3-10-2011; God Bless Toni Preckwinkle—at least one Illinois Democrat sees cutting jobs and budgets are important to save tax money and attack deficits. Can the IWCC and State of Illinois be...

We want to extend kudos to the Cook County Board Chairperson for reversing the sales tax increase brought by her misguided predecessor. We also note she isn’t cutting services to do so; she is simply cutting overstaffed county departments on an across-the-board basis. Someday, we hope all state, county and local governments in the “People’s Republic of Illinois” start to tighten budgets and provide way more value to the taxpayers they serve.

From the IWCC, we note a recent announcement on their website appears to indicate a similar budgeting focus. To give credit where credit may be due, we salute Chairman Weisz for his quiet but solid approach and hope he continues to do more—some of our top arbitrators assert they could handle lots more claims by implementing case-handling efficiencies. As part of IWCC cost-cutting, we note they may be “scrambling the eggs” to make it more difficult to figure out who is on first and what is on second when it comes to status calls but we are sure the industry will adjust. From what we can tell, the two Arbitrators currently on paid leave are going to be there for the foreseeable future. They may literally have no status calls to return to. On another note, while we dislike seeing some of the Arbitrators inconvenienced by longer drives to distant hearing sites, we do feel the fresh faces at some of the calls may be good for overall professionalism in hearings and pretrials.

The IWCC announced they have consolidated some Downstate arbitration territories and made other changes, effective April 1, 2011:

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The Belleville call will be closed and consolidated in Collinsville.

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The Carlinville call will be closed and consolidated in Springfield.

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The Clinton call will be closed and consolidated in Decatur.

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All Rockford cases will be heard by Arbitrator Akemann.

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The Waukegan call will be moved to the second Friday of each month, with the next seven days as trial days. (except for November where the call will remain on the 1st Friday of the month due to Veteran's Day and Thanksgiving holidays)

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The Whittington call will be closed and consolidated in Herrin.

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The Winchester call will be closed and consolidated in Quincy.

The Commission outlines these changes will save travel and rental expenses and allow fewer arbitrators to hear more cases. Arbitrator assignments, effective April 1, appear below. 

Arbitrator

Territory Assignments

Akemann

Rockford

Andros

Kankakee, Wheaton

Erbacci

Waukegan

Falcioni

Joliet

Fratianni

Joliet, Ottawa

Giordano

Peoria

Holland

Danville, Galesburg, Rock Falls, Rock Island

Kinnaman

Geneva

Lee

DeKalb, Woodstock

Mathis

Bloomington, Mattoon

Nalefski

Herrin

Neal

Collinsville

O'Malley

Wheaton

Tobin

Decatur, Mt. Vernon, Urbana

White

Quincy, Springfield

Arbitrators will adopt the existing status calls and schedules for their new territories. Any partially tried cases will stay with the original arbitrator. Revised Downstate calendars will be posted on the Commission’s website shortly.

Please forward any questions or comments.

3-10-2011; FMLA applicants can’t “disappear” after initially seeking leave and you may be able to terminate and make it stick if they do

In this ruling, the Seventh Circuit Court of Appeals found the District Court did not err in granting Defendant-employer's motion for summary judgment in FMLA suit alleging Defendant interfered with Plaintiff's FMLA rights when it terminated him nine days after he had informed management he required “a couple of days off” to take care of his ailing mother. Our disagreement with this decision is not the result reached, but the somewhat strained logic the Court employed to find Plaintiff issued a valid election of FMLA benefits despite a clear intent not to elect such benefits. The trouble this decision portends is an apparent requirement employers “read the minds” of their employees as outlined at the end of the analysis below. 

In Righi v. SMC Corporation of America, (No. 09-1775, February 14, 2011) Plaintiff was a sales rep for Defendant; he regularly worked from home but was required to perform mandatory training at a designated Indianapolis location. During a mandatory two-week training seminar scheduled from July 9-21, 2006, Plaintiff received a call July 11, 2006 informing his mother was extremely ill and he left to be with her near his Illinois home. Upon his arrival his mother’s condition had stabilized, and the following day he emailed a co-worker in charge of scheduling the training sessions to inform he would need to reschedule his training. He also emailed his supervisor July 12, 2006 to inform the supervisor of the reason for his departure from training. In that email Plaintiff specified he had vacation time available and did not wish to take FMLA leave “at this time” but was requesting a leave of absence. Upon receipt of the email and over the following four days Plaintiff’s supervisor made no less than 15 attempts to reach Plaintiff for an explanation of the type and duration of Plaintiff’s anticipated leave, leaving messages on his work-provided cell phone, at his home and by personal conversation with Plaintiff’s roommate by calling the roommate’s cell phone. Plaintiff effectively “disappeared.” Plaintiff made no contact with his supervisor until July 19, 2006, at which time his supervisor informed him he needed to be present for a meeting the next day. He was then terminated July 20, 2006 for violating Defendant’s leave policy.

