “Quantitative Risk;” No “Traveling Employee” Issues Involved.
Editor’s comment: This is an appellate ruling with which we strongly agree. Our single academic concern is the IL WC Appellate Court’s continued determination to “non-publish” many of their important, well-researched and detailed rulings that many observers consider crucial for all sides to understand. Please remember this claim had to have at least $1M in benefits at stake. We think when that amount is in dispute should mandate normal publication.
In Sherrod v. Star Transport, issued in Feb. 2014, Decedent Sherrod began working for Respondent, Star Transport, Inc. (Star), on May 1, 2008, as a long haul truck driver. Before he was hired, he underwent a physical examination and was found medically fit for the job. Upon commencing his employment, Decedent began a probationary training period with Star.
On June 15, 2008, about five weeks into training, he was on a route from Florida to Peoria, Illinois, when he stopped in Lebanon, Tennessee, for the night. When Decedent failed to check in with Star on that date, Star contacted the management of the hotel in which Decedent was staying. A hotel manager subsequently found Decedent lying on the floor of the hotel. An ambulance was dispatched, and Decedent had passed at the scene.
Upon learning of the death, Claimant authorized Tennessee officials to conduct an autopsy on Decedent in order to rule out foul play. According to Claimant, Decedent was not actively “sick” at the time of his death, but had suffered from chronic asthma for which he took over the counter medication. Decedent's fiancé testified in telephone conversations she had with Decedent during his training, he stated he complained to Star about pain and swelling in his leg, and also told his fiancé he was "in the truck constantly and did not have access to the rest area of the cab of the truck." The fiancé also testified she could hear Decedent wheezing in these conversations.
The only expert testimony in this case came from medical examiner Dr. Stacy Turner, who performed the autopsy on Decedent, and testified by deposition on behalf of the claimant. Dr. Turner testified Decedent died in a natural manner and his death was caused by a pulmonary embolism originating from deep vein thrombosis of the leg. Most likely, a blood clot formed in his leg and traveled through his body and into the lungs, causing a pulmonary embolism. According to Dr. Turner, the exact cause of deep vein thrombosis (DVT) is not often known, but it could result from many different things, such as problems with the blood itself; problems with blood vessels or blood flow; injuries; hereditary predispositions; and stasis, which means being still for a long period of time. Dr. Turner testified that obesity and an enlarged heart are also risk factors, and, based upon her examination, Decedent had a significantly enlarged heart and was obese.
Dr. Turner indicated that sitting still for a continuous period of time could cause an abnormal blood clot to form, or result in the formation of additional clots if a clot was already in existence. Although Dr. Turner acknowledged DVT could exhibit symptoms such as a swollen leg, she testified that the autopsy did not indicate Decedent had any leg swelling. When asked about the likelihood someone could develop DVT when being required to sit for days at a time, Dr. Turner responded there was no way to tell, and it would be different for each individual.
On cross-examination, Dr. Turner testified that she could not give an opinion as to whether Decedent's work activities led to his DVT or to the pulmonary embolism that ultimately caused his death. She further indicated that she had no idea of the time sequence in which the blood clot formed or when it traveled through the decedent's body to cause the pulmonary embolism. Finally, she was unable to say that the prolonged sitting lead to the blood clot that caused the decedent's death in this case. According to Dr. Turner, she was not provided information as to the length of Decedent's employment as a truck driver or trainee or how much time he spent driving. She further indicated she did not have any of the decedent's medical records prior to the occurrence.
Driver logs were critically important—Decedent was employed by Star for six weeks. He drove an average of 34.5 hours a week. In our view, that isn’t a lot of sitting, as it is about 20% of the time in a 168-hour or 7-day week.
From the evidence, the Arbitrator denied the claim. The IL WC Commission wrote a solid and excellent opinion which carefully weighed the medical/expert evidence and noted there was no clear opinion on causal connection in the record. To the extent Dr. Turner opined “prolonged sitting” might contribute to DVT, she also outlined lots of other factors, like the personal conditions of obesity and an enlarged heart could have caused the issues leading to death.
