6-30-2014; SB3287--Can We Counterattack?; Important ECA Ruling with analysis by Pankhuri Parti-Shawn Biery; Kevin Boyle Reviews Title VII Ruling of note; Matt Gorski on WCLA Presentation and more

Synopsis: SB3287 Makes Safety Consultants and Maybe You Liable for Safety Advice—Can We Counterattack?


Editor’s comment: We are asking for our readers thoughts and comments. SB3287 strips away the exclusive remedy protection for independent safety consultants when someone gets injured at work after they have provided safety advice. On top of that, no one has any idea what “safety advice” might be or how it will be defined moving forward. We are now concerned all workers’ comp participants/vendors other than employers, insurance carriers and brokers might get hung out to dry and be sued for doing their normal day-to-day work in handling claims. By that we mean, safety consultants, lawyers on both sides, third party administrators and their adjusters (who arguably aren’t “insurance carriers”), treating and IME doctors, surveillance operatives, physical therapists and others all are arguably providing “safety advice” and might get drawn into litigation.


In short, we feel this is a very irritating new law. To the extent it makes provision of safety services more difficult and expensive, we feel it is anti-social and counterproductive. It is our reasoned legal opinion there is significant new liability for many WC vendors of whatever nature to provide safety consulting services or advice in the Illinois workplace moving forward. The lead claim which led to the passage of SB 3287 was a safety consultant who looked at/examined a manlift in a building. A female worker later used the lift and fell and became paraplegic. She died from her injuries about seven years later. Plaintiff’s counsel argued the safety consultant should have noticed an OSHA-required railing should have been installed. It wasn’t there. Although workers’ comp benefits were paid, the civil case was dismissed under the old law but the new law would have allowed it to proceed against the consultant.


The last paraplegic claim that went to a jury in Illinois resulted in a verdict of $64,000,000. One might assume if you provide any “safety advice” and someone is seriously injured or killed, you may have significant liability now that you didn’t have prior to June 5, 2104 when our current Governor signed this troublesome bill into law.


At present, it is our reasoned legal impression whenever someone is moderately/seriously injured or killed in an Illinois workplace, Plaintiff’s counsels are going to send the employer written interrogatories about who the non-employee consultants/claims handlers and other WC vendors that provided any advice for the premises or processes leading to injury. Anyone listed as a “consultant” is certain to be sued with high exposure. While there will be defenses, it is going to be challenging and expensive to deal with such suits.


Here are some thoughts for folks that might be traditionally identified as “safety consultants”


·         Become an LLC or limited liability corporation and don’t carry any insurance—if you get sued, fold the LLC. Right now, there is no provision in the law which allows Plaintiff to “pierce the corporate veil” to allow you to be sued as an individual. Please consult with your own lawyer or our defense team at KCB&A about the strengths and weaknesses of this approach before following this model.


·         Perhaps a middle ground, consider becoming an LLC and get a moderate amount of liability coverage—perhaps $100K. If you get sued, tender the $100K and then fold the LLC. Unlike typical workers’ comp settings, there is no requirement of which we are aware that a safety consultant have any specific level of liability insurance coverage. If you have some coverage but not a lot, you might be able to get out of a claim rapidly and avoid higher levels of liability—again, discuss this approach with counsel or reply to set a meeting with our experts at KCB&A.


·         Reach an agreement to literally become an employee of the company you are consulting for and get paid on a W2 with other employee benefits. Even if you only work for the company on a part-time basis, if you are an employee of the employer where someone later gets hurt, you will hopefully have the exclusive remedy protections from Section 5. The IL WC Act, as amended, doesn’t say anything about full-time or part-time employment status for in-house consultants.


Here are some thoughts for non-traditional “safety consultants”


Considering the situation of lawyers on both sides, third party administrators and their adjusters (who arguably aren’t “insurance carriers” per the amended IL WC Act), treating and IME doctors, surveillance operatives, physical therapists and others, we recommend you start routinely using disclaimers. KCB&A has just made the following adjustments/additions to the disclaimers in our email tag-lines and fax cover sheets—see the bolded language at the end:


CONFIDENTIALITY NOTICE AND DISCLAIMERThis e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information or otherwise be protected by law. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Any advice or recommendations provided in this document are solely legal advice. Keefe, Campbell, Biery & Associates does not provide safety advice or consulting services. If such services are needed, a licensed safety expert should be contacted.


In our view, all workers’ comp vendors across the state have to do their jobs. By that we mean claims handlers at TPA’s have to handle claims. Attorneys have to fight for their clients. Treating doctors, IMEs and physical therapists have to work their magic. Some of what we do might be called “safety advice” by a rabid Plaintiff lawyer but we have to hope judges and justices in this state are going to let us do our jobs and not expand our liability exponentially for doing so. We hope disclaimers will work but have no way to guarantee it.


We are also asking the many legal, medical and claims experts among our readership—do you have any thoughts on this new challenge? Is there any way to effectively counterattack and defend ourselves from this nutty new law? Please reply with your thoughts and best strategies.




