Synopsis: Document! Document! Document! Federal Judge Tosses Former Employee’s FMLA Claim Against UPS Due to Repeated And Well-Documented Performance Issues. Analysis by Bradley J. Smith, J.D.

Editor’s comment: In Parks v. UPS Supply Chain Solutions, Inc., the United States District Court for the Eastern District of Kentucky entered summary judgment on UPS’ behalf related to its former employee, Gene Parks claims for retaliation under the Family Medical Leave Act (“FMLA”), 29 U.S.C. § 2601, et seq. While certain claims remained pending under the FMLA (i.e., interference claim) and the Americans with Disabilities Act (“ADA”) (i.e., failure to accommodate claim), the District Court commended UPS on their documentation and other evidence demonstrating their progressive disciplinary plans. Particularly, the plethora of evidence related to Parks’ repeated performance issues were UPS’ legitimate reason for termination.

UPS hired Parks in February 1999 to work at its Hebron campus as a material handler assigned to UPS’ Honeywell account. His job duties included driving a forklift, moving boxes, picking products, and controlling inventory. From 2002 through and including 2009, Parks’ supervisors filled out fifteen SCS Discrepancy Forms detailing his errors in pallet building, putaway and labeling. In 2009, UPS lost its account with Honeywell. Consequently, UPS transferred Parks to the Birkenstock account. He was still a material handler with new supervisors overseeing his work.

Parks received numerous written warnings over the remainder of his time with UPS. Finally, after reviewing the numerous performance issues and a final warning, UPS decided to terminate Parks. At the time of his termination, he reiterated that he would be scheduled for surgery related to a spine issue within the coming months and needed UPS' insurance to cover his medicals costs for the surgery. UPS tendered him a COBRA package at the time of termination, but Parks immediately threw it away asserting it was “unaffordable."

During Parks’ employment, he was approved for, and also took numerous leaves of absence. Specifically, in late 2003, he was on a leave of absence for an allergic reaction and a blood clot. He also had leave of absences in July 2003 and November 2004 to deal with complications from a shoulder injury that derived from a prior car accident. In June 2004, January 2005, and February 2006, UPS gave Parks more time off to care for his wife’s serious medical issues. Notably, UPS never interfered with him taking leave on those occasions. UPS granted Parks FMLA intermittent leave in February 2010 for neck pain.

The District Court analyzed the retaliation claims under the well-established McDonnell-Douglas standard to determine whether Parks’ FMLA retaliation claim would survive summary judgment. Although it was easy for Parks to meet his prima facie case of retaliation under the first prong of the test—due to the timing of his termination—in response to UPS bringing forth legitimate and repeated performance issues demonstrating their reasons for terminating Parks, Parks failed to demonstrate any pretext. Accordingly, the district court granted UPS summary judgment and dismissed Parks’ FMLA retaliation claims.

Despite the survival of a portion of Parks’ claims, UPS demonstrated a proper progressive disciplinary plan (both in procedural rules and subjective application). Importantly, UPS maintained records of its prior performance issues with Parks, and also implemented progressive discipline due to his numerous performance issues. Had UPS not properly documented this process, it arguably would have been easier for Parks to demonstrate a material issue of fact requiring a jury trial. Instead, due to the plethora of documentation and testimony related to legitimate performance issues, UPS was able to demonstrate that it maintained legitimate reasons for terminating Parks.

We want our readers to know the defense team at KCB&A handles more than work comp in defending our clients. This article was researched and written by Bradley J. Smith. Brad can be reached for questions, concerns, or discussion regarding the defense of FMLA, employment law, and general liability claims at bsmith@keefe-law.com.

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Synopsis: Prevent Double Dipping! It Is Imperative Work Comp Settlement Contracts or Commission Decisions Clearly Reflect Credit to be Taken from Final Payment.

Editor’s comment: In the Estate of Burns v. Consolidation Coal Company, 2015 IL App (5th) 140503 (June 30, 2015), the Fifth District Appellate Court clarified how an employer is entitled to offset the amount of federal claim benefits paid at the same time state workers' compensation benefits were paid. To be very clear, it is NOT by verbal agreement between the parties. Be warned, this may not adequately protect an employer from still having to pay the full amount of the award, and then seek significantly increased litigation costs to recoup any potential credit from benefits that may have overlapped from two or more sources, to prevent what is called “Double Recovery”. Further, even if the credit is stipulated to by the parties at hearing, or documented in a settlement contract approved by an Arbitrator/Commissioner, it still may not be enough to prevent the continued time and expense of having to seek the credit via the proper channels, but the defense team here at KCB&A strongly recommend it as absolutely necessary to protect your statutory credit in order to seek to offset it later.