Plaintiff filed suit alleging an FMLA violation in his termination. The District Court entered summary judgment in favor of Defendant on two separate grounds: 1) Plaintiff waived FMLA protections when he instructed his supervisor he did not wish to utilize his FMLA leave for his absenteeism, and 2) even if Plaintiff did exercise his FMLA rights, he failed to follow the requirement of FMLA protections by refusing to notify Defendant of his anticipated return to work date as required by Defendant’s policy and FMLA regulations. 

In affirming the District Court, the U.S. Court of Appeal, Seventh Circuit, supported its decision on only the second ground for termination: Plaintiff’s failure to inform Defendant of his anticipated return to work date and his ignoring of his supervisor’s repeated requests for information. In its analysis, the Court noted to prevail on a claim of FMLA interference Plaintiff must prove:

1.     Eligibility for FMLA protection;                                                                                                                   

2.     His employer was covered by FMLA

3.     He was entitled to FMLA leave,

4.     He provided sufficient notice of his intent to take FMLA leave and

5.     His employer denied him FLMA benefits of which he was entitled.

The Federal Appellate Court rightly noted elements 1-3 were not disputed and the parties agreed Plaintiff met those requirements. Turning to number 4, the Court noted where an employee fails to give sufficient notice of intent to take FMLA leave, the employer was under no obligation to provide FMLA leave, and an employee’s failure to comply with the notice requirements stripped the employee of FMLA protections and foreclosed a claim for FMLA interference because the employer’s obligation does not vest. See Stevens v Hyre Electric, 505 F.3d 720 and Ridings v Riverside Med. Ctr, 537 F.3d 755.

Supported by what we feel is strained reasoning, the Court found Plaintiff’s email left some room (emphasis in the original) for him to change his mind and elect FMLA leave protections. Never mind Plaintiff explicitly stated he was not invoking FMLA protections at the time - never mind Plaintiff never made any subsequent contact to his employer to actually invoke those protections - the Court determined Plaintiff’s email, “read in his favor” left some room for him to change his mind, which he never did, but we digress. In determining Plaintiff’s email provided Defendant with sufficient notice of FMLA intent, the Court noted it does not take much for an employer to be put on notice of FMLA intent; one must simply provide enough information to place the employer on notice of a probable basis for FMLA leave and need not explicitly assert rights under FMLA to be afforded its protection. The email did so. Conversely, an employee may also waive the election of FMLA with an expression of clear intent not to invoke FMLA rights.

While the District Court found Plaintiff expressly waived his right to FMLA when he sent the email specifically stating he did not wish to utilize his FMLA leave, the Federal Appellate Court disagreed the email was an explicit waiver of FMLA. Reading it in the light most favorable to Plaintiff, the Court (arguably incorrectly, unless you don’t know what “I do not want to… at this time.” means) found Plaintiff’s statement left open the possibility Plaintiff would use FMLA leave and therefore it was not an explicit waiver of FMLA intent. We feel this begs the question what does constitute an explicit waiver of FMLA intent. Once Plaintiff voiced such intent, the burden shifted to Defendant to show affirmative steps taken to process the leave request. On this issue the Court found Plaintiff’s case deficient. In addressing Plaintiff’s failure to inform Defendant of his anticipated return to work date, the Court noted Plaintiff’s disregard for Defendant’s repeated requests for FMLA information. Noting no less than 15 attempts to reach Plaintiff over the course of five days, the Court found Defendant fulfilled its obligation of inquiry as to the basis and duration of the absenteeism: Defendant made every attempt to fulfill its obligation of reasonable inquiry under FMLA tenets in place at the time. Defendant’s attempt to contact Plaintiff were immediate and numerous, and Plaintiff’s failure to respond to those repeated attempts “dooms his FMLA claim.”

This ruling holds FMLA does not permit employees to “keep their employers in the dark about when they will return” from leave; the employer is “entitled to the sort of notice that will inform them not only that the FMLA may apply but also when [he] will return to work.” The Court noted in all cases the employee must provide the employer with enough information to anticipate the timing and duration of the leave. Even in cases where, as here, the need for leave is unforeseeable, the employee still has an obligation to provide the employer with details as to the length of the leave “as soon as practicable,” meaning within one or two working days of learning of the need for leave under FMLA tenets in place at the time. The Court noted Plaintiff informed Defendant he needed “the next couple days off” but then proceeded to remain absent for nine days, ignoring every attempt at contact by Defendant. Plaintiff’s nine day absenteeism included six working days wherein he attempted no contact with Defendant. The Court noted “this is especially so in light of [Defendant’s] persistent efforts to reach [Plaintiff] to clarify his request….” On that basis, the Court affirmed the District Court’s summary judgment dismissal.