Synopsis: In another ruling we consider positive for Illinois business if they take the proper steps in hiring venders, the Illinois Appellate Court 1st District confirms the Employee Classification Act is not an avenue for a subcontractor to seek personal benefits from a contracting company via the ECA. Analysis by Pankhuri Parti, JD and Shawn R. Biery, JD MSCC.


Editor’s Comment: In a positive decision which guides employers who contract with parties to perform services in the State of Illinois, the Illinois Appellate Court in Michael v. Pella Products, Inc., 2014 IL App (1st) 132695 (June 25, 2014) affirmed lower courts had properly granted summary judgment to Defendant window company since facts confirmed the window company contracted with a residential contractor who was a bona fide corporation under Department of Labor administrative regulations, and thus the Illinois Employee Classification Act did not apply.


By way of confirming the facts of the case, Michael incorporated RJM in 2007 and entered the business of residential contracting. RJM first entered into a contract with Pella in 2008 to provide window and door installation services and then again in 2009. Both the agreements were signed by Michael as “owner” of RJM. As part of the agreement, RJM was to provide sufficient labor to perform the work required by Pella to be judged by Pella’s specification, standards, and expectations. The contractual relationship between RJM and Pella ended in December 2009 and in 2012 Michael filed a putative class action complaint claiming Pella improperly classified him and others similarly situated as independent contractors instead of employees in violation of the Employment Classification Act. The trial court granted summary judgment to Pella finding Michael had performed services for Pella through a “bona fide corporation” and not as an individual. Michael appealed.


The purpose of enacting the Employee Classification Act was to address the business practice of misclassifying employees as independent contractors in order to avoid paying payroll taxes, unemployment insurance contributions, workers’ compensation premiums, and minimum wage and overtime payments in the construction industry. While the Act does not define an “individual” it does create a rebuttable presumption an individual performing services for a contractor is an employee unless it is shown the individual was effectively operating independently from the contractor. Additionally, the Department of Revenue has also promulgated regulations which exclude bona fide corporations from the purview of the Act.


In his appeal Michael did not dispute RJM constituted a bona fide corporation as defined by the Act and he was an employee of RJM. Instead Michael alleged because he performed services in his individual capacity for Pella, he must also be considered an employee of Pella – the contractor and is thus protected by the Act. In essence Michael asked the court to expand the purpose of the Act to include individual claims by employees of a subcontracting bona fide corporation against the contractor itself.


However, the Appellate court disagreed and refused to expand the purpose of the Act in this manner. According to the Court, Michael could not prove he served Pella in an individual capacity because it was RJM who performed those services under the subcontractor agreement. As a result the trial court did not err in deciding Michael did not have an individual claim under the terms of the Act. The Court reasoned the concerns underlying the Act were not implicated in this situation because RJM had properly classified its own employees, complied with the tax laws, paid its employees (like Michael) wages and provided them with benefits. The Court reasoned it was the intent of the Act to exclude bona fide corporations from the purview of the Act because the individuals working for these subcontracting corporations were already employees and could seek wages, benefits, and any additional claims from those corporations. As Michael, an employee of RJM was already receiving wages and benefits from RJM, he could not claim to be misclassified under the Act.


The Court was also unimpressed by Michael’s attempts to show this interpretation of the Act yielded absurd results as a corporation could classify its employees as independent contractors and then those individuals would have a claim against a contractor like Pella. However, the Court clarified in this hypothetical the misclassification claim under the Employee Classification Act would lie against the employer – RJM – and not the contractor. Similarly the contractors could not circumvent the Act by insisting on the creation of a corporate entity with which to contract as in this case the entity created would not be a bona fide corporation.


In its holding the Appellate Court explained since it was the subcontracting company (RJM), and not the individual employee (Michael) who rendered services to the contractor (Pella), the employee was not an "individual performing services" for the contractor under the terms of the Act and therefore was not protected by the ECA. The impact for employers is an affirmed ability to contract with companies for certain services without fear the individual employees of the subcontracting companies would be classified as their employees when some issue arises which may create disputes.


This article was researched and written by Pankhuri Parti, JD who has now successfully transitioned to attorney after clerking for Shawn R. Biery while matriculating at DePaul Law. Feel free to contact Pankhuri about this article at PParti@keefe-law.com or Shawn atSBiery@keefe-law.com.




Synopsis: Important Seventh Circuit Title VII Ruling with analysis by Kevin Boyle, JD.


Editor’s comment: An African-American substitute janitor alleged he was subjected to harassment over a two-and-a-half week period by co-workers at an elementary school in Michigan City, Indiana. Nichols v. Michigan City Plant Planning Dept., 2014 WL2766776 (7th Cir. 2014). 


Although it was a “close call,” the Seventh Circuit affirmed the Northern District of Indiana’s grant of summary judgment for the employer, and against the pro se plaintiff, ruling any harassment was not severe or pervasive enough to create a hostile work environment in violation of Title VII.  Further, the Seventh Circuit ruled the elementary school did not discriminate in its decision to replace the substitute janitor with a permanent janitor. 