Nota bene (note well): In claims dealing with a potential credit, be prepared to pay the award/settlement in full to avoid the risk of penalties and fees for nonpayment. Then you must file suit to offset any credit. Make sure there is adequate written documentation in the record (or contracts) of that credit at every level of the litigation process.

In the case at bar, and to attempt to make a long story short as the procedural history is somewhat convoluted, the estate of a deceased Petitioner was awarded death benefits and burial expenses under the Workers' Occupational Diseases Act after the deceased Petitioner died as a result of diseases arising out of his employment as a coal miner for 38 years. The employer also conceded liability in a concurrent federal claim which paid the widow amounts during periods of the same time the WC benefits were received. Specifically, the estate received federal death benefits from the U.S. Department of Labor via the Black Lung Trust Fund. Apparently, when the employer went to pay the WC award they had a verbal agreement with Petitioner’s counsel who handled both the state WC claim and Federal Black Lung claim that they would subtract the Black Lung credit and just issue the WC check for the remainder amount.

Admittedly, in a the majority of these claims this is a non-issue and may likely be the more practical approach rather than suing the estate to re-coup the overpayment resulting in even further litigation and distress to all parties. The testimony regarding this oral agreement was that it was reached between the attorneys of both parties "because it's the same agreement we reach in all of these death cases where there is a federal claim and there are benefits that overlap." Simply put, there is no dispute the employer is entitled to the credit. But this short-cut approach to recouping credit was found to be improper after disputes arose when the handling partner for the estate left the firm and the estate claimed they were never aware of the credit to be taken, which they then objected to and filed a Section 19(g) motion to obtain a state judgment on the amount claimed.

When an employer fails or refuses to pay a final award, Section 19(g) provides a statutory remedy to enforce the judgment in the Circuit Court. Commission approval of a settlement agreement constitutes a decision of the Commission and is the equivalent of an award within the meaning of Section 19(g). However, in the context of a Section 19(g) proceeding, the Court can only consider the plain language of the decision or settlement agreement.

Here, initially the employer made no claim for credit and did not present any evidence, or later in the appeal sufficient evidence, of the oral agreement between counsels. Neither the Arbitrator's order nor the Commission's decision makes any reference to credit claimed. Had the credit been presented to the Commission and approved by it at hearing, or even by a settlement agreement approved by the Commission, it would be an award within the meaning of Section 19(g). However, because the credit was not presented, either via an approved settlement agreement or at hearing, in the context of a Section 19(g) proceeding, the Court could only review the Commission's award or approved settlement contract.

Importantly, even if the credit had been documented, the Code of Federal Regulations in this specific claim, provided a mechanism for the recovery of any overpayment of federal black lung claims, NOT in a Section 19(g) proceeding. Again, there is no dispute the employer is entitled to the credit. While an employer may ultimately obtain a credit, it is not entitled to that credit in a proceeding under Section 19(g) and may still have to pay the full amount of any award, then properly seek to assert that credit elsewhere via proper channels. This is true even if the award/settlement documents the credit clearly.

This article was researched and written by Nathan S. Bernard, J.D. Please feel free to contact Nathan at (312) 756-3726 or nbernard@keefe-law.com with any comments, questions, or concerns.

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Synopsis: The IL Appellate Court, WC Division Held the Weekly Wage Differential Benefit an Injured Worker Receives Is Based On the Statewide Average Weekly Wage For The Year The Worker Was Injured. Thoughts and Analysis by Pankhuri K. Parti, JD.

Editor’s comment: In a decision confirming the intent of the legislators while writing the Workers’ Compensation Act, the Appellate Court upheld a decision of the Commission when it ruled the date of the claimant’s injury controlled the maximum rate of wage differential benefits the claimant could receive.