Unlike the IL WC Appellate Court’s ruling in the controversial ruling in Village of Villa Park and its progeny, the Court’s majority didn’t go into the ‘qualitative” and “quantitative” analysis of risk. We are also ecstatic to report the IWCC and this Court didn’t even mention or analyze the facts based on their previous and controversial expansion of the “traveling employee” concept. We assume IL truck drivers are no longer implicitly defined as “traveling employees” and each injury claim has to be viewed on its merits, as in years past. The IL WC Appellate Court simply affirmed making the double-negative finding the IWCC’s ruling wasn’t against the manifest weight of the evidence.
We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: The IL Workers’ Comp Lawyers’ Ass’n CLE’s for the IL WC Industry--Dealing With Impairment Ratings at the IWCC. Thoughts and Analysis by Michael Shanahan, JD.
Editor’s comment: On March 27, 2014, the concept of impairment ratings was presented by WCLA in a continuing legal education format. We salute the officers of WCLA for making such presentations open to the public. A point/counterpoint discussion was held to highlight how the IL WC Commission has treated the 5 statutory factors relating to impairment ratings in the recent decisions and the trends that have emerged.
This past week senior WCLA reps discussed the five factors of permanent partial disability under Section 8.1b and how the Commission has treated each factor in recent decisions. As we know by now, for injuries occurring after September 1, 2011, the level of an injured worker’s permanent disability is statutorily based on the following factors:
(i) Medical impairment rating;
(iv) Future earning capacity; and
(v) Evidence of disability corroborated by treating medical records.
As to the first factor, the Illinois Workers' Compensation Act explains how the AMA guidelines are to be used. Section 820 ILCS 305/8.1a "Determination of permanent partial disability" provides that, "for accidental injuries that occur on or after September 1, 2011, the most current edition of the American Medical Association's ‘Guides to the Evaluation of Permanent Impairment' shall be used by the physician in determining the level of impairment."
The single most important aspect of the first factor, which is cited in nearly every Commission decision, is the distinction between disability and impairment. The AMA Guide does not evaluate “disability” - it rates “impairment” and impairment does not necessarily mean disability.
The second factor and fourth factor (occupation and future earning capacity) are closely tied so we will discuss them together. The WCLA discussion suggested veteran and knowledgeable lawyers on both sides may present evidence on not only the current occupation, but all work experience. Providing the total picture of work history may show the injured employee has recovered and is now capable of adjusting to new positions and learning new skills. Transferable job skills and adaptability are fundamental to employability and employability is inherent in determining future earning capacity.
Next, a worker’s age. While this may seem innocuous and straightforward, do not be lulled into cutting corners. With regard to age, it seems the trend is best exemplified as follows:
· The younger the worker, the longer the work life expectancy, the more PPD
· The older the worker, the more residual effects/less time to recover, the more PPD.
Any way you slice it…it seems like it goes the other way for those of us on the Respondent’s side. So, what can we do? A colleague made a great point – there are plenty of 60 year olds who are as healthy as 40 year olds. On the flip side, there are plenty of 40 year olds who have the misfortunate health of some declining 60 year olds. Our job is to argue for inferences. For example (not to pick on older guys/gals), we could argue the older guy/gal will not be living with disability as long as a younger worker.
The fifth and final factor requires evidence of disability “corroborated” by treating medical records. The statute gives examples of impairment such as loss of range of motion, loss of strength, atrophy of the tissue, or any other measure that establishes the nature and extent of the impairment. These and other impairment measures must be “corroborated” by treating records. Based on recent Commission decisions, it seems corroborated has been interpreted to mean the testimony is “credible and generally consistent” with the treating records. Looking beyond the bias of a treating doctor towards a patient, it seems the Commission has taken a somewhat varied approach. Some decisions look to records of the last visit while others will examine the diagnosis, necessity of surgery, and/or course of treatment.
In our view, the bottom line for the veteran lawyer on either side is analyze each and every factor individually and provide evidence favorable to your case. This article was researched and written by Michael Shanahan, JD. The opinions Mike is voicing are his and not those of any member of WCLA or its board. Mike can be reached 24/7/365 for questions about WC at email@example.com.
Synopsis: One Reason to Study History is When Illinois Legislators Make Mistakes, We Remember They Aren’t New and We Made Them Before.