The alleged harassment included a co-worker's alleged one-time use of the "black n----r" racial epithet, which she purportedly directed at Plaintiff. The Court held although deplorable and inappropriate in the workplace, it was not severe enough to trigger liability. There were also several other incidents of alleged harassment including the co-worker saying "where that boy at?" without knowing Mr. Nichols was within earshot; a co-worker bringing Mr. Nichols food but slamming the tray into his chest; other employees allegedly not telling Mr. Nichols the location of the janitor's closet; other employees making a mess for him to clean up; and other employees baiting him to steal a purse and money from an open register. 


Nonetheless, the Court held the totality of the incidents were not pervasive enough to trigger liability; that one racial epithet was not severe enough to trigger liability; that a reasonable trier of fact would not conclude that all of the allegedly harassing comments were directed at him; and the employees were not necessarily trying to ensnare him on account of his race when someone left a purse. The Court also noted Mr. Nichols was never physically threatened, the alleged harassment did not interfere with his work performance, and it was doubtful all of the comments were directed at him. Accordingly, the alleged incidents were insufficient to show such an offensive nature to constitute actionable conduct. 


Lastly, the Court also affirmed summary judgment for the employer and held Mr. Nichol’s termination did not violate Title VII. Particularly, the Court reasoned Mr. Nichols failed to prove discrimination in his employer’s decision to terminate him through the direct or the indirect method. Overall, Mr. Nichols failed to proffer sufficient evidence to defeat his former employer’s motion for summary judgment. Thus, he was unable to present his Title VII claims to a jury. 




Although the employer defeated this claim through an expensive summary judgment motion, properly written and applied policies can help to limit an employer’s liability. Ultimately, the record from the court proceedings appears to be devoid of any written policies for reporting any alleged racial harassment. Although Plaintiff reported the alleged incidents of harassment to the principal, nothing in the record demonstrates what individuals Mr. Nichols should have reported the incidents to. Particularly, a clearly outlined policy for reporting the alleged harassment and follow-up investigation under the policy would allow for an employer to demonstrate its active involvement in preventing and halting any alleged racial harassment. Ultimately, although the pro se plaintiff failed to recover here, these types of incidents should not be considered acceptable behavior between co-workers. 


This article was researched and written by Kevin Boyle, JD. Kevin is our Indiana Defense Team Leader and is licensed in Indiana, not Illinois. He is available for answers to any questions about general liability, employment law or workers’ comp in Indiana atkboyle@keefe-law.com.




Synopsis: The IL Workers’ Comp Lawyers’ Ass’n CLE’s for the IL WC Industry—Notice Defense, Myth or Reality. Thoughts and Analysis by Matthew G. Gorski, JD.


Editor’s comment: On June 19, 2014, different IWCC cases in which notice defenses were at issue was presented by WCLA in a continuing legal education format. We again tell our readers statutory notice remains a requirement in IL WC. Some of the key issues presented at this WCLA presentation are discussed below.


(1)  Sufficiency of Notice


Some things to keep in mind with the sufficiency of notice is a claim is only barred if no notice whatsoever has been given and it is an issue of fact, not law. In Raymond v. Indus. Comm’n, 354 Ill. 586 (1933), the employer was aware the employee was sick even though the employee did not officially give notice to the employer. This illness was unknown as to the cause, and he eventually had to quit work because of the illness. The Commission in this case ruled the Legislature did not intend to require employees to inform their employers of an illness they did not know about in the first place.


This is something for employers to look out for. This would be a prime issue in asbestos cases, where an employee has been exposed, but did not know they were sick. The Commission in this case is saying it is impossible for the employee to give notice if he does not know he has been exposed to asbestos and suffered from its sequalae. 


(2)  Notice in Repetitive Trauma Claims


As we all know, the date of accident in a repetitive trauma case is the date the condition manifests itself. Oscar Mayer & Co. v. Indus. Comm’n, 176 Ill.App.3d 607 (1988), set out two ways the date of injury manifests:


(1) the time at which the employee can no longer perform his job; or

(2) the onset of pain which necessitates medical attention.


In Three “D” Discount Store, 198 Ill. App. 3d 43 (1989), the Commission set out the diagnosis date as the manifestation date, where an employee was examined by an orthopedic surgeon and prescribed surgery. Petitioner continued to work for another month after the diagnosis, but was still constrained to the diagnosis date as the manifestation date.


Employer’s need to be on the lookout for both of these factors, and use them to their advantage. If Petitioner receives a diagnosis and continues to work, Petitioner will have to give notice within 45 days of the diagnosis, and not the date the employee can no longer perform his job.


Also, please note the 45 day notice requirement in 8(j) cases does not begin to run until payments have been cut off. So, be wary of those situations when Petitioners have been receiving benefits under the group plan.


This article was researched and written by Matthew G. Gorski, JD. The opinions Matt is voicing are his and not those of any member of WCLA or its board. Matt can be reached 24/7/365 for questions about WC at mgorski@keefe-law.com