We believe this to be a positive outcome for the employers and insurers of Illinois, who would have had to pay much higher wage-differential benefits had the Court not limited the benefits to the maximum rate applicable at the time of the injury. This is especially true as the maximum rates for the benefits are adjusted yearly and cases can take up to six years to go through the entire appeals process.

Facts and Procedural History: According to the undisputed facts of the case, the claimant was injured acting in his capacity as a hoisting engineer when he fell to the ground from a height of several feet and sustained injuries to his right shoulder and cervical spine. He received treatment and underwent surgery on his right shoulder in February 2007 and spinal fusion surgeries in December 2007 and June 2008. A functional capacity evaluation eventually found him capable of working light to medium duty and permanent restrictions were recommended, which precluded him from returning to work as a hoisting engineer. Evidence presented during arbitration showed at the time of the arbitration the rate of pay for a hoisting engineer with the employer was $45.10 per hour.

In her decision the Arbitrator found Claimant has suffered an injury arising out of and in the course of his employment. It was also found Claimant was entitled to wage differential benefits since he was permanently partially incapacitated from pursuing his usual and customary employment. Specifically, and more relevant to this article, the Arbitrator awarded $982.67 per week. Upon an appeal, the Commission modified this decision by reducing the figure to $840.65, the maximum weekly benefit allowable under section 8(b)(4) of the Act based on the claimant’s 2006 injury date. This rate was also affirmed by the Circuit Court.

The Decision: In appealing this modification of the Arbitrator’s decision, Claimant argued the maximum rate applicable to his award should be based on the State AWW at the time of his May 2012 arbitration hearing rather that the State AWW at the time of his December 2006 accidental injury.

In reaching its decision the Appellate Court looked at the language of the Act and considered the issue one of statutory interpretation. It quoted Section 8(d)(1) of the Act and stated the language made it clear the section was limited by the maximum amounts fixed in paragraph 8(b) of the IL WC Act and case law had long since established the maximum rates set forth in section 8(b)(4) of the Act were applicable to the wage differential awards. The Court also held the amendments effective July, 20 2005 had included express language concerning wage differential awards and the maximum wage differential benefits were 100% of the State AWW in covered industries under the Unemployment Insurance Act.

The Court also disagreed with Claimant’s argument since the Act had been consistently interpreted to require wage-differential awards to be calculated based upon the claimant’s earnings at the time of the hearing, the legislature must have intended the State AWW at the time of the arbitration hearing to be used to determine the wage-differential benefits. While the Court agreed prior decisions ruled it was the employee’s earnings at the time of the arbitration hearing which determined wage-differential awards, it also felt Claimant’s situation was distinguishable from those instances since it involved the application of the appropriate maximum rate under the IL WC Act.

It was the opinion of the Court Claimant failed to provide any authority in support of his arguments and its own review of the applicable case law reflected the opposite – it was the date of the injury which controlled the maximum rate applicable. While citing numerous opinions in support of its decision, the Court also referred to a Supreme Court decision in Grigsby v. Industrial Comm’n wherein the Court held the law in effect time of the injury determined the rights of the parties. Finally, the Appellate Court noted if the legislature had wanted the date of the hearing to control the applicable maximum benefits rates, it would have amended the language of the Act when it enacted its amendments in July 2005.

The Appellate Court also disagreed with Claimant’s argument that limiting an employee’s wage differential to the State AWW at the time of the injury was against the Act’s purpose of thoroughly compensating the injured workers. Claimant argued the State AWW at the time of the injury placed him in the financial condition he would have been in if the injury had never occurred. While the Court agreed with this, it noted the purpose of Section 8(b)(4) of the Act was to limit recoveries and depending on the facts of each particular case, the application of the maximum rates could result in no change to the wage-differential award, a significant decrease to the award, or something in between. As a result the Appellate Court found claimant’s arguments to be unpersuasive and not worthy of reversing the decision of the Commission.

This article was researched and written by Pankhuri K. Parti, JD. You can reach Pankhuri 24/7/365 for questions about WC at pparti@keefe-law.com.

KCBA Blog

7-6-15; UPS Wins FMLA Beef with Great Documentation, analysis by Brad Smith; Nathan Bernard Reviews Credit Dispute in Death Claim; What is the Correct Year for Wage Loss Calc by Pankhuri Parti and...