What we’re bothered by in this decision is the Court’s refusal to acknowledge Plaintiff’s email, even taken in the light most favorable to him, explicitly states he did not wish to take FMLA at that time. Without him ever having made subsequent contact, the Court presumes Plaintiff gave Defendant sufficient notice that he wished to withdraw an explicit waiver of FMLA rights so that it was then the employer’s obligation to institute FMLA protections. The decision basically contemplates an employer will be required to assume an implicit revocation of an explicit waiver, which we feel is pure nonsense leading to the next logical claimed FMLA violation by an employer: The improper revocation of an explicit waiver of FMLA rights and the forcing upon the worker of an FMLA election explicitly waived.

This article was researched and written by Joseph R. Needham, J.D. Please do not hesitate to contact Joe at jneedham@keefe-law.com with your thougths and comments.

3-10-2011; The “Ax Man” cometh and now may be going to jail--our readers keep asking, so here is our recommended legal path(s) in dealing with or “axing” WC fraud by an Illinois worker

We were recently saddened by the national news media who reported Jimmy Smith, one of the principals on the TV reality show Ax Men was busted and may be going to jail for workers’ comp fraud. Take a look at this report at:  http://www.joepaduda.com/archives/002028.html. You keep asking about WC fraud by a worker and we have now had at least four different conference calls on the issue so we thought we would lay it out for your future reference.

First, let’s try to define it – what is WC fraud by a worker?

Before you can deal with it, it makes some sense to define it. Please understand you will hear lots of misinformation and misdirection about the topic on the web and at the Commission. The claimant bar considers the concept of workers’ compensation fraud by workers to be very, very bad for their business. We feel this may be due to the fact they quietly see or learn of more WC fraud than risk managers and the defense bar. Please also understand they tread a fine ethical line when a claimant discloses WC fraud—the attorney cannot ethically disclose it but they also cannot suborn perjury; they cannot put a witness on to provide sworn testimony which the attorney knows is a lie. But the problem is when is a claimant clearly lying to receive benefits. Please remember the main workers’ comp benefits are three-fold, medical treatment, compensation for lost time and permanency or “the settlement.”

More to the point, we define workers’ comp fraud by a worker to be the worker receiving workers’ compensation benefits via fraud or deceit. The main two paths to receive workers’ comp benefits by fraud or deceit are to intentionally mislead doctors and/or adjusters and claims managers about their accident, physical status, medical needs or ability to work. We feel there are two clear situations in which an employer can and should be able to “counterattack” when you have evidence a claimant is committing WC fraud. The first is the “phony accident.” The second is when you have evidence claimant is working or very active while claiming to be totally disabled and receiving TTD.

Fight a phony accident with investigation and documentation

Getting your arms around a phony accident claim starts with detailed and thorough accident investigation. Our advice to clients is to have claimant relate what happened or more simply tell the story time and time again—the more red flags you have in your investigation, the more you should keep asking for the story both orally and in writing. If you need our accident investigation form or webcam questions, send a reply.

What are obvious red flags? We feel they include but are not limited to:

·         Late reporting;

·         Lack of first aid, emergency or other medical attention on the date of an acute injury;

·         Inconsistent reporting—telling you the event occurred on a day they weren’t present at work;

·         More inconsistent reporting—telling one story to the supervisor and another story to the adjuster in three-point contact;

·         Hiding the event—accidents being reported after a layoff or termination for cause.

Our vote when you start to smell limburger cheese during an accident investigation is to get webcam statements from everyone involved; claimant, co-workers, supervisors, onlookers. Try to first authenticate and second, if you cannot authenticate, prove the lie. Please always remember the employer has a difficult standard to meet in defending a phony accident—you have to prove something didn’t happen. If the matter is controverted and has to be tried, you can be sure you will face a claimant who will try to make the lie fit into a package acceptable to the arbitrator.

A much tougher WC fraud issue – what if claimant with an accepted claim is hiding his abilities and recovery?