Editor’s comment: Along with the “Quinn-come Tax” at 5% of income we mention above, we were less-than-thrilled last week to hear House Speaker Madigan is pushing for a constitutional amendment we call the “Madigan-Hates-Millionaires” Tax. It will mean anyone who brings in $1M a year or more will now owe our state 8% of that income over and above federal tax. Speaker Madigan promises the money will be used “for the kids” which we consider both irritating and misleading. Please note the most recent and largest tax increase in IL history went 100% to fund what we call “lifetime pay” for former government workers who are back on our payroll despite the fact they left government employment years ago..
If you ask, what does this have to do with workers’ comp, we point out Illinois used to have a vibrant and growing economy. Illinois WC claims used to run at about 75,000 each year. Last year, we would have been lucky to be at 60% of that total. Jobs are leaving our state and unemployment is skyrocketing. Governor Quinn and Speaker Madigan aren’t helping to create new jobs or a business-friendly environment with their recent announcements. In our view, their overriding goal is to make sure government workers have cush jobs and even cushier retirements.
We remember in March 2007 when Crooked Blago was bashing businesses and calling corporate leaders “fat-cats.” In response, Rich Daley, the powerful Chicago mayor said he didn't appreciate the business bashing as Blagojevich tried to rally support for what was then the biggest tax increase in Illinois history to pay for education and health care.
Daley especially didn't like the characterization of business people as "fat cats." At the time, Daley said it was important to remember Illinois businesses don't have to stay in the state. "If you wanna beat up businesses, go beat 'em up and when they leave, just wave to 'em and they're gonna wave back to you," Daley said.
Now Speaker Michael Madigan is going to attack/smack business leaders with the highest combined income tax in Illinois history. The numbers are shocking and won’t be well received by any successful businessperson living in this state. Each and everyone one of them are thinking about waving back to Speaker Madigan as they move elsewhere.
For a couple of interesting examples:
Bulls All-Star Center Joakim Noah makes $12M a year. If his career last ten years, he will be very lucky—he has to make what he can while young and healthy. He is in the middle of a five-year contract. The combined 5% Quinn-come tax and the added Madigan-Hates-Millionaires Tax of 3% will cost Joakim Noah almost $1M each year, actually $960K to remain in Illinois. If he moves from IL to Merrillville or Dyer, Indiana, he would save almost $5M over the five year contract. That would pay for a very nice crib somewhere else.
For Chicago Bears QB Jay Cutler, the savings to move out of Illinois would be even higher. The combined IL taxes will cost him $1.44M each year or about $10M over the term of his new 7-year contract. QB Cutler will save 8-figures over the term of the contract to get out of our state.
The top five companies that remain willing to be headquartered in Illinois are ADM, Walgreens, Boeing, State Farm and Caterpillar. All of their CEO’s and executives are now subject to Speaker Madigan’s new anti-business tax. Trust us, none of their executives are happy with the State of Illinois.
We ask the rhetorical question--why would any member of the Bears, Bulls, Sox or Cubs live in this state? Why would the execs of any of the companies listed above be happy to hear of the Madigan-Hates-Millionaires tax? Why would any successful doctor, lawyer, accountant, stockbroker or other business person stay here?
Where is the money going to go? We assure you lots of our tax dollars are going to pay lifetime pay for lots of former government workers that don’t contribute nearly enough to justify what they get after leaving public work:
· Legislators in Illinois only have to work/contribute for four years of government work to get lifetime pay in the millions;
· IL Judges/Justice only have to work/contribute for 9 years to get $9 million or more during the rest of their lives or as much as $1M for each year of service—becoming a judge is like winning the lottery in Illinois (if you want the math, send a reply);
· Chicago public school teachers only contribute 2% of their salary to their “pensions” or what we call lifetime pay each year—after 20 years, they haven’t contributed ½ of one year’s salary to their lifetime pay and they get it all back within six months of leaving work. Thereafter, Chicago taxpayers are picking up the tab or our Mayor is going to borrow to pay the tab and our grandkids might be able to pay it off.
We remain concerned about the biggest problem with Illinois—no one in government is doing anything to truly address the many cost-cutting possibilities to make our state or its largest city efficitent, effective and still provide good schools, roads and other needed concepts. Things are simply swirling down and down under the current administrations. If you want our simple thoughts about how to start effectively cut Illinois/Chicago governments, send a reply.
We appreciate your thoughts and comments. Please post them on our award-winning blog.