The other and much more difficult analysis is dealing with a claimant who has recovered from the accepted injury but whom you later “catch” either working or physically active in a fashion which indicates to you they are misleading you and their treating physicians. Please memorize one concept—you cannot normally rely on “one good day” of surveillance or a single report claimant is active and outwardly normal. Be assured you will almost always face the assertion claimant was using lots of drugs and toughed out the one time you catch him/her. We do feel you have a much stronger chance of cutting off a claim and taking the fraud-busting steps we outline below if you can show a pattern of regular physical activity—someone who is working every day or attending a regularly scheduled physical activity which would lead the finder of fact to believe it is a regular occurrence. We urge you to spend the money in a major claim and use a solid surveillance operative to get quality videotape documenting the activity.

Please also remember this is a delicate and demanding state in which to counterattack WC fraud. We consider Illinois arbitrators to be liberal but honest and decent folks—they do not want to be made fools of by a phony, like the Ax Man outlined above. We urge you to consult with outside defense counsel early and often when you smell a rat in your claim pile. With respect to risk managers and claims adjusters, you need the perspective of a veteran trial lawyer to provide you a sense of how evidence will be presented at either the IWCC or in a Circuit Court hearing.

Four Paths to Handling WC Fraud by a Worker

After you have completed your investigation and you have consulted with counsel and you are confident you have what is needed, there are four issues to decide upon:

A.    Cut off the claim and fight when you are sure of WC Fraud--You need to ascertain you have enough evidence in your quiver to cut off WC benefits at all levels and fight. Assume most non-represented claimants are going to immediately “lawyer-up.” If they do, be prepared to let the claimant attorney know you have lots and lots of investigation and claimant is a bad person. Many times claimant attorneys may drop a difficult and fully disputed claim if you have the documentation needed to point them toward honest clients. Please also understand if you keep paying benefits, you are buying into the fraud and most Arbitrators are going to point that out in any hearing. Please also remember the Arbitrators cannot give you a refund of benefits paid following clear evidence of fraud because they don’t have the legal ability to do so; you have to sue claimant in Circuit Court for replevin or fraud to get your money back.

B.    Termination is the next major issue--You need to analyze whether it is enough information to terminate claimant and fight to make the termination stick. In a union environment, you may get a labor grievance from the terminated worker and their union. In such a setting, we recommend you meet with the union reps and let them know what you have and tell them they may not want to aggressively represent a miscreant. In non-union settings, please simply terminate and prepare for a possible retaliatory discharge action. For all of our readers who are concerned about the unusual ruling in Interstate Scaffolding, please remember claimant in that ruling lost his job and didn’t get it back. In that setting, the battle may not be about reinstatement, it is going to be over TTD. Again, if you don’t pull the trigger and terminate TTD, you are in a contradictory legal position.

C.    Start the criminal investigation and prosecution process--Next, have a veteran defense attorney, like the troops at Keefe, Campbell & Associates prepare a letter and forward documentation to the Illinois Department of Financial and Professional Regulation seeking a workers’ comp fraud investigation. You can directly contact Francis "Buzz" Walsh or his staff at the Illinois Department of Insurance by calling 312/636-9457 or toll-free 877/923-8648. If you give him enough evidence, he will start and finish his review and make a decision to

a.     Drop the investigation;

b.    Seek additional documentation or

c.     Refer the matter to the local county state’s attorney for criminal prosecution.

Convictions resulting from their hard work are outlined on the web at: http://www.insurance.illinois.gov/wcfu/condata.asp. Please remember such a criminal action is like any other—it is done by state and county officials at no further cost to you, other than your time. The prosecutors can decide how much or little time and effort they want to put into the criminal charges and prosecution. They can also settle or drop the charges for a variety of reasons.

D.    Last but not least, Sue!!!--Finally, you can sue claimant in a civil action for common law fraud and/or insurance fraud. If you bring a civil action, the costs and fees are like any other litigation—you need to get a budget and plan to manage what you are doing. You may also be countersued by claimant for retaliatory discharge. You control the claim—it can’t be dropped or settled without your agreement like the criminal action above. We have seen some judges “stay” civil actions requiring a ruling from the Workers’ Compensation Commission denying the underlying WC claim—we completely disagree with that approach but you have to remember this is Illinois and judges sometimes do odd things.

All in all, we feel these are your options in countering clear evidence of WC fraud by a worker. One other thought, please note if you are represented by captive or “house” counsel in handling your WC claim, there is almost no chance they will take any of the actions above other than to try to deny and win the WC claim at the IWCC—they work for the insurance carrier and we are certain insurance carriers aren’t going to let their attorneys take active roles in fraud-busting.

We hope this covers your concerns on this complex topic. We look forward to your further thoughts and comments. Please do not hesitate to post them on our award-winning blog.